Case ID: miss_15/html/0163-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Clayton", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The President, Directors and Company of the Planters Bank of the State of Mississippi vs. The State of Mississippi.
    The failure of a bank to redeem in specie the notes 'which it has put into circulation, is a cause of forfeiture of its charter; when it suspends specie payments, it ceases to discharge the obligation imposed upon it by its creation and to answer the ends for which it was instituted ; and unless there be some express exemption extended to it, for such failure, the state may resume its grant.
    It seems that banks are not exempt from the rules of the common law in regard to corporations and the application of the law of quo warranto to them for forfeiture of charter; but are subject to them, at least so far as to have a judgment of forfeiture entered against them for a failure to pay specie on their notes.
    The decision in the case of the Planters Banlt v. The State, 6 S. & M. 628, cited and confirmed.
    On appeal from the circuit court of Adams county; Hon. C. C. Cage, judge.
    This was an information, in the nature of a quo warranto, under the act of 26th July, 1843, chapter 3. The affidavit, on which the information was filed, contained three charges. 1st, the bank “ had not paid specie for its notes for the last two years.” 2d, that the bank was “ then in a state of suspension.” 3d, that “ the stockholders of said bank did not, at the time they respectively subscribed for stock in said bank, pay for their said stock in gold, silver, nor the notes of the Bank of the State of Mississippi, or any of its branches, to wit, one fourth at the time of subscribing, one fourth in sixty days thereafter, and the remaining two fourths six months after the said bank went into operation.”
    This affidavit was filed in the office of the clerk of the circuit court of Adams county, on the 7th December, 1843; and accompanying it, the district clerk filed an information charging generally, that the bank “ had used and was still using, for the space of two years last past and upwards, without any warrant, grant or charter the following liberties, privileges and franchises, to wit, that of being or becoming proprietors of a bank,” &c.
    An injunction was issued by the clerk of the circuit court, upon this information, on the 29th December, 1843. It was directed to the bank and its counsellors, attorneys and agents. It “strictly enjoins them, the said president, directors and company, under a penalty of sixty thousand dollars, that they absolutely restrain all persons from the collection of any demands claimed by the said bank, person or persons, or assignees, or corporations, and all their officers and agents, or other person or persons, until the said information be finally tried and determined.” The injunction was served on the president and cashier of the bank.
    At the May term, 1844, of the court, the defendants moved to dissolve the injunction on the following grounds : 1st, Because the writ is not issued and returned according to any law. 2d, Said process is void on its face. 3d, There is no lawful affidavit, or information, or quo xoarranto filed in this case. 4th, That there is no law now in force in this state warranting said injunction. The court overruled the motion, and the defendants filed a bill of exceptions which exhibits all the proof offered on the trial of the motion, which was as follows. The defendants read the writ of injunction with the returns as before set forth. Then the agreement of the counsel, on both sides, was read, showing that the governor made a request, under the act of the 23d February last, upon the Planters Bank, to appoint a commissioner and make a surrender under that act, which request has not been complied with. The first suspension of specie payments by the bank was on the 4th May, 1837, and continued till 28th December, 1838; second suspension, on notes over ten 
      dollars, 5th March, 1840; and on all notes, 1st October, 1840. The state sold all her $2,000,000 stock in said bank to the Mississippi Railroad Company, on the 6th March, 1840, after the said bank had accepted the transfer act of 15th February, 1839. It was admitted that the amount of money enjoined by said injunction, greatly exceeded $500. This was all the evidence on the motion.
    At the same term of court, June, 1844, the defendants filed their plea to the information, setting forth the various acts of the legislature, incorporating them, and claiming to exercise banking privileges, and all other rights and immunities granted by said acts.
    To this plea the state filed five distinct replications, the substance of which is as follows:
    1st Replication. That after the bank had entered into the business of banking, under said acts of incorporation, to wit, on the 1st January, 1842, large amounts of the bills, notes, and evidences of debt of said bank, had been put into circulation by the defendants, and were, at the time of filing the information, in circulation, and that, while they were thus in circulation, to wit, on the .1st January, 1842, said defendants, by the fraud, neglect or mismanagement of them, or some or all of their officers or agents, became and still were, at the time of filing said information, wholly insolvent, and unable to redeem the said bills, notes, and evidences of debt, so in circulation, in specie, or other lawful money of the United States. Whereupon the said defendants, on that day, discontinued, ceased, and closed their banking operations, and from that time until the filing of the information, neglected to resume their banking operations, either by way of discount, or otherwise.
    2d Replication. That after said defendants went into operation, under- the acts of incorporation referred to, to wit, on the 8th June, 1843, large amounts of the notes, bills, and evidences of debt of said bank, had been put in circulation; and while they were in circulation, to wit, on that day, the defendants, by the fraud, neglect or mismanagement of them, or some or all of their officers or agents, became wholly insolvent, and unable to redeem their said bills, notes, and other evidences of debt. Whereupon said defendants discontinued their banking operations, either by way of discount or otherwise; and on that day, 8th June, 1843, assigned and transferred so much of their property to trustees in trust for the payment of their debts, as to render themselves incapable of continuing their banking operations, according to the intent of the said statutes of incorporation.
