Palmer was set free in a prisoner exchange for a prominent Richmond citizen, recuperated two weeks, and rejoined his regiment in February 1863. During his period of imprisonment, the regiment had become mutinous because of a failure to have officers appointed and other enlistment inducements it felt had not been honored. 212 troopers faced court-martial and the possibility of going before a firing squad for refusing to fight in the Battle of Stone's River. Palmer reorganized the regiment, personally appointed officers in whose abilities he had great trust, and had the charges against the confined soldiers dropped on the condition that they behaved going forward. The severely demoralized group of men rallied and distinguished themselves during the 1863 Tullahoma Campaign, the Battle of Chickamauga, the capture of Brig. Gen. Robert B. Vance's raiding cavalry and re-capture of 28 wagons of a foraging train in January 1864, and the Franklin–Nashville Campaign.