The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1868-11-03

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draw capital from an insolvent bank, because
it has none OF their clpital remaining. When
| insoIyeut its assets belong SOLELY 10 It's credi-
Tors. 15 How, 315.)
"rhe result is that so much OF each OF the
the withdrawal of any part OF the specie or
other property of that bauk, and the appro-
priation thereof to the use OF the State"
'slmpaired the obligation OF contracts made
with the complainant as the lawful holder and
bearer of bills of the bank, and so were in-
operative and invalid" tl5 How, 321.)
unconstitutlonality of the act, according to the
first construction. AS to tho construction that
| the State or the Governor as such, was trus-
tee for creditors of the bank, Mr.. Hayne relied
particularly on the following passage, to wit:
IF this law had contained only the first sec
ton, vesting the real property of the bank in
the State, aud providing no remedy by which
tlis complainant, as q creditor OF the bank,
could reach it, we think it would have impaired
! The obligation OF his contracts. True, it does
not touch the right of acti III against the bank;
it only wlthdrnws the real property from the
reach of legal process, and thus affects the
remedy. But it by no means follows, because
q law affects only the remedy, that it does not
impair the obligation Of the contract. The
obligation of q contract, in the sense in which
those words are used i'll the constitution, is
that duty of performing it, which is recognized
and enforced By the laws. And if the law is
so changed that the means OF legally enforcing
this duty are materially impaired, the obliga-
ton of contract no longer remains the samo."
: dTne law now in questl: withdraws
the real property of the bank altogether from
the reach of legal process, provides no substi-
tuted remedy, and leaves the creditor, as is
truly said by the Supreme Court OF Arkansas
in condition in which his rights live but in
grace, and his remedies in entreaty only"
(15 How, 32o)
South Carolina, as matters stool before the in
stitution of any of the pending suits, on the pas
sage OF the act OF 1868, the creditors OF the
bank might have sued at Law the said corpora
ton, ard, upon obtaining judgment, have is
sued execution which could take effect upon any
of the tangible property Of the said bank, and,
l.. ;;-ccAA1:mesi in ennitv, con!d have subjected
nil the assets to tho payment of debts; but
under the net of 1868, if Governor Scott takes
possession of the property OF tho bank and its
assets, how ase they to be reached by legal
process? A Judgment against robert X. Scott
Governor no Judgment could be obtained, or il
obtained would be equally Intellectual; for the
the act requires him to sell the property and
assets Of the bank and place the proceeds OF
sale in tho Treasury OF the State, subject to
the order of the Governor" If once withdrawn
from the treasury by him, and subsequently
mixed with the general funds OF the State, or
expended by him, it could not be reached by
any proceedings either in law or equity. This
surely "affects the remedy ,nd impairs the OBJ
liration of the contract in the sense in which
these words are used in the constitution"
I shall not insist at length on the effect OF
the 11th section OF the act OF 1866 10 raise SUD-
plies, which directs the bank to hold the assets
of the bank for the benefit, first, OF the fire
loan bondholdcrs in Europe, and second, for
the fire loan stockholders in America, and,
Third, lor the billholders. 1t is, as conceive,
not necessary for The purposes OF this case.
But this act once acled upon by the bauk md
accepted by the preferred creditors, was, in
my opinion, a contract" The President and
Directors did accept it, and they so informed
the Earrings; the Barings approved and !aaTTEe
ity with the said act. And it is submitted that
this act, considered as the instruction OF the
sole stockholdcr, and having been adopted and
acted upon by the President and directors of
the bank, and accepted and acted Cn by the
Earrings and others, il q contract, incapable OF
repeal by tie Legislature. An accepted as
| siSnmcnt is q contract, and bank mas
q right to make IN assignment and TO prefer
creditors. (Sce Burrill, OH Assgnmenta.) This
act, therefore, whether called statutory as
sig nmcnt, or by any other name, has created IL
contract which cannot now be impaired by any
State legislation. Whether such assignment,
| instituted by the sole stockhoder and carried
out by the corporation, was in all respects
| equitable, is not now i'll question. The law
then sanctioned such on assignment. 1t was
legal and binding as q contract, and cannot,
either by the bankrupt Act (which is not retro
spcctivc as to this point or by the Legislature
| of 1868, be abrogatcd or impaired"
The act of the Legislature OF 1868 in re-
ouirinc The seizure OF the assets, for nnd in
behalf of the State," immirs the obligation Of
tho contracts made under and by virtue of
three preceding acts-ihc act OF charter in
1872 the fire loan act of 1858, and the act OF
1865, violating the faith pledged in all the three.
The cases of Curran vs. the State OF Arkansas,
and OF Bills ads. the State OF South Carolina,
are sufficient fUr this head. No other al'
| thoritics need be cited.
3. The rule should be discharged, because
the subject matter here in controversy, TO wit !:
| the validity OF the act under the provisions OF
| winch Governor Scott demands the assets OF
the bank, and the duty and obligation OF the
president and directors 10 deliver said assets,
IS 'iL,s pendenS" in tho Circuit Court OF the
United States, in the cass OF BarinS Brotners t;r
| & Co. vs.. the President and Directors or the
Bank of the State OF South Carolina, Robert
| X. Scott, Governor, ct M. The SAID suit is
hill fled on tho equity side Of said court, pray
ing that the said Robert X. Scott, whether rs
| Governor or ''in any oth,r capacity" and AL
other PERSONS" DC restrained and cnjoincd
from cxcclting that portion of the act for
closing the operations ofthc Bank of the State
of South Carolina which requires that posses
sion can bo taken of tllse assets "fol and in
behalf of the State OF South Carolina" and
.hat the said PrcsidcntGnd Directors, and G.
NJ. Furman, and Thomas r. Waring, be re-
strained aud enjoined from delivering tho
same. under SAID act. and that such
portion of said act SHOULD be pronounc-
| ed unconstitutional, void, and no law,
inosmuch as it .'Impairs the obligation OF con-
tracts" already made. This is the very subject
in controversy here. This bill was filed on the
19th of October inst. Subpoena ad responder
dunn was Immediately selved with copy OF the
hill on The President and Directors Of the Bank
of the State of South Carolina, on Chas. nj. Fur
man. Thomas II. Wuring and Arnoldus V. Daw-
son: u subpoena nd respndendum issued to
| Robert *. Scott and was served on him with
| coDy of the bill on the 14!h day OF October, and
| copy of the bill was served on the Attorney
| General the same day. The Governor was, inn
mediately on the filing Of the bill, notified by
letter that O. motion for writ OF injunction
would be madc at such time as would suit his
convenience. Governor Scott declined to name
time and made application for the nilnda-
mus. Formal notices o. the time and place
that the motion for the writ OF injunction
would be made we're theL served on all the de-
PENDANTS. Tapping's MMdamus, page rs, lays
| it down that 'sit is principal OF law That where
| a matter is in controvers? before q competent
| jurisdiction the Court Oh L. r. will not inter-
fere by mandamus." See also ibid 3S and 270,
Rex VS.. Hay, 1 Burrows 2295, Rex vs. Bettes-
/ II