Case ID: scl_28/html/0433-01.html
Source: Caselaw Access Project
Author: {"author": "Harper, Chancellor.\n     Dunkin, Chancellor.\n     \n      Johnson, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The State vs. The Bank of South Carolina.
    
    A general refusal, by an incorporated Bank, to redeem its issues and deposits in gold and silver coin, is, per se, a sufficient cause of forfeiture of its charter: and such forfeiture may be enforced by scire fados in the court of Common Pleas.
    
      Before Butler, J., at Charleston, May Term, 1841.
    abstract of pleadings, &c.
    This was a scire facias to vacate the charter of a bank, for having suspended specie payments. The scire facias set forth and alleged, that the persons therein mentioned, and their successors, were originally incorporated by the name and style of The Bank of South Carolina, by an Act of the General Assembly of the State of South Carolina, ratified on the 19th December, 1801, entitled “ An Act to incorporate the South Carolina and State Banksthat the said charter was amended by an Act, ratified on the 15th December, 1815, entitled “ An Act to amend the charter of the Bank of South Carolinathat it was renewed by an Act, ratified on the 31st December, 1822, entitled “An Act to renew the charter of the State Bank and the Bank of South Carolina, and for other purposes therein mentioned and that by another Act, ratified on the 20th December, 1832, entitled “ An Act to renew the charter of the Bank of South Carolina,” the said charter was renewed for the term of twenty-one years from the 31st December, 1834. And the scire facias alleged that the said State of South Carolina, in and by the said last mentioned Act, did give and grant unto the said Bank of South Carolina, the liberties, privileges and franchises following, that is to say: to be a corporation and body politic, for and during the term of twenty-one years from the 31st December, 1834; and for and during the said term, to issue promissory notes and bills of credit in the nature of a circulating medium, not being of a lower denomination than five dollars, and payable on demand, when due, in gold and silver legal current coin of the said State ; to receive and hold moneys on deposit ; to make loans of money, and discount promissory notes, at a rate of interest not exceeding six per centum per annum; to deal and trade in bills of exchange, and in gold and silver bullion; and to carry on and transact such other moneyed operations and banking business, as are usually carried on, transacted and performed by incorporated banks. The scire facias then alleged that the said Bank of South Carolina afterwards, and after the said 31st December, 1834, to wit, from thence hitherto, at the city of Charleston, in the district of Charleston, and State aforesaid, under and by virtue of the provisions of the said last mentioned Act, did carry on and transact, and doth still carry on and transact, the business of banking, as an incorporated bank ; and did use, and still doth use, the several liberties, privileges and franchises aforesaid; and that afterwards,' and during the time aforesaid, when the said Bank of South Carolina so carried on and transacted business, as an incorporated bank, as aforesaid, to wit, on the eighteenth day of May, in the year of our Lord one thousand eight hundred and thirty-seven, at the city of Charleston aforesaid, in the district and State aforesaid, the said Bank of South Carolina having, before that time, put forth and issued, and having then and there outstanding, and in circulation, as part of the actual currency of the said State, the promissory notes and bills of credit, in the nature of a circulating medium, of the' said Bank of South Carolina, so put forth and issued as aforesaid, to a large amount, to wit, to the amount of seven hundred and fifty thousand dollars, and more; and having also, before that time, received, and then and there having and holding, on deposit, divers other large sums of money, amounting, in the whole, to the sum of three hundred and fifty thousand dollars, and more, for and on account of divers citizens of the said State, and others; the president and directors for the time being of the said Bank of South Carolina, resolved to suspend the payment in gold and silver legal current coin of the said State, as well of all promissory notes and bills of credit, in the nature of a circulating medium, put forth and issued by the said Bank of South Carolina, and of all moneys received and held by the said Bank of South Carolina, on deposit, as of all other debts, dues, obligations, and liabilities whatsoever, of the said Bank of South Carolina, and then and there declared the determination of the said Bank of South Carolina to suspend and refuse the payment, in gold or silver legal current coin of the said State, of the promissory notes and bills of credit, in the nature of a circulating medium, of the said Bank of South Carolina, and of all moneys received and held by the said Bank of South Carolina, on deposit; and that the said Bank of South Carolina, from the said eighteenth day of May, in the year of our Lord one thousand eight hundred and thirty-seven, until the first day of September, in the year of our Lord one thousand eight hundred and thirty-eight, at the city of Charleston aforesaid, in the district and State aforesaid, continually did refuse, on demand made at the banking-house of the said Bank of South Carolina, during the regular hours of doing business, to redeem or pay, in gold or silver legal current coin of the said State, the promissory notes and bills of credit, in the nature of a circulating medium, of the said Bank of South Carolina, which had been put forth and issued by the said Bank of South Carolina; and did also then and there refuse to pay in the said coin the moneys received and held by the said Bank of South Carolina, on deposit; and during all the said time last mentioned, the said Bank of South Carolina, at the city of Charleston aforesaid, in the district and State aforesaid, continued, nevertheless, to put forth and issue the promissory notes and bills of credit, in the nature of a circulating medium, of the said Bank of South Carolina, to receive moneys on deposit, to make loans, and discount promissory notes, to deal and trade in bills of exchange, and in gold and silver bullion, and to carry on and transact such other moneyed operations and banking business as are usually carried on and transacted by incorporated banks; and then and there, during the said time last mentioned, paid out, as money, upon such deposits, loans, discounts, and other banking operations and transactions, the promissory notes and bills of credit of the said bank of South Carolina, and of other incorporated banks, which had also then suspended payments in legal current coin.
    The scire facias then, in the same manner, alleged a second suspension of specie payments on the 14th October, 1839, and from that day to the 21st July, 1840; during which period the said bank continued to do business, issue bills, discount notes, and receive deposits, paying out upon its operations only its own notes, and the notes of other suspended banks. And both suspensions are laid to have been to the great damage of all the good citizens of the State ; in violation of the trusts and conditions of the said charter of incorporation given and granted, as aforesaid, to the said Bank of South Carolina, in and by the said last mentioned Act of the General Assembly aforesaid; and to the utter perversion of the ends, objects and purposes for which the powers, authorities, liberties, privileges and franchises aforesaid were given and granted to the said Bank of South Carolina, as aforesaid.
    The scire facias lastly set forth that, by an Act of the General Assembly of the said State, ratified on the 18th December, 1840, entitled “ An Act to provide against the suspension of specie payments by the banks of this State,” it was, amongst other things, provided and enacted, that the provisions of the said last mentioned Act should be and become a part of the charter of every bank already incorporated within the said State, which should accept the same; and that every bank in the said State, which had heretofore suspended the payment of its notes in legal coin, or which had declared its determination to refuse or suspend such payment, should, on or before the first day of March next after the ratification of the said last mentioned Act, notify the Governor of the said State of its acceptance of the provisions of the said last mentioned Act; and that in case any such bank should neglect to give such notice, the said Governor should forthwith cause legal proceedings to be instituted against such bank, for the purpose of vacating and declaring void its charter. And the scire facias averred that the said bank did not accept the said Act within the time specified, and that although two meetings of the stockholders were called for the purpose of considering the said Act, they would not attend in sufficient numbers to form a quorum for business, and that at the last of the said meetings, the stockholders then and there present adjourned without accepting the said Act.
    The declaration prays judgment against the said Bank of South Carolina, and that the charier of incorporation aforesaid, and all the powers, authorities, liberties, privileges and franchises aforesaid, given and granted unto, or exercised and enjoyed by, the said Bank of South Carolina, as aforesaid, may be repealed, revoked, annulled -and declared void and of no force and effect in law.
    To this declaration the defendants pleaded, first, not guilty ; second, that the bank, at or between either of the times mentioned in the said declaration, did not continually, on demand made, refuse to redeem or pay, in gold and silver legal current coin of the said State, the promissory notes and bills of credit, in nature of a circulating medium, issued by the said bank, as aforesaid; third, that the bank did not continually refuse to redeem its deposits in the said coin: fourth, md tiel record as the charter alleged in the declaration ; wad fifth, a special plea, as follows:
    
      “ And for a further plea in this behalf, and so forth, the' said The Bank of South Carolina saith, that before the 18th day of May, in the year 1837, that is to say, on the first day of May, in the year aforesaid, the banks in New York, Baltimore, Philadelphia, Richmond, and Fayetteville, had suspended specie payments, by reason whereof, an extraordinary scarcity and appreciation in value of gold and silver coin took place, whereby the payment of the notes of the Bank of South Carolina, and of the debts dué and owing by the said bank, for deposits in gold and silver, without delay, became impossible; and the said The Bank of South Carolina, in common with all the banks in Charleston, did resolve to suspend the ordinary redemption of their bills, *and the payment of their deposits, in gold and silver, until such time as the same could be done by solvent banks, in good credit, with safety to the country, as well they might. And that on the first day of September, in the year 1838, the said The Bank of South Carolina resumed the ordinary payment of gold and silver, in satisfaction of their debts and liabilities, without delay, until the fourteenth day of October, in the year 1839; and that before the last mentioned day, another general suspension of the banks in Philadelphia and Baltimore, and in the States of Virginia and North Carolina, as well as of the banks to the south and west of Charleston, with like effects, took place; that in consequence thereof, the demands for gold and silver, in payment of bank notes and deposits in bank, became and were extraordinary and irregular, having no reference to the quantity of paper in circulation, or unto the credit or solvency of the banks on whom such demands were made, but solely to the drain of specie for foreign markets, and for the traffic in gold and silver, carried on by persons trafficking in the precious metals; that the said The Bank of South Carolina, on both the said last mentioned days and years, was, and from thence continually has been, a solvent company', having sufficient means for the payment of all its debts, without any diminution of its capital stock; but by reason of the confusion of commercial affairs, and extraordinary demands for coin, the said bank was not able to pay its dues and liabilities in gold and silver coin, without making oppressive and ruinous exactions of its own debtors; and that under these circumstances, the president and directors of the said bank, on the same day and year last aforesaid, in common with divers other good and solvent banks of the city of Charleston, resolved to suspend the payment of gold and silver coin, in discharge of their liabilities for their notes and deposits, until such early day as the same might be resumed, without grievous oppression to their debtors, and unnecessary injury to the trade and business of the city of Charleston, as well they might. And that afterwards, to wit, on the twenty-first day of July, in the year 1840, the said The Bank of South Carolina, having all along kept in view the duty of paying their debts and liabilities in gold and silver coin, according to the law of the land, and made their arrangements to accelerate, as far as in them lay, the day when the resumption of specie payments might be made, without great and material injury to all persons indebted to them, did resume the ordinary payment of specie, in discharge of their dues and liabilities, and from thence have continued so to do ; and that during all the time aforesaid, their notes in circulation were not greater in amount than they were used to be in ordinary times, and not greater than, with ordinary prudence, might be issued by them, and far within the limits in that behalf permitted by their charter; and that neither the said notes, nor the debts due to persons for deposits in the said bank, were, by reason of the delay of payment in gold and silver, as hereinbefore mentioned, lost or depreciated to the holders of the said bills, or the owners of the said deposits, but have all been fully paid and satisfied. Which are the same defaults or suspensions in the scire facias mentioned ; without this, that the said suspensions are in violation of any rules or conditions in the charter of incorporation granted to the said bank, or to the perversion of the ends, objects and purposes for which the said franchise of being a corporation, with the rights and privileges thereunto belonging, was granted to the said bank. And this the said defendant is ready to verify ; wherefore, the said Bank of South Carolina prays that from the forfeiture in -the scire facias claimed, it may be acquitted and discharged; .and that the said bank, as to the premises, from this court may be dismissed.”
    
      The State joined issue on the/trsi and fourth pleas; and demurred specially to the second and third, on the grounds, that each was pleaded in bar to the whole action, and yet answered only a part of the matters charged in the declaration ; that they did not answer any part of them with certainty, and that the substance of the matters charged in the declaration were neither confessed and avoided, traversed or denied, by either of the pleas, which were evasive, uncertain, and wholly insufficient. The replication to the ffth plea, protesting that the matters contained in that plea were wholly insufficient in law, traversed the allegation therein, that the notes of the bank, and its deposits, were not depreciated in value, and lost to the holders and owners during the suspensions ; and concluded to the country. To this replication the bank demurred generally.
    The cause came on to be argued upon the demurrers, and his Honor the presiding Judge subsequently filed the following judgment.
    CIRCUIT DECISION.
    I shall not consider the technical points made by the pleadings in this case, as by doing so I might be precluded from deciding the important questions of law made in the argument, upon which all the parties concerned desire the judgment of the court.
    With the view of reaching the true questions involved, I shall regard all the facts stated in the declaration as admitted by the defendant. The important facts thus stated and admitted, are the following: that, by an Act of the Legislature, passed In December, 1801, the Bank of South Carolina was incorporated, with power to perform the business and monied operations of a bank of issues, deposits and discounts, with a capital not exceeding $1,500,000, and to continue incorporated until January 1, 1823 ; that, in December, 1815, another Act was passed, authorizing the bank to discount inland bills of exchange; that, in December, 1822, the Legislature re-chartered the said bank for twelve years, with all the powers conferred by the original charter, and the amendment of 1815 ; and that, in December, 1832, the Legislature again renewed the charter, and constituted the said bank a corporation and body politic, for twenty-one years, from 31st December, 1834, with all the powers and privileges given by the previous charters, and subject to the restrictions therein specified, namely, to issue promissory notes and bills of credit, not being of a lower denomination than five dollars, in the nature of a circulating medium, and payable on demand, in specie ; to receive and hold moneys on deposit; to make loans of money, and discount promissory notes at a rate of interest not exceeding six per cent.; to deal in bills of exchange and gold and silver bullion; and to transact all business and moneyed operations incident and pertaining to incorporated banks; that, while the said bank was transacting the business aforesaid, and when the said bank had issued a large amount of bills, viz : $750,000, which were then outstanding and in circulation, as a part of the actual currency of the State, and when the said bank had also on deposit, on account of divers citizens of this State, other large sums of money, in all amounting to $350,000, to wit, on the 18th May, 1837, the president and directors of the said bank resolved to suspend tlie payment in gold and silver, the legal current coin of the said State, as well of the bills issued and put in circulation by the said bank, as of the moneys received on deposit; and that, from the said 18th May, 1837, until 1st September, 1838, the said bank did actually refuse to pay, when demanded, in gold and silver, the bills issued by said bank, and the moneys deposited with said bank; and during all that time the said bank continued to issue bills in the nature of a circulating medium, to receive money on deposit, and to make loans and discount promissory notes, (fee. That afterwards, on the 14th October, 1839, the said bank again suspended specie payments, as it had done in 1837, and continued so to do until 25th July, 1840; and during the time of said last suspension, the bank continued to issue bills, to lend money, and discount notes, as it had done during the time of the previous suspension. “ To the great damage of the good citizens of the said State, in violation of the trusts and conditions of the said charter of incorporation, given and granted as aforesaid to the said Bank of South Carolina, in and by the last mentioned Act of the General Assembly ; and to the utter perversion of the ends, objects and purposes for which the powers, authorities, liberties, privileges and franchises aforesaid were given and granted to the said Bank of South Carolina, as aforesaid.”
    The declaration further sets forth, that, by a certain other Act of the General Assembly, passed 18th December, 1840, entitled “ An Act to provide against the suspension of specie payments by the Banks of the State,” it was, amongst other things, enacted, that the provisions of said Act should become a part of the charter of every bank already chartered in the State, which should accept the same ; and that every bank in the State, which had heretofore suspended the payment of its notes, in legal coin, or which had declared its determination to refuse or suspend such payment, should, on or before the first day of March next after the ratification of the said Act, notify the Governor of its acceptance of the provisions of the last mentioned Act: and that, in case any such bank should neglect to give such notice, the said Governor should forthwith cause legal proceedings to be instituted against such bank, for the purpose of vacating and declaring void its charter; and that this bank refused to give to the Governor such notice as is required by the Act.
    By reason of which several premises, it is alleged by the Attorney General, on the part of the State, that the charter of incorporation aforesaid has become forfeited to the State : wherefore he prays judgment to that effect.
    The questions made by the foregoing statement of facts, have been the subject of excited popular discussion, and to some extent have been prejudged by legislative enactment. They are now to be decided according to the grave and prescribed justice of the law. The Act of the Legislature which directs this proceeding, does not undertake to annul the charter, but it presupposes that the charter has been forfeited by the bank’s suspension of specie payments. What the Act has taken for granted, must, like other matters, be submitted to judicial cognizance, and be regarded by the court as open to free and full investigation. The Legislature has made no alteration of the law, by which the rights of the parties to this proceeding are to be determined; and although the members of the General Assembly have indicated their opinion of the law of this case, that imposes no obligation on a Judge to conform to that opinion. The rights of the corporation, whose charter is under consideration, are the same now, that they were immediately after that charter had been granted by the Legislature. The temper of the times may influence political bodies, and change popular sentiment, but it cannot change the rules of construction governing private rights, under charter or contract. I do not, therefore, feel in the least embarrassed by anything done by the Legislature, in approaching the important legal questions which enter into the consideration of this case. I confess that my first impressions have been changed, and my mind relieved from much obscurity, by the copious learning and lucid argument, on both sides. I have not had access to all the books quoted at the argument, and I must give my judgment on the points made, according to the best views which I have been able to bestow upon them.
    The questions of law are as follow: 1. Is the existence of a corporation, under a charter from the State, a franchise'? 2. Is the Bank of South Carolina a public or a private corporation 'l 3. Can a private corporation be dissolved by judgment of forfeiture'? 4. Has the Bank of South Carolina, by the suspension of specie payments, specified in the declaration, incurred the liability of forfeiture 1
    
