Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1885-05-09
THE BdSD CASES.
Supreme Court.


II The DECISIONS the supreme court
of the United States in the Tennessee
bond cases WAS delivered late yester-
day afternoon. Below we give the sub
stance of the opinion which was made
by the chief justice. only one member,
Justice Harlan, dissenting: - si.fa
The court held that The lien which
arose from the acceptance Of the bonds
by the railroads was only to secure the
state in the performance OF their obi
cations; that this lien did not follow
the bonds into the hands Of the hold
ers, and that under subsequent statute
the state had provided ways for the
railroads OF the payment Of their debts
to the state Hence the railroads had
been relieved. The holder hid bought
the bonds on the credit of the state.
The bonds were regular state bonds,
and IN no manner contained language
showing them to be bonds OF the diff
ferent railroads defendants in the suits.
After detailing the circumstances
and legal phases OF the issue the court
says that the fundamental Question
presented is whether the statutory lien
bound the property OF the railroad
companies for the payment of the
bonds issued to them, TO the several
holders thereof, or only to the state.
The court discusses this question and
decides that the lien ~was. created for
the benefit of the state and not for the
bondholders, and that the lien having
been discharged it is no longer opera
a. y
only the state, and nothing in the liean
is said about the holders. When they
were issued the Republication, of the
states faith was not dreamed of. No
purchaser of the state bonds ever asked
whether anything else than the faith OF
the state was pledged for their pay
ment promptly at maturity. Repudi-
alton was looked upon as dishonorable
and something that would never occur,
Security to the state against loss by the
losms.of its bonds, which were provided
I for, must, therefore, be presumed to
have been the sole purpose of the liens
which were to be created on the issue
OF the bonds. The bondholders we're
never thought of in this connection
for they had the security of the faith OF
the state and could not have been sup
posed to look for anything else. Hence,
this reservation of power by the state
was made broad enough TO allow the
state to deal with the securities which
were Ia ken from the companies at its
own discretion; and in any way that
might be deemed just. No such power
could be exercised il the bondholders
held an interest in the securities adj
verse to the state. s4rn..5, Is
Under these circumstances, this sec
ton is to be looked upon DIS excluding
any such posi- BILE intent, and operating
as notice, to all who might, from time to
time, become holders of any of the
loaned bonds; that the payment of the
bonds and interest thereon, which the
several companies bound themselves
for, was to be made to the state, and
not to them, and that the security
which was taken by the state was for
the performance of this obligation, and
might be dealt with by the state in
any manner its own legislature should
direct or provide. IA.
This reservation vt power is entirely
inconsistent with the idea of debt
from the companies to the bondhold-
-ers on account of the bonds, and if
there could have been any doubt on
this subject without section II, there
certainly is none with it. p
This disposes of all the cases, for the
state in The exercise of its Legislative
discretion, has released each of the
companies whose property is involved
in these suits, from all its obligations
growing out of the original loans, and
has cancelled the hens created for their
security. The companies have either
voluntarily paid their debts to the sat
isfaction of the state, or the state has
foreclosed the lien which was reserved,
and sold the property, free of that in
cumberance, either to the present de-
PENDANTS or to. those under whom they
claim.
The decree each of the cases is
affirmed" S@..s..,s