Court Opinion

ID: 5552492
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:34:45.150619+00
Date Added: 2024-06-11T08:35:11.803556
License: Public Domain

The Court not being unanimous, the Judges delivered their opinions seriatim.

By the Court.

Lumpkin, J.
delivering the opinion.
I propose to write a brief opinion in this case, not because the points adjudicated aro unimportant, but for the simple reason that a decision in these bank eases settles nothing. I am warranted in saying this from the experience of the past six years. With every chango in the Court, the same questions are re-produced for rc-adjudicntion. And we are authorized to infer, that this practice, so subversive of the fun*342damental object for which this tribunal was organized, is to continue so long as this litigation shall last. Why should I or any other Judge, under these circumstances, spend his time and strength for naught ?
[1.] The first error assigned, is in ruling out the testimony of Ragan and Bonner, as to the illegal and fraudulent organization of the Planters’ & Mechanics’ Bank of Columbus, and the participation therein of Bonner.
Counsel for defendant in error confess that the Court was wrong in excluding this evidence, and state, by way of explanation, that the decision of this Court in Anne E. McDougald, adm’x, vs. Bellamy, adm’r of Bailey, at Americus, July, 1855, was not known when the bill of exceptions in this case was certified.
[2.] Was the Court right in rejecting the sayings of Lee, when he delivered a packet of the bills of the bank to Ragan, the assignee, showing from whom and where he obtained them ? We think not, and upon the authority of Lockhart & Thomas against McNabb, decided last summer, and not yet reported.
Here -the main fact is the delivery of the money by a third person to the assignee. Without something explanatory, the transaction is unintelligible. Should not the concomitant declarations of the actor, Mr. Lee, be received as to the place where, and the person from whom, he obtained these bills, as well as the directions given as to the disposition to be made of them ? Admit this proof, and the transaction is illustrated and understood. Reject it, and it is stultified. We see the packet handed over, but for what purpose or with what intent, we are left in irtter darkness.
[3.] Once concede that the amount of the outstanding circulation is a necessary clement in ascertaining the stockholder’s liability, and we hold that it is; and it follows, of course, that every inquiry is legitimate and proper which aids in the investigation of that fact. It is argued, with great earnestness, that to permit these collateral issues, is to defeat the possibility of a recovery; and consequently, is a practical *343denial of justice. At this distant day, since the bill-holder’s right to sue accrued, it may possibly have the effect of driving him into Equity, or even out of Court. That is not the fault of the law.
But what insurmountable obstacle exists in this case more' than in others ? From first to last, there has been a factitious importance attached to these bank cases, which does-not intrinsically belong to them. What are they more than others, either in principle or dollars, that they should disturb the equanimity of the Court, and compromit its dignity by the petty personalities of Counsel; that they should consume, to such an unreasonable extent, the time of the country; that they should be invoked to make and unmake Judges, and convulse the State from one end of it to the other ? The fund of an insolvent is to be distributed — what a number and variety of issues must be formed, before the quota to which, each creditor is entitled can be ascertained ? But a suit at Law against an executor or administrator, is a strictly analogous proceeding. The trustee is sued by a creditor of the-testator or intestate. He pleads, amongst other things, outstanding debts against the estate, of equal or higher dignity,, of which he has been notified. Have not each of these claims to undergo a legal investigation, before a judgment, quando■ or prceter, can be rendered ? And yet, this is a practice of" daily occurrence in our Courts. We have no doubt the difficulty of determining the outstanding circulation is greatly exaggerated in the imagination of Counsel. But be this as it. may, the principle is a plain one.
(4.) As to the 475 shares upon which it is sought to make-Robinson liable, the evidence shows that this stock was transferred to him without his knowledge or consent, and without, consideration; and that if he held it all, it was for the benefit of McDougald, Robinson, therefore, can only be made liable on the ground of fraud. If the Jury should believe, from the proof, that after the fact was brought to his knowledge, that the stock stood in his name, he acquiesced in the transfer for the accommodation of McDougald, then he is presumptively *344liable for tbe bills issued, before he re-transferred the stock to the bank; and, prima facie, he is riot liable on bills issued after that time.
