101 U.S. 337 (1880), Memphis & C. R. Co. v. State Of Tenn.

Citation:101 U.S. 337, 25 L.Ed. 960
Party Name:RAILROAD COMPANY v. TENNESSEE.
Case Date:March 29, 1880
Court:United States Supreme Court
 
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Page 337

101 U.S. 337 (1880)

25 L.Ed. 960

RAILROAD COMPANY

v.

TENNESSEE.

United States Supreme Court.

March 29, 1880

OPINION

ERROR to the Supreme Court of the State of Tennessee.

The facts are stated in the opinion of the court.

COUNSEL

Page 338

Submitted on printed briefs by Mr. Benjamin J. Lea, Attorney-General of Tennessee, and Mr. J. B. Heiskell, for the State; and by Mr. George Hoadly and Mr. E. L. Andrews, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

On the 19th of January, 1838, the State of Tennessee established a bank in its own name and for its own benefit, and pledged its faith and credit to give indemnity for all loses arising from any deficiency in the funds specifically appropriated as capital. The State was the only stockholder, and entitled to all the profits of the business. The bank was by its charter capable of suing and being sued. At that time the Constitution of the State contained this provision: 'Suits may be brought against the State in such manner and in such courts as the legislature may by law direct.' Art. 1, sect. 17. No law had then been passed giving effect to this express grant of power, but in 1855 it was enacted that actions might be instituted against the State under the same rules and regulations that govern actions between private citizens, process being served on the district attorney of the district in which the suit was instituted. Code, sect. 2807. No power was given the courts to enforce their judgments, and the money could only be got through an appropriation by the legislature.

In 1865, this law was repealed, and after that there was no law prescribing the manner or the courts in which suits could be brought against the State. On the 16th of February, 1866, an act was passed to wind up and settle the affairs of the bank, under which an assignment of all the property was made to Samuel Watson, trustee. Afterwards, on the 16th of May, 1866, the State and the trustee filed a bill in equity, in the Chancery Court at Nashville, against the bank and its creditors, for an account of debts and assets and a decree of distribution. At the November Term, 1872, of the court, the Memphis and Charlestown Railroad Company was admitted as a defendant to this suit, and given leave to file a cross-bill. This cross-bill

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was accordingly filed, and set forth an indebtedness from the bank to the railroad company, which accrued while the law allowing suits against the State was in existence, and sought to enforce the liability of the State under the indemnity clause of the charter. To this bill both the State and Watson, the trustee, demurred, and assigned for cause, among others, that the State could not be sued. The demurrer was sustained by the Chancery Court, and the cross-bill dismissed. An appeal was...

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