The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1852-07-11
TEE LAW 0oUxTs.
The Metropolitan Bank Case.
JUDGE rARKER's DECISION.

TIE Peors of ae Of Ner York rs The Metropolitan
Injunction graz ted by Justice Watson ON 2st june last
restraining the Metropolitan Bank from buying
puports TO lie due on its face and from redeemnr bank
at ess than except where IL is the redemption
agent Of bank suing such paper
At the time the plaintiff having served order
to show applied for further injunction restrain
ing the defendant from traDsacng any longer any kind
or description of banking business. 10th motions
argued the time. rhe facts sufficiently appear
in the opinion the Court to show what questions
decided
j S. Chatfeld, Attorney General n Hil, Jr., and
Charles 0Conor, for plaintiff
James !. Graham, Edsard sandford and Daniel Lord
for defendant.
Parker IL mrs entirely ont of confederation
the transactions Of Edward Bcknap, on whose CON-
plant the nurma ion IN this cause was fled the relation
of which. in detail las occupied space III the
defendants aidsyits Whether or not this suit has
grown oot OF controversy between the brokers' and the
defendant is alleged however unworthy may have
been the conduct or the motives Of the complainant in
deciding thesc motions only look nj the question
whether the business OF the defendant are
or arc not authorized by law.
Objections have been taken both sides the sufi-
cheney of the plee dcgs As intimated the counsel
on thu argument shall hold the allegations be sui-
cetly specac Either party desiring more particula,
satemt Mt could have resorted to demurrer But on
this motion. trial the facts alleged ere put in
ISSUE and the objection tat Inc allegations too ge-
neral is not tenable
The defendant objects that Edward BeIlnap ought 10
have been joined OF u the plaintiffs under 4Si Of
the code, which provides thai when action shall be
brought by the Attorney General the relation in.
formation OF person having icres. in the question
u Surn person sLf DC Joined with tht people
az plaintiff In this case Edward Beknap made the
afndayt annexed to the plant which che injunc
ton was SLOWED lie was probably the informant
whose suggestion solicitation the action com.
menced; but he appears to have no interest in The
suit except tn the deicn liant interferes with his bu
ness as broker. oud part culariy in compelling tue
demption OF the bills OF his Government Stock Bank et
Ann Arbcr Every other b.okar in Wall street m" have
similar and perhaps some OF them equal Interest
But that is not al interest that makes II necessary 70
name him as one OF the plaintiffs Nor does the fact that
he il one Of the tockhoide-s in the metropolitan Bank
Affect the QUESTION That interest probably
OF the defendant Tho section Of the code above cited
applicable only case III which the action il subtan.
italy for tn benefit of The relator whn it is brought
to establish claim to public oice Section $50 gives
ample power to the Attorney General to commence The
suit IN the name OF the people only leave granted by
the supreme Court or judge thereof, which leave
duly obtsined in tins case
Another objection made by DEFENDANTS counsel Is that
the subject is not proper for the exercise OF cqua
bejursdction and they cite the of the Attorney
General w. the Utica Insurance Company q John CHI
hcp 81 where on an information filed by the Attorney
General il was held that the Court Of Chanc.ry had
jurisdiction to restrain persons from carrying the
business OF banking in violation of the statute and in
Junction for that purpose was refused That case
decided in Isl and ai;esSards by the 18th section of
an at passed 2st of April 1925, entitled An act to
prevent fraudulent bankruptcies by iucoporaed compa-
MES to facilitate proceedings against them and for other
purposes jurisdiction was conferred upon the Court of
ChanceIy to restrain by Injunction the application
either Of the Attorney General of creditor Of
incorporated bank whenever il should be SHOWN to the
Court that the bank ipsolyent had violated any of
the provisions of its charter. Under that act the
power exercised (Atoney General vs. Bank of Che
mango Hopk Oh X. Sos This jurisdiction was re-
strained 10y the Revived Statutes e r. 81 ed $50 S37
which provides that biz filed by the Attorney Gene
raj il the Court of Chaucery the Chancellor shall have
powerto restrain by injunction any corporation from
assuming or exercising any franchise liberty. priv
lege or acpg business not allowed by the char
ter OF such corporation This section is in force
except that the jurisdiction has been transferred from the
Court OF ChanceTy TO this court and under his
tion that this application for injunction has been
made II is not necessary in such case to show speci
strained reude lit would produce injury to the ~ LtiT
under section 2i9 Of the Code In sui! by the people
the public wrong arising from violation o. the statute
implies an injury during Its continuance H. therefore
II is hown that the defendant mas assumed or exercised
franchises. transacted any business not allowed By
its charter this proper case Tor training 1t by in
junction.
