Case ID: ohio_15/html/0322-01.html
Source: Caselaw Access Project
Author: {"author": "Wood, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In Bank.
    Dec. Term, 1846.
    The Receivers of the Bank of Circleville vs. Seymour G. Renick and others.
    In the absence of express legislative provision, the forfeiture of the charter of a corporation can only be established by judicial action, and cannot be inquired into collaterally.
    The Bank of Circleville having done all the law required, previous to the appointment of a Commissioner, by the Governor to examine its vaults, which the Governor neglected to do, a person who has done business with it as a Bank, and admitted its existence by the receipt of its. funds, cannot, in a suit against himself, by the Receivers of the Bank, question the legality of its organization.
    This is a case in Chancery, reserved in the County of Pickaway.
    The complainants have filed an original, amended and-supplemental bill, in which divers matters of equity are set forth, but are admitted by the complainants’ counsel to be unsustained by the proof, with the exception of the following allegations: That in May, 1841, Seymour G. Renick caused to be delivered $4,000 of the notes of the Circleville bank to Robert Larimore, who is made a defendant, to be exchanged for other funds, and returned to the bank, in order to aid in the extension of its circulation — Renick, at the time of the delivery, being the President of the institution. It is averred that Larimore converted a part of this $4,000 to his own use, and that, in the autumn of 1841, Renick, the President, having become insolvent, transferred the claim of the bank against Larimore, as his own personal claim, to his brother, Felix W. Renick, who brought suit upon it in his brother’s name, for his, Felix’s use, and recovered a judgment thereon for the balance due, some sixteen or seventeen hundred dollars. The object of this proceeding, on the equity side of the Court, is, to enjoin Felix W. Renick from the collection of the judgment for his own use, in the name of his brother, and to compel Larimore to pay the amount over to the Receivers of the bank, for distribution amongst its creditors.
    Seymour G. Renick, in his answer, admits that he was the President of the bank, at the time stated in the bill, but swears that the $4,000 advanced, was by way of loan to Larimore, and that, in the advance of the money, he did not act in the capacity of an agent for the bank ; that it was a personal matter between him and Larimore, who was to refund the amount to the respondent, to be used by him, to pay a bill due, or soon to become due, in the other Bank of Circleville. That the $4,000 ■was drawn out of the bank on the check of this respondent, and charged to his account, which showed a balance in his favor, at. the time of the date of the-check, on the books of the. bank, after the check should be paid.
    Felix W. Renick, for his defence, sets up, in his answer, that he is informed, and believes, that said pretended bank never went legally into operation, and that the charter and privileges, thereby granted, ceased and were of no effect, for want of compliance with the provisions of the third and fourth sections of the act of incorporation. Both of the respondents admit the assignment' of the claim, and state the consideration of such assignment was liabilities incurred by Felix W. for his brother; but Felix denies any knowledge of the claim of the bank to the amount of the judgment. Replications have been filed, and testimony taken. ,
    Only so much of the arguments of counsel is published as relates to the question of the legal existence of the bank.
    
      T. Ewing, for Complainant.
    The answer of Felix W. Renick, sets up by way of defence, “ that he is informed, and believes, that said pretended bank £ never went legally into operation; that the charter and privi- £ leges ceased, determined, and were of no effect, for want of £ compliance with the provisions of the third and fourth sec- £ tions of the charter of said bankand Seymour G. Renick» the President of this same bank, who “ purchased and took hold of it” in February, 1841, testifies thus: “I know the ‘ Bank of Circlevilie, chartered in 1818, did not go into opera- £ tion till the opening of 1840, nor attempt to do business until £ that time. That about that time said bank commenced issu- £ ing bills and notes. The Governor of Ohio never did appoint £ any person to examine the books and vaults of said bank, to £ ascertain whether they had complied with the provisions of £ the fourth section of the bank; and the Governor never did £ give public notice that said bank had complied with the pro- £ visions of the fourth section of the charter of said bank.”
