Case ID: ohio_14/html/0128-01.html
Source: Caselaw Access Project
Author: {"author": "Hitchcock, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Richard Porter and others v. Frederick A. Kepler and Englebert Caprans.
    In an action against persons, charging them as stockholders of an unauthorized banking association, if the jury find a verdict against a part of the defendants, and in favor of others, judgment may be rendered against those who are found to be liable by the jury. The common law rule upon this subject is changed, so far as respects this class of cases, by the act of January 27, 1816, entitled “an act to prohibit the issuing and circulating of unauthorized bank paper.”
    If the plaintiff shows a good cause of action, in his declaration, although informally and defectively stated, the judgment will not be arrested after verdict; nor for this cause will a judgment of the court of common pleas, in pursuance of such verdict, be reversed on error.
    This case comes into this court by a writ of error to the court of' common pleas of Stark county.
    The original case was an action of debt in favor of the defendants in error against the plaintiffs.
    *The declaration contains two counts. In the first, after commencing in the usual form in debt, it is set forth that heretofore, to wit, on April 6, 1839, the defendants were stockholders, shareholders, and partners in a certain institution, bank and moneyed association, not incorporated as a bank by any law of the State of Ohio, nor authorized by any law of the state to lend money .or otherwise act as a bank, which association was by them styled the Orphans’ Institute Bank, otherwise called the Stark County Orphans’ Institute Bank; and afterward, to wit, on April 6,1839, at said county, the said unincorporated bank did, by their agents and officers (naming them), issue certain notes, bills, contracts, and checks, calculated and intended to pass and circulate by delivery to a large amount, to wit, to the amount of $30,000; and, being thus associated, and having thus issued their notes, bills, contracts, and checks, the defendants issued their certain other bill, called a certificate of deposit, which is as follows: “ Dolls. 212, Orphans’ Institute Bank, Canal, Fulton, April 6,1839. This certifies that Messrs. Kepler & Caprans have, for themselves, deposited in this office $212, to bo paid to their order on return of this certificate. R. Hubbell, Jr., treasurer.” By reason of which, the defendants becam'e, and were liable to pay to the plaintiffs said sum of §212, above demanded, when thereunto requested, and in consideration of the premises, the defendants promised to pay, etc.
    The second count is as follows: “And, for that, whereas, heretofore, to wit, on April 6, 1839, at said county of Stark, the said defendants were indebted to the plaintiffs in the sum of $212; for so much money before that time had been received by the defendants, to and for the use of the plaintiffs; and being so indebted, in consideration thereof, afterward promised,” etc.
    “Yet the defendants, although often requested so to do, have not paid said sums above demanded, nor any part of them, but have therein wholly failed, to the damage,” etc.
    *To this declaration a plea of nil debet was filed, at the September term of the court of common pleas, 1843;'the case was submitted to the court, the intervention of a jury being waived ; and the court found the issue joined in favor of the plaintiff, as against all the defendants except three, as to whom the court found against the plaintiffs.
    Subsequently, and at the same term, a bill of exceptions was signed by the judges, and allowed to be made a part of the record. From this bill of exceptions, it appears that a paper-writing, a copy of which was set forth in the declaration, was given in evidence by the plaintiffs, and it was proved that the same was issued in the manner stated in the declaration; and it was further proved that said certificate was givenforthebills issued by the officers of the institution, calculated and intended to pass and circulate by delivery as money. In argument, the defendant’s counsel insisted that said certificate was given without consideration, and was illegal and void; and did not, by law, entitle the plaintiffs to recover for the same. But the court found, as before stated, and rendered judgment, upon such finding.
    The errors as signed are as follows:
    1. That the action being in form, ex contractu, in usual and eommon law form, and part of the defendants being found not to be liable, judgment was rendered against the other defendants, when, by law, it should have been rendered in their favor.
    2. That the contract offered in evidence in support of said action, and on which said judgment was predicated, was without consideration and void, and did not entitle plaintiffs to judgment.
    