    3d Replication. That after the defendants had commenced ■operations, under said acts of incorporation, to wit, 1st January, 1842, large amounts of the bills, notes, and evidences of debt of said bank, had been put in circulation, and still were so, at the time of filing the information ; and while they were so in cir■culation, on that day, the defendants,-by the neglect and mismanagement of them, or of some or all of their officers or agents, became and. still were, at that-time, wholly insolvent, and unable to redeem said bills, notes, &c. so in circulation, in specie, or other lawful money of the United States.
    4th Replication. That defendants, after their incorporation, wilfully or negligently, so transacted and managed their corporate affairs, that, on the 4th May, 1837, the amount of the notes -emitted by said corporation, exceeded three times the amount of the stock actually paid in, including all moneys then on deposit in said bank.
    5th Replication, recites the act passed 21st February, 1840, “requiring the several banks in this state to pay specie, and for other purposes,” which enacted that, from and after the 1st January, 1841, all the banks and moneyed corporations in said state, were required ' to resume specie payments upon all their notes, &c. and other liabilities, of every description, then due. That large amounts of the notes, &c. &c. of the bank, had been put in circulation by said defendants, at and before the 1st March, 1841, the time when the act went into effect, and then were due and unpaid, and that the defendants did on said day, and at other times since, neglect and refuse, on demand being made at their counter, in their banking-house in ithe city of Natchez, in said county, in business hours, to redeem in specie, the notes, &c. &c. issued by said defendants, and then due and payable.
    The defendants filed rejoinders to the 1st, 2d, and 4th replications,- as follows, to wit:
    Rejoinder to 1st replication. That defendants did not, after their being incorporated, to wit, on the 1st January, 1842, or at any other time, fraudulently or negligently so transact and manage their affairs as to become wholly insolvent, nor otherwise become insolvent, and unable to redeem the .said bills, notes, &c. &c., in circulation, in specie, or other lawful money of the United States, and therefore discontinue, cease, and close their banking operations, and neglect to resume the same by way of discount or otherwise.
    ■ Rejoinder to 2d replication, admits that on the day alleged, the 8th June, 1843, they had put in circulation, and then had out, large amounts of notes and other evidences of ' debt, but deny that then, or at any other time, by the fraud or mismanagement of themselves, or their agents or officers, they became wholly insolvent and unable to redeem their said bills, &c., nor did they therefore discontinue their banking operations by way of discount, or otherwise, nor did they then or at any other time assign and transfer so much of their property to trustees for the payment of their debts as to render themselves incapable of continuing their banking operations according to their charter.
    Rejoinder to 4th replication, denies that on the day alleged, 4th May, 1837, or at any other time, they did so wilfully or negligently transact and manage their corporate affairs, as that the amount of notes emitted by said defendants, exceeded three times the amount of the stock actually paid in, including all money then on deposite.
    To the third and fifth replication, the defendants demurred, by a general demurrer.
    To the defendants’ rejoinder to the first replication, the district attorney filed a special demurrer, assigning for cause: 1. It attempts to put in issue an immaterial question, to wit, whether they became insolvent by reason of the fraud and neglect set forth; whereas it is immaterial whether the insolvency. was occasioned by fraud or not.
    2. Because it involves a negative pregnant, and in effect admits there was an insolvency, though not by fraud.
    Issue, in fact, was taken upon the rejoinders to plaintiffs 2d and 4th replications.
    At the May, term, 1845, the demurrers on behalf of defendants, to the 3d and 5th replications were overruled; and the plaintiff’s demurrer to the defendants’ rejoinder to the first replication was sustained, and leave was given the defendants to amend.
    Thereupon, the defendants rejoined to the 3d replication, as follows :
    Rejoinder to 3d replication. Deny that by the. neglect and mismanagement of their officers or agents, or by any other means, they became and remain wholly insolvent, and unable to redeem their bills, &c. &c., in circulation, at the time, 1st January, 1842, and in the manner stated.
    Afterwards, at the same term, the defendants declining to rejoin to the 5th replication, the court gave a judgment of forfeiture as follows:
    “That the said defendants do not in any manner further intermeddle, with or concern themselves in or about the holding of or exercising the liberties, privileges and franchises granted by their said charter, &c. &c., but that said defendants be, and they are hereby prejudged and excluded from further holding or exercising the same. And it is further .adjudged, that all the said liberties, privileges, and franchises heretofore granted them, as set forth in the plea, be seized by said State of Missississippi, and that all the property, books and assets, of said defendants be seized and delivered to the trustees, hereafter to be appointed by this court, and that said trustees have execution therefor.”
    The court then proceeded to appoint two trustees, “ to take charge of the assets and books of said defendants, wheresoever they may be found, whether in their own possession, or in that of their officers, agents, trustees or attorneys; to sue for, and collect all debts due to defendants; to sell and dispose of all property belonging to said defendants, both real and personal, or held by others for their use at public auction, after giving twenty days notice of the time and place, of sale in' some public newspaper, printed and published in said state. And the proceeds of the debts when collected, and of the property when sold, to apply as may be hereafter directed by law to the payment of the debts of said defendants.”
    The trustees gave bonds, which were approved of by the court, and the defendants prayed for and obtained this appeal.
    
