Court Opinion

ID: 6506184
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:18:22.457499+00
Date Added: 2024-06-11T15:54:44.434248
License: Public Domain

WALKER, J.
— Sections 3268, 3269, and 935 of the Code are in the following words: “ Any person, private corporation, or association, who, without authority of law, makes or emits any paper to answer the purposes of money,1-sor for general circulation; such person, and each individual of such corporation or association, on conviction, must be fined not less than twenty or more than one hundred dollars, and may be imprisoned not more than twelve months.” “Any person in this State, who signs any paper to be put in circulation as money, except under the authority of this State, or countersigns the same, must, on conviction, be fined in á sum not less than one hundred, or more than five hundred dollars; and the signature of such person to any such paper must be taken as genuine, unless the fact of signing be denied on oath by *621tbe defendant.” “Every bill of exchange, note, bond, or instrument of any description, whatever may be its form or device, issued with the intent to circulate the same as money, without authority of law, is an absolute, unconditional promise of the association or person putting such bill, note, or other instrument in circulation, and may be sued on by the holder thereof, without transfer or assignment, and without demand, protest, or notice, and the amount thereof recovered, with interest thereon, at the rate of fifty per cent, per annum from the date thereofj or from the time the same was put in circulation.”
From these statutes it is manifest, that the issue of paper by the Gainesville Insurance Company, with the intent that it should circulate as money, without the authority to do so, would subject it audits active officers to losses and severe penalties, as well as involve a violation of its charter. If the corporation was about to do that thing which would be attended by such consequences, the court of chancery had jurisdiction to interpose its preventive power at the instance of a stockholder. — Dodge v. Woolsey, 18 Howard, 331-341; Christopher & Tilton v. Mayor of N. Y., 13 Barb. 567.
This case, then, turns upon the question, whether the bill shows that the corporation is about to issue, without authority, certificates of deposit, with the intent that they should circulate as money. In the solution of this question two points of controversy are presented: first, as' to the power of the corporation to make such issues with such' intent; and, secondly, as to the sufficiency of the bill to show the intent.
1. In determining the extent of the corporate authority, it is proper to look to a law, found in the Code, which was in force before the adoption of the act of incorporation. The law alluded to is as follows : “No private corporation, to which sueh powers are not expressly given, shall, by any implication or construction, be deemed to possess the power of discounting bills, notes, or other evidences of debt, of receiving deposits, of buying and selling gold, silver, bullion, or foreign coin, or of issuing bills, notes, or other evidences of debt, upon loan, or for circula*622tion as money.” — Code, § 1484. This statute must operate ip the construction of the charters of all private corporations, adopted after its enactment. — Br. Bk. at Decatur v. Jones, 5 Ala. 487 ; Ang. & Am. on Cor. (3 ed.) 239, 240 ; People v. Utica Ins. Co., 15 Johns. 358.
But it is said that the legislature could repeal that statute, and have done so, in effect, so far as this corporation is concerned, in the charter. No provision of the charter expressly repeals that statute. If the charter, when considered alone, and without reference to any other law, would merely authorize the “ implication or construction ” that the corporation had the power to issue paper for circulation as money, it would not effect an exemption from the prohibitory section of the Code above copied, or operate a repeal of it as to the particular corporation. Corporations which would otherwise have the, power, by implication or construction, are those which the prohibitory section of the Code is designed to restrict. If it does not restrict such corporations, it has no effect, and is virtually repealed by the contingency in which it was designed to exert its force. It is, then,- only necessary to inquire, whether the charter expressly grants the power in question ; for, if it does not, there is no repeal or modification of the prohibitory section of the Code, so as to secure an exemption from the restriction of that section.
The only section of the charter, supposed to bear on this question, is in the following words: “ The said company shall be authorized to receive, in trust, or on deposit, all funds or moneys that may be offered to them, whether on interest or otherwise; and that they have power to give acknowledgments for deposits, in such manner and form as they 'may deem, convenient and necessary to transact such business ; all such moneys, so deposited, being free from loss or indebtedness, growing out of the insurance business of said company.” The power to issue paper for circulation as money is not, in this extract from the charter, given by name; and we think it demonstrable, that it is not included in any of express powers named.