      3. That the first count in said declaration, on which said judgment was rendered, is not sufficient in law to sustain said action ; being insufficient, among other causes, in this, to wit, that it contains no statement of the consideration on which the contract therein set forth was founded.
    4. That there is, in said declaration, a misjoinder of actions; the first count being in debt, and the second in assumpsit.
    130] *5. That there is a variance between the declaration and the judgment; the former being in assumpsit, and the latter being a judgment in debt.
    Griswold & Grant, for the plaintiffs:
    In the argument of this case, we propose to do little more than call the attention of the court to the matters of error which appear to us to arise on the record. The points of law involved are, for the most part, such as every student is familiar with.
    1. The first error assigned, is the rendition of judgment against part only of the defendants in the suit. The declaration proceeds for the breach of a contract which the defendants are alleged to have made; that is, it counts on a liability of the defendants, arising on a contract. This is the case with both counts.
    But no principio is better settled than this: “In an action ex contractu against several, it must appear on the face of the pleading that their contract was joint, and that fact must also be proved on the trial." 1 Chit. PL, 8 Am. ed. 44 a. “Although in actions for torts, one defendant may be found guilty, and the other acquitted; yet, in actions for the breach of a contract, whether framed in assumpsit, covenant, debt, or case, a verdict or judgment can not in general bo given, in a joint action against one defendant, without the other.” Ib. See also Walcott v. Canfield, 3 Conn. 198, a strong case to the same effect.
    The exception in this rule is, “when one of the defendants is discharged from liability, by matter subsequent to the making of the contract, and which operates to protect him individually, leaving the contract in other respects in full force; as by bankruptcy, etc.” 1 Chit. PL, 8 Am. ed. 45. In New York and Massachusetts, this exception has been extended so as to embrace cases of 131] infancy. Hartness et al., v. Thompson *et al. 5 Johns, 160; Woodward v. Newhall, 1 Pick. 500. But, in all cases within the exception, the plaintiff must enter a nolle prosequi before judgment, or the matter of discharge must otherwise appear by the record, and, we suppose, must be presented to the court by a distinct plea. 20 Johns. 160.
    The rule requiring the contract proved, to correspond with the contract stated in the declaration, is also pertinent here; for it appears by the record that the contract alleged to have been made by all the defendants, was proved to have been made only by a part of them.
    Perhaps the defendants in error will seek to obviate this first error assigned, by appealing to the statute of 1816 (Swan’s Stat. 136), making stockholders, etc., of unauthorized banking associations, liable individually for “the bonds, notes, bills, and contracts of such bank.” Sec. 11. And, in actions, against several persons, on such contracts, authorizing a recovery against such only as are proved to be stockholders, etc. See. 14. There are two answers to this argument, either of which we think perfectly conclusive.
    I. The declaration does not count on the statute, nor make any allusion to it. It proceeds upon a contract, the second count being in fact a common count in assumpsit for money had and received. The first count indeed alleges that the defendants were stockholders, shareholders, and partners in an unauthorized banking association which issued notes contrary to law; but it does not appear by the count, that this averment has any pertinency, or is anything more than a superfluous and verbose description of the defendant’s. There is no reference, in either count, to any statutory liability. But “ when the act of omission, which is the foundation of the action, was not an offense at common law, it is necessary, in all eases, to conclude against the form of the statute, or to show at least that the declaration is founded on the statute; and this is necessary also in an action to recover back money lost at play. 1 Ch. Pl., 8 Am. ed. 373.
    *2. The contract declared upon is not averred to be a contract of the unauthorized bank mentioned in the first count, and it is only on contracts of the bank, that the individual stockholders are made liable by the statute of 1816. Secs. 11-13, Swan’s Stat. 137, 138. On the contrary, the first count distinctly alleges thatr the defendants “ issued” the “ bill” therein set forth, thereby negativing any presumption that the contract was a contract of the “ bank.”
    II. The second error assigned is, that the contract offered m evidence was proved to be without cousideration. The facts upon which this error was predicated, are shown by a bill of exceptions, by which it appears that the certificate of deposit declared upon, was issued for the circulating notes of an unauthorized bank, which were worthless and void under the statute of 1824. Swan’s Stat. 154. We can only refer the court, on this point, to the bill of exceptions, the statute, and the case of Wright et al. v. Porter et al., decided in bank December term, 1841, but not reported. Though the statute makes the stockholders of such associations liable for the contracts of its officers, it means of course such contracts as would be binding, if made by individuals.
    III. The third error assigned is, that the first count, being a count on a simple contract, contains no sufficient statemeut of a consideration. We do not suppose the instrument set forth to be a bill of exchange or a promissory note importing a consideration; and, though a consideration may be inferred from the language of the insti’ument, we do not think this circumstance excuses the omission of a formal statement of the consideration on which the contract was in fact made. We simply cite the following well-known rule, as applicable to this point: “ In declaring upon a contract, not under seal, it is in all cases necessary to state that it was a contract which imports or implies a consideration, as a bill of exchange or a promissory note, or expressly to state the particular consideration upon which it was founded. 1 Chit. PL, 8 Amer. ed. 293.
    IY. The fourth error assigned is a misjoinder of causes of action; the first count being in debt, and the second in assumpsit.
    
