Case Name: THE STATE, ON THE RELATION OF VAN MATRE, v. BUCHANAN
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1833-04
Citations: 1 Ohio Ch. 233
Docket Number: 
Parties: THE STATE, ON THE RELATION OF VAN MATRE, v. BUCHANAN.
Judges: 
Reporter: Reports of cases at law and in chancery Ohio
Volume: 1
Pages: 233–240

Head Matter:
THE STATE, ON THE RELATION OF VAN MATRE, v. BUCHANAN.
Quo warranto — bank directors — admission of parties and counsel — practice—-jury—corporation records — competency of a witness — evidence—release—resignation.
The charter of the Commercial Bank of Cincinnati provides, that no director of any other bank, or the co-partner of any director of any other bank, shall be a director of that bank, applies as well to directors of banks in the other states, as to those in this state.
In construing a statute, the meaning or intention of the law may be gathered from its words its object, scope and end, the form of its remedy, and the evils which led to its adoption, that it may be interpreted to work its due effect.
The cause of the recent failure of banks was overtrading, and the legislature intended to cut off facilities to combined overissue of bank notes by the restriction in the Commercial Bank charter, requiring them to have no officer in common with any other bank.
A writ of quo warranto is the proper remedy to inquire by what authority a person holds tho office of bank director. It is the proper writ to try the right to office, and to arrest the usurper.
Such writ will be made returnable forthwith or at short day so that a trial may be had before the term of office expires, that course being necessary to the due administration of justice.
On return of such writ, short rules will be granted for pleading to issue, and the defendant has no right to send the cause to the common rules for pleading, as that would work a continuance, and defeat the object of the writ.
The parties to a suit have no right to demand tho standing jury — a jury of tales men, or a special venire will issue whenever a jury is needed, and the litigants have no right to prescribe to the court which method it shall resort to, to make a jury.
An admission by a party to a writ of quo warranto may be read in evidence against him, but an agreement of his counsel made for use on a rule to show cause, is not, for any other purpose the admission of the party, it is like the admission of a demurrer to be used only in the particular matter in which it is filed.
The court will not control evidence testing upon the courtesy or discretion of counsel.
The records of a corporation are the best evidence of its officers, but is is competent to prove that such officers exist by the admissions of the defendant.
The person procuring a writ of quo wananto, and claiming to be admitted to an office by ousting the defendant is an incompetent witness for the state; he can execute no release that will restore his competency; that can only be done by resigning the office claimed.
Newspaper statements and the understanding of a witness from such sources is no evidence who are directors of a bank.
A declaration by a party that he had admitted what was necessary to sustain the case, or that he would admit what was uecessary, is not an admission of any particular facts, and does not dispense with their proof.
■ Quo Warranto. Rule to show why a writ of quo warranto shall not issue against Buchanan to exhibit his warrant for exercising the office of director of the Commercial Bank of Cincinnati.
Hammond, and N. Wright, appeared for the defendant,
and having showed for cause against the rule, that Buchanan held, by virtue of his being elected a director on the 6th of May, 1833, declined opening the argument.
T. Walker and E. King,
moved to make the rule absolute, and read the following clause in the charter of the Commercial Bank: ‘No director of any other bank or partner of such director shall be eligible to the office of director, of this bank.’ They also read an agreement signed by the counsel of Buchanan, from which it appeared that the defendant was elected a director on the 6th May, 1833, and qualified; that C. Bates, the relator, had the next highest number of votes for director; that the defendant was in co-partnership with Charles McAllister of Philadelphia and Edward Yorke of New Orleans, the former of whom was a director of the bank of the U. States at Philadelphia, and the latter a director of the Canal Bank at New Orleans; that the bank of the U. States had a branch at Cincinnati, and by the usage of the bank, a director of the mother bank visiting Cincinnati would be entitled to a seat at the board of the branch, although he would have no right to vote. They made two points in argument.
1st. That Buchanan when elected was ineligible.
2nd. That Bates, having the highest vote given for an eligible candidate, was elected, and is entitled to a seat at the board.
