The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1850-01-08
p0ny.


to express any lopnion on the subject that the
purchase OF the five thousand shares Of the capital
stock Of the bank and all the OF the bank its Of
fcers and agents relating to that tran,s down
the time OF executing the trust deed and the accompa
pypg SECURITIES legal in their nature and within
the legitimate powers of the corporation The
then 70 far as il will uuder copsideraton aaa
speaking of it from the face OF the papers Is shortly
this: the bank on the second Of March, 1870 gave
Thomas f Davis letter OF credit on Messrs Palmers
Mackillop. Dent Co, Of London Of whom for the
SAKE Of brevity shs hereafter speak "A the Pslmer,
rslmers Co. for forty six Thousand eight hundred
and seventy poun DIS sterlipg for which Davis
vas TO draw bills on the Palmers at ninety days sight
which were to be covered by him ut maturity with the
right Of renewal in certain event Davis drew the
bills and they were accepted by the Palmers; they
were twice renewed and the third set running at
the time the trust deed was executed The bank vas
not then debtor to Palmers Co account Of this
Transaction but was under contingent liability which
would make debtor, in case che bills should not be
provided for ut by Davis at maturity In this state Of
thipgs, the bank on the Both day Of November $780,
made forty eight negotiable promissory notes ount
Ing In the aggregate to forty nine thous Ave
dIed and seventy five pounds sterling payable twelve
months after date with interest to the order of VIM
r. took, teller In the bank who endorsed the notes
and they we're then delivered to the Parers
Of the liability which has been The bank At
the same time and as part Of the same transaction,
executed the trust ed and assigned the stocks
aud mortgages mentioned in the schedule deed,
Tor me purpose OF securing the payment Of the forty
.ig ht promssory notes These nn dertskngs and Sc
curties the complainant seeks to set aside illegal
and void.
The first question which shall consider is upon the
validity OF the notes and feel difficulty in sg
iDH win the supreme Court that the illegal
aud void They were Issued in direct volstiou OF .
statute, which provides that backing association
.ha issue or put in circulation any bill note of
said association" unless the same shall be made
payable on demand and without interest :" and every
violation OF the section by any officer member OF
banking association is made misden eanor punishable
by ne or prisopmsnt or both in the discretion of
the Court STATUTES Of 1870, p 3c6 S4) The notes
were not made payable . on demand nor without
Interest but had year to run, and then paya
be with Interest. IL Is said the part of the de-
PENDANTS that the prohibition only applies bills aud
r.nIss trh kla E.s...
the statute contains no such qualification In terms 1t
extends alike TO All bills and notes issued by banking
Legislature Intended 1t shsuld have mere restricted
application And besides .gotisble promissory notes
and bills Of exchange payable at future day, when
Itu.d ny bank In good credit, may psrform, to q
great extent, the Office Of circulating medium This
has never been doubted by those who have considered
the subject. Stafford '. Wyckof. HUI, IL Smith v.
Strong Id 2sl Bank Of Orleans v. Merrill i'd 2a5
Atty Genl V Life and Fire Ins. Co. Faise 470
Ontario Bank v. schermerhorn, 10 i'd 100 Bank OF
England v Anderson, 3 Bling N C, $50; Bor Ia v S.nK
q England ID 45) Indeed the fact that such pa per
nay enter into the currency Of the county Is matter Of
history Witnss he past notes Of the la.e bank of
United States, sed tho Eegotistle notes aud bills OF
some 81 our own banks, which followed though on q
more humble scale both the frauds and the
OF the patona institution. The issuing Of such paper
belongs 60 mercantile and CONNER cal I'D
not To- The buine.s Of banking Experience has shown
that the banks which engage la such enterprises
rotten ard sooner or later. will end ia defaudag the
community In addition to the North American Trust
aud Banking company, several others OF chs general
Law banks had beea engaged 10 Issuing such paper
before the act Of 1870 passed aad such Of those
iDstutots us has not already failed After
usds in state OF bankruptcy Great frauds upon
the pubic had been committed The legislature say
the Evil aud evidently intended to cover the whols
ground hy utlng the most general and comprehensive
terms; mo banking association shall issue or put Ia
eircu'ation any ti or note unless, SO. There had
leig been sirilsr statute in relation 70 tho safety
uba nahAs (Ststute lssJ p MS, 3il; aud the act Of
lao vas pa.ed 10 extend the press bltion TO
iht general law banks which had ints existssos
AZ later period That these statutes extend 4. ne.
gotabe Promissory not,s aud bulls Of exchaux 20 paya
bic a. future DAY has been decided both here AMI
elsewhere lS~if v. Beers Depio. 10. ryles yat.s
Barb 222, Root v. GODDARD. Mclean IO2. HAYDEN
Y. Dasi. I'd 2Po; sud see Ontario Bsnk " soh.rm.r.
born. 10 Paige. li5) No Judge has I thipk ever az
Ir'ts'd different opinion. Although tue utgnent
q the supreme Court In the OF Sifori v wyckon
q M ll), which was upon bill OF exchange drswn
IN 1850 ~a reversed hy the Court Of ERRORS no one
'e,ms 70 have coubed tha. the future issue Of such
paper VAS prohibited by the OF lsi0 "a Hill atl
dosbted had II not been for the bold an r.ckl,s man
hcg IN whi'h the officers ~ the North Amerosu trust
ann hanAipg Company continued to issue suah paper
After the statute vas passed aud the IMMUNITY which
t'y have snco tnjoyed.