Eraud is a question of fact, to be deduced by the Jury, in this as in all other cases, from all the circumstances connected with the transaction.
The transfer book, wo think, was properly admitted to go before the Jury. And its materiality was strengthened in ■this case, inasmuch as Robinson subsequently re-conveyed to the bank — thus acknowledging, that by virtue of the transfer, the legal title to the stock was in him; and that the bank recognized him as the owner. We do not intend to say — indeed, our opinion is to the contrary — that had Robinson stood aloof entirely from the business, that the mere fact of the stocks being transferred to his name, would, per se, have involved him in any liability whatever.
(5.) We hold there is error in the next assignment, as to the-extent of the defendant’s liability. It is the opinion of this-Court, that the' aggregate body of stockholders, are liable-under the charter, for all the bills.issued by the bank; and: that the liability of each is to be ascertained and fixed by the-following proportion, namely : as the whole capital stock is. to the entire outstanding circulation, so is each stockholder’s-shares to his part to be redeemed.
We think there can be no doubt but that it was the intention of the Legislature to make the stockholders ultimately liable to redeem all the bills or notes issued by the bank. Such is the very language of the charter. Grant this and the argument is at an end; for it follows irresistibly, that each stockholder’s liability to take up the unpaid bills of the-bank, is in proportion to the number of shares which he holds of the capital stock. Eor myself, I never felt clearer in any conclusion.
Having thus succinctly disposed of the five grounds upon which the judgment of the Circuit Court must be reversed, we shall, with all possible brevity dispatch the remaining points in the record.
*345[6.] Was it error in the Court to disallow proof as to whom the hank recognized as the owner of the 475 contested shares? of stock in the hank ? Had the proposition have been to show that dividends were paid to Robinson, or that he voted-as a stockholder, or performed other acts upon the faith of' those shares, the question would have been different. We-have already said that the bank treated him as the legal owner, by taking his assignment. But this was an act. We. do not see by what rule we could let In the declarations of' the bank, through its agents and officers, to the prejudice of' third persons.
[7.] How far are bill-holders to be affected by the assignment made by the bank and ratified by the Legislature? The position occupied by Counsel for the stockholders is, that if assets sufficient in amount and value, were turned over to the assignee to redeem the circulation, and the same have-been wasted, the stockholders are discharged.
It might- well be questioned, whether the assignment made by the bank ever was accepted by the bill-holders, in the legal sense of that term. But conceding that it was, the bill-holder, as the evidence shows, pursued his remedy at Laiv, upon his judgment against the assignee, to every available extent ; and the proof of this is, a return of nulla bona on thefi. fa. by the proper officer for executing the same. And. having done this, and the bill-holder under the charter having a speedy, direct and certain redress against the stockholder himself, the latter cannot require the former to look to any other source for payment. This point is virtually covered by Lane against Thornton, (11 Ga. R. beginning at page 518 et sequitur.)
But it is argued by Mr. Hill with his usual ability, and who raises no question as to the validity of the assignment, that the bill-holders having, by their neglect, suffered the-corporate effects to be lost, the stockholders who occupy the position of sureties, arc discharged, and much authority is cited in support of this proposition. But no precedent has. *346been produced, and none, I feel quite certain,- can be found, which comoB up to this case.
I admit, that if property be assigned by the principad debtor, directly to. the creditor, and it be wasted, there would' ■be justice in the claim set up to exoneration, by the surety. But here the assets are transferred to a third person — one chosen and selected by the corporation, and over whom the-the stockholders had equal power (I doubt not, in fact, far more) with the bill-holders, if not by the form of the deed, ■yet, by operation.of law. The stockholders were not only interested in seeing this fund properly applied to discharge the primary liabilities of the bank, but they were entitled to the residuum should there be a surplus. Why did they not come into Equity and complain that Alexander, the assignee, was not discharging his duty? That he was suffering the assets to be squandered; and that in consequence thereof, they were likely to be damnified ? On the contrary, no fault is found — no complaint heard. Judge Sturges, we are told in the argument, held that the Legislature had no power to save the debts due to and from the bank from extinguishment ; that the debtors of tho bank had a constitutional right which could not be impaired, of being released from the performance of their obligations. And that Judge Alexander treated tho whole matter, assignment and all, as a nullity ; and hence, refused to execute the trust which he voluntarily assumed.