    *Tbat the second count is a common count in assumpsit, for money had and received, the simple reading of it will suffice to prove; but it may not be so easy to show that the first count is a count in debt, though it purports to be so, and can not otherwise be in conformity with the writ. The only reason to doubt whether it is a count in debt, arises from the following averment, which it contains : “ And the defendants, in consideration of the premises, afterward, to wit, on the day and year last aforesaid, at the county aforesaid, undertook and promised to pay the amount,” etc. On examination of authorities, however, we are convinced that this statement of a promise may be rejected as surplusage, and that the count is, notwithstanding;, a count in debt. Thus, “it has been recently held that the words ‘ undertook and agreed to pay,’ do not necessarily import the form of action to be in assumpsit, but are good in debt.” 1 Chit. Pl., 8 Am. ed. o62.
    To show that a misjoinder of causes of action is fatal on error, we cite as follows: “ Counts, in one species of action, can not be joined with counts in another. Thus assumpsit, covenants, debt, or account can not be joined with each other.” 1 Chit. PL, 8 Am. ed. 201. “The consequences'of a misjoinder are more important than the circumstance of a particular count, being defective; for, in the case of misjoinder, however perfect the counts may respectively be in themselves, the declai’ation will be bad on general demurrer, or in arrest of judgment, or upon error.” Ib. 205.
    Y. But if both counts are in assumpsit, then is the judgment (which is clearly a judgment in debt) not adapted to the form of action, and is therefore, we suppose, manifestly erroneous.
    In conclusion, we would urge that the action of assumpsit can not be sustained on a liability created by the statute of 1816, already referred to. From the nature of its provisions the declaration must be special, and must proceed upon some “bond, bill, note, or contract” of the “unauthorized bank,” of which the defendants are stockholders, etc.; and so the statute, in express *terms, requires. Secs. 11, 12, 13, Swan’s Stat. 137, 138. We have heard that this question has been decided somewhere in this state, but can not refer to the case. ’But as we suppose the declaration in the case at bar is not so framed as to bring the statute in question, we deem this point of little importance.
    And if the action of assumpsit can not be sustained on a liability arising on this statute, it follows that debt, in its ordinary form, that is, predicated upon a simple contract of the defendants, is equally unsustainable.
    Harris & Brown, for the defendants:
    The record shows that the suit was brought against the defendants below, as members of an association that had illegally issued notes as bank notes, intended to circulate as money. The first error assigned is, that judgment is rendered against part only of those that are sued. The counsel might have saved himself the trouble of citing authorities to prove that, in a common ’action on contract, judgment must be rendered against all sued or none., But this suit is brought on the statute of 1816, to prevent unauthorized banking, and unless it can be sustained under the provisions of that statute, it can not be sustained at all.
    The court can not overlook the fact that the first count is framed on that statute. The count commences by setting out that the defendants were “ stockholders, shareholders, and partners ” (using the words of section 11 of said act) of an unauthorized banking association. That, by their officers, they (the association) issued “bonds, notes, and bills to pass and circulate by delivery ” (using the term of section 2), which rendered the defendants individually liable; and, having done that, we then set out the “contract,” on which we seek to recover.
    The finding of the court and the rendition of the judgment is in strict accordance with the provisions of section 14 *of the act, that provides that if all sued are not found liable, judgment shall be rendered against such as are. But counsel seem to think that, because we do not conclude “contra forma’’ that it is not a declaration on the statute.. Yet the very authority cited by the counsel says it is enough if it appears that the declaration is founded on the statute. The act of 1816 is a public act. This court will take judicial notice of its existence ; and it abundantly appears, from the declaration, that it is founded on the statute, and slight informalities will not avail in error. The second count is a common count in debt, on simple contract, in strict accordance with precedents, and may be well joined with the special count, however that is founded.
    The objection raised on the bill of exceptions, that the writing given in evidence was without consideration, is wholly without foundation.
    The counsel seems to think that, because the circulating paper ' of this association was declared void by this court, in the case of Wright v. Porter et al., a case decided but not reported, and because the paper on which this suit is brought, was given in redemption for such circulating paper, that it must be void also; though the counsel well knows that the facts were precisely the same in Wright v. Porter et al. as in this case. This court decided, in that case, that no recovery could be had on the circulating paper, because, by section 23 of the act of 1824, Swan’s Stat. 15, it is provided that “no suit shall be brought upon any note or notes, etc., intended for circulation; ” but that, if the contract existed in any other form, suit might be sustained and recovery had. The decision, therefore, of this court, in the case of Wright v. Porter et al., fully sustains this cáse, so far as this objection goes. The decision is undoubtedly in strict accordance with the plainest principles of law. The banking association was bound in common honesty to redeem its paper; and, although the statute had barred a recovery, yet, the paper having been exchanged for a promise in another form, on which a recovery is not prohibited, the moral obligation that existed to redeem, is undoubtedly a good consideration -Tor a promise in a form that the statute will enforce. It is not unlike a promise fo.pay a debt contracted by an infant who is shielded from any liability on such promise or debt made and contracted when an infant; but the moral obligation to pay the debt or fulfill the promise,- is. an abundant consideration to sustain a promise to pay, made after the infant arrives at full age, although no recovery could be had on the original promise or contract.
    The third error assigned is, that no consideration is averred. The reading of the declaration shows that this error does not exist as a matter of fact. The first count clearly sots out the issuing of illegal bank paper for circulation, by which the defendants, as stockholders, shareholders, and partners, became legally liable to pay the debt counted on; and then avers that, being so liable, in consideration of such liability, the defendants promised to pay, etc.
    The fourth error is, that there is a misjoinder. The action is clearly an action of debt on simple contract, as appears from all the papers. The precipe, summons, and declaration are in debt. The plea is in debt. The finding of the court and the judgment is in debt.
    The second count is a common count in debt, on simple contract, for money had and received, for the sum of $212 debt, the same amount counted for in the special count, and does not vary materially from a common count in assumpsit, as the precedents fully show they were not.
   Hitchcock, J.