They contended that the case of Buchanan was within the letter and spirit of the act, and within the mischiefs intended to be remedied. The provision in the act embraced all banks in the U. States, and was intended to prevent any one house from enjoying facilities of bank accommodations not open to the community in general. The course of trade was such that a director here having a partner in the U. S. bank, a bank at N. Orleans or at Dayton, might shape his operations to secure a monopoly of credit and trade and open the door for conspiracy to destroy the other banks. The director of the U. States bank could inspect in the branch here, or from the reports to the mother bank, the accounts of business men in this city, and by communication, shape the operations of the house in which he is a partner for. good or evil in a way unknown to common enterprise, or to business men in general, and in that way obtain unfair advantage, such advantage as the law was intended to prevent. The act admits but one construction, no director of any other bank or partner of such, shall bo eligible as a director of the Commercial Bank.
Hammond and N. Wright
having obtained leave to reply, contended that this was a simple question of construction. If the banks of which the defendant’s partners are directors, were in Ohio, incorporated by our laws, the question would be clear and the defendant ineligible. But banks conducted independent of our laws or situated in other countries not subject to our jurisdiction, were not contemplated by the act incorporating the Commercial Bank, nor with in its provisions. The office of a bank director is one created by and known to our laws. The provision under consideration is local, and can no more operate upon persons connected with directors of banks in other states in the union, than upon those in England or France. As to the danger of conspiracy, expediency, and the use of men here, Hammond supposed it preposterous to suppose the rich foreign capitalists, who know nothing but to add cent, per cent, who could see no farther than their spectacles, and feel no farther than behind their ears, could use respectable men here.

Opinion:
Lane, J.
This is an application for the writ of quo warranto, by which the right of Robert Buchanan to hold the office of director in the Commercial Bank of Cincinnati, is submitted for adjudication. The facts are presented in an agreed case. On the 6th of May, 1833, Buchanan was duly elected a director of the Bank. At that time, he was a partner in business with E. Yorke, of New Orleans, a director of the Canal Bank there, and also with C. McAllister, of Philadelphia, a director of the Bank of the United States. By the charter of the Commercial Bank, it is provided, that no director of any other bank, or partner of such director, shall be eligible to the office of director of that Bank. Whether the legislature intended to disqualify the partner of a foreign bank director from holding a directorship here, is the subject of inquiry, and the first resort must be had to the words by which the disability is created, to learn the intention. In their ordinary and more obvious meaning, the words used extend, to the present case, and the incompetency of Mr. Buchanan is complete, if this be their legal sense. But the respondent insists, that the words used are not to be presumed to refer to any other than domestic corporations — foreign banks being beyond the jurisdiction, must be taken to be beyond the purview of the act, and that for some principle of reciprocity, which I do not well understand, we ought not to sustain a disability in a citizen, arising from alliance with foreigners, because no such disqualification attaches to them from their connection with us. But the words of a statute are not the only sources from which its meaning is to be gathered. It is one of the most familiar duties of a court, to consider its object, scope, end, the form of its remedy, and the evils that led to its adoption, so that it may receive that interpretation which will work its due effect. And we think we may derive much light from these sources, as to the intention of the legislature. The monetary system of every community, is one of the most important parts of its civil policy, and the franchise of banking, is, perhaps, a trust more confidential, more liable to abuse, and if abused,followed by more consequences, than any committed by government to its citizens. It ought, therefore, to be restrained by such bounds as tend to prevent its abuse. The power which flows from the management of a bank, may be injuriously exercised, either to the undue advantage of its managers, to the prejudice of those who depend upon them for accommodation, and as these evils, particularly the last, would be much increased by extending the power, perhaps this led the legislature to disable the same person, or the same interests, from acquiring a controling influence in two institutions.
