Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1875-03-07
NEW ISSUE.
The Question Of Its Validity Decided
BY the Supreme Court.

I
It is Good for ali Debts Due the Bank
Of Tennessee-Ho Point Presented as
10 the States Responsibilisy-But the
Appropriation Of the BANKS Assets
as school Fund was Null and Void.
The Supreme Court rendered a decision
| in the Bank Of Tennessee case yesterday.
When the fact was learned on the streets,
| considerable excitement was OccasiOned
among parsons interested in the "neW is
sue" and when some idea was obtained as
to the nature Of the decision, there were
some pretty lively transactions among deal
ers. The rates paid ranged from 45 to 55
cents in the dollar.
Chief Justice Nicholson deliver d the
opinion:
State Of Tennessee and Samuel Watson, treas
urer, vs.. President and Directors OF the Bank
OF Tennessee ct al.
The original bill was filed by the State
and Samuel Watson, Treasurer, against the
President and directors Of the Bank Of
Tennessee, w. G. BrOWnlOW, Governor; A.
j. Fletcher, Secretary Of State; 5. w.
Hatchell, Comptroller, and various indiFi-
duals named as creditors, and praying that
publication be made, according to law, for
all other persons claiming now or hereafter
claiming, 70 be creditors Of said bank, and
who win not come in and be made defen-
dants, and required to file his, her, or its
claim, in full, giving its origin and cOnsid-
Grafton, and when and how it arose, and
when said parties became the owners
thereof, and the creditors Of said bank.
The prayer is that call proper and necessary
accounts be taken Of the trust funds, or
tn ir proceeds, and between said bank and
Trustee, or between the school fund and
said bank and its creditors, and the amOnnt
Of its Indebtedness asceTtained, and the
amount Of its assets ascertained, and, if
necessary, a rate bill be declared, and said
trust be closed up under the DEGREES and
orders Of this court" etc.
Mark Il. COckrill answered, claiming to
be a creditor Of the bank as a deposition.
lie then filed his crOss-bill on behalf Of
himself and such other depOsitOrs as might
come in. He attacked the act Of the
Legislature Of 1866, authorizing an as
signment, 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 dismissed.
he has appealed.
b. r. Mckinney and others claiming to
be depOsitOTs to the amount Of $4,000,
fled their answer and crOss-bill. They
pray for relief against the State, as 10 the
Sj,OO0,O0O of war bonds purchased by the
bank; and, also, for the failure Of the Stase
Ofurnish capital to the bank to the amount
of S5,OOO,OOO, alleging that the State only
furnished S3,600,000, and is now liable to
make up the deficiency in the capital. This
bill also attacks the act Of the Legislature
authorizing an assignment by the bank and
the assignment as unconstitutional.
Demurrers were fled by the defendants,
insisting on the validity of the act and of
the assignment, and that the cGmplainants
in the cross-bill have no right to make the
State a defendant for the purposes stated
in the bill.
The demurrers were OveTruled, 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 70 the State, which was allowed by
| the Chancellor. From this decree, dis
missing the original bill as 10 the State,
| the complainants in the crOss-bill appealed.
Watson, trustee, also appealed from the
decree Overruling his demurrer to the cross
bill.
Atchison and Duncan fled their an
swer to the original bill, claiming to be
| holders of the notes Of said bank, known
/ as sneyF issue to q larger amount, insist
| inc upon the legality Of their issuance, and
/ attacking the act of the Legislature and
the assignment giving preference to the
| school fund and the provision excluding
| 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 none 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,
and claim for it priority in distributing The
assets of the bank.
On hearing Of the cause upon the answer
Of Atchis0n & Duncan, the Chancellor held
that the notes held by them were valid
claims against the Bank, and, as such, en-
titled to priority Of payment out of the ar
sets Of the bank, and valid as payments Of
debts to the bank. From this decree Wat
son, trustee, and the bank appealed. By
an agreement Of record below, John Hall,
as Trustee of Marion county, became a
party by petition, claiming that the pro
ceeds of certain school lands in Marion
county, deposited in the Bank Of Tennes-
see, were preferred trust funds, entitled to
priority Of satisfaction. No action seems
to have been taken below on this branch Of
the case.
1t thus appears hat the original bill has
never been brought to a hearing in the
court below, and that the proceedings on
the crOss-bills Of COckrill and of Mckinney
s. Co. and on the answer Of AtchinsOn &
Duncan have only been preparatory to a
final hearing on the original bill.
\ 3 L. 9-,e 81 .
have confined ourselves to the questions
properly presented by the record, and there /
fore, have passed over several questions
which were discussed in the arguments Of
counsel.
The question whether the State had be-
come party by joining int the original bill,
so that relief could be legitimately sought
against her for matters not embraced in
but entirely outside Of the original bill,
was raised by the demurrer to the cross
bill Of b. r. Mckinney and others. The |
court hold unanimously that the demurrer
was enormously Oyerruled and that the |
same ought to have been sustained. We |
hold also that the Chancellor committed |
no error in allowing the counsel for the |
State to dismiss the original bill, so far as
the State was party complainant. Ii fol- |
lows that as the Stale is not party TO the |
suit, no question is presented in the case, !
involving the liability Of the State, either |
to make good the original amount Of |
S5,OOO,OOO, on which, was proposed that the |
bank should operate as capital; or to make |
good the common school fund used as /
capital Of the bank; or, to make good the |
S5,OOO,OO0 Of war bonds, bought and held /
by the bank; or to make good the school |
land finds deposited in the bank by Marion /
and other counties; or, to redeem the 'new /
issue" Of the bank by receiving the sum in /
payment Of taxes. Nor havewe considered |
the question whether the State is entitled /
to be subrOgated in the distribution Of the
assets of the bank, to the extent Of the old /
issue taken in and cancelled for taxes. /
None Of these questions were legitimately /
Before US, for the reason that the State is 1
not party to the suit and cannot be so /
made without her express consent.