    1st. All the elementary writers, in conformity with undisputed judicial decisions, have taken it to be true, that the right to subsist as a corporation, by a charter from the Legislature, or a King, as the case may be, is a franchise. In this country, the right to grant charters belongs to the Legislature, and in England it is a part of the royal prerogative. In both countries, corporations are the creatures of the law. The articles of their existence are derived from their charters. ,, In the mode of doing their business, and, in general, in the restricted liability of individual corporators, they are advantageously distinguished from natural persons. “ It is a franchise, for a number of persons to be incorporated, and to subsist as a body politic, with a power to maintain perpetual succession, and to do other corporate acts.” 2 Black. Com. 37. “ The right of acting as a corporation may be called a franchase, existing collectively in all the individuals of whom the corporation is composed.” Kyd on Corp. 13. This right of conducting business by a single agency, unaffected by the death of any of the corporators, and of perpetuating its existence by succession, gives to a corporation what some writers call its immortality. A legal capacity, of a peculiar character, given to a collection of individuals by special act, must be regarded as a franchise. The Bank of South Carolina, by its charter, has secured for its members much restriction of their liability for the debts of the concern, which they would have incurred, if they had been associated in a common partnership as bankers. The stockholders are liable, in no event, to the extent of their individual fortunes. Even in case of the failure of the bank, no stockholder, except directors who may have violated some of the express provisions of the charter, can be held liable for more than twice the amount of his stock.
    Strictly speaking, a private corporation has its franchise indissolubly connected with its legal existence; and, after it has been created, may maintain its existence, independent of the control of the authority by which it was created. A public or civil corporation occupies a different relation to the author of its being. Various powers may be delegated to such a corporation, as part of the sovereign .authority of the State, whence it emanated, which may be controlled and revoked at pleasure. Such powers or liberties may be given to'political corporations, as instruments of government, and may not be indissolubly connected with the existence of the corporations. In other words, these powers, or liberties, may be revoked, or modified, without destroying the corporations, to which they were delegated for definite purposes.
    It becomes, therefore, necessary to inquire, in the second place, whether this bank is a public or private corporation.
    2d. The distinctions between public and private corporations aggregate, is fully considered in the case of Phillips vs. Bury, 2 T. R. 346. “ There are two kinds of corporations aggregate, namely, such as are for public government, and such as are for private purposes. The first are those that are for the government of a town, city, and the like, and, being for public advantage, are to be governed according to the law of the land; and the validity and justice of their private laws and constitutions are examinable in the King’s courts.” In the case of Dartmouth College vs. Woodioard, 4 Wheat. 663, Justice Washington quotes, with approbation, the case of Terrelt and Taylor, which will be adverted to, presently, for another purpose. In that case, the distinction between the two kinds of corporations alluded to, is well stated. “ In respect to public corporations, which exist for public purposes, such as towns, cities, and the like, the Legislature may, under proper limitations, change, enlarge, modify, or restrain them; securing, however, the property for the use of those for whom and at whose expense it was purchased; .but it is denied, that it has power to repeal statutes creating private corporations, or confirming to them property already acquired under previous laws,” <&c. Chief Justice Marshall, in the same case, says: “ The character of civil institutions does not grow out of their incorporation, but out of the manner in which they are formed, and the objects for which they are created. The right to change them is not founded on their being incorporated, but on their being the instruments of government, created for its purposes.” The counsel for the defendant, in the case under consideration, while insisting that public corporations, only, could be controlled by legislative enactment, or dissolved by the judgment of the courts, referred to the city of Charleston, in illustration of the argumeht. Upon that municipal corporation have been conferred by the Legislature, certain powers, constituting a part of the government of the State, such as to elect, and maintain a 3 udge for the administration of justice, and to lay taxes for the support of the city government ; and for an abuser or nonuser of these powers, they might be answerable, or they might be resumed by the State.
    A bank with such a charter as the one before the court, cannot be regarded as a public institution, having any political or civil power pertaining to sovereignty. The counsel for the State attributed to the Bank of South Carolina many qualities and functions of a public nature. It may be public, that is, general, in its uses and advantages, and the State may have funds in it, (as was certainly the case at one time,) but it is still private in the tenure of its property, and in the administration of its funds. All corporations are created on the assumption that they will subserve the general policy of the State, and be of some public advantage, but they are not on that account to be regarded as public institutions.
    The Bank of South Carolina must be placed in the class of private corporations, and be governed by the law applicable to such class. And this presents for consideration, the third question.
    3d. The position is taken,- that as a private corporation cannot be revoked by the Legislature which created it, so it is not liable to forfeiture by judicial judgment — and these views are presented. That, although the private corporation derived its existence from an Act of the Legislature, the tenure of its being, during the term of the charter, is independent of the law; that its liability to individuals for a breach of contract, and to the public and individuals for a violation of the articles of its constitution, is prescribed and limited by the charter; that the State has given to the Bank the legal capacity to take, hold and enjoy property, for private purposes, and has conveyed no power whatever of a public nature ; that, like the right of denizenship, or naturalization, the franchise of the corporation is perfect when once conferred, and cannot be revoked, controlled, or forfeited afterwards. I think these views are founded in mistake. The existence of a private corporation, with a limited capacity to do business, is conditional only; it is given upon the condition implied, that the corporation will keep itself within the sphere of its corporate functions, and will not pervert the end of its institution, nor, in bad faith and with fraudulent purpose, abuse the trust with which it has been invested. Before I examine the provisions of the charter of the bank, which prescribe particular remedies for specified cases, I will consider the question upon the principles of the common law.
    It was conceded, on all sides, that the Legislature has no control over a private charter after it has been granted. Since the decision of the Dartmouth College case, this is not an open question. After a private corporation has been once created, and private rights acquired under it, it would be an act of legislative perfidy to annex new provisions without the consent of the corporators. But it does not follow, that the corporation is independent of all authority, and irresponsible for wrongful acts. The authorities on the subject support no such conclusion. As Mr. Webster remarks in his very .able argument in the Dartmouth College case: “The judicial' establishments of the State are supposed to be competent to prevent abuses and violations of trust, in cases of this kind, as well as in all others.” I undertake to say, that the authorities will sustain this proposition, that a private corporation, created by the Legislature, may lose its franchise by misuser or nonuser, and the charter may be resumed by the government, under a judicial judgment of forfeiture. In the great case between The King and the Oity of London, 8 Howell’s State Trials, 1039, the eminent counsel for the city, Treby and Poilexfen, took the broad ground, that the existence of no corporation was forfeitable under the judgment of a court. I shall not comment upon the merit of their arguments, although they doubtless deserve the applause bestowed on them by the eloquent counsel who argued this case for the defendant. It is sufficient to say, that the ground taken by them was not sustained by the Judges who decided the case, and that their decision, however objectionable in other respects, is unimpeached in this particular. Many questions of a political character, and of a highly exciting nature, were involved and discussed in the case, and the determination of the court was reversed by Parliament, and has been condemned by history as arbitrary and illegal; but not upon the ground that a corporation could not be dissolved by forfeiture. There was no judgment of forfeiture entered up; but if there had been, it must have been reversed by subsequent Judges, if the position of Pollexfen could have been maintained ; for that alone would have been fatal to the proceedings on the part of the crown. The question has frequently arisen in the English courts, and I cannot find that this point has been maintained by a single Judge. Lord Holt, in the case of Sir James Smith, 1 Show. 280, says, “ I am of opinion that a corporation may be forfeited, if the trust be broken, and the end of the institution be perverted.” All the doctrine connected with corporations was fully discussed and considered in the cases of The King vs. Amery, 2 T. R. 515, and The King vs. Passmore, 3 T. R. 199 ; and the Judges seem to have taken it for granted, that corporations are liable to dissolution, by judgment of forfeiture. It is unnecessary, however, to go into the extremely refined and subtle questions discussed in these cases, in order to elicit the judgment on the point now under consideration, as I think that point lias been fully considered and authoritatively decided in this country. The case of Terrett and Taylor, 9 Cranch, 43, excited great interest, as it grew out of a Statute of Virginia, which was intended to confiscate church property for public use, upon the supposition that all such property was calculated to support establishments inconsistent with the political institutions of the country since the revolution. All the questions in the case were fully argued, and elaborately considered; and Mr. Justice Story, who delivered the judgment of the court, whilst he denies the right of the Legislature to interfere with vested rights, under an act of private incorporation, admits, in explicit terms, that “ a private corporation, created by the Legislature, may lose its franchises by a misuser or nonuser of them; and they may be resumed by the government under a judicial judgment upon a quo warranto, to ascertain and enforce the forfeiture.” In the case of Slee vs. Bloom, 5 Johns. C. R. 380, Chancellor Kent takes occasion to review the English cases in which the question has undergone discussion, and after quoting Lord Holt’s opinion, in the case of Sir James Smith, he says, “ it is, no doubt, the settled doctrine at this day,” Chief Justice Parsons, in the case of The Commonwealth vs. Union Insurance Company, observed, “ that the corporation might forfeit its franchise by non-feasance, or mal-feasance.” 5 Mass. 232. Blackstone and all the elementary writers upon the general principles of the law, assert the same doctrine.
    But it was said, that no judgment of forfeiture has ever yet been entered up, and acted on by the courts. It is certain that no such form of judgment can be found. This fact, however, admits of explanation, and does not justify the conclusion that there can be no judgment of forfeiture. As the King or State must necessarily be a party to an information to ascertain and enforce a forfeiture, both have the right to waive the .breach of any express or implied condition contained in a charter, and I suppose, for like reason, may forbear to enforce a judgment upon such information. Such was the fact in the case against the city of London. The consequences of a judgment of forfeiture at common law, amounted, in effect, to confiscation of the property of the corporation. If the corporation were dis* solved, the land which had been granted to it reverted to the grantor, and the debts due to and from the corporation could not be collected. Under such circumstances, the State might well pause in enforcing such a judgment.— Forfeitures of any kind are odious, and are not favored by law.
    It was also urged by counsel, that, by the terms of the charter of this Bank, the corporation is exempt from liability to be dissolved by the State, under a judgment of forfeiture. And first, it was said, that as to any act which, by the laws of the land, would be a criminal offence in ordinary individuals, the members of the corporation actually committing the same, would be personally liable, as other persons were for the same offence; and secondly, that for any breach of contract by the corporation, individuals had their remedy by action, and could recover damages to the extent of the corporation’s liability. Besides the general remedy by action for breach of contract, there are specific remedies provided by the charter, for particular violations of it by the corporation. By the 5th section of the charter, p. 8, it is provided, that the debts of the corporation shall not at any time exceed three times the amount of its capital, and in case of such excess, the directors are made liable, individually, in addition to the general liability of the corporation itself. By another clause, p. 12, the corporation, or the parties actually concerned, are made liable to pay and forfeit treble the value of the commodity in which they have traded contrary to the provisions of the charter, one-half for the use of the informer, and the other half for the use of the State. It will be observed, that there are other clauses in the charter, prohibiting the corporation from doing certain acts, but providing no remedy if the acts be done; such as prohibiting the bank from taking more than six per cent, interest. But the specific remedies enumerated, are not intended to exclude, nor by fair inference can they be construed to exclude, the State from proceedings in the nature of an information against the Bank, for culpable violations of the implied trusts and conditions upon which the charter was granted, or for any wicked perversion of the ends of the institution, This is an independent remedy, not controlled by the charter. Suppose, for instance, that the Bank should usurp the business and functions properly belonging to another corporation, and become a lottery or insurance office; or suppose it should wilfully abuse any of the powers expressly given to it, as by taking more than six per cent, interest, under injunction of secrecy unlawfully imposed upon borrowers ; or suppose it should enter into fraudulent combination with other persons, as brokers or foreign institutions, to oppress some of our own citizens or institutions. Its corporate existence ought to afford it no shield when doing wilful mischief, or doing any business not contemplated by the charter, yet the provisions of the charter afford no remedy for such abuses. Of course, I do not undertake to state all the abuses, or any of them, with exactness, which would be cause of forfeiture.
    4th. The important position in this case, is the fourth, and that I now propose to consider. Has the Bank, by the suspension of specie payments, set out in the declaration, committed such an act as will authorize the court to annul the charter, and dissolve the corporation 1 The effect of a judgment of forfeiture would be to prohibit the Bank from doing any new business, and to compel it to wind up its concerns. The dissolution, in such case, would be like that which is contemplated at the expiration of the charter, as will appear from the language of the Act incorporating this Bank, and the State Bank, p. 12, “ and that any moneys or profits, which on such,” (that is, dissolution by expiration of the term) “ or any other dissolution of either of said corporations, may at the time be possessed or owned by them, shall be held by the directors of said corporations respectively, for the use and benefit of persons holding-shares in said corporations, in average and proportion to the number or amount of said shares.” Although the consequences of a judgment of forfeiture of this charter would not be the same as at common law, still the judgment must be formed upon that which would be the cause of forfeiture at common law. And I think, to justify forfeiture, there must be some wilful and culpable delinquency, some act originating in bad faith, and of mischievous tendency. Gross negligence, in many instances, is regarded in this light by the law; for to be such, it must be wilfui. In general, a nonuser of a charter would be founded oil such negligence. The question now to be decided is, has the bank been guilty of an abuser of its charter, or of such misdemeanor in the management of its affairs, under the charter, as to authorize the court, by its judgment, to put an end to its legal existence 1 It is not pretended, much less alleged, that the bank has been guilty of a violation of any of the express provisions of the charter''; of having taken more than six per cent, interest; of having dealt in any commodity besides bullion, (fee.; or of having contracted debts to a greater amount than three times its capital. Nor is it alleged that the bank has been guilty of any intentional misdemeanor or culpable purpose. The corporation is not charged with having done any business, except that which fell legitimately within the scope and operation of a banking institution, nor that it had in any wise perverted the end for which it was created, by usurping functions that belonged to corporations of a different nature.
    The charges against the bank may be thus summed up: that it had issued and put into circulation, as a part of the currency of the country, more of its notes than it was able or willing to redeem in gold and silver, when demanded; that it had been guilty of injustice, by taking on deposit that which; when deposited, was equal in value to gold and silver; and then refusing to make the same good when demanded ; and that it had continued to issue its depreciated bills, after suspension,’ thereby making profit without adequate responsibility on. its part. In short, the mischievous effects of a suspension have been imputed to the bank as an offence, for which it has not only forfeited public confidence, but also its rights of chartered existence. These charges rest upon this general proposition, that the charter is an executed contract between the State and the stockholders, and is a grant that confers important franchises and privileges to be used for the public benefit; and that the bank, under that grant, having undertaken to perform a trust, in which the public was interested, had failed to perform the trust according to public expectation. The trust spoken of is, that the bank had undertaken to make and preserve a currency, to be, in every respect, as good as gold and silver, i. e. to be money.
    There is no substantial provision in the charter, requiring the bank to issue its notes as currency. By its organization, it had the right to perform the functions of a bank, namely, to receive money on deposit, to discount mercantile paper, to lend money, and to issue its own or other paper, in lieu of notes discounted. In what way it should perform these different functions could not be prescribed or indicated, but must of necessity be left to the discretion and judgment of the directors. I undertake to say, however, that the notes of the bank are no more to be regarded as money, than the notes of private individuals, put into circulation as the representatives of gold and silver. Both may circulate and serve the purposes of money, upon the assurance that they can be converted into gold and silver, at the pleasure of the holders. In strictness, there is no other kind of money — that which a debtor may compel his creditor to accept, and which a creditor can exact under a judgment of the court — besides gold and silver. Paper will be estimated as approaching the value of money, more or less, according to the credit of the source whence it emanates. This, in general, will be settled by mercantile sagacity, public security, and the competition of free trade. So long as notes and bills are received and used as currency, the courts, for many purposes, will treat them as money. For instance, in an action for money had and received, money lent, or money advanced, the plaintiff would recover judgment for the amount of the bills received, lent or advanced, without further valuation, and so in an action of trover, upon the ground that the parties themselves, and the community, regarded these bills as money. But they are considered money only on the implied contract, that they may be immediately converted into gold and silver. Before this bank was incorporated, it did buness under its present corporate title, and its bills were as much money then as they have been since it obtained its charter; perhaps they were better then, as there was greater ultimate security for their payment, or rather less danger of failure. As an illustration of this view of the subject, I will state what I have learned from respectable merchants, that Girard’s post notes, which were checks drawn by him to order, on his own bank, were regarded as better than gold and silver, as they increased in value according to the number of hands through which they passed, and of course the number of indorsements on them. Yet, in a legal point of view, they were securities for the payment of money ; they were conventional money. Can the bills of the bank be legally considered in a different light 1 That legal character must be determined by the charter. At page 10 of the charter for this bank, and another, the following clause will be found: “ The bills obligatory, and of credit, under the seals of the said corporations, which shall be made payable to any person or persons, shall be assignable by endorsements thereon, under the hand or hands of such person or persons, and of his, her or their assignees, and so as absolutely to transfer and vest the property thereof in each and every assignee or assignees, successively, and to enable such assignee or assignees to bring and maintain an action thereon, in his, her or their own names; and bills or notes which may be issued by order of the said corporations, respectively, signed by the president, and countersigned by the principal cashier or treasurer thereof, promising the payment of money to any person or persons, his, her or their order, or to bearer, though not under the seal of said corporations, shall be binding and obligatory on the corporation issuing the same, in like manner, and under the like force and effect, as upon any private pez’son or persons, if issued by him or them, &e.” This clause was intended for two purposes, to enable the corporation to bind itself without seal, and also to characterize and define the nature of its legal liability on such paper, when signed and issued. This is the only clause whiclz .speaks of bills issued by the bank, and it places them, in a legal point of view, on the footing of notes and obligations of individuáis; that is, they shall have the same force and effect as similar paper signed and issued by individuals. They get into general circulation upon the confidence of the community, that they will be paid ozz demand, and so might the notes of individuals. Refusal or delay to pay them, in current coin, on demand, would affect the credit of both, and would subject the makers to be sued. The form and nature of the bank’s liability are not changed by the fact that it is an artificial being; it may be sued in the same way, and for the same cause, as a natural person, for a breach of a pecuniary obligation.
    The suspension of a bank becomes a subject of popular attention and general interest, from the fact that it affects deeply the concerns of society. I will not say that such suspensions, when brought about and continued by fraud and combination, may not amount to malfeasance, and be regarded as something like a nuisance, to be abated by judgment of forfeiture upon the offending corporations. Intentional wrong deserves little countenance from those who are employed in the judicial administration of the laws. But the legal effect of suspension per se, is the naked question upon which I am asked to pronounce my judgment. There are events that would justify a bank in the suspension of specie payments; such as war, and the acts of God. Against these it cannot be supposed that human sagacity and prudence are capable of guarding. A juncture of affairs, brought about by human agency, originating in folly or crime, might be imagined, which would compel banks, in justice to the immediate community around them, to consult the laws of self preservation, by suspending specie payments for a time, such as secret combinations of foreign and hostile institutions against one bank. But I will not go into topics of (his kind. They were used with great ability and address in the argument of the case, by counsel on both sides; but they are rather subjects of a popular character, than matters of judicial cognizance.
    I take the position that the State should have alleged in the declaration all the facts which would justify and sustain the court in pronouncing judgment of forfeiture, and I do not think this has been done, so far as it regards the failure of the bank to pay its notes in gold and silver when demanded. With respect to the money on deposit, the parties who put it there could sue the bank and recover the amount of their deposits in gold and silver, with interest thereon from the date of demand; and it cannot be said that they were in a worse situation by the suspension, than if they had kept the money themselves, or than other bill holders, whose rights have been considered.
    The fact stated, that the bank continued to issue its own notes after it had suspended, was denounced on one side, as highly censurable in itself, and of mischievous tendency, yet the bank was exonerated from all intentional misconduct in so doing. On the other side it was said, that so far from this being an abuse, it was the only relief the bank could afford to the community, against the consequences of suspension; and that this measure was resorted to, not so much for the advantage of the bank, as from a desire to grant relief to others. Now, if the bank intentionally, by itself, or in combination with others, had brought about the state of things that occasioned the suspension, to make unlawful gains, by issuing depreciated paper, a question of serious importance would have been presented. As the case no w stands, this is the fact, that after the bank had refused to pay on demand its outstanding debts, it continued to contract others of the same kind. It does not follow, from this, that it was unable to pay all its debts. It seems to be conceded, as a legitimate principle in banking, that a bank may have in circulation bills to three times the amount of its actual capital, upon which it commenced to do business. When a bank does business in this way, it becomes a bank “ of circulation, operating on its own credit, which is performed by exchanging its own notes, payable to bearer, on demand, in coin, for the promissory notes of individuals, payable at a future fixed day ; the latter paying a per centage per annum, equal to the interest on a loan of capital, for the advantages they consider themselves as enjoying by dealing in the market with the credit of the bank instead of their own.” In such an operation as this, the bank must rely on its debtors, as well as its actual capital, to enable.it to meet its engagements. The very nature of the business, however, must always expose it to the danger of suspension. It does not appear that the Bank of South Carolina has ever availed itself of this principle to the full extent. At the time of its suspension, it seems that it had in circulation of its own own bills, $750,000, being very little more that half its capital. Its ultimate ability to pay all its debts was not denied. Its, credit was Unquestioned, and when it did business, after its refusal to pay specie on demand, it did so without disguise or fraudulent design. As a bank of circulation, it operated on its own credit, with an ability ultimately to meet its liabilities.
    I do not regard the power to issue notes or lend money, as given to the bank by the Act of incorporation, in the nature of a distinct and separate franchise. The organization of the bank under the charter, is its only franchise; and all the functions which it may lawfully perform afterwards, it possesses in common with natural persons. This remark is made with this qualification; that I do not deny that the franchise may be lost by a wilful abuse of these functions. A bank might become a swindling establishment, in the manner of using its conceded powers. I am satisfied that this bank has committed no such misdemeanor.
    Besides these general views, arising out of the legal character of bank paper, other express provisions of the charter may be resorted to, for the purpose of shewing that mere suspension cannot be regarded as a cause of forfeiture. Indeed it seems to me that such a conclusion is absolutely negatived by the clauses to which I allude.
    Take, for instance, the one already noticed, which restricts the bank from contracting, debts to a greater extent than three times the amount of its capital. This does not confer in positive terms the right to issue bills to three times the amount of its capital, but it pre-supposes that the bank may do so without violating the legitimate principles upon which banking institutions should be conducted; and of course that it might be in a condition in which it could not pay on demand all its notes. Now, is the offence producing forfeiture to depend on the contingency of a demand 1 A demand might not be made when the bank had the largest amount of debt outstanding, and when in fact the bank was most in default, but it might be made when the bank had contracted its issues, and had fewest notes in circulation. The fact of issuing or owing more than it could pay in coin, was the cause of difficulty and default; and yet this is allowed by the charter. And can it be contended that the bank should be punished for the conse quence of an authorized act 1 This would be to give a privilege, and punish its exercise.
    By the charter, failure of the bank to pay in specie, and even insolvency, are contemplated and spoken of without the most distant implication that such acts would induce forfeiture. The truth is, that a suspension of specie payments by banks was no novel thing when this charter was granted; and it was granted evidently on the supposition that the bank might suspend - and' still retain its legal existence.
    A redundancy of depreciated paper has been the great cause of suspension. The legislation of the country, not of this State-alone, but of all the States, should bear .a share of the blame in producing the disastrous state of affairs, which gave rise to the late suspension of the banks. The number of banks created by acts of legislation, more than the excessive issues of any one bank in this State, has inflated and deranged the currency.
    It is in the power of the Legislature to retain a control over private corporations, by inserting in their charters clauses to that effect. This, I believe, is the case in New "York and in Massachusetts, in relation to their late charters, particularly bank charters.
    I have taken it for granted that the late Act of the Legislature, under which this proceeding was instituted, can have no effect on the banks that did not choose to accept its provisions. The Bank of South Carolina stands on its legal rights, and is entitled to be protected in them by the judgment of the court.
    I believe no case has been or can be found, in which it has been adjudicated that a bank has forfeited its charter for a suspension of specie payments. On the' contrary, the decisions are the other way. Such, I understand, although I have not seen it, is the decision in Pennsylvania. The opinion of the court in Alabama is full to the point; and as that opinion was delivered by a Judge of great experience and acknowleged learning, it is entitled to great respect. The case was The State vs. The Tombeckbee Bank, 2 Stewart’s R. 37. The bank failed to pay its notes in specie on demand, from June, 1827, to September, 1828; and the only question submitted to the Supreme Court was, whether this suspension was sufficient cause for forfeiting the charter of the bank. Judge Crenshaw states the law applicable to the case, in the followiag terms: “ In the creation of every corporation, it is implied in law, that a misuser or nonuser shall effect a forfeiture of the charter. It is theiefore important to inquire whether a failure to pay specie is such a misuser or nonuser as will work a forfeiture of the charter. The Act pf incorporation has not so declared it. It is not so expressed by the letter of the Act, nor can it be fairly inferred by implication.” After referring to authorities, the Judge concludes as follows: “ The court are unanimous in the opinion, that a failure to pay specie does not, by the terms of the Act of incorporation, amount to a forfeiture of the charter, nor is it implied by general law as applicable to incorporations.”
    The case quoted from Indiana, has little or no application to this case. There the jury had found that the corporation had been guilty of flagrant and fraudulent violations of its charter, which the court regarded as quite a sufficient misuser to work a forfeiture.
    From the view which I have taken of this case, it only remains for me to say, as the result of my best judgment, that the State can take nothing by this proceeding. I therefore give judgment for the defendant.
    A. P. BUTLER.
    The Attorney General, on behalf of the State, appeals from the judgment of his Honor, and moves that the same may be reversed, and judgment awarded for the State, for the reasons following, to wit:
    1. That “ the existence of a private corporation, with a limited capacity to do business, is conditional only; it is given upon the condition implied, that the corporation will keep itself within the sphere of its corporate functions, and will not pervert the end of its institution;” and that it shall be subject to forfeiture for nonuser, misuser or abuser, if the trust upon which the corporation was created be broken, and its institution perverted.
    2. That the forfeiture does not depend upon any express provision in the charter, nor is it confined to the violation of any direct prohibition; but it attaches upon every misuse or abuse of the corporate functions, which defeats the object for which the charter was granted, and perverts the powers conferred to purposes not contemplated by the grant; or, to use the language of the circuit decision, “the franchise may be lost by a wilful abuse of these functions.”
    3. That “ all corporations are created upon the assumption that they will subserve the general policy of the State, and be of some public advantageand the objects contemplated by the rule of forfeiture for nonuser, misuser or abuser, are the benefits and advantages which may be supposed to accrue to the public, from the exercise, by the corporation, of the powers conferred by the charter, and which constitute the consideration of the grant, and the compensation to the rest of the community, for the privileges granted to the corporators.
    4. That the design and entire scope of the charter of the Bank of South Carolina was to establish a bank of deposit, discount and circulation; that the public objects contemplated by such a charter are, to afford to the community a safe and convenient place of deposit for their moneys, to furnish the means of obtaining loans and discounts at lawful interest, by a concentration of capital for the purpose of making them, and tb facilitate these objects, and aid the operations of commerce, by enabling the bank to supply, in its bills, a sound paper currency for the use of the country; that these objects have reference to transactions in money, or its equivalent only; and for their attainment it is absolutely essential that the bank should maintain the character of the bills which are employed in these transactions as money or currency, by promptly redeeming its obligations in legal coin, so as to render them at all times convertible into money ; and that these objects are all utterly defeated by such a suspension of specie payments as is charged in the scire facias, by which the bills of the bank are at once rendered inconvertible, and their character changed from currency or money, into that of mere debts.
    
