Nashville union and dispatch. [volume] (Nashville, Tenn.) 1866-1868, 1868-01-03

culatlDg notes TO the Coptroller who was 70
burn them; and the proof further shows that
the Comptroller was in the habit of reeeiy-
ing from the officers of Tennessee banks
their notes put up in packages, and which
he burnt upon the word of such officers
without counting. These facts being es-
tablished, it is not strange that the people
suffered by this system of banking it
would be strange If they had not suffered.
But the question so far as the State is con-
cerned is, can it be made liable for the
fraud or Idches Of its public officers?
By the act of 1865, the provisions of the
Code, section 1907, authorizing suits against
the State to be brought, is repealed. How
far this may affect suit already pending
is a question which l have not thought
proper TO pursue.
Is the State liable for the ldeheS of the
Comptroller? Much stress is laid upon
that provision IN the statutes, that nothing
in the act shall be considered as implying
any pledge upon the part of the State for
any payment beyond the proper applica-
ton of the securities pledged to the
Comptroller. Certainly no court would
give TO a statute a construction which would
make the State liable for the laches of pub
lie officers, unless there was no escape from
it. By the common law, the sovereign
cannot be sued by the subject, and in this
country the United States, as well as States,
can only be sued by their own permission,
and by allowing suits to be brought against
the State, it cannot be implied that the
Legislature intended thereby to make the
State liable for the tdches of public officers.
The Supreme Court of the United States,
in the case of the United States Us. Kirk
patrick and others, 9 Wheaton, 720, say:
'The general principle is that laches is not
imputable to the government; and, this
maxim is founded not in the nature of
extraordinary prerogative, but upon great
public policy. The government can trans
act its business only through its agents,
but its fiscal operations are so various, and
its agencies 50 numerous and scattered, that
the utmost vigilance would not save the
public from the most serious losses if the
doctrine Of laches can be applied to its
transactions. In also ! Peters 3lS, u
Wheaton sos, IL Wheaton 1874, Wendell
403, 4 Wendell $40.
Only one case can be found where con-
trary doctrine has been favored, and that is
the case of the people Us. Janson. John,
r 1872; but which is expressly overruled by
the case in 4 Wendell, and disapproved by
the Supreme Court of the United States in
the case of the United States rs. Kirk
patrick. The authorities are so full upon
this subject, and the doctrine of holding
State responsible for the acts of public
officers, would be SO fatal to its prosperity
and destructive to It's financial interests,
that nothing but the elearest language
would justify decision giving that con-
struction TO a statute. The proper construcS
ton to be given TO this part of the statute
is, that the State would cause a faithful aps
plication tn be made of the bonds remain
ing in the hands Of the Comptroller
at the time of the bank goinga into
liquidation, and not a guarantee against
the misconduct of that officer for
by the first section of the law be was
like other public officers, to give
bond for the faithful discharge of his du-
ties in this behalf, and by the 9TH section
he is made responsible directly to the note
holder if he countersign the notes without
having the bonds deposited.
Can the Bank Of Tennessee be held liable
for the notes held by compliments. The
proof shows that prior to the act of 1856
the Comptroller was in the habit of keep,
ing the bonds deposited with him by the
free banks ia the Bank of Tennessee, Just
as other special deposits were kept. Of
course there was no liability attaching to
the bank, and no obligation imposed ex cept
for good faith. The officers of the Bank of
Tennessee construed the act of 1856 as
meaning nothing more than that the Bank
of Tennessee was the place where the
Comptroller must keep his bonds. The prac-
tice of the bank, as well as discussion be-
tween the President, the late Cave johnson,
and the Comptroller, James T. Dunlap, who
came into Office after Luttrell, and after
the bank had settled the question as far as
il could, by two years of practice upon that
shows how the bank officers
the law, Dunlap taking the
ground that the bank had something more
to do than merely to act as depository for
the Comptroller. A careful examination
of this statute, think, will lead the mind
to the conclusion that the bank officers
were in error. The Legislature meant
more than mere depository.
They meant TO 80 amend the law that the
Bank of Tennessee should be a check upon
the Comptroller. No notes were to be
countersigned by him until this was DONE
Why require him 10 deposit the bonds in
the bank besore the notes were counter
signed, If he was the sole trustee? And
besides, the law expressly provides that,
after this deposit, the bonds shall be sub
ject to the order Ofthe Comptroller only for
the purpose of carrying into effect this act
Il h. - =, III - 4
1t was the duty of the Bank of
Tennessee, after this law was passed,
to take charge of the bonds and
keep them safely; in other words the bank
became trustee instead of mere deposit
tory. But the question still arises did the
note-holders sustain any loss by this mis-
construction of the statute, or by the neg
ligence Of the officers of the bank? 1t is
too clear for argument that the bank was
only responsible for what the Comptroller
placed there, and that the Comptroller for
the purposes of the act, might order them
to be delivered up upon the circulating
notes being burnt Now, were any bonds
lost while in the hank2 Upon this point
the complainants have totally failed in
their proof. There is not a particle of
proof in this whole matter showing any such
loss. The bonds of the free banks were
kept in the bank vault and not in the treas
ury safe where the bank keptits own bonds,
and therefore it ia said the bank did not
take as much care of those bonds as il did
of its own, but this might be explained
by the fact that there we're twenty-five tin
boxes containing these bonds Of the free
banks, aRd it is no where shown that the
money safe was of sufficient size TO hold
these twenty-five tin boxes besides the other
valusbles usually kept there. But the
deposition of Mr.. Cunningham and others
show that the bank vault was a safe place
Owing TO the construction given this law
by the bank, some liberties were allowed
the Comptroller's clerk and other parties
interested, which perhaps would not have
been had the other construction been given,
but there is nothing in this ptoof that leads
the mind to the belief that any ofthe bonds
of the Exchange Bank we're lost by such
liberties. In fact, after a most careful ex-
animation of this entire record, / am fully
satisfied that the Legislative Committee
was right in reporting that no bonds we're
lost--that Mr.. Spence was mistaken in
saying he had lost one hundred and twenty
three bonds.
The evidence offered to show that the
Exchange Bank had such bonds which
we're not Withdrawn, is in a book which
the Messrs. Spence furnished the Legisla-
tive Committee.
=. hoe The of hafnor