Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1875-03-09

The Supreme Court Declares tbs
TOrbett Notes Regular ana Valid
The AchOOl Fund Rs "A Portion al
Hanks Assets Subject 20 the
Suits of Creditors.
On Saturday last the Supreme Court
delivered the following decision in the
case OF the State of Tennessee and Sam.
uel Watson, Trustee, VS.. the President
and Directors of the Bank Of Tennessee
ct al. After reviewing the case in all it.
bearings as to pleadings, ETC., the Court
agreed in holding the following propesi.
tons:
l. 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
a trust fund, applicable to the payment
Of the debts of the bank. The act of the
Legislature of 1866, which appropriated
the assets Of the bank as school fund,
impaired the obligation of the contract
between the bank and its creditors, and
was, therefore, null and void, as was,
also, the assignment made in pursuance
of that act, 80 far as it gave preferment
to the school fund. 1t follows that the
demurrer to Cockrill's cross bill by the
bank and the Trustee, Watson, etc, was
enormously sustained, and hat the de.
murrer of the bank and of the Trustee,
ETC., to the cross bill Of B. r. Mckinney,
etc, was promptly overruled.
2. Upon the statements in the answer
Of Cockrill and of B. R. Mckinney, etc.
in their cross bill as to the character OF
their claims as depositors, we hold that
they are valid creditors of the bank.
But if there is airy illegally in their
claims, it will devolve upon the bank or
Trustee, by answer and proof, to show
such illegality and invalidity.
3. We hold that the acts by which ii
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 owers af.
ter, as before these acts, to carry
on a legitimate banking business, and
that the receiving of deposits was such
banking business.
4 We hold that Marion, and such
other counties as deposited school land
funds in the bank, are entitled to claim
and receive from the bank such State
bonds as can be identified as bonds
bought with such school land funds, in
pursuance OF law; but as to so much of
those funds as cannot be so traced into
State bonds, now held by the bank, the
counties entitled to such funds are cred.
itors Of the bank, having no priority
over other depositOrs, or general credi-
tors.
8. We agree in holding that the notes
Of the bank issued since May 6, 1861.
held by Atchison and Duncan, and set
out in their answer, are legal and sub.
sisting debts Of the bank, entitled to Jay.
ment at their face value, and having the
same priority Of payment out of the as.
sets Of the bank as the notes issued be.
fore the 9Th of May, 1861. But we do
not agree entirely in the course of rea.
soning by which we come to our eonclu.
sion. Three Of the Judges have pre-.
pared, and will file written opinions on
their branch Of the case. The other two
Judges concuri in the conclusion, but do
not eoncur with all the reasoning of
either OF the three written opinions.
G.. A majority of the court hold that in
the case OF the Bank VS.. Jamison, the
Circuit Judge committed no error in
sustaining Jamison's right to pay his
debt to the bank in the new issue notes
Of the bank at their face value. The
judgment in hat Ease is therefore at.
lirmed, On this point Judge Mcfarland
dissents. This holding rests upon the
doctrine that when the notes Of the bank
were issued and put in circulation, the
law which makes them good in payment
Of debts to the bank was in force and
constituted part of the contract between
the bank and all holders of the notes so
issued and put in circulation by the
bank, The statute of limitations was
not pleaded by the bank against Jami.
sons notes rendered in payment, and
therefore was not involved in the case ia
the court below or in this court.
1t results that the cause will be re-
manded for further proceedings on the
original bill in the court below in &C.
cordance with the rulings of this court.
The costs of this court will be paid by
Trustee out Of the assets Of .he bank.
LSignedl A. 0. p NICHOLSON,
Judge.