    
      5. That although there may be no express provision in the charter, that the bank shall issue its bills, it is not the less the duty of the bank to redeem them in legal coin, when they have been issued: besides, that every grant of a corporate power implies an obligation on the corporation to exercise it for the public benefit; and that in order to the fulfilment of its duties under the charter, it is inevitable that tlie bank should either issue its bills, or pay out gold and silver in its operations, or it must cease to do business altogether, and so forfeit its charter for nonuser.
    
    6. That the obligation of the bank to redeem its bills and deposits in specie, does not depend upon any provision in the charter to thát effect, but arises out of the nature of its contracts with the individual holders and depositors, and the provisions of the law and the constitution applicable to such contracts; and the proposition that the faithful fulfilment of this obligation constitutes the trust and condition of the charter, does not require any express provision to make it so, but results inevitably from the nature of the institution, and the object for which it was created.
    7. That there is no clause in the charter which, directly or indirectly, sanctions a violation of the legal obligation of the bank to pay its bills and deposits in specie ; and especially no clause authorizing it “ to operate upon its credit, by exchanging its own notes, payable to bearer, on demand, in coin, for the promissory notes of individuals, payable at a future fixed day,” and, after it has so operated, and made a profit on the loan of its credit, to refuse to redeem its notes in coin; and that any such provision in the charter would be equally repugnant to the nature of the institution and the federal constitution. That' on the contrary, every clause of the charter has reference ,to the prompt redemption of the obligations of the bank, as a fundamental principle of the institution ; and that the bills of the bank were regarded and received by the community as money, was not an unexpected effect of the charter, but the very object intended in investing the corporation with the powers of a bank of circulation ; and it is, for that reason, the trust and condition of the charter, that the bank should maintain the character of their bank bills as money or currency, by redeeming them at all times with legal coin.
    8. That to suppose the issuing more bills than the bank could pay in coin, “ is allowed by the charter,” is to pervert the object of the institution, and the plain meaning of the clause restricting the debts of the bank to three times the amount of the capital, Which is referred to for the purpose of sustaining that position ; for that very clause, by limiting the issues of- the bank to the proportion which it was supposed that the issues of a bank might always hear to its specie basis, and yet specie payments be maintained, manifests, most unequivocally, the intention of the Legislature, that specie payments should be constantly maintained. That but for the existence of that intention, the restriction would, have been without object or reason ; and the obvious design of the clause was to restrain the bank from issuing to an extent which might disable it from fulfilling the duty of redeeming its bills in specie, on demand, by rendering the directors personally liable for such over issues; and, so far from containing a license to the bank to violate its legal obligations, the clause recognizes, by necessary implication, the duty of the bank, whatever be its issues, to reserve the means of means of meeting them in legal coin.
    9. That the clause in the charter which provides that the bills or notes of the bank, signed by the president and countersigned by the cashier, although not under the corporate seal, shall be binding on the corporation, in like manner and with like force and effect as upon private persons, was intended simply to avoid the rule that a corporation cannot bind itself but by its seal. It defines the obligation, but does not limit the consequences of violating it; in which respect, there is no analogy between private bankers and incorporated banks, the powers of the latter being derived from the charter, which renders them responsible to the authority from which the grant emanated, for the proper exercise of the powers granted : whereas, the powers of private bankers exist independently of any charter, and they are responsible only to the persons with whom they contract. And if the notes of a private banker are “ regarded as better than gold and silver,” by reason of the increased security which numerous indorsements furnish for their payment in gold and silver, there exists, in the personal liability of the parties, the most efficient legal means of preventing any suspension of specie payments, until the parties are actually insolvent; whereas, there is no adequate means of keeping the bills of an incorporated bank even as good as gold and silver, or of protecting the community against the evils of a suspension of specie payments by such a bank, but to put an end to its powers of mischief, by a forfeiture of the charter.
    10. That if any clause of the charter contemplates the failure of the bank to pay in specie, it is only in reference to its insolvency or bankruptcy, when it would be a gross fraud upon the community to continue to do business ; and there is not a syllable in the charter from which it can be inferred, as assumed'in the circuit decision, that the Legislature intended to maintain a broken bank, or one which should continue banking operations after it had become actually insolvent.
    11. That the operations of a bank of circulation tend inevitably to drive specie from general circulation, and to withdraw all the specie of the country from the coffers of individuals into the vaults of the bank; which result, as it is the necessary effect of the charter, must be presumed to have been contemplated and intended by it; and to refuse afterwards to pay out specie, as it may be needed by individual depositors or holders of bills, is a gross perversion and abuse of the powers, conferred by the charter. Nor is it any the less so, if the business has been so badly managed that the bank is unable to redeem in specie a circulation so small, in proportion to its capital, as that of the Bank of South Carolina.
    12. That to refuse to pay specie, for the purpose of preventing “ the traffic in the precious metals,” is to usurp a power of prohibiting the exportation of specie, of. arresting the operation of the law of debtor and creditor, and of interfering with the right of individuals to dispose of their own property; functions of an odious, despotic and dangerous character, which, it is respectfully submitted, are not conferred by the charter, and the usurped exercise of which by the Bank of South Carolina, in suspending specie payments, is a plain and gross perversion and abuse of the corporate powers, and the object of its institution.
    13. That a suspension of specie payments by the bank being a violation of its legal obligations to individuals, it is necessary, in a proceeding for forfeiture of the charter on that ground, to set forth only the facts of the existence and violation of these obligations; and that the consequences of such violation of- the obligation of the bank, as they affect the public, and the powers necessarily usurped by the evercise of a right to suspend, are all properly subjects for consideration in determining the question whether the facts charged constitute such an abuse or perversion of the corporate powers, as amounts to a cause of forfeiture, without any specific allegation of these consequences and usurpations; and that there is no rule of pleading which renders it necessary to set forth such consequences, or any matter of argument, and much less to stigmatize the motives of the bank, by charges of fraud or other vituperative epithets in the declaration ; but it is sufficient to charge the facts alleged to have been “ to the great damage of all the good citizens of the State,” “in violation of the trusts and conditions of the charter,” and “.to the utter perversion of the ends, objects and purposes,” for which it was granted.
    14. That if there existed any “ events that would justify the bank in the suspension of specie payments, such as war or the act of God,” they constitute matter of defence,, and should have been pleaded; and that the exception does not constitute the rule, nor is it necessary that the State-should anticipate and negative any matter of defence which might be suggested, in answer to the charge of a violation of the acknowledged legal obligation of the bank to pay its bills and deposits in specie.
    15. That even if a mere suspension of specie payments-be not a sufficient cause of forfeiture of the charter, yet the long continued and immediately repeated general violation of its obligations by the bank, whilst it continued to put forth its irredeemable paper, as charged in the declaration, leaving the community no redress but innumerable' suits by the individual holders of its bills, renders it a public nuisance, which the safety and welfare of the people, and the honor and prosperity of the State, alike require to be abated by a judgment of forfeiture.
    16. That the continuance by the bank during the suspension of specie payments, to make loans and discounts,, paying out upon such loans and discounts only the notes of banks which had suspended specie payments, as charged in the declaration — which notes, from the very fact of suspension, ceased to be equal in value to gold and silver, and are so admitted to have been by the pleadings — was an habitual violation of the usury laws, and of the provision in the charter prohibiting the bank charging a higher interest on its loans and discounts than six per cent, per annum, or one per cent, for sixty days ; and that his Honor is mistaken in supposing that it was not pretended or alleged that the bank had violated this prohibition; for such violation is not only embraced by the allegation in the declaration referred to, but was enlarged upon in the argument of each of the counsel for the State.
    17. That the refusal by the bank to accept the terms of the Act of December, 1840, amounts to an assertion of the right to suspend specie payments, whenever, in the judgment Of the bank, the public interest requires that they should do so; inasmuch as it is a denial of the right of the Legislature to judge whether the circumstances of the times were such as to render the suspension by the banks excusable; and if the right to determine that question be not in the Legislature, it is necessarily in the banks ; for it is not a question of law or of fact, but of political administration, and does not appertain to the court.
    18. That the judgment is, for the reasons aforesaid, contrary to law, and subversive of the constitution, and of the rights and liberties of the people.
    The cause was elaborately and learnedly argued by Mr. Memminger, Mr. Hunt, and the Attorney General, on behalf of the Stale: and by Mr. Walker and Mr. King, contra; to all of whom great injustice would he done by presenting a mere abstract of their respective arguments ; and this is rendered the less necessaiy by the full examination of them in the several opinions delivered by the members of the court. It is probable, also, that the whole case will be republished in a separate volume, which will comprise all the arguments had at the several stages of this interesting and highly important cause ; including, also, the pleadings at length, and the several points of law arising out of them; thus rendering the case valuable, not merely as an authority on the principal and momentus question involved in it, but also as a repertory of authorities in contested questions of pleading, and as furnishing ample precedents in a form of action which there has been so rarely occasion to resort to in this State, as that of scire facias to vacate a charter. Should such volume he published, it will contain the arguments of counsel at length.
    Richardson, J., delivered the opinion of the court, as follows:
    The declaration and the fifth plea of the bank, state the necessary facts. The bank suspended the payment, in gold and silver coin, of its bank bills, and of its deposits of gold and silver coin, from May, 1837, to September, 1838;. and also from October, 1839, to July, 1840.
    Between those suspensions, and after the second, the bank resumed payments in specie.
    During those suspensions the bank issued its bills as usual, and carried on its customary business in all other respects.
    The suspensions were ordered by the board of directors, and the causes are set forth in the fifth plea in detail. The main reason is, that many banks of the other States had already suspended .specie payments ; that, consequently, gold and silver rose in demand and price; and their efflux, to a great extent, was probably to follow, (fee. (fee.
    And finally, that the suspensions were not the result of inability to pay its debts, (fee. (fee., on the part of the bank, (fee., and were adopted jointly with several other banks of the State, by the resolution of the president and directors of each of those banks.
    By the Act- of December, 1840, the Legislature of the State ordered the legal investigation of such conduct on the part of the banks; and. the court has to decide upon an appeal from the circuit decision, in favor of the bank, whether incorporated banks, so refusing or suspending payment of their deposits of gold and silver coin, and of their bills in legal coin, forfeit their charters.
    The Bank of South Carolina resists, and claims to be treated as other debtors who delay or refuse to pay their debts.
    The State charges the banks so suspending payments, with this delinquency; that they so misused their delegated powers that they have, in the pursuit of gain to themselves, abused the trust which is the object and condition of all such incorporations. Moral turpitude is not imputed. It could scarcely be imputed to a popular body of all ages and sexes, acting altogether through a counsel of directors or representatives.
    The charge is, that they have wilfully omitted and refused,, in virtue of their own resolution, deliberately made, to fulfil the political State trust confided, as the condition of their incorporation; and that disability to hold it longer, as a State institution, follows such wilful omission and refusal.
    If both fraud or any bad motive and wilfulness be essential, the defence of the bank must prevail, because such fraud is neither charged nor admitted nor proved. Moral fraud could not be committed by a mere institution of law. The argument of the charge may be reduced substantially to this: If A, being a party to a contract, and also the agent of B, a joint party, does an act which may vacate the contract, it is vacated both as to B and A. The reply may also be reduced to this: That it cannot be vacated as to B, unless a fraud has been committed; and there being no fraud, the contract is unbroken, both as to A and B.
    The directors who made the suspension are stockholders, and the agents of all the other stockholders. They constitute the practical capacity of the bank ; and the foregoing brief analysis presents the point of difference. So that is — or is not, some acting against conscience, some bad motive or fraud, necessary before forfeiture — is a question to be kept in view throughout the argument. The bank puts itself upon its chartered rights for protection. And the question of the South Carolina Bank is the quesiion, I might say, of all the banks of the United States, who have suspended payments. Inasmuch as the question made by the pleadings is very general, have banks of discount and deposits a legal right to suspend or refuse the payment of their bills and deposits in gold and silver coin 1
    Such a question involves, not merely the doctrine of civil incorporations, of vested rights, and the application of practical principles of daily occurrence, but certain fundamental rules of the federal constitution. And its final adjudication as a general principle of law, would bear upon the business and interests of all the States for generations.
    It is not merely that the banks of the States are very many, and the officers and stockholders most respectable and leading men ; and that all our commerce, at home and abroad, depends, for fulfilment, support and enlargement, upon the faith and credit of bank bills. But the banks may be justly said to hold both the character and credit of the twenty-six States of the Union in sacred deposit.
    The mass of the people are judged of, and our institutions weighed in the estimation of foreign nations, by the conduct of such general agents as our banks , and confidence or suspicion, credit or discredit, follows; and the national character grows up accordingly.
    Thus every man may feel the effects of our banking system, and of bank conduct, come home to himself and his family concerns, for good or for evil.
    It is not surprising that men and lawyers are divided upon such a question, between such parties; or that all should be anxious for such a judgment as may settle down into public confidence; exhibit their courts as tenacious of vested rights ; and present our fundamental laws, as worthy of high commendation, and practical and equal in their operation. But all parties desire general reformation in our money currency. This investigation leads us to inquire, and finally to decide:
    1st. What is the assential trust of a bank of discount and deposit!
    2dly. Has the South Carolina Bank abused that trust!
    3dly. If so abused, does forfeiture of charter follow as the necessary consequence of law !
    But those final and essential questions of the case require consideration of the following incidental questions:
    Have civil corporations always a policy or public purpose fo fulfil, as the object and end of their fiduciary powers!
    
      This is an important and leading enquiry.
    
    What is a chartered bank, as distinguished from a private copartnership bank!
    What are its obligations, rights and duties, that indicate its peculiar public purpose or trust !
    How is suph trust to be distinguished, as an imperative duty, from its discretionary acts, as its rules of business, of credit, of security, &c.
    
    
      Again. We must understand how bank bills differ in character, and in the legal payment of debts, from gold and silver coin, and from private notes. How, and upon what terms, bank bills become part of the money currency. Why they should be always convertible into legal coin, or lose the character of currency. How they differ from other debts and obligations of a bank, in reference to the public, remedy ; and why they bear no interest, as if actual money.
    A third class of questions must be also finally considered, to wit:
    What is the practical operations upon the case before us, of the federal constitution, in prohibiting the payment of debts, except in gold or silver coin ; and in forbidding the obligations of contracts to be impaired 1
    
    Why should an individual State enforce such restrictions upon its own powers 1 and why undertake to uphold the money currency, by requiring its banks to pay their bills in legal coin 'I
    
    The whole argument of the case may be seen in these questions $ for, if corporate bodies have a public policy, to fulfil such policy must be a prime trust; and corporations cannot but be political institutions. And there must be a public remedy to redress abuses. In like manner, if the corporators are individually exempt from liability, and the bank assets out of reach, then the redress must be in recalling the charter, or to restrain the corporate body in some way ; otherwise the laws would be very inefficient. It is equally clear that, if the State or other creditors are, by law, to receive bank bills as money, such bills must be either money, or represent it, and be convertible into money ; they must point out legal coin somewhere, that, if the contract for corporate privileges depends upon the fulfilment of the trust confided, the trust must be strictly acted up to; else the policy and faith of the State may be violated or trifled with, at the discretion of her subordinate institutions.
    It follows, that what is the public policy or trust of a bank of discount and deposit, must constitute the first question of the case; and, has the trust been abused, the second.
    These two questions must accordingly be always kept in view, in considering the other questions. We will first inquire, in what does the trust of any corporate body consist 1
    
    
      The trust consists in the political design, and legitimate end, to be promoted by the charter of incorporation.
    It arises out of the rights, franchises and powers given ; as the implication of reason, justice and law, deduced from such powers.
    And accordingly, this political design is seldom expressed in the charter. But, being (he consequence of law, the trust should be as plain as the implied obligation to return money borrowed. It should be a necessary consequence, otherwise chartered rights would be very unsafe and deceptive. The origin of corporations in England indicates this political design — I might almost say, their official charter and public object.
    They were instituted to protect the crown, the government and the people, against the encroachments of the feudal Lords; and they were effective instruments.
    The powers and exemptions bestowed, indicated the will of the Sovereign, in the subject and direction of the charter. And the corporation, which was made up of many men united in one body, was constituted an agent to execute that will. This was the origin of corporations in England. Let any one reflect for a moment upon the political and effective use made by the British Parliament and Minister of that city State, the corporation of London— or of the Bank of England, or of the East India Company ; by which they govern an hundred millions of subjects in Asia; and he will scarcely doubt that corporations are most effective instruments of government, with a political object in trust, which must be preserved. In this last instance, if not in the two former, the corporation and its trust, are scarcely less political, governmental and authoritative within their sphere, than the Parliament itself. At least, such was evidently the opinion of Charles Fox and Lord North, in their coalition to govern England, by commanding the East India Company. There must be no perplexing doubt left on this head. If, for instance, the federal government could incorporate our towns and railroads, our colleges, banks, manufacturing and commercial companies, and religious societies, it would be little to say that her domestic political power would be augmented by fifty per cent., and the rights of the States forthwith in their wane. If she could even declare them bankrupts, she could undermine the constitutional powers of the States. To conceive' rightly of corporations,- as the political and moral aids of government, is so essential to the understanding of such artificial bodies of men, with powers.imputed by the objects .of their trust, that I suppose it, if I may so speak, the initiative of a right judgment in the case before the court.
    Let me, therefore, further illustrate the proper conception from the general powers and privileges of corporations.
    1. They are permanent bodies. Why? In order to promote the settled political ends, moral objects, or general improvement of the State. And this political end is the reason that they were originally subject to repeal at pleasure of the crown, and still tojudicial visitation.
    2. They have the right to remove, for the same purpose, a member for misconduct. This is an arbitrary power ; but it is given in order that the majority, at least, may be kept faithful to the main design, promote its object, and prevent forfeitures. This power of emotion is precisely analagous to the right of the State to recall the charter, i. e. to eject all the members, and has similar reasons, not arbitrary pretences, for its exercise.
    3. Why are corporators individually exempt from liability for their corporate acts ? >
    Because such acts often depend upon sound discretion, and may be of great public corcern. But as men often err in judgment, they ought not to be deterred in their corporate duties, from the apprehension of personal liability.
    From the history, the use, privileges and powers of corporations, we may plainly perceive that they are public institutions ; each with a system of its own, according to its public purpose — which purpose constitutes its muin trust; and which trust it is bound to act up to, as the condition of its corporate rights and implied powers. .These are altogether factitious, and are given for the purposes' of the trust. Individual advantage is not the primary object of such trust, but constitutes very effective means in order to ensure the fulfilment of the public object, and therefore any member may be ejected, or the whole removed.
    Now then, in order to discover the liability to forfeiture of a bank of discount and deposit, we are to inquire what is its peculiar trust 1
    
    But, before doing so, let us define generally what forfeiture is.
    Forfeiture is the consequence, in law, of the wilful desertion, infraction or abuse, by the corporate body, of the peculiar trust confided by the charter. This being abused, forfeiture is the regular consequence of such delinquency. The trust is simply resumed by the State; that is, all the members are removed.
    The process to forfeit a charter is analagous to the proceeding to disfranchise a public officer. The charter presupposes that a public trust has been abused ; upon conviction, his commission terminates at the discretion of the State, and the office departs as a consequence. In a word; in both, the case of corporations and of public officers, the State is the proper beneficiary of the trust confided, and the government is of course bound to see it fulfilled, or to recall its endowment of office or privilege, as the case may be.
    Both the questions, what is the trust of a corporate body, and what is the consequence of its abuse, are clear. We proceed, therefore, to the first immediate question of the particular case. What is the peculiar trust of a bank of discount and deposit, which the bank must fulfil, or forfeit its charter, at the discretion of the State 1
    
    In order to discover the public purpose or essential trust of such a bank, we enquire — what are its rights, duties, interests and practice; first, as a private copartnership, and then as a public institution 'l If such private and public bank concur in their rights, duties, &c. &c.} the conclusion, what is their trust, will be plain, as a consequence ; for, as the trust, if expressed, would mark out such rights and duties — so, such rights and duties being admitted, equally point out the trust. They are strictly reciprocal. In England, banks and bank bills have been in use about one hundred and forty years; but their national bank issues no bill under five pounds sterling. The Bank of France issues none less than five hundred francs. In this country, banks have been used about fifty years ; and the first bank of North America issued penny bills. Our own Bank of the State issues dollar bills. I need scarcely say, that banks and paper money are interwoven with our history, to fullness and repletion.
    Two years ago, the States numbered some eight hundred banks; and within that time we have witnessed many suspensions, and not a few total failures. But, let it be ever borne in mind, that in the conflict of specie andpaper money; and in the fearful cloud of suspensions, followed by vicious liquidations and total insolvencies, besetting so many of the States, in this State our banks have presented light and hope. We have had comparative peace and safety. And among these, the mother institution, now before the court, stands as unsullied as the common bank error permits. The exemplary integrity of her first president, the venerable Thomas Jones, has pervaded such institutions, and afforded a pattern for many banks that followed in the State.
    It would be blindness not to perceive that banks and factitious money have become literally dovetailed in our State institutions, in our business, our interests and our feelings. We could as well discard our rail roads, or our means of social intercourse. And when, upon the whole, the banks of South Carolina have done well — and that, too, under difficulties and seducing examples — it is plain that the time and the particular instance are by no means unpropitious in this State, for deciding the grave and consequential question before the court.
    Proceeding, then, more closely to the question, what is the design and proper trust of our banks of discount and deposit 1 let us take, for that purpose, the history of the very bank before us, and consider the duties it took upon itself when a mere private copartnership of Thomas Jones & Co., called the South Carolina Bank.
    Before its first charter of 1801, this private institution received deposits, and returned them in specie, on demand. It discounted promissory notes in exchange for its own bills, which it paid in specie, on demand, to the bearer. It was a voluntary bank of discount and deposit. Its right was to receive and to discount. Its obligation was to keep and to pay in gold or silver coin ; and it performed those offices. Who can doubt what was its obligation 1 Thereupon this private firm acquired the confidence of the community — its bills circulated, and were received in place of legal coin, in payment of men’s debts. And it is honorable to this private bank, that its bills were receivable in payment of taxes, by an Act of 1795. In this stage of its history, this private bank was incorporated in 1801, (8 Stat. p. 1,) and was still called by its charter, “ The Bank of South Carolina." Thus chartered, it was authorized to practice precisely the same rights, and perform the same duties, upon paying a sum of money in lieu of future State taxes. What then was the change?
    Thus chartered, the South Carolina Bank acquired—
    First, the franchise of being a corporation — that is to say : it was made an institution to promote certain public ends, through the means of a body of corporators, (not mere partners,) with their capital of all kinds exempt from taxation.
    This franchise is a virtual assurance by the State to the people, and lays the foundation of general confidence in the whole community. It assumes that their bills represent legal coin, and presupposes an institution for an important public purpose.
    Secondly. The individual stockholders could no longer be sued at law, or in any' way rendered liable for their bank debts, except in a certain event, and then to a limited extent. Such exemption belongs to all corporations, and is their requital for their devotion to a public purpose, and the policy of the State.
    
