Page:Federal Reporter, 1st Series, Volume 8.djvu/143

 CLAFLIN V. SOUTH CAROLINA E. CO. 129 �of issue there may be, -when it becomes necessary to enforce the earlier liens. �This, I believe, disposes of all the questions presented under this branch of the case except as to the coupons taken up in 1877, and January, 1878, by the syndicate. These will be coasidered here- af ter. �2. As to the second mortgage : �Ai a meeting of the directors of the company, May 21, 1872, the following resolutions were adopted : �Resolved, As the sense of this board, that some measure of relief for the large and oppressive floating obligations of the company, incurred for valua- ble improvements, and for acquiring controiling interests in important Con- necting railroads in danger of passing into unfriendly hands, has become expedient; and, further, that some means of providiiig for the annually-recur- ring bond maturities should be devised ; therefore, be it — �Eesolved, That a second mortgage be authoiized to be created upon the prop- erties of the company to the extent of three millions of dollars, ($3,000,000 ;) that bonds to that amount under said mortgage be executed, to run 30 years, bearing 7 per cent, interest, payable in semi-annual coupons, first of April and flrst of October, in the city of New York; and whereas, it is a duty we owe to the stockholders in putting a final mortgage upon their property to take every necessary precaution to secure to them the utmost value of the bonds to be issued under the said mortgage, and thereby to accomplish the end proposed, naniely, the relief of the company's finances; therefore, — �Eesolved, That the president be authorized to sell the said second mortgage bonds at not less than 80 per cent.: provided, nevertheless, that he shall take payment for the same in ihe following manner, viz. : one-third in cash and two- thirds in the unsecured bonds of the company at not less than 80 per cent., when these terms of payment shall be tendered. �At the same meeting it was voted that the privilege of making payment for second mortgaga^e bonds by one-third in-cash and two- thirds in non-secured bonds, should extend for one year from the date when the bonds should be prepared for sale, and the proceeds of the bonds should be applied exclusively to the extinguishment of the floating debt and of the unsecured bondg. The floating debt at this time amounted to something more than $1,000,000, and the unse- cured bonds to $2,000,000. In accordance with these resolutions, a mortgage, and bonds of $500 each, amounting to $3,000,000, were executed. The mortgage recited the substance of the resolu- tion of the directors, and especially that the proceeds of the bonds "were to be applied exclusively to the extinguishment of the floating deibt and the retiremeut of said unsecured bonds." Of the new bonds it is coneeded that 2,269, amounting to $1,134,500, were regularlj v.8,no.3— 9 ��� �