The Bolivar bulletin. [volume] (Bolivar, Hardeman County, Tenn.) 1865-1888, 1879-07-24

LIABILITY or THE STATE As TRUSTEE
The State by lis proper officers, in pursu
ance Of repeated enactInents, gave its uOtea
or bonds payable to bearey, with the view O
aiding IN building up i system Of interua
improvements. The money was raised and
applied as the State intended. though Otter
IN selling the bonds the statute was violated
by the bonds being sold Tor less than par
and for which the statute imposes certain
penalties on the roads violating this law
bnt does not make the bond void which Is
made psyabie to bearer, and isin every sense
made negotiable by delivery.
by the various provisions of this statute
and amendments, q sinking fund vas created
nrst one per cent, then two per cent, then
lncresset 20 iour per cent, and this sinking
fund, wlih the aCcrlung interest. was to be
used in extingu;shing bonds. This was to
. De set apart and and paid in by the rail-
roads. his wSs part of the contract. OF
course, and was intended 10 make certain
the payment OF the bonds. The interest on
+ the bonds fell due lst Of January and lst of
, July, bat the roads were to paw the money
20 the State Is DAYS before the time fixed Tor
payment by the State.
The 18th section If the original act Of 1852
Is IN these words;
the State Of Tennessee expressly reserves
the right to enact, by the Legislature, all
such laws as may be deemed necessary TO pro-
tect the interests of the State and to secure the
State from loss in consequence of the Issuance
OF such bonds: but so as not 20 impair the vested
rights of the stockholders of the companies"
This statute, together with the act of 1857.
providing that ali roads receiving aid should
oe sold in two years after failing TO paw the
Interest, and which was agreed to by all the
roads securing aid under and subsequent 70
1t, gave the state the right TO sell the insol-
vent roads and 10 allow the solvent roads to
pay in bonds, for Its own protection.
But the question Is, when the State did this
and collected not only the interest in ad-
vance TO meet the coupons as they fell due,
bat the entire sinking fund, all At once
whether the State did not become a trustee
as TO the sinking fund and "a TO the interest
collected in advance 20 pay coupons. Did
not the State hold this money under CON
tract to pay the coupons and bonds2
| do not propose TO debate this question OF
law, but to say that III my opinion no law
yer can be found who has made reputation |
as reliable lawyer, not being erratic or /
reckless, who, when the question Is put TO |
hran upon this state OF facts, will deny the /
hduciary character O the State. l go so far 1
as 10 say that IN my opinion not one can be /
found, leaving out erraLic men and who are /
just a. well known in their nei- hborho DDS As
red headed men, that will deny the hduciary 4
character OF the State, do not care how ihe
lawyer may stand on the question of the com
promise, if he is a reliable, Trustworthy man.
Of course reliable" includes the element of
sense enough to make point appreciate |
one, and does not embrace every man who !
has the gil. Of talk.
Now if the State is a trustee, or indeed If
the State. IN pursuance of the Constitution !
executed its notes to aid in permanently err
abllshiUg "a welI-regulated system of in |
erua! Improvement" The question arises |
cannot the courts compel the execution of |
he trust or a compliance with the contract
~ suit 10 reach the revenue.
he question as 10 the power OF the court
% deal with a State that has made Itself
rusiee Of funds which were once set apart
or creditors, Is settled in the case Of Currin
IS. the State OF Arkansas. in Is Howard.
In that case the State OF Arkansas had
created a State bank, the State owning ali
he stock aod the capital being mainly State
ponds.
The State afterwards repealed the charter,
0ok the money OF the bank and paid cur
ent expenses and by enactment took it,
'wn bonds up and took charge OF the real
state as belonging to IL
IL & suit agairst the State to hold 1t liza
Sic as a trustee, and which was brought in
he State court bur finally went TO the Su-
irene Court of the United States, under the
18th section OF tbs judiciary act 81 1888, the | ,
curt said:
so far therefore, as the property Of this |
auE mas become vested in the Stale. or gone TO I
ts use II IS 50 vested and used charged with a ! I
rust in favor Of this complainant "a creditor OF q
be bank unpaid creditor, unless there is | 9
JmelhinE IN the character of the parties, or the
0nsideration upon which, or the operation Of i
3e laws by force OF which IL has been trans {
Erred, taking the case out OF the principle above
I'D down" /
And again the Cour; says: i
Indeed il has not been attempted 10 main O
IN r1ha t4vu I
lsre private corporation, whose charter the ! a
legislature could not repeal, would be valid | q
ut It is argued this IS = different case; that the
legislature has power 10 destroy this CORPORA | +,
on, and therefore its contacts are no longer ! 3
existence, and cannot he enforced against the ii
-opertJ OF the corporation, which, upon the re II
"a! OF the charter, reveris 10 the ErIntOrs oil | b
lands and escheats 50 far ss it is personality d
the State; sud II II be II tbs power OF the
tate thus to destroy the remedies Of creditors
: repeating the charter, their rights must be | e
'ns;dered 10 be entirely subject to the Hill of o
Re state, and 40 law can impair the obligations
their contracts, because subsection 70 any law ! 4
hich may be passed belongs 10 the very exist <
ice OF such contracts. Or, to express the same :
ea IN different words, that the State created | :
I'd cen destroy the corporation and all its con- y
acts, aud, SIS It can thus destroy them BY re | u
Ealing the charter, it can modify, ObsJruct and a
bridge tEe rights of creditors and the oDiiga- | b
ons Of their contracts without repeating their b
larter. Neither these premises nor the concur b
This case not only decided that this vas a
ust fund in the hands of the State, and a
lat the suit commenced in the State court 81
,uld be maintained, but 1t decides that a q
" which deprives creditors OF large cor Il
1ration OF all legal remedy against is s.
ropergy, impsirs the obligation Of it con d
act and l. invalid. o.
So the question viii arise, whether the act Il
1860, repeating the law authorizing the q
tate to be sued, IN force when the bonds tC
ere issued, impairs the obligation Of q con a.
act, and this IL "a most serious question.
The view which ] have here taken of the Re-
smands which will be made and enforced m
' the present Supreme Court Of the United | 81
ates, is greatly strengthened by another "a
,ctrine now we'll established and that j., il c'
re State embarks in any kind Of business, o.
makes contracts, - to these 1t Is 10 be Al
Gated having voluntarily put itself on a =
vel with common people, and is TO be
Gated 81 they are.
The Supreme Court of the United States, g,
the case 4 Murray W.. Charleston, de II
dcd IN 1871 and reported in the 9Th vol ]
me oi Otto, held that States and cities t,
hen they borrow money and contract 10 n
ay il with interest, are not acting as SOY b
come down 10 the level OF | q
-dinary individuals. Their contracts have
Re same meaning "a that OF similar con y
acts between private persons" And our | "
gn Supreme Court, IN the case Of the ! I
ank of Tennessee vs.. Dihreil, . Sneed, 3Sl, q
ave said q
The doctrine thst when State becomes a a
Jmmcu carrier, by means of railroads owned n
= itself or otherwise, or bankers, o. IN any | o
-her mode enters into Tire common avocation :
citizens OF private companies OF c0TpO- |
atoms that 10 throws off its sovereignty. ! /,