    This defence is set up under circumstances somewhat striking and remarkable.. The president, and principal owner of the bank; who personally knew all about each secret defect in its organization, has taken a portion of its funds and handed them over to a brother, his private creditor, and he himself has be-, come insolvent, so-that no creditor of the bank can have any personal security against him; and now, when those creditors, who knew nothing' of the defects in the organization of the bank, but who received its bills in good faith, do, through the trustees appointed by law to represent their interests, bring suit to recover this money, and apply it to the satisfaction of their claims, this defect in organization is disclosed, and set up as defence by this President and owner of the bank, and his creditor,, who has through him received its funds, is, or is not, as the law may determine, to save and indemnify them in the plunder and spoliation. It could not be the intent of the law to countenance such injustice ; and I will endeavor to show that, rightly understood, the law' does not do it.
    That we may know where the burden of the controversy lies, it is important to understand exactly what is admitted, and ' what is denied by the pleadings; ■ and to this point :
    The answer of Felix W. lie nick admits the charter; it admits, by clear implication, that the complainants had possession of that charter, and acquired rights under it, but avers that the charter, and privileges thereby given, .ceased, determined, and were of no effect, for want of compliance with the provisions of the third and fourth sections of the charter of said bank.
    Now, compliance with the provisions of the third section is abundantly proved. We show, by the statement of Edson B. Olds and P. N. White, that the three thousand shares were subscribed, and fifteen per cent, thereon paid in, and in the vaults of the bank, in gold and silver, and they commenced the operations of the bank as far as permitted by the third section of the act. This is not denied, but it is alledged that they went further, and issued bills without the money having been counted by commissioners appointed by the Governor, and his consequent proclamation. Nay, further, the fact is, and so admitted, that they gave notice to the Governor of their compliance, and ¿sited for commissioners, who were never appointed. The bank, therefore, had complied, as far as action on its part could go, with the provisions of the third and fourth sections, and it was the Governor only, who had failed to comply with his duty. This is upon the face of the matter. Whether there was any thing of it whatever, in' good faith, is extremely doubtful; but those who set up the. bank, and those who managed it, and those who have -received its funds from the owners and managers, cannot be permitted to aver that acts, fair on their face, were fraudulent, to the end that they may extend and consummate the fraud. .
    Then, after the three thousand shares were subscribed, and the $23,000 in gold and'silver were paid in, these corporators had possession of the charter of the bank; they are authorized, by the express terms of the charter, to “ forthwith commence ‘ the operation of said bank, so far as may be necessary, in the ‘ appointment of officers,” &c.; but if they- commence issuing bills, without having first complied with the provisions of the fourth section, they forfeit the charter. That compliance, so far as their action is concerned, consists in giving notice to the Governor, and that notice was in fact given.
    But the spirit and intent of the law was, that they should issue no bills until the Governor made his proclamation. This is admitted. And it is further said, that the charter became forfeited, if having done every thing on their part, and the Governcjr failing to do his duty^ they should issue bills. This is not so. clear; the statute does not say so in express terms. There is room for. construction; and it is proper that the matter should be settled by a direct adjudication on the very point. If the charter, once brought into being, has been avoided or annulled, that fact should be. made known to the people by a' public judicial proceeding, the quo warranto provided by our law, that the violators of the law might not make that violation an instrument of further injustice, and that the innocent and unsuspecting might be put upon their guard. The question of compliance or noncompliance with the requirements of the charter, in putting such bank into operation, cannot be inquired into collaterally, but only on a scire facias or quo warranto, where the State is a party. This I hold to be .clear on principle and authority. . •
    On principle, it is a matter of no moment to the individual who is the debtor of the bank, or who has taken its property as a trespasser, or has got possession of its funds by fraud, whether, in going into operation, the bank did or did not comply strictly with all the requirements of its charter; there is no natural justice or right in them to set up, as a defence against an action for the injury-, any such defect, if it in fact exist. It is a question solely between the sovereign and the corporation, the creator' and the creature; and, as the corporation must, if at all, take possession of its franchise and go into its exercise, in tiie presence of the sovereign who gave it all its faculties and prescribed the conditions of its being, it must be presumed, from his acquiescence in their exercise, without all conditions performed, that those, omitted have been' waived, and our laws have made most ample provisions for the trial) and adjustment of questions such as this. The forty-fourth section of the act of the 23d February, 1816, provides, “that the Supreme * Court shall have full power, on a quo warranto, to hear and * determine all questions touching the violation or forfeiture of ‘ charterswhich provision, that is, the section containing it, is expressly adopted in the first section of the act incorporating, , , this hcinR* • 1 • ^
    The law, therefore, has made ample provision for this examination and adjudication, on the direct issue at the suit, of the State. It would seem, therefore, that the Legislature intended that mode should be adopted; and public convenience and public justice require that it shouldfor the same law must apply to this as to all other banking institutions. The fact that it has been purchased and taken hold, of, by men who chose to use it as an. instrument of fraud, cannot change the law, with respect to it, at least • it cannot be allowed to change it to their advantage.