And thus, funds now alleged to have been amply sufficient to satisfy all these demands, were permitted to be wasted. And the doctrine is, that the bill-holders, with no notice by the stockholders to look after this property, and with co-ordinate power to do so themselves, arc barred from pursuing their statutory remedy!
[8.] Tho next error assigned is, the refusal of the Court to charge the Jury, that by the judgment of forfeiture, the debts due by the bank were extinguished.
This Court having repeatedly, within tho last six years, assigned reasons for entertaining tho same opinion as that ■ *347held by our brother Worrill upon this point, I am content to rest my judgment of affirmance, in the present case, upon the past argument. (8 Ga. Rep. 488; Ib. 486; 11 Ib. 458; 16 Ib. 289.)
My mind has never wavered for a moment upon this question, whether considered upon general principles or upon our own special legislation relative to the subject.
In Thornton vs. Lane, (11 Ga. Rep. 493,) in -speaking of the odiousness of the antiquated Common Law rule, that upon the dissolution of a corporation, the debts due to and from it ■are extinguished, and which, thank God, I have lived to see itself extinguished, by an authority not subject to review, I remarked that “ Georgia is not obnoxious to this reproach, so far as this corporation” (the P. & M. Bank of Columbus) “and others in its vicinity, in pari delicto, are concerned. She has made ample provision to rescue them from the operation of this rule.”
Let us glance, for a moment, at some of the enactments upon this head. I shall not attempt an analysis or collation of all of them.
The Act of 1840 (Cobb, 115) contains this explicit provision : “ And in case any of said banks, their branches or agencies, shall then and thereafter” (that is, after the 1st day of February, 1841,) “fail or refuse to comply with and perform the requirement aforesaid promptly,” (pay specie •on their bills,) “ then his Excellency, the Governor, on due proof thereof, is hereby authorized and required to cause judicial proceedings to be instituted, forthwith, against such •defaulting bank, in the Superior Court of the county where the same is located, to the end that the charter of such bank may be declared as forfeited and annulled; and that the assets of the same be immediately placed into the hands of a receiver, under adequate security, for the benefit of the creditors thereof.”
Under this Act, judicial proceedings were instituted against the P. & M. Bank, to forfeit its charter, on account of its failure to redeem its notes in specie. But as hope was held *348out that the bank would resume specie payments, in the winter of 1841, another Statute was passed authorizing and requiring the Governor to arrest the prosecution, provided the bank would commence to redeem its liabilities by the 1st of January, 1842, and should continue to do so thereafter. (Cobb, 117.)
Rut the promise of resumption proving delusive, the Legislature again, in 1842, enacted that, “ in all cases where judicial proceedings had been commenced by the State against this and other banks, which had become amenable to the provisions of the Act of 1840, and which had failed to comply with the requirements of the Act of 1841, upon the final trial of such proceeding and the rendition of a verdict, upon which a judgment of forfeiture should be pronounced, the Judge should pronounce the judgment of dissolution for all purposes whatsoever, saving and excepting as to its power, in its corporate name, to collect and pay its debts, and to sell and convey its estate, real and personal, which power should be exercised by the receiver or receivers, whose appointments are herein provided for, in the name of said corporation, subject to no control whatever by the corporation or its officers. No inference can properly be drawn from this nor any other expression, in any of these Acts, adverse to the stockholders’ right to interfere, legally, to protect their interest. Their right to do this, resulting from their liability under the charter, could not be divested, even by the Legislature, had it been attempted. And it was made the duty of the Governor, on being notified thereof, by the Judge before whom the case was determined, to appoint three competent persons as receivers, whose duty it should be to take charge of and collect, as early as practicable, the debts and demands due and owing to said bank; and to pay off and discharge its liabilities, and to turn over the balance of the assets to the stockholders, in proportion to the amount of stock held by them.” (Cobb, 118, 119.)