    Thus privileged and legalized in the public confidence, their bills circulated with increased assurance; when, in 1814, the Legislature prohibited to all other corporations than banks, the issuing of bills as a circulating medium. The reason and policy of this Act are plain. No other corporations but banks are obliged, by the trust of their institution, to pay their bills promptly. Prompt payment was not the object of their incorporation, and of course their notes cannot be depended on as a circulating medium to represent money. But this Act does give to future banks a more exclusive franchise; and the South Carolina Bank, having been re-chartered in 1822, and again in 1833, has that advantage. But the reason and policy of the Act of 1814 do well illustrate an important and essential characteristic of our money currency; that bank bills constitute a circulating medium or currency, and of course represent money ; and that the issuing such currency ought to be confined to such corporations only as have for their prime trust the prompt payment, in gold or silver, of the notes they issue.
    It is in accordance with this charter of bank bills, that our court has decided that a tender to pay in bank bills, is a lawful tender in payment of debts, unless expressly excepted; that is, unless the debtor himself be required to produce the gold and silver, and then he must himself do what he would have authorized the creditor to do; i. e, go to the bank, or procure the money, and tender it in place of its representative, the bank bill.
    This adjudication gives the proper conception, from authority, of what a bank bill truly is, to wit: that while legal coin constitutes the measure of all values, bank bills are the representatives of that very measure, and point out to the bearer, on the face of the bills, where the actual gold and silver measure may be found at all times, i. e. at the office of discount and deposit of the bank that issued the bills.
    Such is the meaning of the convertible bank bill that constitutes a good tender of payment. It was a good and striking figure, that every bank bill is a key to the vaults of its proper bank.
    A bank bill is, therefore — if either authority or reason and analogy can make it so — the assurance of the bank that it holds the gold and silver money in deposit, to pay the bill on demand at its counter.
    The bill differs from the usual certificate of a deposit only in this, that the bill is payable to any bearer, instead of payment being confined to the depositor alone. All our banks, like their original of Hamburgh, are banks of deposit. The modern practice of discounting promissory notes did no more than introduce the new form of certificates of deposits, called bills; and common convenience required they should be payable to the bearer — while confidence in their convertibility into coin, as if certificates of deposits, gave them the character of money, and they then became a circulating medium. Upon this head, as well as upon the public ends of all corporations, I do feel that I labor superfluously for reflective minds. But something more is due upon such an occasion. While, therefore, upon the subject of money and bills, let me observe that it has been justly remarked of coin, that it is money only when used, or in circulation. Coin hoarded is not money; for the purposes of commerce, or a practical currency, its character as money is suspended. It is only gold or silver. Apply this observation to bank bills; they represent coin only as long as they are convertible on demand. Such convertibility constitutes their true and only being as a substitute for money, or a circulating medium. But yet, as coin hoai'ded, though not current money, may be very valuable, so inconvertible bills, though possibly valuable in prospect, cannot be lawful currency. They are neither money, nor the representative of money. How many millions of bank bills in the United States have, at this moment, as little of the essential characteristic of money, as the old continental currency of the revolution 1 All those are alike' — they promise dollars, but are mere evidences of debt.
    We cannot disagree in the practical fact that renders bank bills in law a part of our money currency. Such false tokens of money are entirely without the reason, and foreign to the adjudication just referred to. That adjudication can be supported but upon the explicit assumption and confidence that the bills tendered do faithfully represent legal coin, and do inform and assure the bearer where such coin may be had on demand, under both pecuniary liability to the individual receiving, arid the penalty of forfeiture to the State, for bad faith in its own accredited institution.
    The State policy, in this respect, is to furnish a currency to pay men’s debts as they were contracted, without advance or discount, by the vacillations of bank bills. And the undertaking of banks is to support that policy, by keeping such a specie capital as will meet, all its bills, on demand, at the hazard of disfranchisement.
    This necessity is the cause why banks have the express right to trade in gold and silver bullion, and nothing else. Many, but very different corporations they are, may linger out a long life in hopeless insolvency, because ability to pay, and prompt payment, were not the very end and public purpose of their incorporation.
    For instance; a rail road, a hotel company, or a city, may owe an immense amount — the State has no concern in their debts. To pay on demand was not the public purpose of their institution. Even banks may delay to pay their bonds and contracts, other than bills and deposits. These last alone represent money ; and being received as money, is the reason they do not bear interest before actual demand and refusal at the bank. And when so dishonored, they lose that peculiar characteristic, become the mere evidences of debt, and no longer the representatives of money, nor a circulating medium.
    A too slight conception of this distinction, and of such object of their institution, is supposed to have led banks on to the delinquency of disregarding the public policy and trust confided to their hands, as if such policy and trust were placed at their discretion. The error evidently consists in confounding their public trust, which is imperative and indispensable, with their rules of order, of credit, of security, of contracts, and the like, which are all discretionary. Whereas, both the federal constitution, and the laws of the land, do, by their paramount authority, constitute and command the main trust for all incorporated banks, in order to render them the instruments of government, and for its ends, not for the ends of its agents, the corporators. Their interest lies in lending money within the principle of the trust, and in their exemption from personal liability. Were it not so binding, the State would protect and foster an institution which could do more than the State could do, consistently with the federal constitution.
    The distinction between the binding trust and the discretionary rights of every corporation is plain, I would think, to all understandings that search the subject; and yet, in many published bank arguments, it seems laid aside, and therefore the error must be exposed. Then, I ask, is there any corporation without some imperative trust 1 Not one. Is • there one that may not be disfranchised by the abuse of its trust ? Not one. Then find out the peculiar trust of any corporate body — as in the instance before us — to pay its bills and deposits in legal coin, on demand, if that be its trust; and the distinction between the trust and its rights, is as plain as that between the doctrines of the Christian religion, which are beyond human control, and the government or orders of a church, which belong to every sect of Christians ; or between the laws of the land that bind this court, and its rules of order and practice, which are at the discretion of the Judges. But it is the common error of human associations with such divided responsibilities and with power.. The exact duty, and the discretionary rights, become obscured and finally confounded with each other. And such, let-me add, has been our own especial peril in the great contestation now before the court. It has been difficult to distinguish between the strict principles that govern the judicial judgment, and the prerogative of the Legislature, to arrest its execution, when it seems so right and just so to arrest.
    But to return to our precise question; what are the rights, duties and liabilities of the South Carolina Bank %
    
    From its own history and conduct, before and since its incorporation — from its voluntary assumptions and practices, which are common to all such, banks ; from the history of such banks, their use, ends and privileges, plainly indicated by their incorporation, and practiced upon; and from the settled doctrine of corporations, and the object of the State, — I deduce the conclusion, and answer the question as follows:
    That the trust and duty, the rights and liabilities, of this ■ bank of discount and deposit, are—
    1st. To receive deposits of gold and silver coin, and to return them on demand. This is the foundation principle of all such banks.
    2dly. To discount promissory notes, by giving coin or bank bills. This is the modern improvement, and right of such banks; and the source of such a circulating medium and factitious money as bank bills.
    3dly. To pay such bills in gold or silver coin, in like manner as if such coin had been deposited for each specific bill. This is clearly within the original foundation principle of banks. And in order to meet this continued-efflux, without too, closely pressing their debtors, modern banks are allowed to trade in gold and silver bullion, and thus replenish their vaults with the adequate and indispensable specie basis, required for such prompt payments. To require such adequate specie basis, every .right, every duty, every policy, and every characteristic of banks, and of their charters, tend and enure.
    The State’s political and constitutional ends, were to give to the public assurance of uniformity, value and permanence, in bank bills that represent money, by the only possible means — the payment of them, as well as of deposits, in lawful coin.
    The State presumed, and all bank charters assume, that if these practical ends be answered, the banks would facilitate and extend trade, by loans of current money; and by their diffusion, promote a safe and uniform, and, at the same time, a more enlarged and convenient circulating medium than hard money.
    Such are the obvious reasons of the State, in the Act of 1814, for confiding to banks, and to no other corporations, the issuing of a circulating medium, and for receiving their bills in payment of all public demands. Preserve the principle, and banks of discount stand among the great utilitarian improvements ; dispense with it, and, as we see in so many of the States, they constitute the master key to frauds, upon the weak and the strong, the confiding and the necessitous. To such an extent have the consequences led in some States, that it might be said the citizens owned no property that could be valued by gold and silver coin, and that an ordinary creditor need not look for lawful money from his debtor. And yet, by the laws of the land, as certainly as an incorporate insurance company is for the purpose of promoting confidence in trade and navigation — a city, to secure a good police — a rail road, to accelerate travelling — a church, to fortify morals and extend religion — colleges and schools, to bring to light and activity the intellect of the whole community — each having its own system and peculiar public trust, which they are obliged to act up to, respectively, or forfeit Iheir charters— so certainly a bank is bound to pay its bills, on demand, under equal forfeiture. And their being all State institutions, is the precise principle and reason of the jealousy of incorporations, when made by the general government; and the true cause of the objection to any interference, by bankrupt laws, with such institutions. They are in the right of the individual States, and plainly their instruments of government.
    I cannot think more need be said upon the political characteristic of corporations — or upon what is the main trust of banks of discount and deposit — or upon the question, whether the voluntary suspension of specie payments constitutes an abuse of such trust.
    But the public characteristic of corporations, as State institutions, naturally brings us to say something more upon the third immediate question of the case:
    Does forfeiture follow the abuse of the trust 1
    Corporations being moral instruments and agents, in the civil polity of the State, of itself indicates that they are, of course, subject to judicial visitation, at the command of the State. They might as well question the right of the State to call its officers to account, or fulfil its constitutional duties. In neither case can there be any arbitrary control. We read of corporations being contracts. In general they are contracts, upon the condition of their trusts. And that they hold their factitious being and privileges no longer than they fulfil such trust, is an inseparable part of that very contract. But this point is settled, by many adjudications that never have been questioned in any court. Still, I would give the inherent reasons for every principle and position. In a case of such national concern, not only the learned and the reflective, but common minds, and the uninformed, and the people of other States, should be convinced of the correctness of our decision: It should be made to take deep root in a settled public confidence. Its fruit belongs to every market. For such considerations, before applying the principles now discussed, to the particular facts of the case of the South Carolina Bank, I propose to take new grounds of law and authority, in support of the same argument, that banks must pay in coin, and on demand.
    The whole argument may be placed as firmly upon the following inhibitions of the federal constitution, as upon common law, or the doctrine of incorporations:
    “ No State shall make any thing but gold and silver coin a tender in payment of debts,” <fcc., “ or law impairing the obligation of contracts.” — Art. 1, sec. 10.
    These two constitutional enactments make, throughout the States, paramount barriers to factitious money, unsustained by gold or silver coin; and all suspension or instalment laws, or stops to the obligation of contracts. The first restriction of payments to gold and silver coin, would have been quite ineffectual, unless the obligation of contracts had been also made unalterable by any legislation. If the bank question can be made to turn upon these provisions of the federal constitution, the argument would amount to a paramount principle and contract of reciprocal assurance among the States — the motives of our decision would then be of deeper interest — the sanctions higher, and the possible consequences extended, and be seen to affect the order, welfare and character of the whole United States.
    This consideration is, to my understanding, of great moment; and therefore, although this ground has not been much relied upon, I deem it right, if possible, to make the final decision turn upon such international restrictions among the States, and will accordingly present this view of the argument and law of incorporated banks.
    If I succeed in this additional ground of the argument, it fixes one principle, to govern the decision of all courts throughout the States, and answers a difficulty felt by some, that when the bank was re-charteréd in 1833, it took the charter, with the implied understanding that, as all the banks of the State had before suspended specie payments, and were not called to account, and the State was familiar with occasional suspensions of sterling payments, in all her history, this bank might do the same, if done without fraud, deceit or bad motive. The equity of this view is persuasive, and if addressed to a tribunal that can remit forfeitures, convincing.
    But if such an argument were to succeed Aere, then the courts of one State would support the right of suspending specie payments, and in another State declare it a cause of forfeiture, according to the different history of suspensions in those States; and there might be the same difference of the rights of a bank under an old charter, and under one more recent — as, for instance, the rights of the South Carolina Bank under the charter of 1801, when there had been no suspensions, and under the charter of 1833, when suspensions had become familiar things.
    But this argument, various and inconsistent as would be its consequences, if ever it prevails, and as clearly as I conceive it ought to be addressed to the Legislature, and not to the court, I now propose to meet, by showing that there can be but one rule for judging of bank suspensions; and that such a rule must be without qualification, by circumstances or peculiar understandings, one and the same, in all the States, at least as far as courts of law are concerned.
    But I proceed to the argument. The federal constitution may, possibly, in some of its principles, be in the nature of a compact between the people of all the States, and the rulers they may appoint. But generally, it is in the nature of a compact between the people of each State with every other State, so as to form a confederation of the States, not a consolidation. But however this may be, the provisions just referred to, “ No State shall make anything but gold or silver coin a tender in payment of debts,” nor pass any law impairing the obligation of contracts — these are clearly international laws among the States themselves.
    The State is itself restricted; and do not its institutions come under the same restrictions 1 It may be remarked, that out of State restrictions, express or implied, the federal powers come, so as to make up one complete but complex government, with two Legislatures, each supreme, within its constitutional sphere of legislation, and both subordinate to the constitutional compact, which is made “ the paramount law of the land.” These general principles, and such express enactments, will not be denied; therefore, no one will question that a wilful infraction of the federal constitution, by a State institution, is a ground of forfeiture. And, if the charter of the South Carolina Bank has been forfeited, it occurs by its refusing to pay in gold or silver coin, or in the attempt to impair, by its voluntary suspension, the obligation of its own bills — simply because the inhibitions just quoted forbid all suspensions of contracts. If State institutions could do either, we would be in a worse situation than before the constitution; that is, we might have paper money and stop laws, at the discretion of State institutions, instead of State governments, and that, too, to stop their own payments and impair their own obligations. Does it not follow, that in virtue of the federal constitution, every system of banking — that is, every institution created by a Slate for the purpose of issuing bills in the nature of a money currency, or circulating medium — is expressly restricted to payment in gold or silver coin, and can in no way suspend or impair this obligation of such bills.
    This conclusion appears irresistible. But let me give a single illustration, taken from the converse. The banks having resolved to su,spend specie payments, the South Carolina Bank discounts A’s note, and pays in the bills of the Charleston Bank. The Charleston Bank discounts B’s note, and gives the bills of the South Carolina Bank. Each bank thus clears its own counter of any obligation to pay in specie. How plainly, then, are both banks bound to pay their respective bills on demand? Otherwise A and B are deceived, and written contracts impaired by bank resolutions ; not by the State, but by State institutions ; and how easy might they, then, reciprocally accommodate and play into each other’s hands. But carry the supposed case a step further. Suppose the same two banks had discounted in bills of New York banks. In that case both the Carolina banks would be clear of all obligation.
    How emphatically, then, would the New York bank be bound, in virtue of the federal constitution — the only law of all the States — to pay on demand. How plainly mutual and international, therefore, is the constitutional rule; and how imperative upon every State, to require its chartered institutions, which are of itself, and have none but factitious powers given by the State, to pay its bills in specie, and according to their terms, on demand ; such bills being made a circulating medium, i. e. money, by the State itself.
    
      And under the international prohibition just noticed* how else can the State get over the charge of sanctioning, not only the payment of debts in something else than gold or silver, but of impairing the obligation of contracts, by its own chartered State authorities ?
    The State may as well do the same thing directly, by itself, as indirectly, by her banks ; and so set at naught avowedly, the great international code and compact of all the States.
    If I am mistaken in this constitutional view of the subject of bank suspensions, its error has not entered my comprehension. Unless every State that erects banks obliges them to carry out the principle, as if it were its own statute law, the State, in permitting the abuse by its corporations, enacts a violation of the federal constitution; i. e. the omission so to restrain its own chartered institutions from such violation, is a commission of that violation by the State itself.
    If, then, the truth be that all corporations are constitutional and political bodies of men, for State purposes; and that bank bills are a circulating medium, authorized by the State to represent gold and silver coin; then it follows, from the induction made from the tenth section of the first article of the federal constitution ; and viewing State institutions as identical with the State, that every chartered bank in the United States comes under its provisions in these two particulars:
    First. It is restricted in the payment of its bills, so made a circulating medium by the State, to gold and silver coin, and on demand, if such payment be the promise of its bills.
    Secondly. That it cannot impair the obligations of such bills, by its own resolution to suspend such specie payments.
    And when it does so resolve to suspend, and in pursuance does actually refuse so to pay, the bank infracts the federal constitution.
    It equally follows, that there can be but one rule for the banks of all the States; and such a rule.- cannot be qualified by any accidental circumstances or understandings, in a particular State; if otherwise, the principle of the constitution is not the law of the whole land. Because State institutions may infract it, and actually do what the State cannot do.
    And does it not as clearly follow, that the restoration of bank bills to a sound currency all over the United States, depends upon the firmness and constitutional integrity and union of their judiciaries, in this principle of the federal constitution 1
    Is not, then, the motive of the Act of 1840 of deep interest! Is not its sanctions found in the federal constitution! Is it not bottomed upon a paramount contract of reciprocal assurance among the States, that the measure of all property is gold and silver, and to keep that measure true, contracts shall not be altered or suspended in their obligation so to pay, either by a State or its institutions ! No one doubts that the State is prohibited. But the bank is a mere legal entity — a simple creation of the State’s legislative power — an agent to aid the constitutional objects of the government. Most, truly a bank is all that, and therefore, it must be restrained from infracting the law of the land.
    Upon this last argument, taken from the federal constitution, and its application to all State institutions, as inseparable from the State, I rest my own judgment of the legal solidity of the State’s right, if not its duty, to recall the charter in such a case as the one before the court. — And also, the vital importance and the magnitude of our decision.
    It is the first case in which the general unfettered proposition has been made and fairly met, as a State institution ought to meet and make up such an issue with the State.
    And shall not her judicial department allow to a decision so practical, yet so initiative of a sounder and juster banking system, its proper constitutional highway for the whole Union!
    The remaining question is — How is the South Carolina Bank, so suspending specie payments by resolution, and actually refusing so to pay on demand, to be dealt with ! The facts are avowed and defended. No one can question that total insolvency would be a good cause of forfeiture. Not because bad motives could be imputed to the misfortune, but because the power of paying in legal coin is avowed by the very admission of insolvency. Although, if required, the refusal so to pay must be proved. A bank might owe an immense amount upon special contracts; yet, while it paid its bills and deposits in specie, no forfeiture would follow on that account.
    Neither our Insolvent Act, nor any Bankrupt Law, can reach corporations. They cannot swear out.
    It is then the actual refusal to pay in specie, that causes the forfeiture, and whether the refusal be through inability or wilfulness, the cause is equal, and the consequence the same. The true difference is, that in the case of a gratuitous refusal to pay, the delinquency is more clearly wilful; or, may amount to the abandonment of its trust. For illustration, James 1st abandoned his kingdom, yet said, I am still the king. But the parliament replied — the throne is then derelict; and this was the precise legal consequence of the king’s refusal to fulfil his trust; and his successor took the derelict throne. But no enquiry was made about the motives of James. It was enough, that he acted wilfully. The same consequence followed the more explicit abandonment of Richard Cromwell, and both instances illustrate the proper consequences of wilful neglect, or dereliction of a corporate trust.
    The error of the bank plainly arises from confounding the manner and method of banking which are discretionary, with the legal principle of banking upon the basis of gold or silver coin, which is prescribed, and therefore imperative; or by supposing it came not within such constitutional enactment. But when the federal constitution prohibits,, every State prohibits, within its territory. Otherwise, the federal constitution does not form a confederation of the States.
    And, under this acknowledged principle, I would suggest, and may be excused for suggesting, moral and constitutional reformation ; that the reformation so loudly called for, and the security for a convenient, uniform, and permanent paper currency throughout the United States, depends more upon the firmness and union of the judiciaries of the States, in supporting the proper constitutional principle of bank payments, than upon the systems of State or federal legislatures. Their systems must be ever various. But courts may, and are bound to, unite upon the constitutional principle; and may, by enforcing its true application, repair all incongruities.
    Where the law is plain, Judges have no discretion.
    Feeling, deeply, such considerations, but that to charter banks belongs of right to the States, in order to support their domestic commerce, this constitutional question is brought home to every State — shall their banks be compelled to pay their bills and deposits, in legal coin, on demand, or forfeit their charters 1 It is a question, the final decision of which, in my judgment, involves the judicial character, as constitutional agents, to a great and enduring extent, all over the Union. But I return to the precise question now before me.
    Does the voluntary suspension of paying its deposits and bills in gold and silver coin, for the space of fifteen months in ’37-38, and for nine months in ’39-40, but again resuming payment at the end of such times — these suspensions arising not from the inability of the bank, but following regularly from the resolution of the bank government, the bank at the same time carrying on its business as if there had been no such suspensions — do such suspensions afford sufficient ground and legal cause for the court to pronounce the bank charter forfeited, so as to leave the stockholders precisely on the ground they stood before the first charter, i. e. as mere partners in private banking; or else,, to wind up and settle their business, under the provision made in their charter in case of dissolution. Let me here observe, that it has not entered my understanding to suppose that the facts can, in any view, justify the seizing by the State, of any property or money values of the stockholders. Is their charter forfeited 1 is the only question) made or arising from the suspensions of specie payments in the present instance. And my argument is thus further illustrated. Were the owners of a ferry or a railroad to refuse for fifteen months, at one time, and for nine months at another, to carry across the river any traveller, or were the rail road company to refuse to carry passengers for the same periods of time, alleging that it was not fit, or right, or prudent to carry passengers ; but that they hacl only suspended their operations of conveying travellers, and had resumed the practice of so doing after these suspensions, which had been ordered for good reasons, we would still be bound to conclude that their charter had been forfeited, not on account of any deceit or fraud, but because both the owner of the ferry and the railroad company would have declined to act up to, and given proof that they had deserted, the very ends and public object of their institutions, without adequate excuse or justification. If they had so suspended conveying passengers, under a deliberate resolution, arising from some supposed policy, and not from inability, it could not have strengthened their defence, but enforced the charge of their dereliction of duty and contract. If they had in the meantime carried all other freight and passengers except aliens and adopted citizens, it would not have lessened the cause of complaint but very little. Again, if they had called their neglect suspension, averring that it was not any refusal to carry, inasmuch as they had provided good boats to carry those very men up the Santee to Columbia — up the Edisto and Saltketcher, to intermediate points; and up the Savannah to Aiken and Hamburg; this would not have altered the truth, that they liad refused for fifteen months, and again for nine months, to discharge their obligation to carry all travellers upon the railroad. And so it was with the South Carolina Bank. It continued to receive deposits, to discount notes at six per cent, interest, and to issue bills by way of loans of money upon such notes, and while they refused to return the deposits, or pay their bills in gold or silver, they were as accommodating as possible, consistently with their resolution, to suffer no efflux of hard money from their vaults, to pay the one or the other.
    Now, I grant that there may have been no moral turpitude — no will acting against the dictates of conscience, but acts enough, deliberate and wilful, against the meaning of their contract, and the intendment of their charter; a fraud against its lato. Because, in its acts, the bank adhered to all its own rights and claims of self-interest, but laid aside the corresponding and reciprocal obligations. It received deposits, but returned them not — it took interest, but paid none, while it withheld the principal of its own debts. Though, as to both the deposits and bills, it offered its own or other bank bills in lieu of gold and silver coin.
    Men may call this suspension or compromise. But the resolution to suspend specie payments, coupled with the fact, that the bank avoided payment when demanded, constituted refusal to pay; and an abuse of the great end and prime policy of its charter. And no after payment at a time convenient to the bank, could alter the past, or repair the loss that might have fallen on the bearer of the bill, for want of the coin, or remedy the evil consequent upon the example. If so doing, the bank should- be sustained in such conduct, by the judicial tribunals of the State; and if the judicial tribunals of the States do sustain their various bank suspensions respectively, this conclusion is to my understanding plain, that the 10th Art. 2d Sec. of the Federal Constitution must become a dead letter.
    But, after a time, the bank resumed the proper fulfilment of all its obligations. It therefore presents this position, from June ’37 to March ’42, nearly five years, it suspended specie payments only two years.. And we have learnt that from and during the war of 1812, and after it, our banks all refused to pay in specie for some years successively, and were never reproved. Such foregoing suspensions justly suggest the inquiry, whether our banks can be judicially sanctioned in the practice of the like suspensions, under the emergency of occasional events; at one time with, and at another without, general approbation; and when the State calls, by its officers, for the ultimate decision of the judicial department upon the case, so made up of those very facts, upon strict law. To this last question, my answer is, that thé legal and constitutional payment, in legal coin, is unaffected by the practice of such occasional suspensions. That banks, under such a practice, cannot introduce for themselves such a species of stop law;.even under the honest belief that the delay was wise and called for; that is, if they will do so, they must take the hazard of the State requiring the penalty of forfeiture. As the Bank of England did in 1797, when, after consulting the Privy Council, they ventured to suspend payments in sterling money; -and afterwards obtained the sanction of an Act of Parliament. This historical fact illustrates well, that all matters of excuse, extenuation and the like, must be addressed, not to the court, but to the department of government that can constitutionally remit the forfeiture.
    But acting in the judicial, and not the political department, I cannot doubt that the suspensions, being done under a deliberate resolution of the bank government, and so not claiming shelter under any suspicion of the particular bills demanding payment, or the like, did oppugn the public trust of their charter, and committed the entire delinquency charged on the part of the State. And that their only shelter is precisely like that of the Bank of England, in a legislative act, or in the remission of the forfeiture.
    Much judicial attention has been given to the case before the court, and we have been greatly aided by two very full, learned and able discussions of its entire merits. The arguments gain in strength with time and opportunity, up to the full measure of the case, and the call of the great interest involved. .
    They divided the court, and equally a second time, as nearly as could be. But the following propositions are considered firm and indisputable:
    1st. That corporations are all political State institutions for the ends of constitutional government.
    2dly. That each has a trust, which it is bound to act up to, as the condition of its chartered rights, privileges and functions.
    3dly. That if such trust be not acted up to, the corporation may forfeit all its chartered rights, at the discretion of the State.
    4thly. That all its powers and functions are given to fulfil its proper trust, and to enable it to avoid a forfeiture. And all its advantages are sustained for the same great object.
    5thly. That such powers and functions are either according to the trust intended, or as expressly given by its charter, and do not appertain to the corporate body, by the mere civil rights of its individual members.
    6thly. Such powers and functions are as distinguishable from the civil rights of a citizen, as the official authority of a State officer, from his individual rights common to nil men.
    