    We have had some thirty banks in operation at once in this State, and for a period extending through many years. To all these were certain requirements, certain acts in pais, necessary to be performed before they were allowed to go into operation ; but they went into operation, and there is no existing evidence that in all, or in. any of these cases,'all the prerequisite acts-were performed. Those who organized the banks died, and the stock descended to their children. Persons who knew nothing of its organization, but merely knew that the bank was openly and publicly in operation, under a charter, bought and paid their money for the stock; men who wanted money, borrowed it, and gave their notes for its repayment; officers were chosen for these banks, and took charge of their funds. Now, in this state of things, where, millions upon millions are'involved in the legality of these institutions, it is ascertained that some requisite of the act incorporating them has not been complied with. The debtors who have borrowed their money determine not to pay; the presidents who have taken hold, of the bapks seize upon the funds in the vaults, and hand them over to their friends; and Ihey all with one voice answer — the promissor to an action on his note, the officers of the bank and their friends, to an action of trespass or assumpsit, for the cash, or to trover, or even to a bill in Chancery for the assets.. They answer either to the bank itself, or its assignees, who sue in behalf of its, creditors, you cannot sustain your action, for you had not commissioners enough by one who took your subscriptions; you lacked ten dollars of having paid in fifteen per cent, in gold and silver on your capital stock, before you issued'..your notes; you thought you had enough, but I happen to know that you counted French crowns at $1.10 when they were worth but $1.07. This is our plea in bar to your recovery, and for me, who am in Chancery, this is my equitable defence.
    The system of law must be very imperfect which would endure a defence like this; and ours is not chargeable with such imperfection. As I have already said, these questions are all between the sovereign and the corporation only, and that upon a direct issue. No one has a right to raise them collaterally. A corporation, when it brings suit, must, it is .true, show that it is a corporation; and in England and New York, and perhaps some of the other States, it must show it upon the general issue pleaded, and where that is the rule, nul tiel corporation is a bad plea, as amounting to’ the general issue.
    But the act of incorporation and user under it, is all the proof necessary to sustain either issue. Bank of St. Charles v. Barnales, 1 Car & Payne, 569; Utica Insurance Company v. Tillman. 1 Wend. 555 ; Utica Insurance Company v. Badger and others, 3 Wend. 296; see same volume, 301; Bank of Michigan v. Williams, 5 Wend. 478, V. P. 490; Williams v. Bank of Michigan, 7 Wend. 549. 1
    And proof on the other side of a defect or omission in the steps necessary to carry the charter into effect, does not avail. It must be avoided, if at all, on .a scire facias or quo warranto issued by order of the sovereign. Chester Glass Company v. Dewey, 16 Mass. Rep. 101; Commonwealth v. Union Insurance Company, 5 Mass. Rep. 230 ; Centre Road Company v. McConoly, 16 Serg. and Rawle, 144; Hughs v. Bank of Somerset, 5 Lit. 45.
