Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1879-03-07

It,
But when we consider the object and purpose for
which these bonds were issued, is it probable that
the legislature intended that bonn tie purchasers
should be required TO ascertain before tuey advanced
their money upon them, whether the etga cond-
Piled with?
The bonds were intended as q means of raising
money Tor immediate USE they we're MADE paye .i
to bearer in order 10 protect the credit OF the state
they required by the act of lS54 TO be sold at
par they we're expected 10 be solo In ostiill mar
ket there not home capital TO invest in them
Now, can 1t be possible that under these clrcum-
stances the legislature INTENDED TO fetter thel VIII
restrictions and conditions that would necessarily
have entirely destroyed their market value?
Could it be supposed that purchaser In New
York or London would have negotiated at par, OF
upon any terms, for paper encumbered with eght
conditions, the performance or when were essen
tal TO their validity the literal fumeut OF which
he was bound, lat his peril" as the committee re,
port to inquire into at distance OF thousands OF
miles and the then Imperfect and dilatoTy means
OF acquiring such Information?
To suppose that the legislature passing the act OF
February l L. 1852. meant this is 10 stultify that
body.
The conditions in reference to the Issuance Of the
bonds evidently intended as a security 10 the
state against the railroads and not affect third per
bonds and in proof or this section Ii of the act OF
February Il, 1852, provides that II the governor
ascertained that any railroad company shall nave
fraudulently obtained the of the bonds of
the state, or shall have obtained any of said
bonds contrary to the provisions OF the act,
he shall notify the attorney general of this State
whose duty 1t shall be forthwith to institute in the
of the State a suit in the circuit or chancery
court of the county of the place of business of the
company setting forth the facts and il the fraud is
established, the act goes on further 10 PROVIDE Ot
That the bonds SdU be ddjdged UOd By the court, but
that the road with all the assets and property OF the
company, shall be sold and the proceeds paid into
the treasury, and the stockholders of the company
made Individually liable for the payment Of the
bonds so obtained. .
The sixth ground of defense urged by the commit
tee against the validity the bonds is that the legs-
iature in I8fq-7O Instituted inquiries into the cir
cumstances under which the bonds of the State were
issued, with view to eliminating and declaring In
valid those that were taisted with fraud and were
Jate rod rpm doing
struction ana menaces on the part of the Federal
government amounting to dureSs.
The proof on this point shows that during the ses-
sion OF 1S6a-70 several Investigating committees
were appointed to examine and report upon various
mittee for Investigating railroads consisting Of J. ~
Hall. Fl. Townsend Atha Thomas, John NJ. Elem-
ing, James L. Rapon and A. L. Spears.
The report OF this committee, with the accompa,
Dying testimony fills a space of some one thousand
pages in the appendix to the senate journal OF that
session. and the house appendix and show that they
amined over one hundred witnesses, and yet be-
leve speak by the record when say that in regard
to two only of them was any suggestion lnade as 10
the validity of the State bonds issued to them, VIZ
The Mineral Home, as to which judicial proceedings
were instituted and the bonds recovered or provided
for and the Tennessee and Pacific as to which Sim
liar proceedings would have peen Instituted, as
a member Of the committee but before a
bill could be gotten through tue legislature TO direct
such proceedings to be mad, the bonds held by the
company paid into the State treasury by anotn-
er company to which they had been turned over 1Or
As to ths alleged fact that this committee had
been deferred from adopting any proceedings 10 the
Reputation or validatlOn OF the bonds by fear OF
reconstruction, 1t may be remarked that quite a
number of witnesses were Intercepted on this point,
and with all respect to the committee very Ieadlng
questions were propounded as Will be seen by refer
ence to the testimony. The only witnesses whose
dispositions are of any particular significance are
Dorsey B. Thomas, Clay Roberts, Atha Inomas, NJ
D. Bearden and John 7. Baber. The last three
speak only of TuInorS and fears, Atha THOMAS also
speaks OF rumOTS, and says laIsWer l3J tnal the
action agreed upon by the railroad investigating
committee, OF which, as stated, he was member
was to direct the proper officers OF the state not 10
recognize the bonds Improperly issued naming
those Issued TO the two roads above mentioned, in
any Transactions OF the State, and allow the roads,
By proper action in the courts by suit against the
state to establish their validltE II they could and
that this policy was abandoned for two reasons the
most prominent being fear of reconstruction,
and the other that if bill introduced in REGARD
to the bonds Illegally issued to any road the bonds
would be paid 10 the State and the attempt to I'm
D ach their validity thwarted.
