Year: 1867




1915 a Judgment was rendered against
/ Woodruff and his securities. On the 9th
Of February, 1877, an execution having
issued upon the Judgment Woodruff ten
/ dered to Traphall the Attorney General,
the full amount Ct the Judgment, interest
/ and cost, i'm the notes of the Bank OF the
/ State Of Arkansas, which were refused
The bank charter was passed on the "a
| of November, 1896, the 23th section of
| which provided that the bills and notes
Of said Institution shall be received in all
payments Of debts due to the State of Ar
/ kansas


On the 10Th day of January, 1S45, this
section was repealed. From this brief
statement it will be seen that the indebted
| ness of Woodruff accrued before the repeal
of the twenty-eighth section Of the bank
charter, and while the same was in full
force, while in the case under consideration
the Indebtedness accrued after the repeal of
the the twelfth section of the charter of the
Bank of Tennessee.


Judge Mclean. in delivering the opinion
Of a majority Of the Judges of the Supreme
Court of the United States in the case of
Woodruff as Trapnall, said at is admit
ted he Woodruff had the notes in his pos
session at the time he made the tender
and that they were issued by the bank be-
fore the repeal of the section, and nothing
more than this could be required" But It
will be observed that this opinion was
based upon the assumption that the twenty
eighth section Of the charter had the effect
of guarantee, running with the notes, and
included all the notes of the bank in circu-
lation at the date of the repeal, as clearly
as if on the face of every note the words
had been engraved, "This note shall be re-
ceived in payment Of debts" While we
regard the opinions Ofthe Supreme Court of
the United States as ofvery high authority,
still the force Of this opinion is certainly
very much weakened by the fact that four
ont Of nine judges, being unable TO agree
with the majority, delivered dissenting
opinions.


A contract is defined TO be an agreement
between competent persons to do or not to
do a certain thing.


The contract in this case was not made
with the hank Nofranchise was conferred
upon il by the 18th section of the charter,
and under il the bank could acquire no
rights


1t was merely fiscal agent of the State



swer there was a contract with bona GGe
holder of the notes of the bank, lawfully
issued who received them prior TO the re-
peal of the 18th section Of the act charter
ing the bank The State proposed 10 re-
ceive the notes of the bank from its debtors;
bat, suppose the bank had put none OF iis
notes in circulation, then, notwithstanding
the provisions Of the l2lh section, could it
be insisted that any agreement had been
entered into betWee the State and any one,
by which the State had contracted to re-
ceiye the notes of the bank? Certainly
not


The proposition was 10 persons about to
become the holders Of the notes of the
bank 10 them the State said: In order
to accomplish the objects of this charter,
and ia consideration Of the benefits which
| will derive thereby, if You will give credit
to the notes of this bank, and receive them,
/ will receive them from you in payment
for taxes and other dnes. And when, there
npon, the party to whom the proposition is
made, in consideration of this promise up
on the part of the State, receiS e. the notes
of the bank, the contract becomes complete
between the Stale aud the party who re-
ceives the notes. The consideration NOV
ing the State was good and sufficient; but
there was no contract Whatever between the
State and persons who had received none
Of the notes of the bank


So long as the twelfth section remained
upon the statute book unrepealed there was
a continuing proposition upon the part of
the State 10 its citizens, if you will receive
the notes of the bank as money, the State
will receive them from Won in payment of
vour dues 10 the State and if a second
party is thereby induced to receive them
from the party who received them from the
bank the proposition of the State is there
by accepted by the second holder, and, upon
its acceptance another contract becomes
complete, as between the second holder and
the State, by which the second holder of
the notes is entitled to discharge his in
debtedness TO the State in the notes of the
bank not because of any imaginary guar
antee upon the part of the State running
with the note as a covenant seal running
with land, nor because the second holder is
substituted TO the rights of the first holder,
but because, when the proposition of the
State to him, that if he will receive the
notes as money, it will receive them from
him in payment of taxes and other dues, is
accepted by the receipt of the notes, a
separate, distinct and independent contract
il made; and thus, as long as the PROPOSE
tion is continued, contract after contract
springs up between the State and persons
into whose hands the notes may successive
ly pass.


There is no guarantee, whatever. upon
the face of the note, or in any other man
ner accompanying it. The obligation Of
the State springs alone out of the statute as
it remains IN force at the time of the accept
ance of the notes.


Ii is conceded in argument the State had
the right, at its own pleasure, to repeal the
18th section of the bank charter. This
being so, every one into whose hands the
notes passed, received them with a full
knowledge of the fact, and gave them credit
accordingly and no one can, therefore,
complain of breach of faith upon the part
Of the State in repeating the section, or of
the legal consequences which follow the
repeal.


The repeal operated merely a. a with
drawal by the State fthe proposition, and,
consequently there could have been no
contract between the State and persons into
whose hands the notes passed subsequent
70 the repeal in 1868 The mutual agree
ment Of parties, either express or implied.
is indispensable 10 constitute a contract.


The case under consideration is dstin.
guished from the case Of Woodrnti r. Trap
nall in at least one important feature.


In the latter case the court said the en-
tire stock ofthe bank is owned by the State
IL furnishes the capital and receives
the profits How Is it in this case
The common school fund, a. well
as the surplus revenue Of the United
States deposited with the State under an
act Of Congress, approved June 23d, 1886,
and constituted part of the capital of
said bank, were trust funds, which the State
held merely as a trustee The surplus re-
venue was merely a deposit with the State
and for its safe keeping, and TO the repay
ment thereof from time to time, whenever
required hy the Secretary OF the Treasury,
the faith OF the State stood pledged. The
State held the fund known as the common
school fund as trustee for the hepUrpose Of edu-
eating the children Of the State. and 1t was
regarded so sacred, that by Art. IL. Sec.
10, OF the constitution Of the State, it Is
provided rs follows And the fund called
the common school fH9, and all the lands
and 4,r,ppsls thereof lividan3= Ef.rla and