Court Opinion

ID: 7195257
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:01:58.038152+00
Date Added: 2024-06-11T16:16:18.660789
License: Public Domain

On Application nor Rehearing.
Watkins, J.
(a) In my opinion, the State never was, and is not now, a co-debtor with the Citizens Bank, of the Hope & Co. bonds. The State was and is a surety only, and for the. principal of the bonds, and not for the interest; for in the act of 1836 it is particularly stipulated that the bank shall mention in its indorsement the place at which it will pay the interest; and this individual covenant of the bank to pay interest formed a part of Hope & Co.’s acceptance of the bonds from the bank.
(6) As the State was not a principal debtor,-and did not owe interest, she had a right to require the assets of the bank that had been transferred to her and the Hope company jointly applied to the capital of the bonds; and the opinion of the court so holds.
(c) Under'the compromise and compact of 1880, Hope & Co. did receive the $800,000 of assets, as well as the funds on hand, which had been already realized from other assets pledged — at least, constructively, through the Citizens Bank as its agent — and they can be made to respond, as the opinion decrees, by taking less.
(d) There is no provision in the funding laws, that the interest-coupons attached to consolidated bonds shall bear interest if not-promptly paid at their respective maturities. On the contrary, special provision is made therein that a tax shall be annually assessed and collected for the purpose of paying the interest and principal of" *788these bonds, and it specially declares that “the revenue derived therefrom is hereby set apart and appropriated to that purpose and no other.” Sec. 7, Act 3 of 1874.
This suit plainly illustrates the impossibility of such a demand. If plaintiff had presented its bonds for funding in 1874, they could have presented the interest coupons attached to consols received and collected them at their semi-annual maturities. That is all they are" entitled to now. If there has not been collected and set apart a sufficient sum to meet their demands on interest account it is their own fault. But the opinion of the court allows the plaintiffs to withdraw from funds in their hands the full amount of the interest arrears due on coupons since 1874.
(e) There is nothing- in Act 40 of 1874, except the extension of the Citizens Bank charter to the 30th of January, 1911; and power conferred on the bank “to extend, with the consent of the holders thereof, all thef State bonds issued in its favor, underthe secondsection of the act entitled an act, etc., * * approved January 30, 1836, now outstanding, as well as all interest warrants issued by said bank * * to such a time, and on such conditions as may be agreed upon with the holders of said bonds and interest warrants,” etc.
This act and the conduct and acts of the parties under it are in keeping with their previous contract, under and in pursuance of the indorsement on the bonds- The bank issued, and the Hope Company received, interest debentures, or warrants, for arreared interest, signed by the bank alone, thus completely eliminating the State.
(/) According to the theory of the opinion, there are-but two interest compilations to be made; first, on the consolidated bonds, from January 1, 1874, to the date same are issued to Hope & Co. in exchange for Citizens Bank bonds surrendered; second, on the .various amounts that are collected by the bank on the pledged assets, aiid, from time to time, remitted to the Hope Company.
These two transactions are entirely distinct and separate, and are not component parts of one account, or transaction, and, therefore, the question of imputation of payments does not, in my opinion, arise.
Duiing the whole period of time Hope & Co. held these sums in their hands they -were ostensibly for the account of the capital of the Citizens Bank bonds, for the reason stated above, that the State *789owed no interest, and, consequently, said sums could not be lawfully imputed to interest the State did not owe.
As the Hope people, in 1891, are for the first time awarded consols in exchange for Citizens Bank bonds, bearing interest from the 1st of January, 1874, a settlement is for the first time a possibility, and the decree of this court makes it such. Prior to this application and decree there was no settlement possible or demanded.
There is not, and can not be, any question of partial payments, or adjustment of accounts between the plaintiff and the State, personated by the Board of Liquidation.
The parties to the two transactions are different. The payments, or remittances, -were made by the Citizens Bank, from moneys realized from the pledged assets, to its creditors, Hope & Co. When this suit was brought by Hope & Co. against the State, through the funding board, new issues were raised and new relations established, by our opinion and decree, wherein the State became bound for the payment of interest, on the terms and conditions set oat in the funding laws.
Then it is clear, that remittances thus made and not applied, between 1880 and 1890, can not be considered and treated as partial payments made on account of anticipated interest coupons on consolidated bonds not yet’ demanded or isstied.
For these reasons, I am of the opinion the application for rehearing'should be refused.