The legislature had, it appears, taken recess
from the seventh of March to the third OF May, to
enable the tigating committee - discharge the
Clay Roberts If rs a tRen mr. B6sy
speaker of the senate ana W; r. berkinS; men 'sa
Their efforts to prevent reconstruction by the con
gress then In session. Ihey accomplished lne w
ject of their mission II would seem, ana returned
early In March. The investigating committee APP
pears in the meantime TO have been very lhdustLl.
ously employed, and made their VolumlhouS FeRoIt
to the Legislature, it appears, about the twenty,
fourth OF May. That there was a general ana
we'll grounded fear of reconstruction about ths tlme
referred to does not admit OF doubt; but the at
tempt made in the evidence taken to conn, CT the
oders of the State bonds with the movement
wholly falls II is than probable that the ru-
mOrs that the legislature would upon party or polit
cal grounds attempt to Tepudiate the acts oil BroWn-
lows administra ion, and especially the bonds Is
sued by that administration, was the moving ca use
of the threatened reconstruction, and was repre-
seated as evidence of what was known as GlSloyal,
ty'' by those that then had control OF the feuerd
covernmant But the proof taken by the committee
Shows nothing amounting to any direct menace on
the part OF the Federal authorities OF that would
shCW the plea OF d,eresS and more than that, some
mir piHDSgu, during
have been three different governors ana tnfee sue
cssve Sessions of the egislature exclusive of the
present an representpg the now dominant party OF
The State. yet no effort TO test tie validity OF the
bonds such as suggested by Mr.. Atna Ihoas, OF OF
any other kind has been made.
But, IN the seventh place, 1t is urged By the com
mittee that the State is not estopped by any rec0gn
ton OF ratification these bonds the part OF the
legislature any officers or agents OF the state
from now dispnting their validity, ana that specla
| pTecautiOns to keep the door open in this respect
were adopted by using the ph!aSeClogy illegally Is
sued" in the acts referring to the payment OF tht
whether the doctrine OF estoppel.'' in its techni
cal sense applies to sovereign state, Is question
as to which authorities differ. The supreme court o.
North Carolina is very emphatic in the opinion tha
It does not and for the STRONGEST case that nav
met with on That SIDE OF Inc question, refer ID Ill
But the question, so far as we are CONCERNED, bag
think, been settled the other Way by the Supfen
| court of Tennessee, and to the decisions OF ina
| tribunal we must yield our assent. In the case o
the state as jefferson turnpike company rep. In y
| tuted by the State under the act OF 1889 ~
| rs, Jefferson turnpike company, charging that III
subscription Of the State for one-half the stock
the road and the State bonds, to the amount or MIN
| thousand dollars, had been frdudulentiy obtained
and praying for a cancellation of the stock sui
scriptOn and the reminding OF the emounL OF IN
| bonds, the court says: 1.-THE question first 10
considered is whether the subscription for stock o
the pant of the State and the subsequent Issuance
the part of the private stockholders and Il mistak
of the facts on the part of the governor"
| rhese heinz the facts. there would be no doul
that the contract should be Iescineed unless SUI
seqgent transactions have eefted the gghs OF IN
On with this work from July, 1855 until this hi
Years, and very large expenditures have been
Besides the State was represented
| this board OF directors (of the turnpike company
and these facts were within the
ana took place win tf 6e gasid9
1oEeie1 The State Is not bound by its agents nat
| raj PRISON acting thTOaqh agents Is bo4TtdF
| The truth is government can only act throug
agents and ali its oficers, executive legislative, ]
| dicial and ministerial are merely agents. To d
sumo, tlat is not Bound py the aet OF us agents
to deny its capacity TO crea.e an oDlg dtlon. 81
| this will be commended for by no one. The transa
lions in reference TO the payment OF this money al
the notification of the fact 10 the governor were Il
very things for which they were appointed al
D which deyolYtd upon them as duty me Iatlhc
e to the stock paid in were acts clearly within Z
| scope of their agency.
+ | In subsequent decisions of the supreme court
The question Is not as to the power or the govern
y | to make bonds in the name OF the State but as
his authority to deliver them. His act in deliver
: them before the requirements Of the statute we
5 com piled with, If such we're the fact, was no dou
n | VoIdable; but whether this rendered the bon
+ themselves void in the hands OF innocent holders
It very different question: and have shown how Il
e question was understood by the legislature by
i | provisions of the thirteenth section Of the act
t February IL, 1852.
IS II Isl well-setted principle that void act cam
2, be maze valid by subsequent notifications, bu
/ vOldabe one may and any more irregularities In
s | execution OF power may be waived. These bon'
/ as has been shown. were issued through period
" fOrty-four years. Many consecutive sessions OF
d legislature and fourteen different governors hi
been charged with the protection OF The interests
e | the State; the bonds have been passing lIom ha
% | to hand, some of them constituting
| Investment made b. guardians q
a | Others acting in fduciary charact
,e | some of them constituting the endowment fund
II our own literary and charitable institutions and
e. | through all that long period, no voice OF warm
le mas been heard from those clothed with official
le thofty the recognized and sworn Iepresentatl
of the interests of the State, except the inYes
lions of 1S69-70 above referred to- but. on the c
trary act after act of the leg stature has been pas
O. recognizing, directly and indirectly the validity
d. | the bonds, by funding and receiving them In
ne nent of cues the State, by appointing direct
n on behalf of the State in the railroad companle:
or which these bonds were issued as was the case
| the Jefferson turnpike above cited, and in eI
ne other mode in which the State has acted in re-