      Montgomery and Boyd, for appellants.
    The first error assigned was the refusal of the court to dissolve the injunction on motion. Four gmattds^e presented in support of this position. '
    1. The injunction was not issued or||etumed any law. It was a legislative and not a in its?wflpption : operating as a legislative mandate'/Jand havm|®^^f)ynection with the judiciary or with judicial|aiSá^|¡|a2^ Pick.. |542. It was issued by no court or judge, retractable to'íhflilfri jfor place; and based on the direct command of the
    2. The injunction does not purport to restrain the defendants, but directs them to enjoin and restrain others. Regina v. Derby, 2 Salk. 436.
    3. The affidavit was insufficient, not showing a prima facie case of forfeiture, without which no injunction could issue. The affidavit states three grounds of forfeiture. One ground is “ that the stockholders did not pay their stock subscriptions according to the third section of the act of the 10th February, 1830.”
    The answer to this is that there are two other methods of payment allowed by the charter, which are not negatived in the affidavit. Act 16th Dec.1830, sec. 1; Act 5th Feb. 1833, sec. 6. The malfeasance or misfeasance of the stockholder, in not complying with his contract cannot work a forfeiture of charter. It must be some act of the bank. 1 Serg. & Rawle, 1 —14; Walker v. Deveraux, 4 Paige, 229.
    The other two points in the affidavit amount to no charge of' atiy act done or omitted by the bank, but only of a certain condition of her affairs. 1 Spear’s Rep. 467; 9 Wend. 373; 23 lb. 215, 595.
    The mere non-payment of specie, without any allegation of any voluntary, wilful ox fraudulent act, on the part of the bank, will not work a forfeiture. 23 Wend. 236, 584 — 586,'589 — 594; 1 Hopk. 316 — 661; 6 Cow. 211, 215, 216, 219 ; 2 Stew. 36; 1 Spear, 433.
    It is no violation of any express provision of the charter, nor of any general law, and the act of 1836, p. 171, sec. 3, and the act of 1840, p. 15, sec. 8, 9, 10, impose peculiar penalties of a specific nature ; and' the last of said acts expressly saves the charter from forfeiture, and provides fo? an entirely different proceeding. 6. How. 674; 4 Pick. 460; Act 10th Feb. 1830, sec. 32; Act 9th Dec. 1831, sec. 6. Mere omissions of a general duty, or a naked charge of insolvency not sufficient. Act 10th Feb. 1830; Hopk. 355, sec. 6 — 16, 20, 22 ; 5 Cond. Rep. 587; A. & A. 661; and n. 3; 662, and n. 1.
    The last point under this head, was that banking was not a franchise in this state prior to 1840, and no forfeiture of charter could accrue unless directed by the act of incorporation, or some general law. It is only the violation of a franchise that works a forfeiture. 4 T. R. 38 ; 6 East, 259; Finch’s L. 164; A. &. A. 3, 618; 3 Jac. L. Diet. 123; 1 Kyd, 15; 2 J. C. R. 377; 15 J. R. 379 ; lb. 388. The state could only resume what she had granted, to wit, a franchise. 6 Cowen, 219 ; 9 Crunch, 51; 13 Peters’s R. 519; 19 J. R. 473.
    The doctrine of trusts, and not of franchises and forfeitures, applies to such corporations as existed prior to 1840, in this state. 6 Cowen, 392 ; 3 Mason, 311; 1 Kyd on Corp. 273 ; 8 Peters, 286 ; 16 Mass. 271; Cases in Chan. 204 ; 1 S. & M. Ch. Rep. 260-262, 282.
    These corporate trustees are subject to the general laws and principles applicable to trustees, and also to the special terms of their contract, and to no other. Secondly, no act of theirs can defeat the interest of the cestui que trust, which would not have the same effect in case of an ordinary trustee. Thirdly, whether their trust character remains till the charter expires, or is taken away or destroyed sooner, the trust remains good, and survives with all its incidents for the benefit of the cestui que trust. 2 Mod. 52; 4 lb. 58; 2 Bac. Abr. 482, .last ed.; 3 Co. 75 a ; 7 Paige, 294; 15 Mass. 622.
    It is next insisted, that this bank has been excepted by express legislation from' the common law rule as to forfeitures, &c. Act 1839, p. 61 ; Act 1837, pp. 175, 365; Act 1838, p. 176; Act 1840, p. 16, sect. 9; Act 1836, p. 171, sect. 3; 9 Wend. 351; 23 lb. 218; 2 McMullen, 452; 9 Ohio, 208.
    The state was a stockholder, owning half the stock of the bank, and had legal knowledge of its condition, through her directors. Act 10th Feb. 1830, sect. 12, 28. She sold this stock (say §2,000,000) on the 4th March, 1840, and on the next day, the suspension, as alleged, took place; and this proceeding would enforce the forfeiture against the purchaser of that stock, can this be the law? 9 Wheat. 907; 3 McCord, 377; 1 Hawk. 36.
    The charter authorized the bank to issue notes to three times the amount of capital stock paid in, and all deposits. This negatives the idea of a forfeiture for suspension. 3 Cruise’s Dig. 102; Com. Dig. Franchise C. 3; Act 10th Feb. 1830, sect. 22, 17, 23 ; Act 2d March, 1833, sect. 1..
    The suspension, as alleged, without fraud and in violation of no express law, is not of sufficient duration to warrant the presumption of a surrender. Rex v. Jordan, Cas. temp. Hard-wick, 255; A. & A. 663; 2 Stuart, 30; 6 Cow. 211, 219; 19 Johns. R. 456, 474; 1 P. Williams, 207, per Powel, J.; 24-Pick. 51; 2 Burr. 1870; 6 Paige, 497.
    The act of 23d February, 1844, repeals, by implication, the act of July, 1843, under which these proceedings were instituted.
    They are absolutely inconsistent, and cannot both be enforced, so election is left to the state, because it is placed by the act in the power of the bank to accede to the last law, which would defeat such election.
    The second act shows an entire change of policy, and an intention to save the assets from the effects of forfeiture, for the benefit of creditors. 3 Wend. 600; 13 Ohio, 270.
    
