New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1885-05-05
UNITED STATES SUPREME COURT
SEVERAL IMPORTANT DECISIONS.
TENNESSEE BOND AND TEXAS RAILROAD cAsEs-vIR-


WASHINGTON, May An the United States
Supreme Court to-day, opinion rendered in the
following cases, known the Tennessee bond cases
b nsn na H on 'gn aroad comSSPp ana obsss
No 43-calyn AmoTy stevens and Others appellants aSt
ana Others , ,,. 49,.
Tire Louisville Nashville and Great Southern railroad CON-
l73-Cayin Amory stevens and Others appeants ag
the Chicago. 81 Louis and Ne"-Oreans Railroad company
NO 64~CavIn Amory stevens and others appellants agt
the Mississippi and tennessee alrosd 60 aDany a..
the Mobile an ohio Railroad ompsny and others Appeals
So4, CALVIN Amory Stevens and Others appellants sgt
the Louisville Nashville and Great southern Railroad Com
No 45-Cavin Anory Stevens and others appellants agt
the Nashville ana northwestern Railroad Company ana
No a. avin Amory Stevens appellant. agt the Nash
vile and Decatur haIoad Company ana Others ,b N.,
vile AM Decatur aIosd Con pany ana otheLs o
the NcMinnyne and Manchester Railroad Company and
No 6o-Calvn Amory Stevens and others appellants agt
the Nashville and Chattanooga Railroad Company and
AToTy stevens and others appellants; sEs
Spuoas Io the Crcn Court OF The JHd States for the
Middle District o. Tennessee . -
the Cincinnati. cumberland Gap and Charleston Railroad
40 alvin Amory stevens and Others appellants AIT
the KNOWN and KENTUCKY Railroad 20 apany and Others
the Tennessee Virginia and George railroad comp any
the East tennessee ni Georgia ainoad Company
al uell Ot
Eastern District Of ennessee
These are suits brought by holders Of unpaid bends
Of the State Of Tennessee issued TO various railroad com
panies under the Act OF February IL. 1852. WHICH
provided for the establishment OF system OF
internal improvements to enforce the lien wnicn
vested I'm the State by that act on the property OF
the companies resp .rtyey curlty for the payment
OF the bonds and The sccTung interest thereon
ChIef-Jusuce Waite delivered the opinion OF Ne court
which the question that lies at the foundation OF
all these suits to De whether the statutory zen WIN
which the invested upOnthe issue Of us bonds
To railroad companies. bound the property OF the com.
pauy to which the issue was made Tor the payment Oh
The bonds issued and the interest thereon 10 the sew
era holders thereof only to the State IL holds that
the liability OF the companies to the ondhol ers II any
there be- alone the statute which contemplated
by the state Of its own bonds TO the several com
p.nies aid of the public works they respectively
in constructing " The point TO determined said the
state when lending It's own bonds and taking
bnck security for their payment, INTENDED 10 pro
tect those who might aterward become tue holders OF
the bonds against the consequences OF us own repnda
tiun or Inability To pay or only 70 indemnify itseH
who engaged in conflicting Its great works OF ln-
ternal Improvement To say the least the strong pre-
would be 10 protect Itself ana NOT 10 SECURE s own
pledge faith to 10 the bODdhoders by mortgage from
those To whom its credit was loaned. That IL
was purpose OF the statute 10 secure The performance
t the obltion ON the part Of The company o pay the
bonds to the state shown by tue fact that from tue
moment the delivery If the FIRST bond To the conn any
aud b,fore the bond could be negotiated by sale or
transfer To third person hen vested In the state
b, the very act OF delivery upon nj the property or the
company then acquired thereafter 10 bo acquired SUI
prrior 10 any other lien enrumbrance which could
be- created by the company atterward- The evident
purpose the whole prov sOn was TO vest the state
a lien to secure tile Obligation which the company as
cOuSdcra ION Uf the STATE bonds Issued u IL ~
ad Of works OF internal Improvement be constructed
nT the benefit OF tine public II that Obligation was to
pay the bonds to tho several persons who might become
The bSpd but If the obligation To pay the state
Tor the bonds, tho security would nure only TO the
benent of the state, and lie subject 20 the eOhO tle
StIte without regard TO the bondnoder At that
time mo- one but the could be interested In the Sc
ourity aud that time clearly the lieu operated only as
| security for tho payment OF tue loan OF inc
themselves or ~ any Oher WAY prOvued 10y ,le st
