Court Opinion

ID: 5550821
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:31:12.55961+00
Date Added: 2024-06-11T08:35:05.673507
License: Public Domain

Judge. Liornas
declined presiding in this case, in consequence of onn of the plaintiff's in error being a relative. Judges Warner and Nisbet being-on the bench, after hearing argument, Judge Warner delivered the opinion of the court.
*30It is alleged on the part of the plaintiffs in error that the court below erred, in admitting testimony going to show a suspension of specie payments by the bank in the year 1838. The plaintiffs in error relied on the fact that the bank refused to pay specie in the year 1841, as good ground of defence in the court below, by virtue of the 20th section of the Act incorporating the Western Bank of Georgia, (Prince’s Dig. 131,) which declares “ All transfers of stock in said bank shall be wholly void, if made within six months previous to the failure of said bank, &c.” The plaintiffs in error insisted the note sued on was givenfor bank stock, within six months previous to the suspension of specie payments by the bank in the year 1841. The defendant in error offers evidence to prove the bank suspended specie payments in the year 1838 — more than six months before the note was given, which evidence in our opinion was properly admitted in the court below, for the reason, if there was a failure of the bank in 1S38, then the note sued on was not given for bank-stock within six months previous to the failure of the Western Bank of Georgia, as contemplated by its charter.
The second ground of error assigned is to the charge of the court. The court below charged the jury “ the temporary suspension of specie payments by the bank in 1838 was within the meaning of the charter, a failure of the bank, and that no subsequent resumption could cure that failure, so as to affect any subsequent sale of stock.”
The charge of the court involves the question as to what is to be considered a failure of the bank within the meaning of its charter. By the 13th section of the charter, it is declared, “The said corporation shall not at any time suspend or refuse payments in gold - or silver, of any of its notes, bills or obligations, and if the said corporation shall at any time refuse or neglect to pay on demand, any note, bill or obligation, issued by the corporation, according to the contract, promise, or understanding therein expressed, the charter hereby granted shall be forfeited, &c.”
By the charter of the Western Bank of Georgia, important privileges are granted to the stockholders, in return for which certain duties are imposed ; one of paramount interest to the public is, that payment of the notes, bills, or obligations of the bank, shall be made on demand in gold or silver. The 20th section of the charter provides, “ all transfers of stock in said bank shall be wholly void, if made within six months previous to the failure of said bank, but that said stockholders so transferring, shall be deemed, and held liable for the debts of the institution notwithstanding such transfer.” Itwassaid on the argument of this cause, the bank could not be considered as having failed, until it had been judicially ascertained it was insolvent. Without pretending to say the bank was insolvent, or that its charter was forfeited by its refusal to pay its bills in gold or silver on demand, without judicial investigation ; we are of the opinion, such refusal was a gross violation of duty on the part of the bank; and was such a failure to accomplish the objects contemplated by the charter, as to make void all transfers of stock made within six months previous to such refusal or failure to redeem its bills in gold or silver— and that the stockholders transferring their stock, after such failure or refusal of the bank to redeem its bills, according to the express terms of the 13th section of the charter, would be 'liable for the debts of the institution. We place our decision on the obvious intention and mean*31ing of the Legislature, as gathered from the different sections of the charter itself, and are of opinion there was no error in that portion of the charge of the court, “ that the temporary suspension of specie payments in the year 1838, was within the meaning of the charter a, failure of the bank.”
Bui. when we take into consideration the intention of the Legislature, in the passage of the Act of 18th Dec. 1840, (Hotchkiss Dig. 362) as well as the effect of it, extending the time to such of the banks as theretofore had suspended specie payments until the 1st of February, 1841, to redeem their liabilities in gold and silver, we are of the opinion the court below committed error in that part of the charge in which the jury were told, “ no subsequent resumption could cure that failure, (the failure in 1838,) so as to affect any subsequent sale of stock.
The Act of the 18th Dec., 1840, was intended to relieve the suspended banks from the liabilities which they had incurred under their charters, on account of their failure to redeem their liabilities in gold and silver; and this view of the question is strengthened by the Act of 10th Dec., 1841, which authorizes the governor to arrest the judicial proceedings against certain banks which had been instituted under the provisions of the Act of 1840 ; provided such banks should redeem their liabilities in specie, by the first day of January then next.- — Hotchkiss 363. If then the Western Bank of Georgia did, in accordance with the provisions of the Act of 18th Dec. 1840, redeem its liabilities in gold and silver, such redemption, or resumption on the part of the bank, in the opinion of the court, did cure the temporary suspension by the hank, in the year 1838 — -so as to affect the rights of the parties in the sale of stock. The note sued on bears date 11th March, 1841, and consequently the hank stock was transferred subseqent to the Act of 18th Dec., 1840. Whether the bank redeemed its liabilities in specie on the first day of February 1841, or not, this court expresses no opinion. All we intend to say is, — in our judgment, taking into view the Act of 1840, the court below erred in charging the jury, “ that no subsequent resumption could cure the failure of the bank to redeem its liabilities in gold and silver in 1838, so as to affect any subsequent sale of stock.” Let a new trial be granted.