      These proceedings were in progress when the act of 1844 was passed, and this negatives the idea of an election by the state being intended.
    The involuntary, or compulsory proceedings, under the act of 1844, are positively ordered by that act, if the bank does not voluntarily surrender.
    If the bank surrendered, the state released her from the penalties of the act of 1843; and if she did not surrender, then the act of 1844 was to be put in force, and not the act of 1843. And this release, being the result of law, cannot be made to operate in any different way than if it had not been expressed in the law.
    The state, if an election was reserved to her, has elected to proceed under the act of 1844, by having made the demand, through her governor, under that law.
    If the act of 1843 is not repealed, still the injunction is void It does not connect itself with either the right or remedy provided for by that act, nor in any way affect the right, or promote the 'remedy, as it regards the state, or the debtors and creditors of the bank. 4 S. & M. 439, et seq.; 15 Johns. R. 380, et seq. It stands by itself, and whichever way the suit is decided, its fate is the same.
    Again, the injunction is void, as it interdicts the exercise of a particular power, without any abuse of that power being shown. 4 D. & R. 139 ; A. & A. 560; 2 B. & C. 596. And this cannot be done until after forfeiture ascertained. The charter is a continuing power until actually resumed, and always warrants the proper exercise of all its provisions. Hopkins, 354, 598. The previous decision of this court, reported 4 S. & M. 482 — 519, is not in conflict with these views. No two of the judges concurred in sustaining the validity of the injunction.
    The points made' upon the pleadings were these. The demurrer to the rejoinder to the first replicátion was improperly sustained. Whether the insolvency alleged in that replication was the result of fraud, was certainly a very material issue, and is so recognized by numerous authorities. 23 Wend. 584- * 686,589-594.
    
