Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1871-09-14
BANK OF TENNESSEE.
An Interesting Legal Decision.
The State Authorities indicated.

w lllldm ID BalleW ana InOQ1dS A. CledSe
ct. al, has been pending for some time in
the Courts of the State, involving i'm
portant law and interesting questions OF
fact. The case was decided yesterday
morning. The opinion was prepared and
commenced by Hon. Jas. L. Shields,
Special Judge. We give the following
synopsis of it, following in many places
the opinion verbatim. 2HIt
q 1t begins with recital of pleadings as
follows: "'. Et-" AI'- l|.e'F 1852
The State of Tennessee filed the original
bill in this case in October, 1864. 1t charges
that w. H. 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 1863 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 Sos, S22.-
45 in coin $753,909 in bank notes and
other money; notes discounted, &C., Sl32,-
567. 66 domestic bills of exchange S2l9,.
$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 a de-
cree rendered against Ballew. Cleage and
other sureties for SO, S40.06 and costs of the
cause.
The Special Judge in his opinion, said
of here upon its merits without further
litigation. ts-., 81. .--.,.----s r......-....s
Passing over the dry legal questions, he
said "The bill contains grave charges
against the defendants that are not sus-
tanned" 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 discIoses in the con-
duct of Cleage an illustration of fidelity and
honesty in a fiduciary 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
che loaned $4,000 of it to r. L. 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 & 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 $780, 900 i'll United States |
Treasury notes in discharge of Il. L. Will |
son & Co. 8 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 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 to |
lose all. Accordingly Galloway paid the |
$50, 900, and with Cleage's permission, took |
from the State receiptin full. 1t appears,
says the opinion, that at this time gold |
was at premium of 43 cents in New York,
and that Wilson & Co. afterwards paid Cal
away the full amount of $4,000 in gold,
'who thereby realized a large profit by |
he 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 |
~ the trade. Galloway says he considered
lie risked much by the trade, and that a
lesire to befriend Cleage and the belief
hat Wilson & Co. would pay in gold, in
luced him to make the proposition. He
ays "that Gov. Brownlow's connection
With the matter was only as above stated
% witness knowledge, he had no interest
u the matter FURTHER than as Gorern0r o.
he Staten Galloway says he paid Hunt
s., 800 for his aid in this matter and for
,ther services rendered in many ways.
But SAYS the opinion d" OF this transac-
ion with Hunt and the division of profits
With other persons, it further appears the
Governor tUdS not informed, for he says he
knew of no regard or compensation being
yiven to any one, and that at the time he
he did not believe that any had
)een received"
The record completely exonerates Gov.
3rownlow and the State authorities, and
Is Judge Shields personally said to us,
there is nothing in the case to implicate
hem.n
The amount of specie in the bank in
August, 1868, was SIS, S22 IL. Most of this
|
oaned to Wilson d Co., as stated The
available assets, inclusive of specie and
eal estate, at the time Cleage went South,
vas S173, S51. Al" The total assets taken
South, of all kinds, was 81 ,341, 1855. The
otal amount turned over to the State au-
horities at Nashville was 81 1891 1926.
The Court, after full consideration of
III the facts, conclude that the Bank Off
,ers were guilty of no fraud or wrong, and
hat the State authorities were right in
making the transaction with Galloway,
as they honestly did at the time,
hat Cleage was insolvent and could not
Jay out what he owed the State; and,
urther, that United States money. was le-
raj tender, and that Cleage would have the
light to pay in that money finally. The
COURT reverse the judgment of the Court
below and pass such judgment as they
hink the whole case demands. They re-
use to hold Cleage liable for the premium
m the SIS, S22. IL in coin that belonged to
he Bank, for $50, 1000, as stated before, was