The authority to give acknowledgments of deposits, in such “ manner and form ” as the corporation might deem *623■convenient, undoubtedly clothes it with a discretion as to the manner and form of the acknowledgments. But that discretion is not unlimited. It is limited by the scope of the power conferred. — City Council of Montgomery v. Montgomery and Wetumpka Plank-Road Company, at last term; Beaty v. Khowler, 4 Peters, 152-171; People v. Utica Ins. Co., 15 Johns. 358. The power is, to receive deposits, and give acknowledgments, in manner and form convenient and necessary to transact the business of receiving deposits. The discretion of the corporation is in the selection of the manner of the instruments by which it will execute the power of receiving deposits; and it must be exercised within the area of that power. It cannot be exercised for the purpose of giving their certificates of deposit a circulation as money; because their power is to act as a depositary, and to give acknowledgments as evidences of deposit, and they .have no power to emit paper to answer the purposes of money. The charter itself limits the discretion to a manner and form convenient and necessary in the transaction of the business of a depositary. The power of issuing certificates of deposit is distinct and distinguishable from that of issuing paper for circulation as money. Certificates of deposit may be somewhat assimilated to paper money, in their susceptibility of transfer; but they are different, and the discrimination between them is as easy as between ordinary promissory notes and bank-bills. The power to issue paper, which may be transferred, is not a power to issue paper ■ to circulate as money. If the corporation should issue its certificates of deposit in a manner and form to procure for them a circulation as money, it would issue them in a manner and form not merely convenient and necessary to transact the business of a depositary, but to transact that business, and also the additional and distinct business of emitting paper to answer the purposes of money. The corporation may issue its certificates of deposit in any manner and form which will accomplish its business of a depositary; but not in such manner and form as will accomplish that and another business. If it can so fashion its certificates of deposit as to procure for them *624a circulation as money, it can add to its granted powers by an ingenious device, and obtain by subterfuge an authority which legislative caution withheld from it. The corporation has not the authority to issue paper to answer the purposes of money, or to give its certificates a form and semblance which will accomplish that object.
2. The question still to be considered is, whether the bill of complainant shows that the corporation was about to issue paper to answer the purposes of money. The allegation is, that certain engraved forms of certificates of deposits, specimens of which are attached as exhibits to the bill, and made parts of it, were adopted by the board of directors, and show upon their face that they -were intended to pass from hand to hand as money, or in lieu of money. The pleader does not say, that the certificates were intended, when issued, to circulate as money; but that the engraved forms manifest upon their face the intent. Is that so ? Is the intent a legal conclusion from those engraved forms, and from, the fact that they are about to be filled up and emitted ?
The engraved forms are in the similitude of bank-notes, and have the vignette and other embellishments characteristic of bank-notes. Their amounts are designated, as the denominations of bank-notes, by marginal letters and figures. They are numbered and lettered as bank-notes; are to be signed by the president, and countersigned by the secretary; are for amounts of one, two and three dollars, payable to bearer on the return of the certificate, which is in effect the same as if they were payable, like oank-notes, on demand; and, in addition to all this, they are printed on bank-note paper. They differ from bank-bills only in the fact, that they purport to be certificates of deposit, and are redeemable in bills of specie-paying banks. From these evidences, patent upon the faces of the engraved forms, a chancellor, in passing like a juror upon the facts, would infer the fact that they were intended to answer the purposes of money. Every characteristic, which could contribute to procure for them a circulation as money, without the abandonment of the name of certificates of deposit, has been given to them; *625and then their small amounts clearly indicate the intention that they should issue for sums not adapted to represent singly an entire amount deposited, but suitable for circulation as money. The authorities fully maintain the proposition, that the intent as a fact might be inferred from such testimony. — Safford v. Wyckoff, 1 Hill, (N. Y.) 15; S. C., 4 Hill, 442; Smith v. Strong, 2 Hill, 241; Hazleton Coal Co. v. Megargel, 3 Barr, 324; Att. Gen. v. L. & F. Ins. Co., 9 Paige, 470.
But the inference of the intent would be but the inference of one fact from another. It is not sufficient, in chancery pleading, simply to aver the evidence from which a required fact might be inferred, although the evidence itself, if uncontradicted, and not overcome by opposing proof, might be sufficient to induce a chancellor or a jury to find the fact from it. — Knight v. Vardeman, 25 Ala. 262; Costillo & Keho v. Thompson, 9 Ala. 937; Ogletree v. The State, 28 Ala. 701; Oliver v. State, 17 Ala. 597. The averment of the evidence afforded by the engraved forms, although, unopposed, it might justify the conclusion of the necessary fact that the intent existed, cannot be substituted for the averment of that fact. That evidence is not the requisite fact. It but produces that combination of probabilities from which disputed facts are inferred, and may be overcome by countervailing evidence. — Carter v. Anderson, 4 Geo. 517.
The averment, that the engraved forms show the intent, is a statement that such is the conclusion of law. The correctness of such a statement the demurrer does not have the effect of admitting. — Story’s Eq. Pl. § 452 ; Carter v. Anderson, 4 Geo. 517. It is not a conclusion of law, from the face of the certificates, that the purpose of their issue would be that they might circulate as money. The averment of the bill is, therefore, insufficient to show the intent; consequently, the bill does not contain equity, and the demurrer should have been sustained.
The decree of the court below is reversed, and the cause remanded.