      7thly. That the peculiar trust of a bank of discount and deposit, is to receive deposits of gold and silver, and to discount notes, by loans of lawful money, or by its own bills issued in lieu of money; and of course its implied powers and functions are only such as are incident and necessary to such trusts. And finally,
    That gold and silver coin constitute the measure of all values, and the only legal tender in payments of debts; and that bank bills represent such coin, but only while they are secured in their payment of such coin.
    From such unquestionable propositions, we deduce these conclusions, as a necessary consequence — that such a bank is bound to pay its bills, and return its deposits of money, as a consequence of reason and- law, though not.by the éxpression of its charter — that such payments must be in gold or silver coin, by virtue of the constitution: but this rests on no stronger reasoning than the implied obligation to pay, and that such payment must be on demand, at its office of discount and deposit. These three conclusions stand on the same grounds, with the additional obligation as to the last, of an express promise so to pay on such demand.
    To question its meaning, is to question the two former propositions, or the obligation to pay at all. And finally, that a deliberate and wilful resolution to suspend such payments, accompanied by actual refusal so to pay, which are the allegations of the declaration, constitutes an explicit abuse of the trust of the bank charter, and therefore it is subject to forfeiture at the demand of the State.
    
      But, confident as are my own convictions, I will still listen to the counter arguments of my brethren, and he that convinces my understanding, him will I follow. I did at one time hope, for my own sake, that every Judge would enforce his opinion. For, to be disabused of a misjudgment, in a case so indefinable in its consequences, cannot but be balm to the mind that would judge justly and act independently. And I would therefore be glad of aid from each and every one. Upon this subject, I think it but just to say that the Attorney General did well, when he printed his entire argument for the State; he allowed time to confute-it, if it could be convicted of error, and this was rightly done. But to proceed. The State, gaining its case, at least relief from suspense and anxiety, if not from speculations, will be felt. And all will acquiesce in the decision, while every one may retain his own confirmed views of the principle, that‘may ultimately settle down into general confidence, and become the law of the land. But to do this, adjudications again and again will be required. Precisely the same question must arise in many of the States. I cannot look upon the objects of the Act, as a temporary expedient merely. It was intended to arrest the diffusion of a paper medium — not its useful instrumentality. Paper money may be as good as gold and ‘silver coin, and is much more convenient in daily business. But without a metalic basis ever ready to take its place, such money is deceptive,, becomes the root of frauds and spreads out its scions far and deep in society.
    With all the authority of the British Parliament, and the character of the Bank of England, during its suspensions from 93 to 1823, its bills deteriorated by twenty per cent. The report to the House of Commons in 1800, by Mr. F. Horner, is replete with experimental knowledge on this most interesting subject to every man. And our own experience is, that during our short suspension, and notwithstanding great confidence in our banks, their bills fell three per cent.'below legal coin. But suppose that the banks were tree to suspend at sound discretion, what ought to be their course 1 Would they not reflect 1 If the payment of debts were to he made in gold or silver, by weight, and this is the true principle of their coinage, our sense of justice would be shocked, if the pound and ounce, the pennyweight and grain, were subject to vary indefinitely between contracts and the day of payment; such injustice would be appalling.
    Yet such is the practical consequence, and the plain truth, when paper money does not truly represent so much legal coin, always kept ready to take its place. Unless this be ready on demand, how can usury be ever predicated of any loan of bank bills 1
    
    Bank suspensions do, therefore, derange the application of decided adjudications, in several instances of frequent occurrence — usury, and tender of bank bills for money— and then the seeds of dishonesty that are sown broadcast, between debtor and creditor by suspensions! The directors of banks ought to look to such consequences.
    Are not banks, as well as all corporations, our State institutions 'l — as truly so as its offices. In common with these, then, they should guard against the first springs of immorality — example and temptation. And although such mere legal beings cannot commit frauds; yet, the men themselves who introduce the seminal principle of popular vice, under the shield of their corporate exemption, must incur great responsibility and a just odium. '
    This ought to be deeply impressed upon such State institutions as can and do fashion our public character. And banks have this power to an extent scarcely less than the Legislature itself.
    The Act of 1840 is bottomed upon such considerations. It is in .no hostility ; it raises no sword; but, after offering a shield to all banks, it would correct their aberrations from the principles of their institution. When Luther attacked the corruptions of certain Christian churches, he was a faithful reformer; although when Voltaire attacked Christianity itself, he was an Infidel.
    The very fingers’s ends can feel the distinction between such principles of human conduct, and the application is plain. The system of banking is riot attacked, but its errors are arraigned.
    I ask, is not the State of South Carolina thoroughly in earnest in this movement, made to bring about an abiding regeneration in bank payments ? The system of banking wants only this restoration to its proper and main principle ; and the evils complained of, which are all endured by the departure from that principle, will no more be heard of.
    Let the banks look at the Act under its just aim, and their own practical position, office and influence, and this restoration follows, from a rational consideration of duty and character.
    Upon the same principle, is not the government and its acts the same to the people as education and example to individuals 'l It is so, and therefore, the judgment of a great department, upon a constitutional principle, leads to many consequences in the understanding and conduct of the people.
    The Act of 1840 is no more than what any State may, and probably will, do at its own proper time. I he tendency of the Act to arrest or lessen a growing evil, is unquestionable ; and its movement was at the right time to prevent, in the money currency of South Carolina, a convulsion; which had introduced distrust and disorder into many States; greatly injured the credit of the whole union, and opened a wide ingress to frauds — frauds of the most contagious kind — because the responsibility is sub-divided, and the infliction falls upon unknown classes of men. But the Act has done much to save this State from similar evils, and given it much relative credit by the constitutional principle it would enforce, and by the virtual declaration that without that principle our own banks could not constitute institutions fit for this State.
    I take the Act as found in the statute book, and, for myself, consider it an example of fidelity to the federal constitution, and of just legislative patriotism towards all the States; and therefore respect its object.
    On this head, permit me, for a moment. True patriotism is the love of country, only when united with the will to use all the human faculties for the prosperity and the advancement of her institutions, as well as for her defence and character ; yet it is evidently a local attachment, and may therefore be in danger of dwindling towards the United States, from the more natural and absorbing affection to the particular State of our birth, and of our hourly protection. But this is a tendency to be guarded against by the conduct of the State governments themselves. Vattel, p. 100, says: “ The State will be powerful and happy, if the good qualities of the subject, passing beyond the narrow sphere of the virtues of individuals, become the virtues of the citizens.” “ The grand secret,” (he continues,) “ is to inspire the citizens with an ardent love for their country.”
    But in the United States every citizen has, besides that of his birth, a country of twenty-six States united.
    His attachment to his own State must go farther still, and pass into fidelity and active support to the whole union, and to its princples of government for all the States. This extension of patriotism cannot be attained to the full extent of the federative aim of our general government.
    
      It is the great desideratum of our complex scheme of government. But local attachments bear so hard against it, that to neighboring States so rivals it, that between the two it may be even supplanted.
    How important, then, that each State government should consider, and by her general conduct treat, the federal constitution as a practical system of international law ; and not only inviolable, but to be carried out and guarded, as her own statutes, and thus expand local patriotism, and connect it, by the force of example, with all the States, and the principles of their union, as the parent at home would extend the family respect for the parent abroad, whose absence might weaken the ties of love. This is the very principle of the conduct of these States, among and towards each other, The citizen of one State being the citizen of all, is the proper example. It was the element of the mission sent to this State in 1833, by Virginia. While she disapproved of our Act of Nullification, she sent the messenger of peace, to ask that it be remitted; and the example being set by a leading State, under such a difference of opinion, terms were offered and accepted, in the spirit of an extended international patriotism among the States.
    Upon the subject of banks, credit and currency, in which so many States have been unfortunate, and which, assuredly, is the tenderest point in our general government, this court would comment in the spirit I have just extolled.
    
      Now, then, does not the whole commerce of the United States, as well as of each State — as exchanges, purchases and sales are carried on — depend for its necessary means upon bank bills'? They are emphatically the American currency. Every State authorizes their issue, and in smaller amounts than in any other country, in order to serve its own domestic commerce, which is the basis of the foreign and international commerce, regulated by Congress.
    Yet, in all these respects, the general government cannot interfere, although so deeply concerned on account of such foreign and international commerce. But at this stage, the federal compact intervenes, and absolutely requires the payment of all such bills to be in legal coin. This is lhe only check or control Congress can make use of.
    Does it not follow irresistibly, that that check must be held inviolate, and that each legislature and every governor and judiciary, and the institutions'issuing such bills, are not only bound by the compact, but is not their patriotism called upon to put forth all their strength and wisdom, their example and eloquence, to enforce the constitutional requisition, and to render payment in gold and silver coin, the common, practical and acceptable usage of our whole country'? To effect so much good, the.understanding must be instructed, and the truth should be felt, and brought home to men. There is as much safety to* practical justice, in the habit of mental fidelity to good principles, as to honest speech in the habit of mental candor, which every one may observe in common life to the great.
    We have proved that banks are State institutions, and it is plain, that by their conduct, our character is judged abroad.
    Are they then exempt from the duty it imposes 1 Not so. By their trust they are placed in the very lead.
    All know the value of character in a man; he rules the minds of other men; his word passes for more than his estate. And the influence of his example puts precepts and systems at a distance behind.
    The same force is felt in national character which generalizes the morals and conduct of a nation, and forms the foundation of their credit and influence abroad.
    Let the experiment be tried at this time — send an American envoy to borrow money in Europe, and can he get it upon reasonable terms'? He cannot.
    But, whence has our character and credit abroad, so suddenly deteriorated 1 No where but in a too seeming desertion of the principle of our own constitution by banks, and permitting such conduct to pass unreproved and unrestrained by the constitution, as if we had formed it only to raise our heads above the emergency caused by the old continental currency and the old stop laws; and that being once done, its day had already passed by.
    
      Does it not come home to the understanding of every man, that this is the true cause'?
    While upon the subject of our last Act, and.its operative effects to restore public character, permit me to say that in my judgment the Act marks out both the moral and the path of international conduct among the States, by a positive example set. I will not stint their praise. The legislature has exemplified the public fidelity of South Carolina to the federal constitution. How unlike in character and import is this Act, to the bank resolves, reports, and expositions, that have come over the land in profusion ! I will not say like goods in fashion,-warranted to all customers ; for such expositions have their measure of credit. But this law acts out the part of a State to its own people, and to the other States. It points to the constitution of all the States, and bids her own banks obey that constitution, or be no longer the institutions of South Carolina. It is a movement that must test a great principle of the federal constitution.
    But whatever be the issue, faithful history will write it down as a voice that commanded a faithful regeneration, and note it as a step towards order, tranquillity and justice.
    The rule of the constitution commands less than it deserves our obedience. It alone can reconcile the jarring interests, and bring the discordant materials of many hundred banks to one standard of the right and value of a just currency.
    But so general and inveterate is the practical disregard of that standard, that it requires a united and heroic movement, under one principle, to teach the ignorant and the reckless, that the constitution is the supreme and abiding law of our system — that fidelity to it is fidelity to ourselves. That it is high time for that fidelity to become palpable, in order to save us from lapsing into the disorder of 1789, and the confusion of the old continental currency.
    The Act calls with authority first, upon its own Banks to desist. And by a practical instance at home, invokes the active energy of the individual States upon the subject of their too disordered currency; and we trust it has been shewn, that they hold in > their own hands the true and effectual remedy.
    
      It may be a sacrifice of temporary ease. But such acts belong, and are to the honor of the confederation of the States.
    Look at the State of Maine, in the late memorable negotiation, releasing a vast territory, even to a foreign nation, and dispensing with the federal guaranty of all her lands, for the peace, order and commercial policy of all the States.
    Look at the eight successive releases of territory, from the first, by New York, in ’81, to the last, by Tennessee, in 1806; made by eight States. And we feel what conduct and acts belong to the Federative States, in order to form a more perfect Union and ensure domestic tranquility.
    In such an important movement to restóte the true principles of a legal currency, let me add, may the wisdom, the equanimity, and the disinterestedness of Washington teach the States how and when and where to begin the work of so much reformation. May, too, the comprehension of Jefferson, with the prudent sagacity of Franklin, extend the legislative arm to all the States; and the heroism of Jackson bid them give not back, “ till the going down of the sun,” and the victory be achieved.
    Let such a movement be followed up; stretch out the hand and the rod, beyond temporary ease and mere local associations or local history; and over and beyond the good faith of the Act; order, confidence and success will follow confusion, distrust and dismay, as surely as the uplifted hand of the prophet brought victory to the faithful, or his rod struck refreshing water from the rock in the dry desert. Bo this first, and then send that envoy again to borrow money abroad; and would he return empty handed 1 Had this been already done, he would have, as formerly, the amount pressed upon him by rival bankers. The consequences — the revulsion of such a movement, may make the human mind hesitate. Temporary ease clogs it, and local associations would fetter it. But the principles of the common law strengthen and lead us, and the index hand of the constitution points straight to the one only safe way; and rational confidence, in the experience of commercial nations, gives assurance that the final profit of the conflict vyill be as the merchandize of wisdom; “ better than the merchandize of silver, and the gain thereof, than fine gold.”
    I have done, in a divided court, what seemed to me right, when pronouncing the decision of a majoi’ity; and have, in the minds of many, no doubt, attached too deep importance to a subject which they may think by no means so general in its consequences, as apprehended by myself. I would satisfy the parties, concerned, and the public; would aid what I deem a practical principle — the object of the Act of 1840, and would convince my brethren, or be convinced by their matured counter opinions, the integrity of which is at once the element of its firmness and the assurance that it will be ever open to review; and the final issue will be in the ultimate settling down of the public confidence on one opinion or the other.
    But for myself, and under my present convictions, if in any case I could adopt the still more earnest language of the venerable Dean Swift, to the people of Ireland, against the introduction of copper coin and factitious money, in 1724, (10th vol. of Swift’s works,) it would be adopted in argument against any violation of the 1st Art. 10th Sec. of the Federal Constitution. He begins his expostulation in these words:
    “ What I have to say to you now, is, next to your duty' to God, and the care of your salvation, of the greatest concern to yourselves and your children ; your bread and clothing and every necessary of life depend upon it.” (page 1.) He says, “when the value of money is arbitrary or unsettled, no man can be well said to have any property at all.” “ Nor is any wound so suddenly felt — so hardly cured, or that leaves such deep and lasting scars behind.” (page 185.) He calls it the tenderest point of government, and “ affecting every individual in the highest degree;” and I might add, that the men of our revolution knew all this from dread experience.
    I trust, therefore, that the great time I have occupied in delivering my opinion may be pardonable.
    It is ordered, that the special demurrers to the second and third pleas be sustained.
    Upon argument of the general , demurrer, in which the parties have joined, upon the replication to the fifth plea, all the previous pleadings leading to the demurrer have been looked into:
    And it is adjudged, that the declaration is good, and the fifth plea bad and insufficient. Therefore, it is ordered, that the judgment of the circuit court be reversed, and that judgment for the plaintiff be awarded upon the said general demurrer.
    It is ordered, that the case be remanded fur trial of the issues yet remaining to be tried.
    
      
       This is a mistake. The capital under the first charter was only $675,000 ; and it was not until the year 1832, that the bank was authorized to increase it to $1,000,000, which is tire present amount. The shares hr this additional capital were sold, it is believed, for the benefit of the bank, at a considerable premium. The original charter does not specify the amount of the capital, although several of its provisions assume that it was an ascertained and specified sum. The amount was, most probably, set forth in tire memorial applying for Are charter. Perhaps the sum stated in the circuit decision was supposed to be the capital, from the provision in tHe 3d section of the original charter of 1801, that tlie corporation should be “ capable in law to have, purchase, receive, possess, enjoy and retain, to them and their successors, lands, rents, tenements, hereditaments, goods, chattels and effects, of what kind, nature or quality soever, to an amount not exceeding, in the whole, one million five hundred thousand dollars, including the ammmtof the capital stock aforesaid, and die saiqp to sell, alien, or dispose of.” 8 Statutes at Large, 2. But this provision does not authorize a capital of $1,500,000. On the contrary, the terms in italics shew that the capital was ascertained to be less dian $1,500,000; as that sum includes the capital, and therefore excludes the notion that they are identical or equal. The last renewal of the charter, by the Act of 1832, is, however, conclusive oh the subject, for die 5th section authorizes the bank “ to extend its capital to any amount not exceeding one million of dollars.” 8 Statutes at Large, 66. The amount of die capital of the Bank of South Carolina, as before remarked, is not stated in any part of the original charter, neither is it stated in amy part of the pleadings; and if we were to travel out of the record for the facts, and deal in conjecture, it might be inferred that the capital was only $500,000, tiiat being one third of the amount of property which the bank is authorized, to liold; and in every other bank charter, the amount of property authorized to be held by the bank, is precisely three times the amount of its capital. Thus, in tire charter of tlie Union Bank, tile capital of which, although not specified in the enarter, is known to be $1,000,000, the bank is authorized to hold property to the amount of $3,000,000. 8 Statutes at Large, 15. In the charter of the Planters and Mechanics Bank, the capital is specifically fixed at $1,000,000; and yet die bank is authorized to hold property to the value of $3,000,000. 8 Statutes at Large, 18. And the charter of the Bank of Charleston, in express terms, authorizes the Bank to hold property “to an amount not exceeding, in the Whole, three times the amount of the capital.'’ 8 Statutes at Large, 74. In point of fact, tire capital of the Bank of South Carolina was, as already stated, originally, $675,000, and Was increased to $1,000,000, on the renewal of the charter in 1832. The amount of the capital is not at all material in this case, but as it has been referred to in argument, and in tlie circuit decision, it is deemed advisable that it should be accurately stated and understood,
    
   Harper, Chancellor.