      The authorities relied on from 6 Cowen, 215, &c. misled the pleader. The statute in New York rendered the question of fraud wholly immaterial. 6 Cowen, 212, &c.; 23 Wend. 221, 234, 252, 584; 9 Ibid. 223, 373; A. & A. 662; 19 Johns. R. 456.
    But the rejoinder was general; and not, as supposed by the demurrant, a special denial of a fraudulent insolvency. Of course there was no foundation for the demurrer.
    The next error was the overruling of- the defendant’s demurrer to the third replication. This replication avers in effect, an inability to pay specie on a given day. It is not a suspension by the order of the bank, or a total refusal, but a mere inability, or insolvency, at a given day. • This never was a ground of forfeiture. 1 Hopkins, 354; 23 Wend. 584; 2 Stuart, 37; 1 Spear, 433,' per King and Butler, justices; 15 Pick. 351; 6 Gill. & Johns. 205 ; 7 J. C. R. 224.
    The last error assigned was the overruling the demurrer to the 5th replication. This replication claimed a forfeiture because the bank had failed to comply with the provisions of the act of 21st February, 1840, requiring a resumption of specie, payments.
    The following points were made in this part of the case.
    1. The act is inoperative and void if intended to make any new causes of forfeiture, and was never accepted by the bank. 12 Conn. R. 550; 3 Story’s Com.; 2 Stuart, 30 ; 16 Mass. 259.
    2. If no new cause of forfeiture was created by the act, then the mere allegation of a refusal to pay specie on a particular day, without any further allegation, amounts to no cause of forfeiture. It is not as strong as the case of a mere suspension, which has been already considered. 23 Wend. 541, 588.
    3. The act itself provides for a liquidation, and not a forfeiture. 16 Mass. 259; 13 Ohio, 270; 3 Wend. 600; 6 How. 674.
    4. The act provides its own penalty, and not a forfeiture.
    5. The act was repealed by the act of 1843, under which these proceedings were.instituted, and that act was repealed, as we have shown, by the act of 1844.
    6. This act was a mere general law, and non-compliance with it would only subject a bank to its own provisions, and not to a forfeiture.
    7. The resumption, required by the act, was of notes then due, 1st January, 1841. The notes named in the replication are stated to have been issued after that date. The notes due on the 1st March, and since, may or may not have been issued at or prior to 1st January, 1841. The demurrer ought to have been sustained.
    Freeman, attorney-general for the state,
    cited the following authorities : 6 Cow. 219 ; 1 Spear, 491 ;• lb. 485 ; 23 Wend. 236, Co wen’s opinion; 1 Spear, 466 ; Colder v. W. C. Bull, 3 Dallas, 391; Van Horne's Lessee v. Dorrance, 2 Dallas, 304; Call v. Hagar, 8 Mass. 430; lb. 472; Stat. of Mass. 1812, c. 140; Brown v. Penobscot Bank, 8 Mass. 4'45; Vose v. Grant, 15 Mass. 505 ; Stat. of Mass. 1812, c. 32; Bank of Rodney v. State, 4 S. & M. 439; Ang. & Ames, 2d ed. 639, and authorities cited; 9 Cow. 205 ; 18 Johns. 137, 138 ; 23 Wend. 206; 4Mass. R. 58; 6 Cow. 218; lb. 219; 23 Wend. 236; 1 Spear, 485 - 491.
    