This being an action at common law in form ex contractu, if it were to be governed by the ordinary common-law rules, there is no doubt that the first error assigned would be fatal to the judgment; for perhaps no rule is better established, than that, in such case, all the defendants, or none of them, must be made liable. A verdict in favor of one, operates to acquit all But the declaration shows that the defendants wore unauthorized bankers, issuing and putting in circulation *paper in the similitude of bank notes or bills intended to pass as money; and this rule has been modified by statute, in cases like the one now before the court. On January 27, 1826, the act “to prohibit the issuing and circulating of unauthorized bank paper,” Swan’s Stat. 136, was passed, and makes provision for cases like this. Section 11 of that act provides, “that every stockholder, shareholder, or partner, hereafter interested in any such bank,” that is, any unauthorized bank, “shall be jointly and severally answerable, in their individual capacity, for the whole amount of the bonds, bills, notes, and contracts of such bank herealtor executed; anjr agreement, shift, or device, in such bond, bill, note, or contract, or otherwise, to the contrary notwithstanding.” ■ The next section provides that the holder of any such note, bond, bill, or contract! may institute suit and recover judgment against all or any part of the persons interested in such association. Section 14 provides that “if, during the progress or in the trial of such suit, it shall appear that any one or more of tho defendants are not liable to such action under this act, it shall not pi’event tho suit from proceeding as to any other defendant, but judgment shall be given for the full amount of such bond, bill, note, or contract, against anjr ono or more of the defendants, who may appear to be liable.” The judgment in this case was entered in pursuance of this provision. And wo must either sustain it or overrule the statuto itself. This we have no legitimate power, nor have we any desire to do, for we believe it to be based upon the principles of j ustice.