Certainly I cannot suppose it necessary seriously to argue that a charter of incorporation may be forfeited, if the corporation fails to accomplish the purposes for which it was created; a principle recognized and affirmed by every one of the numerous decisions and authorities in which the subject has been treated; which has not been questioned for more than a century; and which is asserted by the judgment which is now under consideration ; that, according to the authorities quoted in argument, “franchises may be forfeited by breach of the trusts upon which they were granted, and perversion of the end of their grant or institution;” “that a corporation may be forfeited, if the trust upon which it was created be broken, and the institution perverted;” “that a corporation may be dissolved by misuser or abuser; for, as all franchises flow from the bounty of the crown, so there is a tacit or implied condition annexed to such grants, which, if broken, forfeits the whole franchise;” “ that a corporation may be dissolved by forfeiture of its charter, through negligence, or abuse of its franchises; in which case, the law judges that the body politic has broken the condition upon which it was incorporated, and that the incorporation is void ;” “ and that suffering one act to be done, which destroys the end and object for which the corporation was instituted, must be regarded as equivalent to a direct surrender.”

Then what are the purposes for which banks are created ! There is no doubt but that, according to the authority quoted — “ the power to issue notes, make discounts, and receive deposits, would follow from the mere grant of a charter of incorporation as a bank. These constitute the ordinary banking powers, and are incidental to every grant of a bank charter, unless expressly excluded.” 2 Cowen, 711 ; 15 Johns. 393. That the - corporation is to exercise these functions, is included in the meaning of the word bank, as universally understood in this country. Such charter would equally import that, at least generally, the bank should pay its notes and deposits in gold or silver when demanded; and all this would be as perfectly understood by every individual of ordinary intelligence, as if the law had declared in the most explicit terms, “ that it shall be the duty of such bank to lend money ; redeem its notes, when demanded, in gold and silver; receive deposits, and in like manner repay them when demanded.” No one has conceived of a bank which was not to make discounts; ■which was not to issue its notes — or if we suppose this left to its discretion and sense of interest, as being the main source of its profits — which, if issued, was not to redeem them when demanded; which was not to receive deposits, or receiving them, not to repay them on demand.

But, indeed, the charter of 1832, under which the defendants claim, after granting them the franchise of being a corporation for twenty-one years, does, by reference to the former charter, and the charters of other banks, and in connexion with the Act of 1816, in fact, confer upon the Bank of South-Carolina, as alleged in the sciere facias, the powers, “for and during the said term, to issue promissory notes and bills of credit in the nature of a circulating medium, not being of a lower denomination than five dollars, and payable on demand, when due, in gold and silver, legal current coin of the said State; to receive and hold moneys on deposit; to make loans of money, and discount promissory notes at a rate of interest not exceeding six per centum per annum; to deal and trade in bills of exchange, <fec.” Certainly it can make no difference that the form of the Act is that of a grant of powers. The grant expresses the purposes for which they were created, and it is by the exercise of these powers, that they must fulfil the purposes of their creation. It is no less binding on them, than if such were declared to be their duties. Then, if they are bound to exercise these functions, according to the authorities, these are implied to be the conditions of their continued existence. If there were such express conditions in the charter, no one would doubt but that by accepting the charter, they entered into a contract for the performance of those conditions. It can make no difference, that, according to unquestioned authority, they are implied by law. There is no hardship in this, for they are as perfectly understood as if they were expressed.

I agree with the Attorney General, that until the cases of Terrett vs. Taylor, and Dartmouth College vs. Woodward, the distinction of public and private corporations, as understood for the purposes of these decisions, had not been generally recognized by the English cases. The general distinction of every corporation, by the English law, is that of civil, and eleemosynary. 1 Bl. Com. 270. And when Lord Holt, in Philips vs. Bury, says that there are two sorts of corporations, one for public government, the other for the administration of private charity — that public corporations are not subject to a founder, but to the general law; but that those for private charity are subject to the exclusive control of the founder, or visitor, who represents him — he indirectly refers to the same distinction that Biackstone has done. Yet in the Attorney General vs. Pierce, 2 Atk. 87, it is said that it is the extensiveness of the objects which constitutes a public charity; and that when the objects are to be selected by trustees, this makes it a public charity. The distinction laid down in Terrett vs. Taylor, and Dartmouth College vs. Woodward, has been recognized and followed, probably, in every State of the Union; no part of the law is more familiar, and perhaps those decisions are not now to be questioned.

But when the question is, whether the Legislature has power to modify or repeal a charter, undoubtedly we are to inquire whether it is, or is not, a contract. And as, undoubtedly, this depends on the result of an inquiry whether it is or is not founded on a consideration, it is hardly necessary to say, that without á consideration, there can be no contract. The decisions in the cases I have referred to, determine that in the instance of the civil corporations enumerated, cities, villages, (fee., the mere exercise of the functions or privileges conferred, can be no consideration for the grant of those functions Ur privileges. These charters, therefore, are not contracts.

Undoubtedly there may be civil corporations without contract. Take the instance of the President and Directors of the Bank of the State, the capital of which is exclusively owned by the State. They, certainly, are merely the agents of the State for the management of its funds, and the State may dispose of its funds and discharge its agents whenever it thinks proper. So of the Trustees of the South-Carolina College, exclusively endowed and supported by the State. The Commissioners of the Roads and the Commissioners of the Poor, in the several districts, are corporations. Yet, evidently; they are the mere agents of the Legislature for the purposes of government. Their creation is not the grant of a franchise, but the imposition of a public duty. Many similar instances might be enumerated.

But when on the faith of a charter an individual endows a college, a church, or a hospital, he pays- a money consideration for the franchises conferred, and it would be against faith that these should be resumed at pleasure. It is immaterial whether a consideration be of benefit to one party, or of detriment or expense to the other. So in the instances of charters to a turnpike, rail-road, or bridge company, the members pay their money on the faith that they shall have the benefit of the exclusive privileges conferred during the stipulated time. So of a manufacturing company. When the charter of a ferry is granted, there is an implied undertaking on the part of the grantee, perfectly well understood, that he will provide the means of transportation, will transport passengers with their goods, and will be, to a certain extent, an insurer of the goods transported. These stipulations for the public service and benefit, on his part, form the consideration which renders the grant of the franchise a contract on the other part. It is a continuing contract, and if he should fail to any material extent in performing his part of it, this would authorize the other party to put an end to it, by a proceeding similar to the present.

Now, the present defendants claim to be.exempted from the ordinary control of the Legislature, to modify or revoke their charter at its pleasure, ou no other ground than that their charter is a contract. But if they are not bound to-the performance of the functions and duties, for the public benefit, before specified, there is absolutely no consideration whatever for the grant to them, and their franchises may be resumed at pleasure. So the defendants set up a contract by which only one party is bound. But if there is any thing to which they are bound, I suppose it will be conceded that it is to redeem their notes and pay their deposits, when demanded, in gold and silver, at least, as I have said, in general. If there is any thing which would defeat the purposes of their institution, and prove injurious to the public, it would be the unnecessary, general, and habitual refusal so to redeem. It is agreed on all hands, that a charter may be forfeited, by non-user. But can we conceive a forfeiture for failing to do that which the corporation was under no obligation to do ? Certainly, there must be some refusal to redeem in specie, which would be cause of forfeiture. If, for no cause assigned, a bank should suspend specie payments for years, until its notes had depreciated fifty per cent, or more, (which has often occurred in the United States,) or if, after putting a large quantity of its notes into circulation, it should declare its intention to redeem none of them during its corporate term; and should act accordingly, could any one doubt, but that this was a defeating of the purpose of its creation?

I have said that in general ahank is bound to pay in specie, and that a general refusal to do so, is a cause of forfeiture. This implies that there may be particular refusals, which are not so; and I have no doubt but that such is the case. If one of its debtors should present a large amount of its notes, it might refuse to pay them, and claim to set off its own demand against them. So if it should refuse to pay a note suspected of being counterfeit, or should capriciously refuse to pay several of its notes. This would need no justification, but under the general issue pleaded, it would appear that this was no general refusal to redeem, defeating the purposes of its institution, and within the meaning of the law.

A bank is not said to refuse payment because it does not pay at five o’clock in the afternoon, or on Sundays, or holidays. So, if in a Catholic country it were usual to suspend business during Lent, a banker would not be said to refuse payment, who should shut up his banking-house during that season. The thing must be judged of according to the habits of the country and the exigency of circumstances. Thus, in the instances supposed in argument, of a hostile invasion compelling the officers to remove with the funds and effects of the bank, or of the sickness of officers, or the burning of the banking-house, compelling them to suspend business for a time; nay, even, perhaps, in a case of a sudden run, if they should close their doors, for a short time, or of necessity refuse to pay, till they could collect their resources, it might be said that these were not refusals to pay within the meaning of the law; there was no general or wilful refusal.

But in the instances last referred to, there is supposed a total suspension of all the business of the bank, which indicates an important difference from the case before us. If after the retirement of the enemy, or the recovery of the officers, after a reasonable time for procuring another house, or of collecting their resources, had elapsed, the banks still continued the suspension of their business, they might be proceeded against for non user; although, perhaps, aresumption before proceedings instituted, might be held to cure the default. But when refusing to pay specie they continue to transact all other business, it cannot be said that they are guilty of non-user; though they enjoy all, and more than all, the legitimate advantages of their contract, without being subject to its burdens or performing its duties. In such case, there is no refusal to pay on demand, for no demand can be made. The ferryman may forfeit his charter by non-user, if he fails to perform his part of the contract. If he should refuse to transport one or several passengers, on account of high water, or capriciously, that could not be termed a non-user, though he might be liable to the individual injured. But if he should give public notice of his intention to suspend the transportation of any passengers, and should accordingly refuse to do so for nine months, he could hardly defend himself in a court, by showing that there was an excessive emigration, injurious to the State, and that he acted from the nraiseworthy motive of checking it. In this case, the defendants, according to the pleadings, did refuse to pay any of their notes or deposits in gold or silver for the space of nine months. They did this in pursuance of a resolution, deliberately adopted and published to the world; and apart from the pleadings, their notes must have of course depreciated in some degree, as compared with gold and silver, which the laws have made the measure of value. If this be not at least a, prima facie refusal to pay on demand, within the meaning of the law, defeating the purposes of the bank’s institution, and requiring to be justified or excused, it is plain there can be no such thing. It is general, and toilful. No other assignable limit can be fixed, which would not equally include the cases before supposed, of a suspension for years, until notes should have depreciated half their value, or a general refusal to pay during the corporate existence.

But it might be said that such extremity of abuse would be evidence of fraud. Indeed -it has been the principal argument throughout, that to induce a forfeiture there must be a fraudulent abuse, or such gross negligence as shall be evidence of fraud ; that there must be some malfeasance, or corrupt motive. Actions are either lawful, or unlawful. Of unlawful acts, some are fraudulent, and there are others which are not so regarded. I know of no intermediate class of actions, of equivocal generation, which are characterized as acts of malfeasance, or (if that be regarded as any thing else than fraudulent,) mala fide, or marked by a corrupt purpose. '' f course, I do not allude to acts of violence or crime, which may be called acts of malfeasance.

I would, in the first place, observe, that there might be instances of the extreme abuses which I have supposed, in which it would be impossible to establish the actual or moral fraud — and the law knows no other — nay, in which it would not exist. There is not, in reference to this subject, any artificial rule — as in the case of a person indebted, who afterwards proves insolvent, making a conveyance of his property — by which the fraudulent motive is to be inferred from certain appearances. You must establish the actual fraudulent motive. But I can well conceive, that without the gross neglect which would be evidence of such motive, there might be a very long and unnecessary suspension and great depreciation; the directors thinking all the time that they were rendering their country good service. A gentleman of the greatest probity and intelligence was formerly at the head of one of our banking institutions, who is known to have inclined to the opinion that an irredeemable paper currency formed the very best circulating medium. If he had induced his directors, in accordance with his views, to declare their notes perpetually irredeemable, it would have been impossible to establish the actual fraudulent motive; and mere especially as, in the particular circumstances, no personal advantage could have been gained, and there would have been no corrupt motive of private gain.

But for the argument which we have heard, I should hardly have thought is necessary to say that fraud is not predicable of a corporation at all. It may, however, be capable of acting loilfully. The law supposes, at least prima facie, every person capable of acting at all, to intend what he does, and the obvious and necessary consequences of his act. Without this there could be no execution of any law. As in the instance quoted in argument, of a public officer exacting more than his lawful fees, under color of his office; undoubtedly this would be prima facie extortion. If there were any thing, however, equivocal in the terms of the law fixing his fees, which might have misled him ; or if, upon the error’s being pointed out, it were promptly corrected, this might serve to show that it was the effect of mistake or inadvertence, and not wilful. If a corporation be incapable of willing, it is incapable of making any contract, for every contract depends on the assent of the will. Then, if ■ an action is charged to be done, it is charged to be wilfully done, and if the act be in itself unlawful, it is charged to be unlawfully done. If this be a contract at all — and on this the defendants must rely, to entitle themselves to any protection of the court — it must, as I have said, be mutually binding. In every case of a continuing contract, the failure of one party to perform any material stipulation on his part, authorizes the other party to put an end to it. The object of the scire facias is to allege such breach, and require the party to show cause why the contract should not be declared at an end; as the quo warranto, on the supposition that, by the breach, it is cle facto at an end, seeks to restrain the party froth going on with it. Such breach is charged by the declaration in the present case, and I know of no authority or reason to require an addition to the phraseology of any expletives, such as “ wilfully” and “ unlawfully.” And I may observe, that if judgment should be against the defendants, there would be no forfeiture, in any other sense than as an agent or overseer might be said to forfeit his contract, by failing to perform his part of it.

But you cannot attribute to a corporation any act to which motive is requisite to give character. It is a legal person — an abstraction of the law — to which you cannot attribute any moral disposition whatever. It can commit neither crime nor tort — though its agents or members, as individuals, may. A corporation answers without oath, and the reason assigned is, that it cannot be prosecuted for perjury. In the case of the city of London, it was asked, how would you prosecute a corporation for high treason— would you hang up the common seal ¶ And it might have been added — if, upon conviction, you wrnuld punish it in the persons of its members, would you hang up the guilty and the innocent corporators together 1 — those who had resisted the treason, as well as those who had concurred in it 1 If the corporation, by vote of a majority, should command treason or murder, under the common seal, certainly this would be no corporate act; it would be the act of the individuals who concurred in it, and as individuals they would be punishable. If a majch’ity should command a trespass, would you charge this abstraction with having-committed the act with force and arms? If by the vote of such majority, a libel should be published under the common seal, would you charge the corporation with having published it maliciously, exempting the guilty individuals who directed it from their personal responsibility 1 So, if the majority should command an act of deceit, to the injury of individuals, would you, by an action against the corporation, anda recovery out of the corporate funds, inflict penal damages, not only on the guilty individuals of the majority, who commanded it, but the innocent minority, who may have done every thing in their power to resist and prevent it; the former being exempted from all personal responsibility? It is charged in the present case, that the president and directors of the bank resolved to suspend, and did suspend, specie payments. But the president and directors are the agents and servants of the stockholders, and it is the notorious rule of law, that the principal is not responsible for the tortious acts of his servant, committed in the course of his employment. But it cannot be necessary to pursue this subject further. Notwithstanding the extensive research which has taken place, no authority or dictum has been found, in any elementary book, or decided case; from Bracton to the latest of the reporters of our States, in which the proposition contended for has been affirmed or suggested. In .the case cited from Indiana, though abundant and gross fraud was established, it is no where said that this is necessary to work a forfeiture. Yet I have no doubt but that acts fraudulent in themselves, may be a cause of forfeiture; not that fraud is attributable to the corporation, but that the act in itself is a violation of the terms of their charter, a breach of their contract. The fraud, if any, is to be visited upon the individuals who committed it.

If the suspension of specie payments in question be,prima facie, a breach of the terms of defendants’ charter, it remains to inquire if it has been justified or excused. This has been attempted by the fifth plea. That plea I understand to be, in substance, that at the time in question, there was an extraordinary and embarrassed condition of the commercial affairs of the country; other banks having suspended, there was created an extraordinary, and irregular, demand for specie, for foreign exportation, and otherwise, so that it became impracticable to continue the payment of it without great injury to the State and suffering to individuals; that the safety of the State required the suspension; that they were solvent, but suspended payments with a view to the public safety and advantage.

And is this the sort of investigation on which a Court is called upon to enter ? On both sides of the argument, there was urged in the strongest terms, the danger of entering into theories of trade or political economy; their uncertainty, and the contradictory views of those who advance them. On one side, it is thought the best course, in cases of such commercial embarrassment, to leave the evil to work out its own remedy ; that by this course, if the present suffering be severe, a sound and healthy state of things will be sooner restored, and permanent prosperity more effectually established. On the other side, it is thought that there may be measures of relief and mitigation, which, while they alleviate the present evil, may lead gradually, but not less effectually, to the re-establishment of a better state of things. In such inquiries, we could only be guided by the speculations of financiers, commercial men, and political economists; who hardly come within the class of professional men, of whom it is said, cuique in sua arte credendum. Are Judges to become the partizans of these and their theories; abandoning the sobriety and certainty which have hitherto been the characteristics of legal proceedings 1 Are we to determine when the public good or safety requires a prohibition of the exportation of specie ? Have we a dispensing power, to protect banks in the refusal to pay their creditors, in order that they may be able to-indulge their debtors 1 Have courts the power to pass relief laws'? These things may appertain to legislative powers ; but if courts should assume them, it would be quite as bold and unwarrantable an usurpation, as has ever been attributed to Legislatures, and might justly subject them to more, perhaps, than the censure of public opinion.

But let us examine more closely some of the details of this plea; which, I suppose, is drawn with as much ability as could be brought to the task. After stating the suspension of banks in various cities of the Union, (and there might be some uncertainty in the inquiry how large a portion of the banks of the country must suspend, before the effects afterwards spoken of can be brought about,) the plea adds, “ by reason whereof, an extraordinary scarcity and appreciation of gold and silver coin took place.” Now, in a general sense, every thing which is the subject of commercial exchange may be said to appreciate, or depreciate, as its value changes relatively to other things. But as the constitution of the United States has made gold and silver the measure of value ; as whatever you buy, or sell, must be paid for in this medium, if required; it is loose and inaccurate to speak of it as having appreciated, or depreciated, in reference to other commodities. It is with reference to this, I suppose, that it is alleged in a subsequent part of the plea, that the notes of the bank were not depreciated. Gold and silver had appreciated: for the plea states that the bank had suspended — that is to say, that its notes were not convertible into gold and silver at the pleasure of the holders — that is to say, that one could not be obtained in exchange for the other — that is to say, that one had depreciated relatively to the other. The plea is contradictory. The plea proceeds, “ whereby the payment of the notes of the Bank of South Carolina, and of the debts due and owing by the said bank for deposits, in gold and silver, became impossible.” The word impossible certainly is not used in the ordinary acceptation. It is not alleged, that all the gold and silver in the vaults of the bank had been paid out, and if any remained there, certainly there was no physical impossibility of paying it. It is stated that the bank was, and continued solvent. Taking the whole plea together, it evidently means that the continued payment of specie was impossible, without producing the injurious effects spoken of in reference to the suspension of 1839.

With respect to that suspension, after .stating the previous suspension of other banks, it is added, — “ that in consequence thereof, the demands for gold and silver in payment of bank notes, and deposits in bank notes, became, and were, altogether extraordinary and irregular.” That the demand for specie will be irregular, is inevitable from the fluctuations of human affairs, and in general, banks, as well as individuals, are bound to be prepared for such fluctuations. It would be rather a difficult and dangerous discretion, to determine when the demand was so extraordinary, as to render suspension necessary. I may observe, that if the case were before a jury, it might be difficult to establish such necessity, as there were various other banks, in the same city, and at the same time, which did not suspend. The plea goes on, “having no reference to the quantity of paper in circulation, or unto the credit or solvency of the banks on which such demands were made, but only to the drain of specie for foreign markets, and for the traffic in gold and silver, carried on by persons trafficking in the precious metals.” As I have said, can it be supposed that courts are to judge of, and remedy, the evils arising from the drain of specie for foreign markets, or the trafficking of individuals in the precious metals ? After asserting the solvency of the bank, the plea proceeds, “ but by reason of the confusion of commercial affairs, and the extraordinary demands for coin, the said bank was not able to pay its dues and liabilities, in gold and silver coin, without making oppressive and ruinous exactions on its own debtors.” I say nothing of going into a legal investigation of the confusion of commercial affairs, and the extraordinary demand for coin. The charge against the bank is of having violated its contract of incorporation. The answer is, that we have done so with a good motive, and for a benevolent and patriotic purpose; we have refused to pay our debts, that we might not press injuriously upon our debtors. It is evidently not a plea of legal justification or of legal excuse, but of moral or political excuse. If a breach of contract has been committed, it shews causes why the breach should be waived; if a forfeiture has been incurred, why the forfeiture should be remitted. It is a political plea, and such an one as I hope will never again be offered to a court.