return the bonds Ia the state would not Technically
nav the bonds II would pay the loan ana thus cancel
the lien" -
tue for payment by tue co1pdn In some Oher
way than by taking up the bonds from the several
payment by "a company into the Bank OF TENNESSEE OF
sufficient amount oil money to enADe tue state 70 meet
Legislature To be not only paym or the interest on
the bonds 10y the company. but the payment and the
only payment the lien created by the statute
was intended 20 secure ana "a 10 the payment OF me
prncipa that this provided for IN three ways: BY
the establishment OF sinking fund; by foreclosure, II
the company failed to pay the bonds at maturity; and
by foreclosure ana proceedings against guilty STOCK
holders before maturity II an issue OF bonds was OBJ
ane by fraud contrary Ia tue provision OF the act
IL fluids that under the sinking iund provision the com
p.ny was required to make payment 10 the state aud
Tor MS pay nent the stae as to give credit on the
bonds IL holds that this clearly ihpnes lhd Tue oSn
! Of the bonds was % create debt on the bonds by
| the company to the state. aud that this dept
10 be discharged pro td1 on tue payment annually
the state Treasury OF the amount required by the
Win rcsrec 10 the question whether there exists any
other liability OF the company on the bonds Than the one
To- the state. the Court that II such other liability
exists at ALI II must be by virtue O None Other provision
| OF the statute than the one referred TO- ahd
| ever paws that debt cancels all the Obligations OF
| the company upon the bonds ana that whenever
II appears that payment OF the bonds must be made TO
one the idea OF debt the bends To another Is ex-
clnded II finds that payment 10 Tue state Is aOSouLey
staues Of 1852 aud 1856 payments into the sinking
fund were treated release pro dhto OF on the
/ A.. M mr. nm
and that the act OF sG0 shows beyond all question that
such was legislative understanding at the time OF
| the operation OF this provision or the original act
The court holds that there Is nothing IN the provision
for foreclosure In 81 the failure OF the company to
nav nj maturity the bonds Issued TO IT, 70 show that the
author OF the had the security OF tue bondhoder
in his MUD when drafting this SECTION and mat tue pro
vision for proceedings for foreclosure before the maturity
of rho bonds IN of issue OF bonds obtained by fraud
The court hints that section IL OF the act OF ls02
hch reserves To STATE the right To enact all such
swS NAV bs deemed necessary protect the iner-
~ - the STATE aud TO secure the State against all LOSS
I'm cosseguenoe OF the OF bonds under the pro-
visions OF this act sucn manner as not TO impair
s yssed rights OF the ckhOders of the companies,
nothn is said about the vested rights OF bendhOders
anu ' ~ was Tsyer Intended to vest in them
any right which would interfere IN the remotest
Jeyyrae with the free exercise OF all the power
~ 1hc State TO deal with the borrowing companies In
reference to bonds and the security created therefor
49, "a MIGHT under any circumstances that should arise
he deemed for the interest Of the state and the
companies they being the only parties To ihe contract
of Inc companies that were to be ut all III wha
Was to be doue." ,. A..
The Court adds In conclusion; As has oeen seem tho
bopds to be issued were on their lace To DnI only inc
stnte Al that repudation or state talth was not
hou rht OF No purchaser OF state bonds ever asked
bahar ANYTHING elsa than the faith OF the state was
nledged for their payment promptly at maturity Ike
nud1tion was looked upon rs dshonoable ana as some
Thing that would never occur Security 70 the state
sainst loss by the loan OF its bonds which were pro-
yed for must therefore be presumed to have been inc
sole purpose OF tho liens whch were 10 10 cIo"eu o INV
issue OF the bonds' 49,, ,-.... -, a.. 49,.
BY the Judgment Of tile Court tue aecree OF the court
heI1w ina each OF tho cases Is affirmed
fuStices Matthews and BlatchfOrd took no part in
fnstIce Matthews delivered an opinion in the Virginia
coi,nnn tax case OF Moore against Greenhow. The
nIainR I'm error In this fled petition IN April,
fsSi I'm the Circuit Court of the City OF Richmond
nravipe for n maniamus to compel tue deieDdant as
Ta11s,rer NJ the CITY of Richmond, 10 issue to him
certAcate stating that he had made the deposit re-
oirrd nv law In payment oi his license tax. he having