    If it be contended, as I presume it will not, that, this charter was void for nonuser, I would answer, that no such defence is set up in the answer, and if it were, it could not prevail The act of incorporation contemplates a judgment to declare such forfeiture before it is effectual. Section 5, “ shall not be adjudged to be forfeited for nonuser, &c.” See, also, the mode of adjudication provided by the act of February 23, 1816, section 44, adopted in this charter; and see, to this point, 1 Bl. Com. 485; 2 Kent Com. sec. 33, p. 51; Trevitt v. Taylor, 9 Cr. 51; Dartmouth College v. Woodward, 4 Wheat. 663; Society, &fc. v. New Haven, 8 Wheat. 483; Rex v. Armory, 2 Tenn. Rep. 515, 528; 1 Gill and Johns. 1; 2 Blackf. 367; 8 Ohio Rep. 552; Shee v. Bloon, 5 Johns. Ch. Rep. 377.
    And we contend on our part, that if these principles of law do not enable us to sustain our action, as against third persons wholly unconnected with the corporation, the defendant, Seymour G. Renick, is estopped from denying that it was a corporation. In other words, a court of equity will not suffer him to make such defence against his own solemn and public acts, as President of such bank, and that Felix W. Renick, holding through and under him, in privity with him, is also estopped.
    And we claim also, that the proceedings in chancery under which the receivers derived title, and the verdict of the jury, in the case involving the very question of corporation or not, is equivalent to a judgment in rem, and concludes the question.
    & Brush and N. H. Swayne, for Felix W. Renick, one of the Defendants.
    The defendant, Felix W. Renick, relies upon two grounds of defence —
    First: That there never was such a corporation in existence as is assumed by the complainants’ bill.
    Second: If there were such a corporation, that it had no right, legal or equitable, to the fund in controversy.
    First: As to the first proposition —
    The answer makes the issue of nul tiel corporation. The burden of proof rests upon the complainants.
    
      The legal provisions and the facts upon ■ which this question arises, are as follows :
    On the 14th of January, 1818, the Legislature passed “An act to incorporate the stockholders of the Bank of Circleville 16 Ohio Laws, 70. It provides:
    “ Sec. 2. Be it further enacted, that the capital stock of said ‘ bank shall consist of three hundred thousand dollars, (money ‘ of the United States,) to be divided into six thousand shares, ‘ of fifty dollars each, and the subscriptions towards constitu- ‘ ting said bank shall be opened at Circleville, and at such other ‘ places, and at such other time or times as the commissioners c may direct, under the superintendence of Henry Nevill, John ‘ Ely, John Black, Daniel Ludwig, David Kinnear, Peter Ap1 pie, John Burr, Daniel Turney, Jacob Shoemaker, Samuel c Lybrand, Jonathan Renick and Joseph Hedges, who are here- ‘ by constituted and appointed commissioners, and they or a ‘ majority of them, are hereby authorized and empowered to ‘ keep open the said subscriptions until three thousand shares ‘ of the aforesaid bank are subscribed for, and until directors ‘ are duly elected and qualified.
    “ Sec. 3. Be it further enacted, that so soon as three thousand ‘ shares of said bank are subscribed for and fifteen per centum ‘ paid on each share, said commissioners shall immediately give ‘ four weeks’ notice of the time and place of electing directors, ‘ in the manner provided for giving notice of the payment of ‘ installments by the eighth section of the act to incorporate ‘ certain banks therein named, and to extend the charters of ‘ existing incorporated banks — and the persons who shall then ‘ be chosen, shall forthwith commence the operation of said ‘ bank, so far as may be necessary in the appointment of the ‘ other officers of the bank, and to direct such further install-e ment or installments to be paid, as the interest and advance- ‘ ment of the bank may require; and all payments on shares, ‘ previous to said bank going into full operation, shall be made ‘ the one-half in gold or silver and the other half in bills of the * Bank of the United States or some of its branches, or. in spe- * cie, at the option of the stockholders.