In May, 1843, just before the judgment of forfeiture was rendered, the bank made a regular assignment of all its pro*349perty, real and personal, and of all its debts, credits and effects, for the benefit of all its creditors. And ,no receiver having been appointed by the Governor, under the Act of 1842, because none could be found -willing and competent. to act, the Legislature at its next session in December, 1843, ratified and confirmed the assignment made by the bank, declaring that it should be taken, held and considered, valid for all purposes, both in Law and in Equity. And the assignee, Robert B. Alexander, was authorized to sue and be ■sued, in his said character, for any demand due to and from said corporation. (Cobb, 120, 121.)
And yet, in the face of all this legislation and of this assignment by the bank, before its charter was forfeited and of the legislative confirmation thereof, it is insisted that the liabilities of the corporation, and consequently, the personal liability of the stockholders, is extinguished! and wherefore? Suppose it be true that the debtors of the bank, and .the stockholders contracted in reference to the Common law rule? Is it not equally true that they contracted also in reference to the acknowledged right of the Legislature to rescue the assets from this principle ? And .is not the one to be taken as much an element of the contract as the other ?
But while it is not disputed that the Legislature had the power to interpose and prevent the operation of the Common Law rule, and that they have exercised the right, as is clearly ■shown in the foregoing quotations, yet, it is contended, that •by the judgment of forfeiture, upon the quo ■warranto rendered against the bank, that all the debts due to and from the institution were extinguished.
I have endeavored, and I trust successfully, to demonstrate on a former occasion, that conceding this to be true, it does not affect or impair, in the slightest manner, the collateral' undertaking of the stockholders under the 11th section of the charter. (16 Ga. R. 289.) I am, content to submit that opinion, and upon it my judicial reputation, to the test of time and the scrutiny of the professional world, and to be. judged accordingly.
*350But waiving this view-of the subject, what was the judgment of the forfeiture pronounced by the Superior Court of Muscogee County, against the Planters’ & Mechanics’ Bank of Columbus? It is in these words: “It is considered by the Court, that the liberties, privileges and franchises, to-wit: that of being a body politic and corporate, by the name and style of the Planters’ & Mechanics’ Bank of Columbus, heretofore used, enjoyed and exercised by the defendant, be seised into the hands of the State, and that the said defendant do not, in any manner, hereafter intermeddle, use, have, enjoy or exercise, any of the liberties, franchises or privileges of a body politic or corporate, but that the defendant be absolutely prejudged and excluded from holding, using or exercising any of the privileges, franchises or liberties of a body politic or corporate, and that the State recover its costs, to be taxed,” &c.
Suppose it be true, that apart from the Acts of 1840,1841, 1842 and 1843, the debts due to and from the bank would have perished with the corporation, how can it be pretended that they are not saved by the Statutes? Does, this judgment assume to disregard the law, as has been -suggested, on account of its supposed unconstitutionality ? We deny that it admits of any such construction; and we must interpret it by itself, and not from tradition. We hold that the judgment is precisely what it should have been, both in form and substance.
The Act of 1840 directed a judgment of forfeiture to be rendered against this and other defaulting banks, upon failure to pay specie at a stipulated period. But the same Act rescued the assets by providing that they should immediately be placed in the hands of a receiver. The Act was silent as to who should appoint the receiver ; and therefore, a question may have been raised as'to the necessity of the further action of the Court. But the Act-of 1842 removes all doubt or difficulty upon this point. A judgment of dissolution was to be pronounced for all purposes whatsoever, saving and excepting .as to the power of the bank, in its corporate name, *351to eollect and pay its debts, &c. which, power is to be exercised by a receiver, to be appointed by the (governor, upon being notified by the presiding Judge that the charter has been judicially annulled.