The recent failure of so many banking corporations in this state, could not have been forgotten. The cause of this failure was over-trading. As the. profits of a bank are chiefly from the extent of its circulation, there is a strong and constant temptation to extend its issues too far. The proper check to this evil, may be found in the necessity of sustaining its credit, by providing for the return of its notes. When such an institution depends on its own resources the remedy is promptly applied, for the ordinary course of business, the interest of individuals, and especially the interests and jealousy of rival institutions, confine the notes of each bank to its own circle of business where its credits can be estimated, and by a speedy return of such notes as are not required for its business, prevent the risk to the public, from the undue extension of its issues. But if banks should combine instead of acting independently, it is easy to see that means might be devised, to crowd into circulation notes to an unsafe amount. There is a house in Massachusetts which controls one banking institution in its own state, two in New York, one in Ohio, and one in Michigan, extending over more than 600 miles. By remitting notes for issue remote from the place of payment, and by other means, they have the power to sustain in circulation a greater amount from the combined banks than they would be able to do if each stood alone. And if they were disposed to be dishonest, they might perpetrate frauds to an immeasurable extent, and might even escape a part of the odium by sacrificing the distant branches. Indeed some of the worst frauds in our country have been carried into execution by the combination of fraudulent bankers. It is then the alliance between banks, the co-operation of those who ought to act as checks upon each other, which the legislature sought to prevent, and for this end have required that they shall have no officers in common. If this be the mischief to be guarded against, and the means by which it is to be effected, it is evident, from the ease of communication and the state of business in our country, that the remedy would be wholly ineffectual if it only restrained too close a connection between banks of this state; indeed the evil would be in some degree increased by the remoteness of the allied institutions from each other. The examination therefore of the design of the law to learn the intention of the legislature leads us to the conclusion, that a partnership with a director of a foreign bank was intended to be forbidden, and that the present case is fully within the scope of the restriction.
In considering this matter, I have not deemed it necessary to make any distinction between the two partnerships, or the greater damage claimed to arise from Buchanan's connection with a director of the U. States Bank. Since either, in our opinion, is sufficient to exclude him from the office to which he is elected.
A writ of quo warranto is ordered, therefore, to inquire by what authority Buchanan holds his office. On the return of which, the requisite judgment will be pronounced.
Court. Can you agree upon the day of the return ?
The counsel for the state proposed any day of the term, for trial. The defendant's counsel denied the right to issue a writ and direct its return on a particular day. It was insisted that the question was a new one, and time was asked to examine the course of common law, which was allowed. On another day the writ was ordered, and made returnable forthwith. The writ which issued recited the proceedings had upon the rule fully, as in a declaration. On the return of the writ the state asked for a short rule to plead. The defendant contended that the cause must go to the common rules as other cases, and to that end must be continued.
Wright, J.
Authority is conferred upon this court to issue writs of quo warranto, when necessary to enforce the due administration of justice throughout the state, and to exercise jurisdiction when the writ issues agreeably to the usage and principles of law. The due administration of justice is the end aimed at — the means to be employed are such as accord with the usages and prin-. ciples of law. Officers in this state are mostly elected annually. Quo warranto is the legal writ to try the right to hold office, and for ousting a usurper. This court sits but once a year. The writ does not issue except upon motion, and after rule and cause shown, and if when issued it must go the common rules for pleading, and a continuance is to follow of course, the remedy will prove wholly ineffectual; for the office usurped would expire before the complaint would be got ready for trial, and the judgment of ouster, if rendered, would operate upon a person no longer in possession of the office, or if in possession under a new election asserting a new claim to the place, or new color of right. We must so exercise this jurisdiction as to .give effect to the administration of the law, and not take a course certain to render it nugatory. Unless, therefore, counsel otherwise agree, the defendant will be ruled to plead by tomorrow morning, and a venire will issue for a jury returnable at that time for the trial of the issues, if a jury is required. Lilly's Ent. c. 10 — 4; 4 Con. R. 95-123,297, 358; Com. Dig. Quo War. c. A,plea, fyc.
King, for the state,
read the writ and stated the issue. He was proceeding to read the agreement of counsel, used upon the hearing of the rule to show cause, when
Hammond,
objected, that it was not evidence — it was not an agreement by the defendant, but one made by his counsel for another purpose altogether.
