The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1854-10-01
IMPORTANT LAW REPOR rs.
nesklsns In the Supreme. Superior, Marine
,. and United States Courts.
The GREAr INDIANA BOND CLAIM.
Interesting to Lawyers and Litigants.

Supreme Co0rt-General Term.
JnroATANr pEcIsIos ON THE INDIANA CLAIM.
By Hon. Judge Roosevelt,
SET % - Tracy 7almGQt, President Of the North
<meiIcas Trua and Banking Company.-Among the
claims presented for liquidation the Receiv or the
he Nerth American Trast and Banking Company, was
behalf Of the state Of Indiana for si75OOo, in
tie form Of eighteen certificates Of deposit Of this demo-
nrations Of Zine and thousand dollars each. dated
Jan 3D. and psyabs with interest at periods varying
fon Eve to twenty two hs after date. These GER
Hfcates it appears renewals Of others previously
given, And those again traced their origin to written
agreexent Of the 18th Of January 1889. between the
Trust Company, free bank formed under the general
lsw on the one part, and the Norris Canal Company
(acng according to the testimony agents for the
State Of IndiAna), the other Il was an agreement
On the part without reference to any particular
purpose sell twelve hundred bonds Of the state Of
hoiana and the other to give in payment the 'sne
eo liable obligations Of the Trust Company. payable not
nomination If which (the highest being need
Dot ~ the terms Of the agreement have been less than
sI'to Such an agreement, says the Ree'iver, was
Unlawful de- by corp ration in public stocks, And
an unla vful issuing BY corporation Of prohibited
species Of bank notes, AID that no rights, thsrs
fore ccgnzahle by court Of justice from it.
To understand the point of the Receivers objection
the claim, and Of the to it. brief
ysars prer 1855 the aauS x this as
was chartered monopoly made by various express
statutory provisions, denominated collectively the Re-
sraniDg Act This act, under penalties prohi
bited almost every branch Of banking any person,
company partnership not specially authorized BY
porate charters doed cut from time TO time by
sve Legislatures to successive political personal IA
vores Tie granting Of these charters, may readily
= in time became great abuse a % mach 80
he state government inserted In the then const
tuten provision requiring thereafter the assent OF
twohrds Of the members elected to each branch Of tho
pe,.ts rsyeritsm, nsVs.thsIs:., fortified Va.
ssnt Corruption until III public Sssatsiason became 50
strong and universal that the Legislature at
ns 9n % ns the sS Of s
Of persons AT not Incorporated srom keeping OH ".
notes or ss was repealed And on the 18th Of april,
in the following year. the whole system remodeed
the passage O law emitted AN act to sathorss IN.
ste I'D Of restrainng the business Of banking" Under
ss 5 %
ssoh they assumed the Ct STYLE pAora
ton thus formed construiEg the act, which author-
isd their formation, expressly intended not to per-
~ and 70 restore great degree the natural system
free banking Ct was pSBulary called the Free Banking
vsa ass With &. as.s Of
night have done the purchase from ths credit
appropriated to the use OF the company and the
r.sas4y p %S1' except s ua' s..ne %s tin oa
standing Of about Sis oO0 This balance any form
o. 70 extent the Receiver .ow refuses 70 reoogozs
nssce that tie contract out Of which it arises being,
~ he contends prohibited by law the ASSOCIATION
consequence were under obligation either to pay
for any portion Of their avsils The whole case 1t will
le seem the part of the Receiver (aud here IL
the mg osd Rsss p
nsshps or whatever may have been the legislative in
tsntion ~ 70 their character and denomination yet
being In reality corporations, they are, and must be-
aose roe.s subject TO ~ existing prohbtory sna;t-
.ent, whether constitutional or merely lsgs-
Now whether the free banks corporations quasi
corporations only associations possessed like limited
sind for sss purposes Of the present argument quite
tnmatsria The only question Is (a constitutional diff
ss,s. having been dispose Of the in
sus enacted to govern the &C Of chartered banks
forms q limited p..tnsi.hp and Ipf tat insenson i
entertained BY the law'making power, expressed in
taton to discover it, the rule bsoe infexibe and IS
Just % II fexb that penal enactments wnen not
fecy clear admit Of no extension BY Judicial infe
renee 10 me it seems obvious well from the word
IS origin, progress and final passage that such inen
SON mainly that they wished, as was Indispensable 9,
svod application Of the provisions Of the then con-
to the
e S1ss y general NJ law sTS
almost hypercritical caution, whenever speaking of
the contemplated partnerships, denominatei them
made none Of the usual provisions for .airectors'
aoxed no suits or eonveyanees except TO- or against
~, the ms and q s or
stockholders by that Of shareholders; and instead Of
Stunning that all any Of the existing yulations
gard corporate bodies would Of apply to the
nsw associations, selected from among these regu-
tons few deemed suitable and proper and expressly
al oSs should be bnns these on
oney.d esrpor.sion ana i whole series, from year
particularly act q May 1897 distinguished and
tue Of the aet Of April u.s. 1885," What hight then,
M ai Sas ss a
but that they shall be deemed bodies corporate whss
iAe Legislature have saidAnd said clearly and repeat
eddy, BY the most unavoidable implicationthst they
shs not. True, IT is not competent t, the Legislature
white which in it, nature baci; but 1t competent
TO that department Of the nent to Declare and
;he judisary win b. bound BY the ds%s.,,,ssiO1
and have all the rights and privileges Of the whitest
IN thst re-rset Of legislative intention The Lssisature
against undisputsd corporations had perfect
and Of courle As against the new to de-
b applicable This, In effect, they have oone by
declaring terms Of the Most pointed implication, that
She free banking associations not and in event
ahould be deemed to be "bod;es porate pocn but
banking part ncrshps with all the rights Of natural per
sons except to issuing bills notes to be put In cir
sulaton money, ana upon their compliance with the
directions prescribed BY the act with only limited liz
hhty for partnership debts The late Supreme Court,
notwithstanding the clear and unidentified evdcn Of
the legislative intention in two cases. after the pas
sage Of the Free Banking law held in that view
that view only they had right TO hold that these
cations In spite Of legislative definition to the contrary
were fact bodies eorporAte within the prohibition Of
tbs Constitution In the Court of Errors however on a.
appeal to the higher Jurisdiction OF that tribunal ard
after the mos. elaborate discussion, opposite con,u
zion vas sussequenty arrived A. as distinctly expressed
a. declaring hst the associations organized (unaer the
general law, not bodies polite or corporate