832 



TENNESSEE. 



revenue and the political power of the State 

 over the same " and directing this revenue " ex- 

 clusively and preferentially to the discharge of 

 such contract," " thereby denying to the State " 

 that benignant supervision that will both allow 

 and prompt her to temper and adapt her rule 

 to the circumstances and vicissitudes which the 

 coming year may bring ; that this same feature 

 violates section 24, Article II, of the Constitu- 

 tion, that " no money shall be drawn from the 

 Treasury but in consequence of appropriations 

 made by law " ; that the same feature violates 

 section 12, Article XI, of the Constitution, 

 which provides that the interest on the com- 

 mon-school fund "shall be inviolably appro- 

 priated to the support and encouragement of 

 common schools"; that it breaks in upon the 

 previous revenue system, adjusted to what has 

 heretofore been receivable for revenue, thereby 

 amending that system, yet without referring 

 thereto, and thereby violating section 17, Arti- 

 cle II, of the Constitution ; that the act amends 

 the revenue act of 1873, which prescribes what 

 shall be receivable for taxes, by adding the com- 

 promise coupons to the list of tax-receivables, 

 and yet does not recite in its caption or other- 

 wise the title or substance of the law amended; 

 that the act violates section 2, Article II, of the 

 Constitution, forbidding any person belonging 

 to one department of the government from 

 exercising any power belonging to either of the 

 other departments; in this case the "Funding 

 Board," constituted of the Secretary of State, 

 Comptroller, and Treasurer, being given judi- 

 cial power, etc., and that the Legislature (look- 

 ing to the possible consumption of the revenue 

 actually provided by the coupon) did not make 

 adequate provision for the ordinary expenses 

 of the government. 



The bill, in conclusion, prays in case com- 

 plainants are " mistaken in regard to the power 

 and functions of the Funding Boafd ; and in 

 their construction of the act in reference to 

 the school fund, that the same may be con- 

 strued by the court," etc. The persons desig- 

 nated in the act by their official titles as a 

 Funding Board were made defendants to the 

 bill in their own names, thus: "M. T. Polk, 

 T. N. Nolan, and D. A. Nunn, hereinafter 

 styled the Funding Board." The injunction 

 prayed for was granted, and thereupon the 

 defendants, having been served with process 

 and enjoined according to the prayer of the 

 bill, appeared in the Chancery Court at Nash- 

 ville, and moved the court to dissolve the in- 

 junction for want of equity on the face of the 

 bill. That court dissolved the injunction, and 

 in addition, of its own motion, also dismissed 

 complainants' bill ; from the decree thus made 

 the complainants appealed to the Supreme 

 Court. A motion made to advance the cause 

 on the docket was granted at the close of the 

 year, and the case was set down to be argued 

 on the 17th of January, 1882. 



The matter of the debt of Memphis was be- 

 fore the Supreme Court in June, in the case 



of John O'Connor t. the City of Memphis. 

 Memphis owed a debt, the principal of which 

 amounted to nearly $3,000,000. The city had 

 been in default, both on principal and interest, 

 since January 1, 1873, and in January, 1879, 

 it secured the passage by the Legislature of a 

 bill repealing its charter, and creating the so- 

 called " Taxing District " of Shelby County in 

 its stead. On February 12th of the same year, a 

 receiver was appointed, by one of the Federal 

 courts, to take charge of all the city property, 

 and vested with power to collect some $3,000,- 

 000 of unpaid taxes, by garnishment or other- 

 wise. The repealing act having been taken to 

 the State Supreme Court, it was declared con- 

 stitutional, the court holding that " municipal 

 corporations are within the absolute control of 

 the Legislature, and can be abolished at any 

 time in its discretion, and an act which repeals 

 the charter of a single municipal corporation is 

 constitutional." Following this decision the 

 United States Supreme Court decided the ac- 

 tion of the Federal Court, appointing a re- 

 ceiver, to be void. Thus far the decisions 

 seemed to be against the creditors of the city, 

 but the decision of the State Supreme Court 

 in the case of O'Connor altered the situation 

 to some extent. This suit was pending against 

 the city at the time of the repeal of the charter. 

 The plaintiff moved to revive the debt against 

 the taxing district, on the ground that the 

 latter is in legal effect the same corporation as 

 the city. The majority of the court, according 

 to the Memphis "Avalanche," "concurred in 

 the opinion that the reviver should be ordered, 

 holding that the taxing district was a mu- 

 nicipal corporation, organized for the govern- 

 ment of the same people and territory as were 

 formerly under the local government of the 

 city. The court holds that so much of the 

 act establishing the taxing district as declares 

 that it should not be liable for the debts of the 

 city of Memphis, is void ; that the same people 

 and territory being reincorporated under a 

 new name, the new municipality is but a con- 

 tinuation of the old, and liable for its debts, 

 notwithstanding a legislative declaration to 

 the contrary." 



The following are further extracts from the 

 opinion : 



"Whether the Legislature can withhold the taxing 

 power as against debts previously contracted is a 

 grave question, not now before us. It may be that 

 the creditor can not collect his debt, but to use the 

 language of Judge Clifford, in the feeckwjth case 

 " he ought always to be able, by some proper action, 

 to reduce his contract to judgment." 



The creditor should have this risrht in the present 

 case, both for the purpose of reaching his share of 

 the assets which may be realized by the receiver, and 

 to have the benefit of future legislation. The courts 

 can never presume the permanent repudiation by the 

 State of an honest demand. This court has decided 

 that the holder of a valid claim on the Treasury of the 

 State is entitled to compel the Comptroller to i<sue him 

 a warrant therefor, although it can not be paid without 

 an appropriation for the purpose by the Legislature, 

 and no such appropriation has been made. 



We express no opinion on any point not now before 