But it is claimed that this action is not under the statute, but is a mere ordinary action of debt. The statute does not give any new form of action ; it merely changes the rale of law as to tho mode of proceeding and in the rendition of judgment. It declares in section 13, “ that in such suit,” if it is a suit upon a bond, note, bill, or contract of .such unauthorized banking company, it shall “, be sufficient for the plaintiff to set forth, in substance, that he is the holder of such bond, note, bill, or contract; that the defendants were interested in said bank, at the -tdate of such bond, note, bill, or contract, or subsequently thereto ; and that the same is unpaid,” etc. All this has, “in substance” been done in tho present case; and therefore, so far as the first error assigned is concerned, the judgment is well enough.

2. The second error assigned is, that the contract set forth in the declaration, and offered in evidence, is without consideration and void. It was a contract of an unauthorized banking institution, and the defendants were stockholders and shareholders of that association. The law before referred to makes the stockholders individually liable for all the contracts of the association. It is true that section 23 of the act of January 28, 1824, to regulate judicial proceedings where banks and bankers are parties, Swan’s. Stat. 147, provides that no action shall be brought upon any notes or bills thereafter issued by an unauthorized bank, and intended for circulation ; and that the same shall be held and taken in all courts as absolutely void. But this contract is not a note or bill intended for circulation. It is merely a certificate of deposit, and is such a contract as this court held in case of Wright against Porter and others was valid as against the stockholders of this same Orphans’ Institute and Bank. There was in fact, however, a consideration for the contract, and that consideration consisted in notes which had previously been issued by the same association, intended for circulation. And the argument is that, inasmuch as these notes were void, therefore' there was no consideration. The legislature, from motives of public policy, declared such notes to be void. But we can not, the.relore, go further and say that'Other contracts, which the same body has declared to be obligatory, are void.

The next error assigned is, that the declaration is defective in not setting forth the consideration upon which the contract was given. This, under the statute, is not necessary. ..But, in fact, the consideration does sufficiently appear in the contract itself; and this contract is made a part of the declaration. It was given for money deposited in the office of the association, *and which they promised to pay on the order of the defendants in error.

The fourth error assigned is, that there is a misjoinder of counts in the declaration, the first being in debt, and the last in assumpsit. i •

The record shows that the precipe in the case was in debt, the writ was in debt, the declaration commences in debt, it concludes as in debt, the plea is as in debt, and also the judgment. It is true that the pleader has raised a promise upon the liability set forth, as in assumpsit. But this promise may well be rejected as surplusage. It was unnecessary to state it. And after verdict, when the case shows that the plaintiff had a good cause of action, although it may have been informally set forth, we would not, for that cause, arrest the judgment, nor will we, for such cause, reverse the judgment of an inferior tribunal. If the counsel for the plaintiff in error supposed there was a misjoinder in counts, it would have' been well to have demurred. But even had the question been ¡presented on demurrer, we incline to the opinion that the declaration must have been sustained.

This disposes of the fifth error assigned, which is, that the judgment is erroneous, because the declaration is in assumpsit, and the judgment in debt. We think the declaration is in debt, and therefore the judgment is properly entered.

In the opinion of the court there is no error in the record, and the judgment of the court of common pleas must bo affirmed.