I do not say that it may not be a very good moral, or political, excuse. With that, as a Judge, I can have nothing to do. It has, however, been cheerfully admitted, through the whole course of the proceeding, that the conduct of those having the government of the bank, has been actuated by the most praiseworthy and public spirited motives, and that, from the character of the individuals concerned, it is impossible to attribute to them any other motives. It is for the Legislature to judge of the financial of commercial condition of the country, and provide the means of relieving its embarrassments. It is for the Legislature, also, if a violation of the charier has been committed, to determine whether proceedings shall be instituted to vacate it. I do not say that exigencies may not exist, in which the public safety may require such suspension. Far be it from me to judge or determine of any such matter. But if such a state of things should actually exist, it is to be supposed that upon application to the Legislature, it will authorize the refusal to pay in gold or silver ; or if the exigency should suddenly and unexpectedly arise, so that it would be impracticable to obtain the previous authority of the Legislature, that it would subsequently sanction the act, or forbear to enforce the forfeiture. It would, be unbecoming in this court to suppose, of a co-ordinate branch of the government, that such an application would not be entertained with all due justice and consideration. And I would most seriously impress, if I could, upon every friend of law, order,, and limited government, that nothing can be more likely to provoke the exercise of irregular and arbitrary authority, than to deny, or obstruct, that which is unquestionably just and constitutional. Such exercise of authority might be more likely in relation to the present subject, as it is too plain to be argued, that if the suspension now in question does not amount to a violation of the charter, there is absolutely no limit whatever to such right of suspension, but the pleasure of the banks themselves. If the judgment should be, that banks are not at all bound to redeem their notes in gold or silver; or what would amount to the same thing, that it is at their discretion whether they will redeem them or not; can any one fail.to perceive the continual temptation, of the strongest interest, to abuse their functions, and the enormous evils which may result to society from such abuse 1 Is it better, safer, more for the interest and security of society, that these interested parties should be the judges of the exigency, of the Legislature of the State'? The latter, in a technical sense, is a party to the contract, but it has no interest beyond the public advantage. I think it ought not to be said, that in directing this proceeding, the Legislature has in any degree prejudged, or expressed an opinion in relation to the case. There is no other authority to direct such proceeding, and it is impossible that it should in any case direct it, without thus far expressing the opinion, that there are grounds for inquiry. That it offered an alternative, by which even the inquiry might be avoided, certainly cannot make it any more an expression of opinion.

There are various topics which have been urged with much zeal in the progress of the cause, which I should not think it necessary to touch upon, even summarily, but from respect to the sources from which they w’ere-derived. Such is the argument drawn from the provision of the charter of the bank, that the bank shall not contract debts to more than three times the amount of its capital. If this be an authority to issue to that extent, then the fact that the bank had not made issues or contracted debts beyond that extent, would have been a justification, and should have been pleaded. But no one has contended that this amounts to a justification. If the bank had contracted debts to three times the amount of its capital, and loaned out its specie, so as to insure its own inability to redeem its notes and deposits on demand, could this have been a justification'? If not an authority to issue to this extent, it amounts to nothing as an argument. The bank was bound to conduct its affairs prudently, so as to be able to meet the demands upon it. It would be as reasonable, if there had been no such provision, to argue that the bank was authorized to issue to any amount they might think proper, and if they had done so to ten times the amount of capital, rendering their inability to redeem inevitable, there was no violation of the charter. To have contracted debts to more than three times the capital, would have been a violation of the express terms of their charter. It does not follow that they have not violated it by contracting less. The restriction was intended as one security, though a very inadequate one, against the suspension of specie payments.

Such, also, is the argument drawn from the repeated suspensions of the banks during a period of many years, which was said to render the right to suspend almost prescriptive; from the Legislature having sometimes expressly sanctioned such suspensions; and from the fact that it has sanctioned the suspension of its own bank, which, as was said, was created in a state of suspension. Certainly, no one doubts but that banks may suspend with the sanction of the Legislature, as was done by the Bank of England, in 1797. Whatever violations of the charter may be committed, if that does not direct proceedings to vacate them, there is no other authority to call them in question.

If any practical conclusion can be drawn from the facts relied on, it is that the Legislature is apt to listen with very great facility to applications for such sanction. So of other provisions of various laws which it is said look to suspension. Certainly, whenever a bank is created, it is almost inevitable that the possibility of suspension should be looked to, as such things have been very frequent. But I have seen nothing to show that it was looked to with approbation, or that it was contemplated that they should depend on the mere will of the banks themselves. In the instance of directing the Comptroller General not to receive the notes of banks who have suspended payments, certainly it does not appear that such suspensions were looked to with approbation. The banks have sometimes thought it necessary to excuse themselves, as being in some default. But I cannot think it necessary to pursue these topics.

' I have not thought it necessary to refer to authorities, for we have hardly any direct authority upon the point. The decisions in the cases from the New York Reports, turn upon the construction of a particular statute of that State. There are expressions in them, on general principles, favorable to the conclusion to which we have come. There is a dictum in the case cited from Pennsylvania which looks the other way ; too lightly thrown out, I think, if by it was intended the conclusion which was drawn from it. As to the case from Alabama, the question seems not .to have been necessarily involved in it, nor to have been very fully considered by the Judge. But however this may be, and notwithstanding the respect which I entertain for the judgment and learning of that Judge, I find myself unable to concur with him.

I think the demurrers to the second and third pleas should be sustained; that the demurrer to the replication to the fifth plea, should go to the plea itself, which should be overruled; and that the cause should be remanded, to be tried on the pleas of the general issue and nul lid record.

Dunkin, Chancellor.

I concur in the judgment of the court, and desire to state, briefly, the reasons which have led me to this conclusion.

Whatever doubts may have been, at one time, entertained, the argument of the Circuit Judge, and the authorities cited in his opinion, seem clearly to have established, that a bank is a private corporation, and that the charter creates a franchise, which may be forfeited by misuser or nonuser.

All corporations are created by the consent of the sovereign authority — in England, of the King, as expressed by Parliament; and in this country, of the People, as expressed through the Legislature. It is the duty of all corporations to act up to the end or design, whatever it be, for which they were created. And it is an implied condition of the grant, that, on failure to perform this duty, the charter may be resumed by the authority which granted it. Such was the doctrine of Lord Holt in Sir James Smith’s case in 1691; such the doctrine of Sir William Blackstone, 1 vol. ch. 18; and such the opinion of the Court of King’s Bench, in Rex vs. Passmore, 2 T. R. 513, decided in 1788.

In this conntry, the authorities are not less distinct, uniform and conclusive. “A private corporation, created by the Legislature, may lose its franchises by a misuser or non-user of them; and they may be resumed by the government under a judicial judgment, upon a quo warranto, to ascertain and enforce the forfeiture. This is the common law of the land, and is a tacit condition annexed to the creation of every such corporation.” This is the language of Mr. Justice Story, in pronouncing the judgment of the Supreme Court of the United States, in Terrett vs. Taylor, 9 Cranch, 43. The doctrine has been repeatedly recognized by that court, as well as by Chief Justice Parsons, Chancellor Kent, and, it is believed, by every judicial authority in the Union, which has had occasion to discuss the subject. Nor is it understood that, on this point, any difference of opinion is entertained by the members of this court.

The result of the authorities, then, is, that when a corporation ceases to perform the purposes for which it was created, the charter becomes subject to forfeiture at the will of the authority which gave it existence. It is a broken contract; and the party in default has no right to complain if he ceases to enjoy the advantages of it. But, although the authority which created the charter, has a right to revoke it, it does, not follow that the right must be execcised. Reasons may exist, which would render the enforcement of an acknowledged right harsh, impolitic, and even tyrannical. The existence of the right is not the less indisputable.

If it were conceded that the act charged against tbe bank, rendered it no longer capable of fulfilling the great purposes of its creation, little doubt w’ould be entertained, by this court, of the right of the Legislature to resume the charter. Probably the only question on which a serious difference of opinion exists, is whether, by suspending specie payments in the manner charged in the declaration, the bank ceased to discharge the duties which it assumed in receiving the charter.

Duties may be expressed or implied. The court was warned, with much earnestness, against the danger of recognizing implied trusts, as they were termed. It was urged that this was a criminal prosecution, or in the nature of a criminal prosecution, and that conviction should never follow, unless the offence were plainly written in the law, and the sanction affixed. This seems to me a misapprehension. In the charter of a ferry, no clause is inserted requiring the ferryman to transport passengers; and when a religious or charitable institution is incorporated, their several duties are never defined ; but it has never been questioned that the duties and purposes of each were well understood ; were obligatory; and that, on failure to perform them, the grant might be revoked. So, if a bridge company were incorporated as such, which, instead of building or keeping a bridge, should use the charter of incorporation for the purpose of carrying on banking operations, the court would not hesitate to declare the charter forfeited, both for non-user and abuser.

And this, too, furnishes an answer to the argument, that the bank of South Carolina is not indebted to the charter for its authority to issue bills, (fee., inasmuch as the individuals composing the corporation had, for many years previously, exercised this power. The corporation is the creature of the charter. The Legislature gave existence to that, which had no existence before. The individuality of the members was lost, as well as their rights and responsibilities as such. The charter, in giving existence to a new being, became the origin and source of all its powers and capacities.

It is well stated in the judgment of the Circuit Court, that “ all corporations are created on the assumption that they will subserve the general policy of the State, and be of some public advantage; that the existence of a private corporation is conditional only.” And in Dartmouth College v. Woodward, 4 Wheat. 658, Mr. Justice Washington says : “ The obligation imposed on them, and which forms the consideration of the grant, is that of acting up to the end or design for lohich they toere created by their founder.”

What was the public purpose intended to be accomplished by the creation of the banks 1 What was the obligation imposed upon them, which formed the consideration of the grant of the privileges and immunities conferred upon them, and the condition of their existence as a corporation?

The ordinary idea of a bank, is a place where the money of individuals may be safely deposited ; where loans may be effected; and the notes or bills of which may be used with greater convenience, as a substitute for gold and silver. The original charter of this bank was granted in 1801. For ten years previously, the individuals seeking the charter had conducted an institution on their individual responsibility, which effectually answered all these purposes, and enjoyed the confidence of the community. Desiring a grant from the Legislature, which would alter and limit their responsibility, which would extend their existence, and confer on them other privileges, they undertook that the corporation would continue to discharge the same duties, and would afford the same public advantages.

The constitution had already prescribed gold and silver as the only legal tender in payment of debts. This was. equally obligatory on individuals as on banks. But the ¡usage of the country had given a different character to their obligations. By these usages, and according to the general understanding of the community, the bills of banks Were redeemable on demand, in specie, at the counter of the banks. Their immediate convertibility was their great recommendation to public confidence. Unlike that of an individual, the ability of the bank might be tested in.a raopient. In consequence of this quality, their bills, payable without interest, were readily received in exchange of notes payable with interest. Bank paper and money were, even judicially, regarded as convertible terms, because, in practice and in fact, bank bills could be immediately converted into gold or silver.

The Legislature had, then, a right to expect — it was an implied condition of the charter — that these characteristics of bank paper would be preserved ; that the bank would do no act, would adopt no measure, which would impair the credit of its paper, and thereby destroy its distinctive quality between that and the obligations of individuals.

Practically, it cannot be questioned that the suspension of specie payments impairs, of necessity, the credit of bank paper. The only criterion is its convertibility into gold or silver. Prior to the suspension, this is immediate, and the credit of the bank is perfect. Suspension produces a change as instantaneously as the coldness of the atmosphere causes a depression in the thermometer. Its extent will depend on a variety of circumstances — -the probable duration of the suspension — the character of the directors— public opinion as to the ultimate solvency of the institution. But the mischief is done. Their bills may, and will be, received, for the time, in payment of debts, in the ordinary transactions of life, &c., because nothing else can be obtained. It is the uniform effect of a depreciated currency, to keep out of circulation every othel medium. But such bills are not received as gold and silver, nor are they worth as much as gold and silver, or the notes of specie paying banks. They supply a currency; but the necessary effect of suspension is, that they constitute no longer a sound currency. It becomes less and less sound, the longer the depreciation continues. When the Bank of England suspended specie payment, in 1797, its bills were, at first, ata trifling discount, but before they resumed, in 1821, the bills had, at one time, depreciated to twenty-five per cent, discount; and such is the necessary fate of inconvertible bank paper.

As a place of deposit, the usefulness of the institution is, in the same manner, impaired. It has been decided, that every individal making a general deposit, is entitled to ■demand specie from the bank. So long as the bank continues to pay specie, the confidence of the creditor is unshaken, and the bank derives all the advantage from the use of the money. Suspension of specie payments always produces panic among the depositors, if not well-grounded alarm and distrust. The rush of individuals on the banks, at some of the northern cities, on the first intelligence of suspension, afforded conclusive evidence that confidence was gone, and precipitated, if it did not produce, the common ruin of the banks and themselves. Where the institution has been long known, and the character of its officers well established, the immediate effect of suspension is less injurious; but uneasiness always exists, and confidence diminishes, as the bank continues in suspension.

So far as banks are intended to facilitate loans, and thereby accommodate the public, their usefulness and their .functions ought to cease, so soon as they suspend specie payments. In this respect, there should be no difference between banks and individuals. When, from any cause, they become unable to redeem their obligations, they should cease to extend their circulation, or, in other words, to enlarge their indebtedness. They owe it to themselves and the public, to pause, and ascertain their condition. Under an acknowledged inability to redeem in specie, their notes should be no longer exchanged with those of individuals on unequal terms. Doubtless, the banks of this State were much influenced by this principle during the period of suspension. But, if the right to suspend, and continue in suspension, be once recognized,'the temptation to over-issue becomes irresistible. This was manifested in the course pursued by the banks after the last war; and until their circulation was checked by the establishment of the United States Bank; and it is still more strongly manifested in the reckless career of the south-western banks since the suspension of 1837.

But it is said, that banks have always exercised the right, of suspending; that this must have been well known to-the Legislature who granted the original charter; and, in the language of the counsel, that “ this bank was born in suspension.” It is true, that when the Bank of South Carolina was incorporated, in 1801, the Bank of England' was in a state of suspension. On Sunday, 26th February, 1797, an order of the Privy Council was issued, directing the suspension of specie payments, and on the following day this order was approved by Parliament. The bank did not resume until 1821, “presenting, during that interval,” says an eminent writer, “ a stupendous phenomenon, unparralleled in history.”

But the suspension of the Bank of England was perfectly consistent with the principle which has been assumed. The authority which granted the charter, can alone avail itself of a breach of the condition. “ The crown,” says Mr. Justice Ashurst, in Rex vs. Amery, “may elect whether it will take advantage of the forfeiture.” The suspension of 1797 was in obedience to an order in council, and with the sanction of parliament. The authority which could alone sue for the forfeiture, had directed the act to be done. In the case of the State vs. the Bank of Charleston, decided at Charleston, in February last, all the court held that the Legislature, by adopting the resolution of approval, of December, 1838, and subsequently amending the charter of the bank, had waived, or released, the forfeiture, which may have been incurred by the suspension of 1837.

So, in 1814, during the war with Great Britain, all the banks in the Middle and Southern States suspended specie payments; and, in 1837, many of them again suspended. But these were extraordinary emergencies, and the* State may well have considered that these were not fit occasions to enforce a forfeiture.

It is not denied that exigencies may arise, in which a bank, or any other corporation, may be excused for conduct which would forfeit their charter. But such excuses are not for judicial tribunals. They are properly addressed to the discretion of that authority which has entire control over the subject, and which is much more competent than a court of justice to estimate the validity of the excuse. Suspension of specie payments is always a bold, perhaps a hazardous measure — it may be one of wisdom. The Legislature, and not the banks, must be the ultimate arbiter as to the sufficiency of the cause. It is no more than a salutary check, that the State should have the power to vacate the charter, when, in their judgment, a measure, inconsistent with the objects and design of the institution, has been adopted frivolously, or inconsiderately, or fraudulently. With this restraint, suspension of specie payments would be of rare occurrence, and might be, comparatively, harmless. Without it, the extreme medicine of life would become its daily food. It is only when the banks assume an attitude of irresponsibility, that the power becomes dangerous and alarming.

The constitution declares that no State shall emit bills of credit. Our ancestors had experienced the disastrous effects of an irredeemable paper currency. The mischief originated in the absence of any power to coerce payment, and the consequent recklessness with which-bills were issued, to the ruin of the citizen and ultimate annihilation of State credit.

But a bank which is at liberty to suspend specie payments at the discretion of the directors, has nearly equal power with a State, and; practically, is scarcely more amenable to the ordinary process of the law. The corporation may be sued; but an execution can reach only the real estate which is required for banking purposes, and, perhaps, the specie in their vaults. The indebtedness of the bank may exceed a million of dollars, and the tangible assets amount to a few thousand dollars. Debts may be •due to them to a large or a small amount; they may be good, or they may be worthless. The law affords the creditor no means of ascertaining the condition of the bank, or of rendering its assets available. It is said that this implies fraud on the part of the bank. But who shall pronounce the conduct fraudulent, because the issues of the bank vastly exceed its specie, and the debts due to it have proved comparatively worthless. Banks may continue to do business, may enlarge their circulation, for years after they have become insolvent, and the public remain in entire ignorance of their condition. The Bank of England was, for twenty-four years, in a state of virtual insolvency. The banks of the South-Western States have been in a state of suspension for the last six years, with little prospect of resumption. Their bills are depreciated from 15 to 50 per cent. Yet, these bills still circulate as currency. The banks continue their operations, and will do so, in defiance of public opinion, or of any efforts of individuals to coerce them to a just discharge of their obligations. The whole section of country is inundated with bank paper, much of it as worthless as the old continental money, and with about the same power in the holders to require its redemption. The history, and the probable fate, of many of those institutions, may find a fit prototype in that of the Bank of Vincennes, reported in 1 Blackford, 267. 'For some years prior to filing the information, the bank had been in a state of absolute insolvency. Yet, during this period, it enjoyed the public confidence; was the depository of the funds of the Federal Government; issued paper to a large amount; made dividends among the stockholders, and strenuously resisted any interference or inquiry on the part of the Legislature, as an infringement of their chartered rights. It was proved, at the trial, that the indebtedness of the bank amounted to $373,000, and that it had, at the same time, “ thirty one dollars in specie, and no other available funds.” “ The idea of a banking company,” says Mr. Justice Holman, in pronouncing judgment of forfeiture, “ with a capital of a million and a half of dollars, created an indissoluble corporation for a term of twenty-one years, must be highly alarming to the community. A chartered right of acting with impunity, is derogatory to the spirit of our government; and, when connected with so much power, might be highly destructive of those equal rights guaranteed by the constitution.” This was a case of complicated fraud. But precisely the same public evils may result without the probability of proving fraud, and, perhaps, without any right to impute it. It is the consequence of great power without practical responsibility.

The only security for the public — that which will preserve to banks the confidence of the community, and perpetuate their usefulness — -is the immediate convertibility of their paper; and when, from any cause whatever, this ceases, a recognized authority in the State to vacate the charter, if in their judgment this extraordinary position was not warranted by the emergency.

Johnson, Ch.

delivered a dissenting opinion, which had not been filed when it was necessary to send this volume to the press, and is therefore most reluctantly omitted.

O’Neall, Evans and Butler, JJ., concurred with Johnson, Ch.

J. Johnston, Ch. and Wardlaw, J. concurred with Richardson. J., Harper, Ch. and Dunkin, Ch.

Judgment reversed.

IN THE COURT OF ERRORS, AT COLUMBIA, MAY, 1843.

The State vs. The Bank of South Carolina.

OPINION OP CHANCELLOR JOHNSON.

The leading questions involved in this cause, and those to which alone I shall address myself, are of much importance in themselves. They are, in some degree, novel, and it cannot be disguised that they have derived additional interest from the political considerations which have been brought into the discussion of them. The world are not yet agreed whether chartered banking institutions, with the power'to issue bills, are or are not a blessing or a curse; and there is, perhaps, as much, or more, diversity of opinion as to the limitations and restrictions that ought to be imposed upon them. With these considerations, happily, the court has no concern. They belong exclusively to the legislative department of the government, and, divested of them, the questions which I propose to consider, depend on plain and well defined principles of law — principles founded on common sense and common honesty, and of universal application. I mean those by which contracts are interpreted, .and by which the parties are required to fulfil them in good faith, and nothing more.

For the purpose of arriving directly at the principal matters of controversy, I propose to concede, 1st, that the bank is a private corporation ; 2d, that the charter, (the Act of incorporation,) confers on it certain privileges or franchises, which may be forfeited for non-use or abuse; 3d, that the proceeding (sci. fa.) is the proper mode of trying the question of forfeiture; and following the example of the circuit court, I shall avoid the technical questions raised as to the pleadings, and refer to them only so far as may be necessary to present the questions to be considered.

The charter has been generally treated in the argument, and I think properly, as a contract between the State and the bank; and to ascertain what that contract is, and whether it has or has not been broken, we must refer to the Act of incorporation, which called the corporation into being. In doing this, however, it will be necessary to refer only to such of the provisions as bear upon the question in hand.

The bank, as stated in the judgment of the circuit court, was first chartered in December, 1801, to continue until the 1st January, 1823. In 1815, the Legislature passed an Act amendatory of the charter, by which it was authorized to deal in inland hills of exchange, a power not before granted or exercised. In December, 1822, the charter was renewed by Act of the Legislature, for the term of. 12 years, to he computed from the 31st of that month, with the right to enjoy all the powers, privileges, immunities and benefits, and subject to all the restrictions granted and imposed by the charter under which it then acted. The charter was again renewed by Act of the 20th December, 1832, for a period of twenty-one years, to be computed from the day on which its previous charter would expire, and it is under this Act that it now exercises banking powers; and by this Act it is “ permitted and authorized to exercise and enjoy all the privileges, rights, powers, immunities and benefits which it now exercises and enjoys under its charter, or which the Planter’s and Mechanic’s Bank, and the Union Bank of South Carolina, or either of them, now exercise, possess a id enjoy, under any Act of the General Assembly of this State now in force ;” and it is further provided, “ that the said Bank of South Carolina, for the charter so renewed and extended, shall, on the 2d day of January next after the expiration of its charter, pay into the treasury of the lower division of this State, a bonus of sixteen thousand eight hundred and seventy-five dollars; and it is further provided, that it shall and may he lawful for the hank to increase its capital to one million of dollars, paying an additional bonus. in proportion to such increase of capital.”

We are thus referred back to the previous charters of this Bank, and of the Planter’s and Mechanic’s and Union Banks, to ascertain what are the powers, privileges and immunities granted, and the restrictions imposed, by the Act last referred to.