      Sanders and Price for the relators.
    The fifth replication shows the passage of the act of 21st of Feb. 1840, entitled an act requiring the several banks in this state to pay specie and for other purposes, which required, from and after the 1st day of January, 1841, all the banks, &c. to resume specie payments upon all their notes, bills, &c. then due, and avers that after its passage, to wit, on the 1st day of March, 1841, large amounts of the bills, notes, &c. of said president, &c. had been at and before that time put into circulation by them, and then remained due and unpaid, and they the said president, &c. did on said 1st of March, 1841, and at divers other times, since that time, neglect and refuse, on demand being made at their counter, in their banking house, in the city of Natchez, during business hours, &c. to redeem said bills, notes, &c. then due, in specie.
    We have no doubt about the correctness of the decision, as well upon general principles as upon authorities. Blackstone defines this writ as follows : “A writ of quo warranto is in the nature of a writ of right for the king, against him who claims or usurps any office, franchise or liberty, to inquire by what authority he supports his claim, in order to determine the right. It lies also in case of non user or long neglect of a franchise, or misuser or abuse of it; being a writ commanding the defendant to show by what warrant he exercises such a franchise, having never had any grant of it, or having forf cited it by neglect or abuse.” 3 Black. Comm: 262, title Quo warranto, and authorities there cited.
    I have ever regarded, and yet do, all acts incorporating banking companies in the.several states as well by congress, as in violation of the federal constitution, which prohibits the.states from “coiningmoney,” “emitting bills of credit,” “ making anything but gold and silver coin a tender in payment of debts,” and which does not give any such power to congress, and in violation of that section of our state constitution, which declares “ That all freemen, when they form a social compact, are equal in rights ; and that no man, or set of men, are entitled to exclusive, separate public emoluments or privileges from the community, but in consideration of public services.” But the courts of our country have ever yielded to the misguided legislation on this subject, and what was intended to be prohibited by the framers of our early constitutions, has been construed otherwise by the courts, until they have obtained such toleration, that they can only be reached by the majesty of the people, and in all legal proceedings must be now regarded as constitutionally created.
    If then these corporations are constitutionally created, the sovereign power of the state has but imparted to the corporators, for a specified time, a portion of its sovereignty, to do and perform certain specified acts, retaining the inherent right of rer suming that sovereignty whenever they shall fail to conform to the grant, or misuse it.
    Mr. Justice Clayton, in the case of the Commercial Bank of Rodny, speaking of incorporations, says, “ that charters are always granted upon condition, either express or implied.” “ There are always implied conditions in every charter, if not express, that the. corporation shall perform certain trusts, and discharge certain duties, and upon breach of these conditions, the government may resume the franchise.” He quotes approvingly, Tenet v. Taylor, 9 Or. where the rule is thus stated : “A private corporation, created by the legislature, may lose its franchise by misuser or nonuser of them, and they may be resumed by the government, under a judicial judgment upon quo loarranto, 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.” He thenre-marks : “ This principle has been recognized and enforced in many of the states of our union, and its justice and propriety settled beyond doubt. Massachusetts, -New York, New Jersey, Maryland, Virginia, South Carolina, Ohio, Indiana and Arkansas, have- all acted upon it.” And quotes authorities, which are referred to.
    ' The chief justice, in the same case, in his opinion says : “It is a right which belongs to her in her sovereign capacity. Every charter is granted by the exercise of the high functions of government, and contains a portion of the power of government within it. Any abuse entitles the state to 'reclaim the power, and if no remedy existed at the time of making the grant, it is competent for her to provide one. Other checks out of the way, it was competent to direct proceedings by bill, accompanied by an injunction to stay the proceedings of the corporation. By adopting the information, other ancillary remedies are not necessarily excluded. It was ail implied condition in the contract, that the state might withdraw the franchise for a forfeiture. If it may be withdrawn, may the abuse not be checked until it is withdrawn ? But it may be placed on higher ground. The state being the only' power that can control the abuse of authority by corporations, is bound to protect the public from the influences of these abuses, whenever they may occur.” 4 S. & M. 512.
    By the demurrer to these replications, the averments therein are taken as true ; the bank had become wholly insolvent and unable to redeem their notes, &c. and had refused to redeem, as required by the act of 1840. These .acts are, by their terms, misusers of their franchise, and a failure “to perform certain trusts and discharge certain duties,”- for which “ the government may resume the franchise.”
    In the case of the People v. Hudson Bank, 6 Cowen, 217, it is held, that “suffering an act to be done, which destroys the end and object for which a corporation was instituted, is equivalent to a surrender of its corporate rights; as where an incorporated bank becomes insolvent.”
    
