ERROR to the Supreme Court of Tennessee, the case being this:
In 1838 the legislature of Tennessee chartered a bank, enacting as follows:
'A bank shall be, and is hereby established in the name and for the benefit of the State, to be known under the name and style of 'The Bank of Tennessee,' and the faith and credit of the State are hereby pledged for the support of said bank.'
The capital of the bank, which was five million dollars, consisted chiefly of the school fund of the State and of surplus revenue of the Federal government. The deficiency was to be made up by funds raised on the faith of the State. The dividends which the bank should make were to be applied to common schools and academies, and the bank itself was to be managed in aid of internal improvements. Any losses arising to the trust funds used to make the capital were to be made good by the State. The governor was to nominate to the General Assembly, for confirmation or rejection, twelve directors, to serve for two years, as officers to manage its affairs.
The twelfth section of the charter contained this important provision:
'That the bills or notes of said corporation originally made payable, or which shall have become payable on demand in gold or silver coin, shall be receivable at the treasury of this State, and by all tax collectors and other public officers, in all payments for taxes, and other moneys due to the State.'
The bank went into operation with branches in different parts of the State, and was employed largely in various ways as the fiscal agent of the government.
In May, 1858, the legislature of the State passed an act to revise the statutes of the State, and so established its 'code.' In this code were certain enactments, thus:
Section 603. The collector shall receive, in discharge of public taxes and other dues to the State, besides the constitutional and lawful currency of the United States,
'1st. Such bank notes as are current at par in this State.
2d. Warrants issued by the comptroller.
3d. Certificates from the county court for killing a wild-cat.'
'''Sect. 41. All public and general acts passed prior to the present session of the General Assembly, and all public and special acts, the subject whereof are revised in this code, are hereby repealed.'Sect. 42. Local, special, and private acts, and acts of incorporation heretofore passed, are not repealed, unless it be herein so expressed.'
From the character of its organization, the newly incorporated bank was capable of being placed much under the control of the governor and legislature of the State; and at the outbreak of the late rebellion in Tennessee, May 6th, 1861, it passed into the control of the rebel agents, who then managed to possess themselves of the State government. They issued its notes to an indefinite amount, advanced immense sums to the rebel State authorities; and when the Federal army were approaching with superior power, left the bank, carrying with them its coin, and all its assets, except real estate and some uncollected debts. The bank was thus ruined, and its bills became largely depreciated.