And was not just such a judgment rendered? One which recalled to the State all the liberties, franchises and privileges which had been granted to the bank, and leaving the debts due to and from it untouched ? The form of the judgment was not prescribed by the Act, and it never was contemplated that it should, in so many words, save and except the liabilities of the Bank from its operation. Hence, it makes no attempt to do this. It would have been a work of supererogation. This had been expressly and effectually done by the several Statutes passed for this purpose. The judgment fulfilled its mission in dissolving the charter. The custody and collection of the debts were committed to a receiver not appointed by the Court, but by the Governor, not deriving his authority from the judgment of the Court, but from the Statute.
We respectfully submit, then, that an attempt is made to wrest this judgment from its legal import, and to attribute to it a meaning and effect never contemplated. Were it otherwise, it was not in the power of the Court to award a valid judgment in contravention of the law. A judgment of a Justice of the Peace for fifty dollars, under the old law, or one hundred under the new, would .be void for want of jurisdiction ; for where a judgment is beyond the jurisdiction of the Court rendering it, it may be treated as a nullity in a collateral proceeding.
. But suppose I am wrong in all this, could there be any doubt, that under the Acts set forth, the judgment might be set aside and a new judgment awarded in conformity with, the law ? I insist,! however, there is no occasion for this. The judgment is right, and it is doing violence to the obvious design of the Legislature and the Court, to undertake to pervert it to the' purpose claimed for it.
Suppose just such a judgment was now rendered upon a *352quo warranto, since the repeal Act of the last Session wa& passed — would it be pretended that the corporate debts were-extinguished ? And why not ? Why were not the Acts of 1840 and 1842, as much the law, as to this corporation, as the Act of 185o-’56, is now to corporations generally ? The late Statute simply repeals the Common Law rule as to defunct corporations. Was it not set aside by the Acts of 1840-’42, as to this bank ? Why, then, should a general judgment of forfeiture, without any saving as to the debts, operate differently in the two cases ?
I must think that examination and reflection will eventually conduct us to but one conclusion in this case. That such was the cotomporaneous construction put upon the judgment, of forfeiture, is evident from this fact. Suits at Law, under the Statute, were brought against Judge Alexander, as assignee of the bank, by the bill-holders. He was a gentleman of high professional standing; and yet, he submitted to have judgments go against him, without opposition. And these judgments are made the foundation of the suits, at this day,, against the stockholders; and it will not do to say, by way of explanation, that he was sued as assignee under the deed, and not under the law. As assignee under the deed merely,, no action at Law could have been brought against him. And.. no one knew this better than he did.
Before dismissing this branch of the case, I would take occasion to remark, that more than once during the discussion of these bank cases, Counsel have portrayed in vivid colors the hardship of enforcing the'individual liability clause against, the stockholders, when by the judgment of forfeiture, they were deprived of the means of meeting and discharging the indebtedness of the bank. But by reference to the Acts, it will be seen that no such injustice is ascribable to the Legislature. The provision for collecting the corporate assets was co-cxtensive with that for paying its debts. And if any debtor of the bank has escaped, upon the ground that his liability was extinguished, the fact has not been brought to the knowledge of this Court. Indeed, it is more than intimated *353—it is distinctly stated in this discussion, that the assigneesuffered the debts to be lost, because he did not see fit, for reasons satisfactory to himself, to enforce their payment.
[9.] The only remaining question is, as to the constitutionality of the Act of 1848. The- objection is, that the body of the Act does not correspond with its title. We are unable to-detect the discrepancy.
The Act of 1840 was to compel the several banks to redeem their liabilities in specie; and to provide for the forfeiture of the charters of such as might refuse. The Act of 1841 was to arrest judicial proceedings and grant further time for resumption. The Act of 1842 was simply amendatory of these two; and the Act of 1843 was amendatory of all three — and such only is its title. Where is the repugnancy ? Does not the Act effect-what its title indicated? Instead of the Legislative assignment and its execution by a-receiver, to be appointed by the Governor, as directed by the Act of 1842, the Act of 1843 ratifies the assignment by the Bank and substitutes the assignee therein named, in the place of the receiver, as contemplated by the previous law. Instead of discord, v’e see nothing but the strictest harmony and conformity between the Act of 1843 and its title.