Asthe ssuipg Of the notes was expre.sy prohibited
by lar II lie impossible to maintain that they ar. valid
securities To hold that they can BE- enforced
The benz would be going very far torards defeating
ars vnd has been adjudged In several q the al
i.sdy ciies end am not aware OF any authority TO
the contI,ry The igai liability acoou ut Of ~hich
thsEstlYtt are void.
The trust deed doe, net speak OF rrcmisory note. 20
"fNIff tut tftitts thAt the had CIat day
executed sDd delivered TO Palmer. 20 ts.is certia
Gates Of depost payable IN twelve months froui date
With interest. such Instruments whatever ma mes tue
fhues may give them, are promissory notes They 1
are engagements 90 psy certainums IT money TO the
ptrsons therein ssmed az sspociHed time at al events
A proussory note imports q consideration aud sJus
need be ebtoDed But though a con,iderstiop b.
ntrtoIsd 10 Written promise 20 pay money whsther
y b. doue IN general terms a. oy the words - for
dsposit Of money IL is,tilia Iromis.ory note and
u certificates 81 deposit payable TO the Palmer. at a
utute Gay bad been Issued in lieu q the which
-.Te actually delivered, they would have been pro-
ri-soiy notes coming equally within the prohibition
y ue statute. tnd hsins equsny void. tB,nx Of OR.
tart Aervili, Hill 20; southern Loan co Nor
~ Barr lbs, md see craig v. stat. Of Missouri
Peters, 4s3) Indeed did not unfersspd tn. def M
ians counsel 20 deny that certificates OF deposit pay
'he Mt future Day, promissory notes bat IL va,
ait not 20 appear that the certificates be made
negotiable ~ill not stop TO inquire whether the
see Ontario Bssk v schsrmerhorn 10 Page rs lI4;
pr ihnk 70 quite evident that the cestincstes
rutt de,d were negotiable and the statement the
Dot q the note hat they Issued pursu.uce 4
trust deed and that the payment Of them qua
anu'd BY the a.signed securities, shoss thst II YES
OF pdtd thst they sbould pass beyond the haods of
ne falmsrs end although the fact does not expressly
'ppsr, u Is plainly inf,rble that all the vsroas
sritt.p spgsevueBts Go psy money, Witch the otnk I
had before made aid cent abroad sale In forekn
markets. we're IN form &C. pass from hand TO bsad.
~ mete delivery lns letter e the president CT /
he bsuk 10 the rslnsrs dated the 2sI OF OCTOBER, \
1855 he speaks q the certificate. Of dsps~ issued b
representatives. 81 msn-y issued upon credit II
he company; AID ,eversl oftho Instrument cunt.
ng IN the aggregate 20 f22bO .tsring we're ..ut to
ne falmets, With the letter TO be .cd to other per
ons than the payses named IN them With assurances
81 the capital q the bank would sn5rd sbuudsnt
udenpity TO the holders There are many other /
hugs Ina the csse going TO show that all Of the
nts Of tbs bank 70 pay money whico -rre sent
broad were in Negotiable. form. But without iOok-
~ into other trsntactcns a. sufficiently spprars from
he trust deed. that the obligations which TO 90
cmJsny IL, By whatever name they might he called
to be made negotiable The trust 10, not created
the security Of the Falners alone TO whom c-r.
ifcstss we're to be executed and delivered but after
default In payment the trustees we're to stand pos
tssed Of the assigned securities In trust for tue hold
re- q the certificates and were 20 proceed to the
.sration OF the securities by sale or othst wise aud
sy the money unto the said Pslmers, HsckllOp
Jent Co, any other parties who may then be the
lodeis CT ssid ceTtiacstes until the amount owing to
ne holders Of the said certificates Of deposit shalt Do
nil paid Subsequent clause In the deed IL In near
hesme sords; aud other parts Of the tastrument |
nos thst the certiaoates were 10 pass beyond toe
sho. ~ ths pages Is impossible not TO see that
Pstuts INTENDED the certificates should be negOts-
Die Asuumsrts a. therefore csrtiacste. Of dec pst
ntNsd o. poet notes had beeu issued they would ss
u Fnfaa -.