    “ Sec. 4. Be it further enacted, that so soon as fifteen per £ centum on three thousand shares of the capital stock of said ‘ bank is actually paid in, it shall be the duty of the directors ‘ to give notice to the Governor of the State, that the said bank ‘ is ready to commence full operations — and the Governor, ‘ on the receipt of such notice, shall forthwith appoint some ‘ suitable person, not being a stockholder in said bank, to ex- ‘ amine its books and vaults, and if, bn examination, it shall £ appear to the satisfaction of the Governor, that the provisions ‘ of the third section of this act have been complied with, it ‘ shall be the duty of the Governor to give public notice that £ said Bank of Circleville has complied with the provisions ‘ of this section, and is thereby authorized to go into opera- ‘ tion, and it is hereby authorized accordingly: but in case ‘ said bank shall commence issuing bills or notes without first e having complied with the provisions of this section, the char- £ ter hereby granted, and the privileges given, shall cease, de- £ termine and be of no effect, and the stockholders of said bank ‘ shall be liable for the debts contracted, as though this act had £ never been passed.
    ££ Sec. 5. And be it further enacted, that this act of incor- £ poration, and the charter hereby granted to the Bank of Cir- £ cleville, shall not'be adjudged to be forfeited for any nonuser ‘ whatsoever, at any time before the 1st day of January, 1820.”
    On the 16th of August, 1839, Lybrand, Renick, Barr and Shoemaker, (four of the commissioners named in the act,) opened books, at Circleville, for the subscription of stock. Lybrand acted as chairman and E. B. Olds as secretary. Stock was subscribed to the amount of-. Subsequently, Olds gave up the subscription book to George House, who, with others, made further subscriptions to a large amount,££ not under the direction of the commissioners.”
    On the 6th of April, 1840, E. B. Olds and P. N. White examined the books and vault of the bank, and found that three thousand shaves of stock had been subscribed, and that there was, in the vatilt of the bank $23,000 ini gold and silver.’ Olds apd White, at .the time, were not stockholders.
    . No person was appointed by the Governor to examine the books and' vault of-the bank, ancl no 'public notice was given by him according to the prevision’s, of the. fourth section of the charter.
    .' We hold that these proceedings — not; being in conformity to the charter — are a nullity, and that the omission stated is fatal. ‘ , '
    1. ' The charter names twelve ..commissioners,' and “they or • a majority of’ them,” were required, to act. A smaller number could do nothing. They were clothed with no power or authority. whatsoever. The Legislature -confided in the judgment and integrity of the majority, and was specific in requiring the action of. at least that number. If the law had' not expressly ■'authorized a smaller number than the whole-'to perform the duties designated, it would have been,' necessary that all should have been present and acting, though the concurrence of a majority in what was done would have been sufficient. See Young V. Buckingham'et ah, 5 Ohio Rep. 489, and *the authorities there cited.
    The1 four commissioners who opéned the books, having no authority to act, their action was whplly void.
    .‘/Adhere an.act, prescribed by law, is .done by persons who -have no'authority to do-it,- it' is ndt voidable,- but void.” See lOBac. Áb. (Amer. ed.) 374; 3'.Inst. 231.
    . The subscription of stock under such circumstances — as respects the charter and the existence of a corporation under it — is as if it had not been made.
    2. It appears, by the certificate of Olds and ,White, (which it is agreed shall go in evidence,) that $23,000 were in the vault, but it does not appear that a dollar was, or was pretended to 'have been paid in on the stock subscribed. Indeed, it seems .to be' admitted, in the argument of the complainants’ counsel, that the whole proceeding was colorable, merely,' and fraudulent.
    3. The counting of the specie by Olds and White, was unauthorized and of no effect.
    it is not pretended, that either of them had any authority from the Governor, or that they reported to him. No one else, under the charter, could give such authority. The acts of these persons can have no more effect than if they had been done by any other mere, strangers for their amusement or the gratification of an idle curiosity.
    4. Until public notice was given by the Governor, the bank could not go into operation; nor do any act beyond the initiatory steps necessary to prepare it for "corporate existence. The 4th section of the act provided, that upon a given state of facts, it should be “the duty of.'the Governor to give public 4 notice that the Bank of Circleville has complied with the prb4 visions of this section, and is thereby Authorized to go 4 into operation, and it is hereby : authorized, accordingly.”We think it cléar, 'that until this notice was" given, the bank could have no authority whatsoever to.go into operation. The notice was necessary to put life into it and give it a legal ’existence. Without the notice, it could be, at most, but in an inchoate and embryo state. If it , went into operation without such notice being given, its conduct was not under the law, but against the law.' It can claim no rights under enactments which it has violated and set at defiance. It has fulfilled none of the terms which its creator- prescribed as conditions inevitably necessary to its existence. ' . -
    The clause in regard to issuing notes does not militate against this view of the subject. The Legislature seems -to have had two things distinctly in view, and made two distinct provisions accordingly:— . ; •
    ' 1. That the corporation could not exist at all, until certain conditions precedent were fulfilled. ■ . .