swer and on additional aidavits read on both sides 1t
is shown that The defendant is banking association
gsnized in April 1851 under the Act authorize the
business OF banking passed Aprli 10, 1879 ava the
amendments thereto. TIE defendants place Of business
is in the city Of New York, aud its capital originally
$3.50 600, has been increased TO two millions Of dollars
II IL charged IL the complaint that the defendint has
employed its capital in buying at price lie thar che
sums % ,abo On cir faces respectively the bills ani
notes nenC ed for circulation money issued by banks
banking c!aons individual bankers this State
and other States WI ch at the place Of such bJipg are
not current rodeemable 1T par and dposing Of the
same by sale or return thereo. for redemption 20 the
bank, banking ation or individual banker issuing
the samc respectively The defendant, in its answer,
admits Chat ii has received from the deposor and deaf
ers with the Metropolitan Bank such bills md notes
issued n this State al al count abatement hy way
oil exchange OF not more tLan one fourth OF one Per
cent and at greater discount or abatement than that
NJ NIicn Inc palkS bluhilg hSeOriIpnS ing gcn
bile aud notes were allowed by law 10 redeem or pay the
same in the city Of New Io.k and the defendant admits
that II has received from depotor and dealer Sth the
metropolitan Bank such bills and notes OF other States
at discount or abatemsn rot exceeding the current,
reasonable and true rate, difference of exchange. be-
tween such bills and oils payable IN the city Of New
York and the defendant C-nes that it has bought or
ceyed said bills and notes. either of this State of other
States otherwise Than Is thus admitted
No evidence is produced before Of any act Of the
detenant beyond what Is nus admitted There Is, then
controversy Us The fact thag defendant has been
rt.g n
count and the principal eon presented for decision
is TO the legality Of such practce This question is
to be ex8ulusd The facts admitted BY the defend.
ant viz thai The defendant has been in th practice of
receiving such bills or notes from its depostors and
deal'rs AID that il b not otherwise purchased them.
Blu, DO not zee how right to ieceiye them be
dtinguisted IRON the Iisnt buy them generally at
a dhcount &c receive sLem on deposit would probably
be the in which tee busncs would DC transacted
in Gather case at least il might be such IL the notes
receyd at discount on deposit the avails may be
afterwards applied in payment OF nete falling due at
the bank or they may be drawn out ON the check
Of the depoor The notes may thus be received by the
babs in a! ment OF debt or they may be bought by the
bank lilo he ayaIls areto be applied may perhaps be
uncertain OF tie time OF the dfspost And the question
after a IL Mbethera bank has the right 10 receive such
LneurreD bank notes at discount If they may be so
receytd the aras may BE- disposed Of by The bank in
~ awfpl way. II, however, legal distinction eau
be taken between buying such uncurrent notes AZ dis
count aud receiving them from dpositors and dealers,
the defendant il 70 Lave he benefit OF It, the facts
admitted present only the Latter The defendant
can e&erce No powers except those expressly granted.
or such az are incidental TO the execution the GRANTED
powers. (Bank Of Augusta VS.. EARLY, 10 Peters $50
These powers are defined in the 18th section Of the Act
to authorize the business of banking as follows" Such
association shf nave power TO carry the business OF
banking by disccubting bs noes and other evidences
of debt iy receiving depots by buying and selling gold
and silver bullion for ign coins and bills OF exchange in
the SPECIFIED in their articles Of association Tor
the purpofcs authorized b. this act by loaDing money
real and pcsc secury by exercising such IN
cidenal powers SHAH lie necessary to carry such
business Then tollcss che authority to appoint and
remove officers.
Is the receiving Of uucurreu, notes ut discount
thorzod under the power 90 discount bill, notes and
other wilderness Of debt2 n T. ad that that If
the 18th Recun Il only applicable 20 TIE discountng Of
paper net yet due ana that discount intended the
taking of the Interest Cor the time that the has
70 run Def due bul CroL IN the Of 81 -countn
bank peper due. the f8lr sao Of cxchaug wen
the interest m8y be deducted when the Is payabl
at a different place Although uncurrent bank bills
due Us7a their face yet tkey payable at distant
IlaCn M fhItcn 81, FIR