The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1902-04-05

defeated the purposes of the State in
these respects.
1.-The defendant, further answering,
denies any and all parts of paragraphs
one and two of the said bill of complaint
not herein admitted
III.
'The defendant, answering paragraph
three 60 of the compliments bill of
complaint, admits that at the time of the
passage of the said act of 1866, the de-
PENDANT the State of North Carolina. was
the owner (subject to the statutory lien
or mortgage hereinafter set out, and 20
be designated as First Mortgage'D of
thirty thousand shares of stock in the
North Carolina Railroad Company, of
the par value of three million dollars
(shaTes one hundred dollars paD And
the defendant further admits that the
State Treasurer has directed, whenever
certain bonds were regularly and lawful
ly issued under the above act to exc
cute mortgages as additional security to
the same upon an equal amount of stock
held by the State in the said North Caro-
lima Railroad Company; but the defend
ant saith that the said act provided that
the said transaction should ne made and
perfected in a particular form and man
ner-the provision being that the Treas
urer should execute and deliver with
each several bond deed of mortgase for
an equal amount of stock in the said
North Carolina Railroad Company. But
this defendant denies that the sew
eral mortgages to be made
nv,
the said act were ever executed, and in
Sists that the endorsement on the said
bonds as set forth in the said bill of
complaint was not made in pursuance of
or in conformity to the provisions of the
act of the General Assembly of North
Carolina (Chapter 100 of the Laws of
1S66-'67 referred to in complainant bill
herein), and did not have the effect of a
conveyance or transfer by way of mort
gage, either in law or in equity of any
of the said stock, nor did it confer a
lien by way of pledge or otherwise upon
the same That no certificates of stock
are numbered or otherwise identified,
nor has there ever been any delivery of
any shares of said stock to any of the
said bondholders, or to any one for them.
And the defendant further saith that the
said attempted mortgages or liens are
also void because of the illegal issue
and sale of the bonds, as stated in para
graph two (2) of this answer.
THE defendant admits paragraph four
"a of the bill of complaint herein.
THE defendant admits paragraph five
90 of the bill of complaint, except so
much thereof as alleges that the COM
plainant and other holders of bonds
which were issued in aid of the Western
North Carolina Railroad Company after
the passage of the act of 1866, have a
second mortgage or equitable lien upon
such an amount of the said stock as
would equal in it's par value the princi-
pal or par of said alleged second mort
gage bonds; and as to this part, the de
PENDANT denies the truth thereof.
VI.
THE defendant, answering paragraph
six CO of the bill of complaint, says it is
true that an adjustment of the first
mortgage bonds was made in pursuance
of chapter 1873, acts 1879, and in accord
ance with the terms set forth in Exhibit
c. attached to the bill of complaint
herein; but this defendant utterly denies
that the said new bonds were not in law
and in fact substituted for the original
bonds, and alleges that it was expressly
agreed that the new bonds were not given
in payment, but only in renewal or sub
scription of the old bonds, and that the
original lien on the stock of the said
North Carolina Railroad Company was
to he preserved unimpaired for the Sc
curity of the new bonds as fully as the
old bonds were secured thereby This
defendant further saith that the effect
of the transaction was simply a substitu-
tion of the new for the old bonds, GER
tain interest on the old bonds being re-
mitted
1.-The defendant admits that the terms
of said adjustment are set forth in Elk
hibit C. as alleged in paragraph seven
CD of the bill of complaint; but saith
that the act of 1879 chapter 1873, should
be taken and considered as a part of
said agreement and adjustment, copy
Of which act is attached hereunto, mark
ed Exhibit "A and which defendant
prays may be considered a part of this
answer.
THE defendant, answering paragraph
eight (8) of the complaint herein, saith
that she has never heard or been in
formed, save by the complainant bill of
complaint, whether the complainant, it's
assignors or any prior holder of the bonds
declared on were parties to or assented
to the said adjustment; but defendant
denies that other holders of said mort
gage bonds did not consent thereto, and
alleges that, on the contrary, a large
number of the said bondholders, to the
extent of at least $2,213,OOO assented to
the said adjustment by exchanging, under
the provisions of chapter 9S. acts 1879
their bonds for new ones unsecured ex-
cept by the faith of the State) at the
rate of twenty-five per cent of the prin-
cipal thereof, so that all of the alleged
second mortgage Indebtedness, amount
ing to abut 81, ass, 900, has been settled
by the exchange aforesaid, except as far
as can be ascertained, about $3.50, 900
The defendant denies the remaining parts
of said graph, although she is ad-
vised that she is not compelled to answer
thereto, the same being merely allega-
lions of law.