Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1880-04-17

the Samej ana TO This the -tA1th, honor and
credit of the stats was pledged; and as a
made obligatory on the state treasurer to
set apart for that exclusive purpose so
much of thereyenues as may BE- necessary
TO pay the interest on, said bonds,
commencing with tho interest to
fall due on the LIST day Of July, 1874.
Here we have every element Of contract.
The debtor makes a plain propositions;
the creditor accepts that proposition and
does all that was required Of him, relying
on the honor of the state that she would
execute ii in good faith on her part. That
this is such contract as can be enforced
in the courts of the country, under the
protection Of the provisions in the consti-
tuition of the United States forbidding o
state to pass q law impsiring the obligation
of contracts, think may be safely assumed
as sound legal proposition. Now the
question recurs, what effect has this new
contract on the rights of the bondholders
against the solvent railroads of the stste2
do not think that this is a case for the ap-
plication Of the doctrine of subrogstion;
nor do think that the doctrine Of implied
trust, arising from ultimate liability, would
apply. hold that the rights of the bond
holder and the liability of the railroads
both spring out of the eontract--the act of
February 18th, 1852 The matter between
the state and the railroads was settled
by the act of January 10th, 1870,
and this settlement was ratified and con-
frmed BY the bondholders when they &C
cepted the proposition in the act of March
18th, 1873, and funded their past due bonds
and registered those not due. -.4..-A 4 .,s
The bondholder was then put to his olec-
ton, as between the state and the railroads
jointly, or the state alone. They made
their election, and, in SO doing, they relin-
quished all rights they had against the
roads under the original act', and released
the roads from all liability. This was
done at the instance of the state and to en-
able the state to carry out in good faith the
contract she had made with the railroads
as evineed by the act of January 10Th, 1870.
took this position in political article
ton of the question In the light OF all the
authorities, now hold to the opinion then
expressed.
While this view of the law of the case
may be satisfactory to the railroads, it is
certainly not encouraging to those who
advocate the doctrine that q sovereign
state can evade her contracts by simply re-
fusing to act at all.
The conclusion rescued Ia that the third
section of the act of March 18th, 1873, is
either o gen eral law or a contract. If it is
4
under the provisions of the act of Febru-
AIRY 18th, 1852 If it is o contract then the
| railroads are released under the act of JAN
uary Goth, 1870, from all liability to the
state, and under the act of 1878 from all
liability to the bondholders, and they must
pursue their remedy against the state under
the last named act. .
/ The argument made by those who OPP
pose an adjustment and payment of the
daht hat aigp al OF nj M
forced to pay its debts, will not be sus-
tanned by the courts of the country. When
the stats becomes party to q contract, she
stands on the same footing as other con-
tracing parties. This is settled by the case
of Fletcher vs. Peck, 6 Crouch, ps 81, and
the state of New Jersey va. Wilson, 7
Crouch, p. les, and other later cases on the
same question. .r.E
In the case Of Fletcher vs., Peck. the
court, speaking directly on this point,
says: IF the legislature felt itself alb.
solved from those rules of property which
are common to all the citizens Of the United
States, and from those PRINCIPLES of equity
which are acknowledged in all our courts,
its act is to be supported by its olcn potoer
alone, and the same power may divest any
individual of his lands, if it be the will of
the legislature go to exact it. .
This resembling act might we'll be doubted
were Georgia single sovereign power.
But Georgia can not be viewed as single,
unconnected sovereign power, on whose
legislature no other restrictions are imposed
than may be found in its own constitution.
She is part of a large empire; she is q
member of the American union; and that
union has constitution, the supremacy of
which all acknowledge and none claim the
right to pass. The constitution of the
L nited States declares that no state shall
pass any bill of attainder, e1 post facto law
or lien impsiring the obligation of con-
tracts" ....
The case Of the state of New Jersey va.
Wilson was an issue strictly between the
state and private citizens, and in that case
the court recognized and applied the prin-
cipie settled by the case of Fletcher vs.
Peck, and held that the New Jersey legis.
lsture of 1904 could not repeal clause Of
an act passed by the legislature of l754,
exempting certain lands from taxation.
The principle commended for is, that, if
state enters into o contract with individual
citizens, the terms of which vest in the citi-
zen certain rights that she can not BY her
own act release frora liability. and that, as
against the state, the courts of the country,
acting under the constitution Of the United
States, will be open to the citizen for the
redress of his wrongs. We need not bother
ourselves about the means to be adopted by
INC D1tIou OtStee COuEts tnb exoCpLlOu
of DEGREES against q state. The power in a
court to legally enter decree on the plain
est principles of law, about which there
can be no controversy. carries with il the
power 10 execute the decree entered,
! have not discussed the question as to
the liability of insoivent roads for the out
standing bonds issued TO them, for the
reason that the amount Of this class Of
bonds is comparatively small. Nor have
/ discussed the more important question Of
the liability Of the state to the solvent roads
in case they are held liable at the suit of
the bondholders. l can. at present, see no
good reason why the solvent roads. in case
they have to pay these bonds, should not
have relief against the state under the
seventh section of the act Of 1852, for the
face value Of the bonds of the state paid
into the state treasury under the act of
January 10th, 1910, including the accrued
interest on said bonds 3|@
IL lis enough for US to know that either
the state or the railroads will have 10 pay
the bonds issued to the solvent roads 1t
would be dishonorable for the state TO
avoid payment if she could, and il would
be ruinous for the railroads TO be forced to
pay these bonds, which they have once in
good faith paid 10 the, state on her own
proposition, as contained in the act OF 1870.
If, after the solvent roads have paid
81, 100000 Of the state debt, they can be
cid TO pay the bulk Of the remainder,
aud the state can, by force of her power
as q sovereign, refuse TO pay, and maintain
that position before the courts of the coun-
try, the act would be doubly dishonorable
and humiliating in the extreme.
The contemplation of the possibility of
such result is enough to bring tinge of
shame to every man who claims TO be q
Tennesseean, and awake in the breast Of
every honest man in the civilized world q
feeling of indignation against people who
would SO wrong their fellow-men, them