The herald and mail. [volume] (Columbia, Tenn.) 1873-188?, 1875-03-12

necessary accounts be taken of the trust
funds or their proceeds, and between said
| bank and trustee or between the school
fuLd and said bank and its creditors, and
, the amount OF It's Indebtedness ascertaiu4
ed and the amount of its assets ascer-
tanned, and If necessary a late will be de
| claTed, and said trust be closed under the
DEGREES and orders of this court" etc.
Mark X. COckrell answered, claiming to
he creitor of the bank as a depositor He
then filed his cross-bill on behalf of him
self and such other depositors as might
come in. He attacked the acts of the
Legislature of 1880 authorizing an as
Segment, giving preference to the school
fund over creditors, as well as the assign
ment made under the act.
This cross-bill was demurred to and the
demurrer sustained and his bill dimissed
| lie has appealed
B, R. Mckinney and others, claiming
to be depositOrs to the amount ofSI30, 600
| hled their answers and cross bill.
They pray for relief against the State, as
TO the $4,000, 900 of war bonds, purchased
| by the bank; and also for the failure OF
the State to furnish capital to the amount
OF S5,0OO,OOO, alleging that the State only
| furnished s., 100000 and is now liable to
make up the deficiency in the capital.
| his bill also attacks the act of the Leg
| islature authorizing an assignment by the
| bank, and the assignment unconsttution-
al. Demurrers were filed by the defend
ants, insisting on the validity of the act
| of the assignment, and that compliments
in the cross bill have no right to make the
State a defendant for the purposes stat
| ed in the bill
| The demurrers were over ruled, and
the State and Watson appealed; but the
| appeal was afterwards set aside, and then,
| The State, by her counsel, dismissed the
| original bill as to the State which was
allowed by the Chancellor. From this
| decree, dismissing the original bill as to
| the State, the complainants, in a cross
bill appealed. Watson, trustee, also APP
pealed from the decree overruling his
demurrer to the cross-bill.
Atchison and Duncan filed their answer
to the original bill, claiming to be holders
of the notes OF the band known as the
new issue" to large amount insisting
upon the legality Of their issue, and at
lacking the act of the Legislature and the
assignment, giving preference to the
new issue as null and void. This
answer is filed for Atchison and Duncan,
and such other note holders as may come
in, but have come in as far as the record
here shows. They do not file their
answer as a cross-bill, and ask no relief
against the State. They insist upon the
validity of the new issue held by them
aud claim for it priority in distributing
the assets of the bank.
, On the hearing of the cause upon the
answer of Atchison and Duncan, the
Chancellor held that the notes held by
them were valid claims against the bank
and as such entitled to the priority O
, payment out of the assets of the bank
and valid as payments of debts due to The
bank. From this decree Watson, tn,
, Trustee, and the bank appealed.
t By an agreement of record below, Johr
. Hall, as Trustee of Marion County, be
came party by petition, claiming tina
the proceeds of certain school lands il
D Marion County. deposited in the Bank 0
= Tennessee, we're preferred trust funds
c entitled to priority of satisfaction. n
action seems TO have been taken on Thu
| branch of the case.
: 1t thus appears that the original bill
!, has never been brought to a hearing il
the court below, and that the proceeding
the cr0ss-bills of CockriIl and of Mckin
: ney & Co, and On the answer of Atchisol
.
to d final hearing on the original bill
In considering the case in this court WI
have confined ourselves to the questions
5 properly presented by the record anC
, therefore have passed over several ques
lions which were dismissed in the argu
ments of counsel.
The question whether the State had be-
: come party by joining in the origina
BILL so that relief could be legitimately
sought against her for matters not EN-
braced in, bat entirely outside of the orig
inal bill, was raised by the demurrer Il
} the cross-bill or B. Il. Mckinney ant
others. The Court hold unanimously
that the demurrer was enormously over
ruled and that the same ought to hav,
been sustained. We hold also that tn,
Chancellor committed no error in allow
, lug the counsel for the State to dismiss
/ the original bill so far as the State was
! party complainant 1T follows that as the
State is not a party to the suit, no ques
, ton is presented in the case involvin.
= the liability of the State, either to max,
good the original amount of S5.0O0,O0t
: on which it was proposed that the banl
, should operate as pltal, or To max,
good the Common School Fluid used a
cap tai of the bank; or, to make good tn,
SEHOOl Ituu luuuS uepDSlISu III Iue Ddut
by Marion and other counties; or, to re
deem the new issue of the bank by re
ceiving the same in payment of taxes
nor have we considered the question
, whether the State is entitled to be sub
rogated in the distribution of the assets {
the bank to the extent of the old issue
taken in and Cancelled Tor taxes NOnC
of these questions we're legtimatCly be-
fore US, Tor the reason that the State is
not a party to the suit and cannot be So
made without her express consent
We may also remark that we have not
considered the question of the statute OF
Limitation as applicable to the new issue
that question not arising in regard to
the new issue" notes held by Atchisou
and Duncan, and these being all, except
those rendered in payment by L. II.
Jamison, presented by the record,
The Court agree in no ding the follow
ing propositions:
When the Common School Fund was
| placed in the bank to constitute part of
its capital, it became assets of the bank,
to which the creditors of the bank had a
| right to look, and that these constituted
trust fund, applicable to the payment OF
the debts Of the bank The act Of the
| LEGISLATURE of lSG6, which appropriated
the asses Of the bank as school fund, i'm
paired the obligation of the contract be
| tween the bank and its creditors, and was
| therefore, null and void, as was, also, the
assignment made in pursuance of that
act SO far AS it gave pretermeHt to the
| school fund. 1t follows that the demur-
rcr to CockrilIs cross-biIl by the bank
! and the Trustee, Watson, ect., was err0-
neousIy sustained, and that the demur
| rer of tee bank and of the Trustee, etc,
to the cross bill of B. Il. Mckinney, etc,
was promptly overIuled.
, Upon the statements in the answer
| of C5ckriIl ami of B. Il. Mckinney, etc,
| in their cross-bilI5 as to the character OF
| their claims as depoSitois, We hold that
they are valid creditors of the bank
But if there is any illegality in their
| claims. it will devolye upon the bank or
| Trustee, by answer and proof, TO show
such illegality and inyalidity.
; We hold that the acts by which it
was attempted to declare the State indie
pendent, and to dissolve her connection
with the Union, had no effect in chang
ing the character OF the bank, but that
it had the same powers after, as before
these acts, to carry on a legitimate bank
ing business, and that the receiving of