    2. If bank notes were issued before those conditions were complied with, that it never should exist. ' . .
    
      In such case the charter became ipso facto — wholly and forever void. A forfeiture at once ensued as the penalty of the transgression. Whatever may be thought of the other points relied upon, we think the giving of notice by the Governor was indispensable to the existence of the corporation.
    There is a wide distinction between the class of cases where a title is to vest upon the performance of a condition precedent, and those where an existing title is to bo divested, upon a failure to perform a subsequent condition.
    This distinction runs through the law of corporations, as well as that of contracts and devises.
    In respect of both the latter, the condition precedent must be performed, or the title cannot vest. Nothing will excuse performance. Equity cannot relieve. The principle of .compensation does not apply; Wells v. Smith, 2 Ed. Ch. Rep. 86; Scott v. Tyler, 2 Bro. C. C. 431; 1 S. & S. 239 ; 4 Kent’s Com. 125. In regard to corporations, the law is equally well settled.
    In Angel and Ames on Corporations, 502, it is said that, in England, and in some of the United States, the plea of nul tie! corporation is held to be bad on special demurrer, as amounting to the general issue. “ If, however, such plea be answered, £ the replication must set forth specially how the plaintiffs are ‘ a corporation, if the incorporating act requires certain things £ to be done before the plaintiffs can become a corporation.”
    In the Bank of Auburn v. Aiken and Werd, 18 Johns. Rep. 137, the Court say: “The replication was bad; the £ plaintiffs ought to have replied specially, and shown how they ‘ were a corporation; for the act by which they were incorpo- £ rated requires certain things to be done before the plaintiffs £ could become a corporation.”
    “ Where a corporation is created by a statute which requires £ certain acts to be done before it can be considered in esse, £ such acts must be shown to have been done, to establish the £ existence of the corporation. This rule does not apply to a £ corporation which is declared to be such by its very act of ‘ incorporation, and which does not require any acts to be per- ‘ formed to give effect to its charter.” Fire Dep’t of New York v. Kip, 10 Wend. 268.
    The authorities referred to by the complainants’ counsel will be found, upon examination, not to conflict with the views and authorities upon which we rely.
   Wood, C. J.

The important question which first demands the consideration of the Court, is one exclusively of fact, and that is, whether the $4,000 advanced to Larimore by Seymour G. Renick, in May, 1841, was in behalf of the hank, and for its benefit, or a loan of his own funds, on his own private or individual account. If the money was advanced for the bank, Seymour G. Renick had no right to mould the transaction into one of a private nature of his own; and as the claim was a mere chose in action, not negotiable, the bank, by.its Receivers, may pursue it into the hands of a bona fide assignee without notice. If collected by the assignee, the money should be refunded ; if not, its collection should be enjoined, and Larimore decreed to pay directly to the complainants, for the benefit of the institution, that the avails of the judgment may pro tanto discharge the liabilities of the institution.

The allegations of the bill, and the answer of Seymour G. Renick, are directly at issue on the main point, and have, consequently, thrown upon us the necessity of a careful examination of the depositions on file. From them, much curious history has been elicited as to the manner in which this slumbering corporation was revived, but which is irrelevant to the present inquiry. It is certain, however, that Seymour G. Renick took possession of the bank, in February, 1841, as President, owner of a majority of the stock, and, therefore, the controlling director. He was looked upon as the financier of the institution, and was, in fact, the bank itself, as is unequivocally established by the proofs in the case.

