Knoxville weekly chronicle. [volume] (Knoxville, Tenn.) 1870-1875, 1871-09-20
BANK OF ENNESSEE.
An Interesting Legal Decision.
The state Authorities INDICATED.


portant law and interesting questions of
fact The case was decided yesterday
morning The opinion was prepared and
commenced by Hon. Jas. Il. Shields,
Special Judge. We give the following
synopsis of it, following in many places
the opinion verbatim.
1t begins with recital of pleadings as
follows:
The State of Tennessee filed the original
bill in this case in October 1864. 1t charges
that w. II. Ballew, as President, and
Thomas A. Cleage, as Cashier of Branch
Bank of Tennessee at Athens, were re-
sponsible for the safe keeping of its funds
for 1868. That in September 1853 they re-
moved its assets South with the rebel ar
my, and that through this removal and
subsequent speculation much of the Bank
property was lost.
The bill charges that the assets sent
South and squandered consisted of S5S 3d.
As in coin $685. 900 in bank notes and
other money notes discounted, &c, Sl32,-
567.66 domestic bills of exchange 1919.
$50. The bill charges that Cleage invest
ed portions of this money in cotton, sugar,
&C., and profited thereby.
The cause was heard at Athens and de-
cree rendered against Ballew, Cleage and
other sureties for so, ,06 and costs of the
cause.
The Special Judge, in his opinion, said
the case was one that ought to be disposed
of here upon its merits without further
litigation.
Passing over the dry legal questions, he
said: 1.-THE bill contains grave charges
against the defendants that are not sus-
tained.n Cleage denies that any of the as
sets were squandered or speculated upon
and the opinion says 1--WE are satisfied that
the Bank officers at Athens were not
guilty of any fraudulent intent and acted
in good faith. Indeed, we feel constrained
to say that this record discoses in the con-
duct of Cleage an illustration of fidelity and
honesty in fduciary capacity rarely
equaled and never surpassed
1t appears from the record that Cleage
took South with him 'principally Con-
federate securities and evidences of debt,
and commercial paper based on Confed-
crate scrip" After he reached Georgia the
specie that had previously been sent to
Nashville was forwarded to him, and that
"he loaned $4,000 of it to r. T. Wilson &
Co, who executed an obligation to place
that amount in American coin in the
Bank of Liverpool to the credit of the
Bank of Tennessee that at the close of
the war the property of the bank, except
the said obligation of Wilson d Co.. that
remained in the hands of Cleage passed
into the custody of the United States mill.
tary authorities, and by them was deliver
ed to the government Of the State at Nash
VILE" 1t further appears that after the
war, Mr.. Thos. Galloway, being in Nash
vile, and learning of the fact that Cleage
was to be arrested and held TO account for
the bank property, proposed in lieu TO pay
TO Gov. BrownlOw $4,000 in United States
Treasury notes in discharge of II. II. Will
son d Co.'s obligation. This proposition
Governor BrownlOw declined. Gala
way seeing Samuel Hunt at Nashville,
told him that if he could induce the au-
thorities to accept his proposition he would
make him a nice present. Some time af-
ter, Gov. BrOwnlow, believing that Cleage
was insOlvent and permanently removed
from the State agreed with Galloway to
accept his proposition, saying that it was
better for the State to take this than 10
lose all. Accordingly Galloway paid the
S50,000 and with Cleage's permission, took
from the State receiptin full. 1t appears
says the opinion, that at this time gold
was at a premium of 43 cents in New York
and that Wilson d Co. afterwards paid Cal
laway the full amount of $50 600 in gold
''whO thereby realized large profit by
the transaction"
Galloway says in his testimony that Gov
Brownlow and Mr.. Fletcher, Secretary OF
State, both believed Cleage insolvent, and
thought they would save the State $4,000
by the trade. Galloway saws he considered
he risked much by the trade, and that q
desire to befriend Cleage and the belief
that Wilson q Co. would pay in gold in.
duced him to make the proposition. He
says " that Gov. Brownlow's connection
with the matter was only as above stated
TO witness knowledge, he lad no iilteres
IN the matter turttcr than as Governor d
the State" Galloway says he paid Hunt
So, 500 for his aid in this matter and fol-
other services rendered in many ways
But says the opinion: " OF this transac-
ton with Hunt and the division Of profits
with other persons, it further appears the
GoreritOr tcds not informed, for he says he
knew of no reUdrd Or compensation being
given to any one, and that at the time he
testified he did not believe that any had
been received ..
The record completely eXOnerates Gov.
Brownlow and the State authorities, and
as Judge Shields personally said to Us,
there is nothing in the case 70 mplieate
them.h -r.8
The amount of specie in the bank in
August, 1868, was SOS, SPILL Most of this
was sent to Nashville, and afterwards
loaned TO Wilson d Co, as stated The
q available assets, inclusive of specie and
real estate, at the time Cleage went South.
was S173 SILL" The total assets taken
South, of all kinds, was 81 ,341 1885, The
total amount turned over 10 the State au-
thOrities at Nashville was 81 1851 AS ..
The Court, after full consideration oi
all the facts, conclude that the Bank OFF,
GERS were guilty of no fraud or wrong, and
that the State authorities were right IN
making the transaction with Galloway
believing, as they honestly did at the time
that Cleage was insolvent and could not
hot / Il. .