Year: 1879

10 Speech aG MuT1ToOSDOfOs SAUL
ID day, June 2S--AnOther GraY
re Point Raised for Considerable
v by the People. ...
a The point made by me in the speec
e ct Gleason is that the present Suprem
: Court of the United States will seize "
: on the Osborn case, which goes to th
: extent of operating upon State officer
= to compel the restoration of money in


properly collected by State when th


State is alone interested ultimately il
the fund-and compel the revenue off
GERS of the State to apply money in thei
! hands to the payment of coupons, &C
! cordinG to the contract.


But 1 wish, to-day, in addition, to pre-


sent another and wholly different grounC


upon which the courts will undertake
to compel us to comply with the con
tract if we refuse to pay anything AM
first, has the State in any way made it
self trustee for the payment of the in


terest and principal of the debt? Is the


State merely a debtor, or is it both debt


or and trustee2 Without reciting the


words of the various statutes, which


would be too tedious, I will state the


facts, and which will not be contradic-


ted by any well informed person.


The State, by its proper officers, in


pursuance of repeated ensctments, gave


its notes or bonds payable to bearer, with


the view of aiding in building up sys-


tenn of internal improvements. The


money was raised and applied as the


State intended, though often in selling
| the bonds the statute was violated by


the bonds being sold for less than par,


and for which the statute imposes cer-
tain penalties on the roads violating this
law, but does not make the bond void
which is made payable to bearer, and is
in every sense made negotiable by de-
livery. ..... ..... ......
By the various provisions of this
statute and am mendments, sinking fund
was created, first one per cent, then
two per cent, then increased to four per
cent, and this sinking fund, with the
accruing interest, was to be used in ex
tinguishing bonds. This was to be set
apart aud paid in by the railroads. This
was part of the contract, of course, and
was intended to make certain the pay
ment of the bonds. The interest on the
bonds fell due 1st of January and 1st of
July, but the roads were to pay the
money to the State IS days before the
time fixed for payment by the State.


The 18th section of the original act of
1852 is in these words:


"The State of Tennessee expressly re-
serves the right to enact, by the Legis-
lature, all such laws as may be deemed
necessary to protect the interests of the
State, and to secure the State from loss
Ia consequence of the issuance Of such
bonds; but so as not to impair the vested
rights of the stockholders of the com
panies."


This statute, together with the act of
1857, providing that all roads receiving
aid should be sold in two years after
failing to pay the interest, and which
was agreed to by all the roads securing
aid under and subsequent to it, gave the
State the right to sell the insolvent roads |
and to allow the solvent roads to pay in
bonds, for its own protection.


But the question is, when the State |
did this and collected not only the in
terest in advance to meet the coupons as |
they fell due, but the entire sinking
fund, all at once, whether the State did
not become trustee as to the sinking |
fund and as to the interest collected in
advance to pay coupons. Did not the
State hold this money under contract to
pay the coupons and bonds?


l do not propose to debate this ques-
ton of law, but to say that in my Opin-
ion no lawyer can be found who has
made reputation as reliable lawyer,
not being erratic or reckless, who, when
the question is put to him upon this
state of facts, will deny the fduGiary
character of the State. / go so far as to
say that in my opinion not one can be
found, leaving out erratic men and who
are just as well known in their neigh
borhoods as red headed men, that will
deny the iduciary character of the State,
l do not care how the lawyer may stand
on the question of the compromise, if he
Is q reliable trustworthy maDi of course
reliable" includes the element of sense
enough to make a point or appreciate
one, aud does not embrace every man
who has the gift of talk.


Now if the State is a trustee, or indeed
If the State, in pursuance of the Con
stitutiOn, executed its notes to aid in
permanently establishing ga well regu-
lated system of internal improvement"
the question arises, cannot the courts
compel the execution of the trust or
compliance with the contract by suit to
reach the revenue.


The question as to the power Of the
court to deal with State that has made
itself trustee of funds which were
once set apart for creditors, is settled in
the case of Currin VS.. the State of Ar
kansas, in Is Howard.


In that case the State of Arkansas had
created State bank, the State owning
all the stock and the capital being main
ly State bonds.


The State afterwards repealed the
charter, took the money of the bank and |
paid current expenses and by enactment
took its own bonds up aud took charge |
Of the real estate as belonging to it.


In suit against the State to hold it |
liable as a trustee, and which was