His first transaction with Larimore, of which we have any evidence, was on the 17th of May, 1841. He then checked on the bank, in favor of Larimore, for $2,500. This check was charged'to Renick, find .the money, in The bills of the bank, to Larimore, to exchange for currency, and- the currency to be delivered to the bank. Seven days afterwards, Larimore sent to thé bank $2,750, in bills of other banks. This amount was credited to Renick. The depositions of McCulloch and Doney .prove that, when this $2,750 yvas transmitted to the bank, it was accompanied-with a letter from Seymoilr-G. Renick, inclosing his check for $4,000. The letter \yas dated the 22d of May, and'the check, inclosed in it, the 17th of June, and not charged to him on the .books of the bank until that date, though paid;,- as the cashier testifies he believes, some time before. ' The cashier arid Doney both swear, they understood' this money was to be exchanged for the benefit of the, bank. This evidence is corroborated by the fact, that Larimore, after-. wards, paid to the bank $2,000 in Chillicothe paper, for which he had exchanged a like amount of, this .$4,000 of the paper of the Bank of Circleville.. It is true, in- the settlement between. Renick and the bank, in December,-1841, he gave his note for. the money advanced- to, and unpaid by Larimore. But the bank-was, at this time, insolvent,, and Renick had previously become so; and, counsel very properly infer, that he then deemed ,it. more(.convenient to his condition, that Larimore should stand as'his creditor than the bank:' the', former was able to1 pay — the latter could not. The,,depositions^of both Seymour G. Renick and Larimore have been taken, but they are; as directly in conflict as the bill and the answer ;- but laying Larimore’-s deposition aside, ■ as incompetent from interest, it does riot appear that any. note or memorandum was taken by. Renicli for the money advanced to Larimore. On- the contrary, it. is- sufficiently evident there was not.-, This fact is only to be accounted for on the ground, that the advance was not a loan, but thai the transaction was exclusively for the interest of the bank, and so considered at the time. No man lends a large sum of money, for months, preserving, no written evidence of the debt, or, at least, it is not the ordinary mode iri which a banker transacts his business. On the other hand, where large sums are to. be .transmitted, or paper exchanged, for the benefit of another exclusively, nothing is more common; apd we are therefore 'led irresistibly to the belief, from all the above facts, that this advance was not a loan, as set up in the answer. We arrive at this conclusion', even regarding the answer- as strictly responsive'to the bill, because, to the substantial facts, there is far more testimony than the rule in equity requires, in such-cases, to establish it., '

Felix W. Renick appears, hówéver, to be sorely troubled, for the reason, that this- bank had not been legally- organized. He defends on the ground, that a majority of the commissioners named in th'e charter did not attend to open the books .for subscription to the capital stock. The evidence is, that four out of the seven in esse, were present. He claims again, in substance, that the charter was forfeited. In the absénce of express provision, the forfeiture of the charter of a corporation can only be established by judicial action, and cannot be collaterally inquired ipto. He defends, also, japón the ground, that no commissioner was appointed by the Governor, as th'e charter required, to examine into the condition of the bank, count the funds in its vaults and report thereon to the Governor, 'who was to issue his proclamation; giving notice that the law was complied with, and without this, contends the bank had no.legal existence. The evidence -is, the amount of capitál- stó'ck required by law, was subscribed ;■ the per centum', called for thereon', by the 'charter, before commencing business, was in the vault of the bank, in silver and gold, and application made for the appointment of á -commissioner, which appears to have been disregarded. The' bank then had done all ón its part, either truly or falsely,- it had performed every obligation demanded and necessary to its complete organization. That all this Was not done in.- good faith, we aré not judicially informed. Under such circumstances, we are by no' means prepared - to say, eer-? tainly not, as against those who admit its existence by the receipt of its funds and in transacting business with it as a corporation, that they can deny it has acquired rights, as such, and defeat its honest claims, for any act of omission of duty by the executive, if it be such.

The cases referred to, as authorities, by this defendant’s counsel, do not seem to us to apply. They are cases where the plea of nul tiel corporation has been sustained on the ground either of some condition precedent to the organization, to be performed by the corporation and omitted to be done, or where a forfeiture has been established by judicial sanction.

Decree for Complainants.