King,
insisted that the agreement was made by the consent of the party and intended to bind him. He did not expect such an objection from such a quarter.
The defendant's counsel asked to have the question reserved to the Court in Bank, which was refused. They then pleaded not guilty to the writ, upon which issue was taken.
When the jury was called, Hammond, for the defendant, objected that the venire was a special one. This is a highly important power the court is exercising, and it should proceed cautiously and legally. We have a right to the standing jury, and insist upon the right. As the standing jury has been discharged, we contend this cause cannot be tried at the present term, without violating our right to the standing jury.
Wright, J.
This Court has been in the uniform practice, where the standing jury is out, or where, for any cause, a jury is wanted and the standing one is not in attendance, either to order tales men summoned into the box without writ, or to issue a special venire for a jury. The standing jury is not now in attendance; we have the issue in fact to try, and have issued a special venire for a jury, in the usual way. We know of no right in the parties litigant to select their own jury, or to prescribe to the court which of several legal ways it shall resort to, to compel.the attendance of a jury. The objection must be overruled, and if there be no challenges, the jury may be sworn. The jury was then sworn.
Wright, J.
The paper offered is an agreement by counsel upon the rule to show cause, it is not an admission by the defendant, if it were it could be used against him: in its nature it assimilates itself in our view to the admission of a demurrer, of no avail except on the particular question where it was used. The offer to read a paper of this kind does not address itself to the Court, to sustain a legal right — it seems to be solely addressed to the courtesy and discretion of counsel, over which we have no control. Unless by consent the paper cannot be read.
King,
then offered Wm. S. Hatch to prove that McAllister and Yorke were directors, &c.
Hammond,
objected, that better evidence of these facts existed on the corporation records, and they must be produced, or their non production be accounted for, before lesser evidence can be received.
King,
the position taken by the other side is in general true. If it is not competent to prove by parol that McAllister is a director, it is competent to prove that the defendant admitted that he was, and that I will do.
Hatch,
being sworn, said, that he had heard the defendant admit some time ago, that McAllister was a director in the bank of the United States, and Yorke a director of the Canal Bank at N. Orleans, but had never heard such admissions since the 6th of May, or any thing which showed they were then or are now directors.
Caleb Bates, was called as a witness.
Hammond,
objected his interest. He is the real complainant and seeks the place of the defendant if he be ousted.
King,
could not see the interest of the witness.
King,
then proposed that Bates release to the defendant all his interest, in the office.
P. Benson,
was sworn, and showed a slip of a newspaper containing a list of the directors of the bank of the U. States, and was proceeding to state his understanding that the persons whose names are on the list are directors of the Bank, when
Hammond,,
stopped him.
Weight, J.
It is competent to prove the defendant's admissions.
Wright, J.
The witness appears on the proceedings as the prosecutorin fact, and to have a direct interest in the eventof the suit. He claims that he was elected a director of the Commercial Bank, and that the defendant usurping his right has ousted him from the office: and he asks of us to put the defendant out and himself into that office. He is inadmissible.
Wright, J.
That will not discharge his interest. If the judgment should be in favor of the state, the release will not avail the defendant, nor prevent the witness from obtaining the office. A resignation of the office will restore his competency.
Wright, J.
I suppose the state will not contend that this is evidence.
Bates was again called, resigned his office, and was sworn. He said he had a conversation with Buchanan, in which he said he had admitted and should admit all the facts necessary to sustain the action. He intended to admit every thing we might wish to prove. At another time he said he understood he was to be nullified, the witness replied,yes, when he said, well, I have admitted all the facts that may be necessary. No facts were mentioned which had been admited, in either conversation.
The cause was submitted without argument.
Wright, J.
to the jury. Before the state can claim a verdict at your hands, it is bound to prove the allegations set forth in the writ, as well that McAllister and Yorke were directors, as the other allegations. The court has heard no evidence to sustain either allegation. You can retire if you desire it, or agree in the box.
Verdict, without retiring, of not guilty, and judgment for the defendant thereon.