I have looked into these Acts with some attention and care, and I have not been able to find that any express authority is given to the banks to make or issue bills or notes — but that is necessarily implied from many of their provisions — or that the notes or hills, when issued, shall bo regarded in the nature of a circulating medium. It is, however, declared, that the hills and notes issued by the bank, promising to pay money, “ shall he binding and obligatory on the said corporation, in like manner, and with the same force and effect, as upon any private person' or persons, if issued by him, her or them, in his, her or their natural capacities, and shall be assignable,” &c. 8 Stat. at Large, 21. They are expressly authorized to deal in bills of exchange and gold and silver bullion, and generally to do and execute all and singular such matters and things which to them may be thought necessary and proper for the good government and management” of the bank. Amongst other limitations and restrictions imposed on the bank, they are forbidden to receive a greater interest than six per cent, per annum, or at any time to incur debts to a greater amount than three times the amount of their capital, “ exclusive of the monies actually deposited in the hank for safe keeping,” &c.

The breaches of this charter complained of in this proceeding, are, 1st, that while the said bank was transacting business, as aforesaid, and when the said bank had issued a large amount of bills, viz: $750,000, which were then outstanding and in circulation, as a part of the actual currency of the State; and when the said bank had also in deposit large sums of money, in all amounting to $350,000, on the 18th of May, 1837, the president and directors of the said bank resolved to suspend payment in gold and silver, the legal current coin pf the said State, as well of the bills issued and put in circulation by the said bank, as of the money received on deposit; and that from the said 18th ofMay, 1837, until the 13th of September, 1838, the said bank did actually refuse to 'pay, when demanded, in gold and silver, the bills issued by the said bank, and the monies deposited in the said bank; and during all that time continued to issue bills in the nature of a circulating medium, to receive money on deposit, and discount promissory notes. &c. 2d. That afterwards, on the 14th day of October, 1839, the said bank again suspended specie payments as it had done in 1837, and continued so to do until the 25th July, 1840, and during all that time continued to issue bills, •to lend money, and discount notes, as it had done during the previous suspension ; and it is charged that these acts were done to the great damage of the State, in violation of the trusts and conditions of the said Act of incorporation given and granted, as aforesaid, to the said Bank of South Carolina, in and by the last mentioned Act of the General Assembly, and to the utter perversion of the ends, objects and purposes for which the powers, authorities, liberties, privileges and franchises, aforesaid, were given ánd granted to the said Bank of South Carolina.”

And it may be observed here, once for all, that this declaration charges no new act to have been done or committed by the bank, which is not expressly authorized by the Act, except the suspension of specie payments ; nor is the act of suspension any where expressly prohibited or declared to be cause of forfeiture. But it is insisted that we must look beyond the charter itself, and inquire whether it is not a violation of some condition implied from the nature of the contract; and I agree that in this, as in all other contracts, all that is necessary to carry into effect the expressed intent of the parties may and must be implied. And if one employ a carpenter to build an house, the law implies an obligation on his part that he will do it in a faithful and workmanlike manner; or a smith to shoe his horse, he is bound to do it skilfully, although that is not expressed. In the language of Mr. Justice Washington, in Dartmouth College vs. Woodward, 4 Wheat. 658, in reference to private corporations, “ the obligation imposed on them, and which forms the consideration of the grant, is that of acting up to the end or design for which they were created by their founder.”

What, then, was the end or design, of the Legislature in incorporating this bank ? It is no where expressly declared, but if we look into the powers granted, and the nature of the institution, we can hardly be mistaken in supposing that the advantages and conveniencies which would result to the community by the facility of obtaining loans of money, by the increase in the amount of the circulating medium, and by the greater facility in the transportation or remittance of'large sums of money, and the bonus paid for the charter, were benefits contemplated to be derived by the State. Nor can it be supposed that the Legislature contemplated no benefit to the bank. No set of men will be found to accept of such a charter, with all its hazards and responsibilities, from pure love of country. Neither the time nor the occasion called for so much disinterested patriotism. The bank expected, and the Legislature unquestionably intended, to confer on it the usual profits and e noluments arising from banking operations, and to this end conferred on it, in the language of the Act of 1801, the power “ generally to do and perform all and singular such acts, matters and things which to them shall or may appertain.” And if this grant means any thing, (and, according to the maxim, ut res mages valeat quam pereat, it must have some effect, if possible,) it conferred on the bank all the rights, powers and privileges necessary to carry on their business, according to the general usages of banks, in all respects, except in such particulars as were expressly provided, and subjected it to all the liabilities and restrictions imposed by the usage. To the usage, therefore, we must look for all the implied powers and liabilities of the bank,

Let us begin with the organization of a bank. The amount of the capital, as in this case, is usually limited by the Act of incorporation, and the stock is subscribed, and is paid for in specie, or whatever else the bank may regard as an equivalent, unless otherwise provided in the charter — sometimes in other stocks, of which $300,000 subscribed by the State to the State Bank, to be paid by a certificate of the Comptroller, bearing an interest at the rate of six per cent, per annum, will furnish an example. (See Stat. at Large, 8 vol. p. 12.) We know, too, that subscriptions for stock are, for the most part, paid in the bills of other specie paying hanks, which the officers of the bank undertake to convert into specie, as a convenience to the stockholder; that, government and other marketable stocks readily convertable into money, are frequently received in payment; and in some cases the bond or note of the stockholder, bearing interest, is accepted as a substitute. But in all these cases care is usually taken to require payments in specie, to suit the probable demands on the bank, If the whole amount of the capital should be paid in specie, (a thing which has rarely or never occurred within the memory of man,) unless put into action, it would remain a useless and unproductive mass; and it is known, that to avoid this, it is usually invested in productive marketable securities, which may be made available at short notice; and we have it from high authority, that specie in the proportion of about one third or one fourth of the amount of the circulation, is ordinarily sufficient to meet the current demands, the bank depending on the proceeds of notes and bills of exchange, payable at maturity, and daily falling due, to meet any extraordinary emergency. Such is a general internal view of the banking institutions o'f this State; and for the purpose of meeting the question fairly, it may be conceded that generally the bank was bound to redeem its notes in specie, when demanded.

By the terms of the charter, the Bank was authorized to incur debts and issue bills to three times the amount of its charter; and can it be supposed, that the Legislature, with a knowledge that the capital of the Bank was to be made up and employed in the manner before stated, expected that it would or could be, at all times, prepared to meet all the demands that might, under all circumstances, be made upon it? — and contend that the failure to do so, should operate as a forfeiture of their charter.

Banks are created, born, with the elements of suspension in them, which the slightest circumstances may call into action. No Bank would accept a charter for the privilege of issuing bills to the precise amount of the specie in its vaults, at a lower rate of interest than is allowed by law for the loan of money by an individual, diminished still more by the expenses of Banking operations; and to make any profit at all, (and be it remembered that that is one of the ends of its incorporation,) it must take the hazard of being unable, at all times, to meet the demands upon it. Combinations of other banking institutions or private individuals, or a panic, might almost at any time force them to suspend. As appropriate to this subject, I remember to have somewhere seen an anecdote in relation to one of the private Banks in England. A horse having taken fright, ran away with a carriage, and dashed it to pieces against the Banking-house — a facetious observer said of it afterwerds, “that there had been a run upon the Bank.” The bill holders took the alarm, and rushed upon the Bank, with a fury little short of the late Cincinnati mob. Explanations were vain, they would hear none. And when the excitability of the human passions in relation to pecuniary matters are remembered, such a case might well have, occurred.

But let us examine the veritable, actual history of Banks, in reference to the necessity of the suspension of specie payments, at the time this Bank was first incorporated in 1801. The Bank of England, perhaps the most magnificent institution of f jie kind in the world, was in a state of suspension, and Alison, in his history of Europe, now publishing in numbers, (see the 3d No. p. 405,) says that the consequences, whether for good or for evil, were not attributable to Mr. Pitt, the prime minister,'but. they were forced on him by stern necessity. Bankruptcy, irretrieveable national bankruptcy, stared him in the face, if the momentous step were any longer delayed and it is universally agreed, that whatever evils might have resulted from the measure, it enabled Great Britain, and furnished her with resources, to sustain the most expensive, sanguinary, and protracted war to be found in the annals of the world. But it is said that this suspension was authorized by the Privy Counsel, and therefore justifiable. That is true, but I know of no higher authority to show that suspensions'are sometimes less injurious to the public interest, than the exhaustion of all the resources of the Bank by continuing to pay specie. Let us come nearer home for an example. Who has forgotten that in 1812 every Bank in the United States suspended specie payments, and did not resume until 1817, after the termination of the late war with Great Britain, and that the army and navy were paid.and subsisted by the bills of these non-paying specie Banks? Andean we forget that the Southern Army were paid and subsisted by the bills of our own Banks, to which, although I do not know the fact, this Bank, the Bank of South Carolina, in all probability, contributed its due proportion? And why was all this? Simply because.the supply of specie was unequal to the demand, and if every dollar had been drawn out of the Banks, the public interest would not have been subserved, though the Banks would have been ruined. No one ever heard this, complained of as a violation of their charters, either judicially or otherwise. On the contrary, the Legislature, by the Act of 1815, passed during this suspension, conferred on this very Bank greater powers than she had before exercised, that of dealing in Inland Bills of Exchange. It may be said, that this was a great public emergency, which justified the Act, arid certainly it was justified in public opinion. But arc the public concerned in nothing else but the payment and subsistance of its army and navy? Are not the interests of commerce, in a degree, equally the objects of the care and attention of the Legislature ? And may not emergencies arise out of them which would impose on the Banks the like necessity of suspending specie payment? The Legislature, at the time of granting this charter, knew that the Bank was to be organized and conducted in the manner, and would be exposed to^the perils, before stated, and that even the public interest, as in’ the case of the Bank of England, might require it to suspend, and it cannot be supposed that a forfeiture for that cause would have been left to implication. So much for the past. Let us now look to the suspension of specie payments in 1837, which extended to all the Banks in the United States, except those of Massachusetts. This i¡=¡ recent history, and we all know, without reference to the chronicles of the day, that this was forced upon the Banks by the extraordinary demands for specie for exportation abroad, and the Banks had no alternative but to suspend, or to suffer all the specie to be carried out of the country, leaving them powerless, bankrupt, and the country from Maine to Louisiana and the Rocky Mountains, probably without a ■ dollar of the precious metals; and throughout that whole extent, not a murmer of complaint is heard against any one of the Banks, and no one, then or now, believes that payment in specie, by this Bank, or any of the Banks of this State, would have promoted their own interests or subserved the public benefit or convenience. Let us hear what we, the people of this State, through our representatives, have said of it. In his message to the Legislature, at the commencement of the Session, in November, 1837, and when all the Banks were in a state of suspension, and remained so until September following, Governor Butler brings to their view the fact of suspension, and exhibits a statement of their actual condition, obtained from materials furnished by them. That portion of the message, and it seems a resolution of the Legislature, which I have not been able to obtain, declaring their confidence in the soundness of their banking institutions, were referred to the committee of Ways and Means, of which one of the counsel for the State in this cause, (Mr. Memminger) was the Chairman, and the following is their report.

“ The Committee of Ways and Means, to which was referred so much of the Governor’s Message as relates to the conditon of the Banks of our State, and the Resolution of the House, declaring our confidence in our banking institutions, beg leave to report: — That they have examined the condition and exposition of the Banks accompanying the Message, and feel satisfied that they are entitled to the public confidence.”

Does this look like the State intended that a condition was implied in the charter, that suspension should be a cause of forfeiture 1 Again, by the Act incorporating the Commercial Bank of Columbia, the bills of that Bank are made receivable for taxes and all other public dues, as long as they continue to redeem them in specie; but provides, that if they suffered any of their bills to be protested, the Comptroller should prohibit their receipt, “unless good and satisfactory cause should be shewn him by the said corporation, for protesting in a court of justice the payment thereof.” Contemplating, evidently, the possibility and necessity of suspending payments.

Lending and putting in circulation her bills during the time of suspension, thus, as it is said, increasing the evils incident to it, is charged upon the Bank as a violation of its charter. That charge is, I think, fully met in the Circuit Court opinion. But the truth will, perhaps, afford the best commentary. The Banks, although they had suspended specie payments, retained the confidence of the community, and that confidence has been fully realized. Their bills were sought after with avidity. There were, in fact, no others in circulation, nor was there any specie which could be made available in the country. The specie paying Banks never suffered one of their own bills which came into their possession, to pass their portals, and the fact is well known that the whole crop of 1839 was purchased and paid for in the bills of the suspended Banks. They -were received without hesitation, at par, in the payment of all debts and contracts, and if it were put to the community to decide, I do not hesitate to say, that they would pronounce, with the exception, perhaps, of those who entertain prejudices against Banks, that the suspension was a general benefit. Say that depreciation in the value of their bills was the inevitable consequence of suspension — The planter was indemnified in the sale of his produce, and the merchant in the sale of his wares. The Bank had no power to force their bills into circulation, and if individuals thought proper to make rags, shin-plasters, kites, or coon-skins, the measure of value, the State has no concern tin it — nay, cannot counteract it. The value of Bank paper always has been and always will be, subject to fluctuation; and even the precious metals are not exempt from the general consequences of a redundant or inadequate supply.

So much for our domestic materials; we will now look abroad and see what we can glean by the way side.

The question, whether the suspension of specie payment by a Bank, was a cause of forfeiture, came directly up in the case of the State of Alabama vs. Tombigbee Bank, 2 Stewart’s Rep. 30, referred to in the judgment of the Circuit Court, and it was held to be no cause of forfeiture. It arose incidentally in Pennsylvania, in the case of the Commonwealth vs. The United States Bank, which will be found in Appendix C, to the Brief in this cause. Mr. Justice King, the President of the Court of Common Pleas, delivered the opinion of the Court, and in remarking on this question, 'which seems to have been freely discussed in the argument, he says, “No one could assert, as a general doctrine, that the non-payment of a debt by a corporation to its creditor, was such a misuser of its franchises as would induce a forfeiture of its charter.” In the case of The People vs. The Washington and Warren Bank, 6 Cowen, 216-7, the question came before the Supreme Court of New York, and the language of Wood-worth, Justice, who delivered the judgment of the Court, appears to me entirely appropriate. “ I cannot,” says he, “assent to the proposition that insolvency merely, at a particular time, however produced, is good cause for dissolving the corporation. Its continuance must be such as to afford substantial ground to consider the object for which the institution was created, as defeated.” Again — “ The refusal to pay, unless arising from continued insolvency, is, in my apprehension, no ground of forfeiture. The remedy of the creditor would seem to be by action. As to suspending operations, that may, in some cases, be a prudent and justifiable measure, and consistent with ultimate solvency.” And he might have added, with the interest of the Bank and the community; and all the researches of the counsel have not been able to rake up, from the rubbish of ages, a single case or dictum, controverting the correctness of this doctrine.

There is a principle running through these cases, whici, although so commonplace as to be often overlooked, pervades every contract, and is of Universal application. Parties may make any contract they think fit, if the .subject contracted about is in itself lawful; and if the party bound, do that which it requires of him, or forbears to do that which it forbids, in good faith, and loss or injury happen to the other party, it is damnum absque injuria.

I have before stated, that the declaration does not charge the Bank with any act prohibited by the charter, or the omission to do any act expressly enjoined by it. Nor is there any allegation that the affairs of the Bank were not conducted in perfect good faith. I have shewn, I think, conclusively, that although the Bank was bound, generally, to redeem her bills in specie, it was not expected that she should do so under all circumstances, because it was impossible, and that suspension was forced upon her by circumstances which she could not controul. If loss has happened to the State, it is damnum absque injuria.

But why refer to authorities ? Why reason about this matter? The specie of all the world would probably not be sufficient to redeem all the Bank paper now in circulation in the United States; and although it might be proved by a deduction, as conclusive as a mathematical conclusion, that the Banks ought to pay all their liabilities in specie when demanded, the fact stares us in the face, and we cannot shut our eyes upon it, that the thing is impossible.

The suspension of 1837 is one of the causes of forfeiture charged in this declaration, but I did not understand that it was intended to be particularly relied on, and I cannot suppose that it was thought to be tenable. The Legislature, one of the contracting parties under whose authority this proceeding was instituted, has declared that the Bank, notwithstanding this suspension, was entitled to the “public confidence,” a concession necessarily implying that its affairs had been conducted with propriety — and it is notorious, that the whole community admitted the necessity and approved the; suspension.

The suspension of 1839 is, it seems, the gravamen of this prosecution. That differs from the former, principally in the circumstance that it continued only about half the time. The circumstances under which it occurred, were also somewhat different. In the first, all the Banks in the United. States, except those of Massachusetts, had suspended. In the last only the Banks in Philadelphia and Baltimore, in Virginia and North Carolina, and South and West of Charleston, and the Planters’s and Mechanic’s Bank, the Union Bank, the State Bank, and the Rail Road Bank of Charleston, had suspended ; the Bank of the State of South Carolina and the Bank of Charleston, only, continuing to pay specie; and an argument against the necessity for suspension, has been drawn from the circumstance, that the two Banks last named, continued to redeem their paper. But that cannot bear the test of examination, The pressure on two Banks, haying incurred liabilities to thp same amount, with the same means, may be very unequal, as in the case of a,ran upon one of them, originating either in convenience, caprice, or a combination against it. And the operations of one may go on smoothly and safely, and the other may be drained of all its immediate resources, although equally solvent. In illustration of this, I trust I will be pardoned for stating a fact, derived from the President of the Commercial Bank of Columbia, which had not suspended specie payments. The Bank of the State of South Carolina, as before remarked, continued to redeem her bills in specie, and yet, at the time, the Commercial Bank had in its possession an amount of the bills of the former Bank, equal, at least, to fifty per cent, over and above all the specie which she had in her vaults, as ascertained by the Report of her President, and if this amount had been pressed | upon her, she, too, would, in all probability, have been forced into suspension, but it was forborne in the spirit of courtesy.

Having established, as I think, satisfactorily, that the bare suspension of specie payments is not a ground of forfeiture, it follows, necessarily, that it was incumbent on the State to charge and prove some fact which would have amounted to a forfeiture, as the non-use or abuse of its franchises; the neglect to exercise them, in the language oí Judge Woodworth, for so long a time as would “afford a substantial ground to consider the object for which the institution was created, as defeated or some abuse of its powers for unworthy or fraudulent purposes, by which loss or injury was sustained by the community, as the suspension of specie payments when the bank had the means of paying, and without necessity; resorting to means to depreciate its own paper, and purchasing it at a discount; putling paper into circulation without providing the ordinary means to redeem it; or any other dishonest or fraudulent practices.

If I am wrong in this, the fifth plea, which has been characterized as rigmarole, contains, notwithstanding, in my judgment, the material of a perfect justification. The declaration, it will be remembered, does not charge any deceitful, dishonest or fraudulent practices against the bank. This plea states, that in consequence of the suspension of the banks in Baltimore, Philadelphia, Virginia and North Carolina, of the banks south and west of Charleston, and of a portion of the banks in Charleston, and the demands for specie being extraordinary and irregular, “ the said bank was unable to <pay its clues and liabilities in gold and silver coin" and that she resumed as soon after as her means enabled her to do so, with safety to her own interest and the interests of the community. The fact that she was forced into suspension by circumstances which she could not control, without fault or blame on her part, is her justification.

It is said that this is mere matter of excuse. The line which separates excuse and justification never has been and never can be defined. The extremes are palpable enough, but the point at which they meet invisible, intangible. Take the cases of murder and manslaughter as an example. If one kill another of malice prepense, indicated by his laying in wait, that is murder ; but if he kill him in sudden heat and passion, on reasonable provocation, it is clearly manslaughter. But what precise state of facts will or will not amount to reasonable provocation, cannot be ascertained by any rule ; and the only means heretofore devised for solving the difficulty, is the trial by jury. So here, if the defence does not, as I suppose, amount to a perfect justification, as matters of excúse they present a mixed question of law and fact, which a jury alone are competent to solve. I have not looked into the pleadings with reference to this result; but I feel assured that the distinguished counsel for the State would not suffer a case of such importance, and of so much concernment to the community, to go off on a mere question of pleading, and the court would order a resf ondeas ouster if that should be necessary.

The counsel have indulged in speculations as to the unreasonableness of supposing that the Legislature would incorporate a bank with the privilege, express or understood, of not paying their bills in specie. I refer to the Act incorporating the Bank of the State of South Carolina, 8 Stat. at Large, 24, where it will be found that its capital consisted entirely of public stocks, and the pledge of the State to support the bank, without a dollar of specie. That, however, was at a momentous crisis, when all the banks in the Union were suspended, and was no doubt justifiable. But with .the policy of a contract made with the State, the court have nothing to do. All that is expected, all that the court can do, is to declare the law of the contract. The State, whilst she exacts only the reasonable performance of the obligations to her, never repudiates her own.

There are others who think, and perhaps justly, and I confess I am strongly inclined to the opinion, that the world would have got on in the end as well without the aid of chartered banking institutions, and that all the legitimate objects of their institution might as well have been obtained by the means of personal credit or private institutions. The fact cannot, how-. ever, be disguised, that under the stimulating influence of a superabundant quasi currency — and whether substantial or not, is immaterial to- the question — all the departments of agriculture, commerce and manufactures, of science and literature, have been fostered and flourished in the United States to an extent unknown in modern times; and whether the revulsion which is' now felt in the pulse of the body politic, is destined to a collapse more dangerous than the original disease, is yet to be determined. Of one thing, however, I am perfectly assured, that when the rage for banking, which is now rapidly passing away, shall have subsided, no company will be found to accept a charter to be forfeited for suspension of specie payments under all circumstances ; an event which may and must, in all probability, happen; and if what I have not already said, does not demonstrate it, I refer with confidence to the learned and able report of the late Mr. Stephen Elliot, the first President of the Bank of the State of South Carolina, to the Legislature, in 18 — , re-published by the order of the Legislature, and bound up with the Acts of 1840, in whidi be concludes that emergencies may and must arise, in which suspension is inevitable; and to the no less able report of his successor, the late Judge Colcock, with whom I was long associated on the Bench, to the Legislature, justifying the suspension' of that and all the other banks of the State, in 1837, as forced upon them by circumstances over which they had no control. And that is responded to with an approving voice by the report of the committee of Ways and Means, in the resolutions of the session of the Legislature, in 1837. And yet that very act is charged against this bank as a damning sin, a sin not to be justified, palliated or forgiven!

I am of opinion, therefore, that the judgment of the circuit court ought to be affirmed.