      
       For the substance of the act 1843, see the case of Commercial Panic of Manchester v. The State, 4 S, & M. 439-442; and Commercial Panic of Natchez v. The State, 6 S.& M . 601-603.
    
   Mr. Justice Clayton

delivered the opinion of the court.

This is an information, in the nature of a quo warranto, filed against the Planters Bank, in the circuit court of Adams county.

The fifth replication to the plea of the defendants, in substance, recites the act of the 21st of February, 1840, requiring the several banks in this state to pay specie and for other purposes, which enacted, that from and after the 1st of January, 1841, all the banks and moneyed corporations in the state were required to resume specie payments upon all their notes, and other liabilities of every description then due. That large amounts of the notes of the bank had been put in circulation by said defendants before the 1st of March, 1841, the time when said act went into operation, and were then due and unpaid, and that said defendants did on said day, and at other times since, neglect and refuse, on demand being made at their counter, in the city of Natchez, in business hours, to redeem in specie the notes issued by said defendants, and then due and payable.

To this replication the defendants filed a demurrer, which was overruled by the court, and upon their refusal to file a rejoinder, a final judgment was given against them.

The opinion in the case of the Commercial Bank of Natchez v. The State, settles the principles which govern this. The act of 1840, above referred to, is merely affirmatory of the common law. See State of Ohio v. Commercial Bank Cincinnati, 10 Ohio, 539. It creates no new causes of forfeiture; for, at common law, the failure to comply with a material condition of the charter, either express or implied, was a ground of forfeiture. Of this character is the failure of a bank to redeem in specie the notes which it has put into circulation. When it fails to do this, it ceases to discharge the obligation imposed upon it by its creation, and to answer the ends for which it was instituted, and unless there be some express exemption extended to it for such failure, the state may resume its grant. e very ingenious argument'of counsel, in this cause, in which it is attempted to prove that banks are but trustees, and not subject to the rules of the common law, in regard to corporations, cannot, in our view, be sustained, at any rate to the extent to which it is here pushed.

We have reviewed the decision of this court, in regard to the effect of the two acts of 1843 and 1844, and we can see no reason to change the opinion then delivered.

The judgment is affirmed. _ 
      
      
        Commercial Bank of Natchez v. The State, 6 S. & M. 599.
     
      
      
        Planters Bank v. The State, 6 S. & M. 628.