Court Opinion

ID: 5553166
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:36:03.674156+00
Date Added: 2024-06-11T08:35:13.352256
License: Public Domain

Benning J.
concurring.
On the day of the organization of the bank, the directors made an order in these words: “ Ordered, that the note of the stockholders for the amount of their several subscriptions paid in, be discounted; the notes to be payable, thirty days after demand by the President of the bank.”
This order was immediately" carried out. The amount coming to Semmes was §9,500, for which he gave his note. This was on the 8th of May, 1852.
This transaction was void, or it was valid. It must have been the one or the other. If the purport was merely to let the stockholders have the use of the money, until the bank commenced business, and not to let the bank commence business, until the money was returned, the transaction was not forbidden by any law with which, I am acquainted'. It *548certainly was one that couícl affect none but the parties to it. To show that this was the purpose, it might be, perhaps, that nothing ought to be deemed sufficient short of proof, that the bank did not commence business until the money was returned, i. e., until the notes were paid. This, however, is a point which I do not think requires decision.
Be this then, as it may, the transaction was void, or it was valid. That is certain.
If it was void, the effect was, that the stockholders, for the sums respectively received by them, became respectively indebted to the bank in spile of the transaction; if it was valid, the same thing happened by virtue of the transaction. Either way, the effect was precise^ the same, viz: that the stockholders-respectively became indebted to the bank, m the sums which they respectively received from the bank. In the case of Semmes, this sum was $9,500; for which he gave his note.
Being thus indebted to the bank, their debts stood like any other debts due to the bank; that is they stood subject to be paid or extinguished, in the same way as other debts due to the bank, were subject to be paid or extinguished.
Afterwards, on the 12th of July, 1853, Semmes, and H. S. Smith, and Kyle, the Cashier of the bank, made this arrangement, viz: that Semmes should transfer his stock to Smith, and Smith should pay the bank for the stock, and the bank should surrender to Semmes his note. . '
Accordingly, on the same day, Semmes transferred his stock to Smith, and Smith verbally promised Kyle to pay the bank for it, and Kyle surrendered to Semmes his note.
Afterwards, but long before the existence of the summons of garnishment, Kyle, acting for Smith,- paid the bank the said amount that Smith had, promised to pay the bank, for the stock which he had got from Semmes.
Now, did all this amount to an extinguishment of Semmes* indebtedness to the bank.
*549The plaintiff in error says no. He says that Kyle had no original authority, as cashier, to make this arrangement, and that the arrangement was. never ratified by the board of directors.
But is this all true? I think not.
First. The arrangement was made as above stated, on the-12th of July, 1853, a part of it being the transfer by Semmesof his stock to Smith. This transfer had to be upon the-books of the bank. Therefore, it was made, probably, in the bank; especially, is this to be said, as Kyle, the cashier, was-a party to the arrangement. On that same day, the directors? had a meeting, for on that day, they elected Smith a director in Semmes'place; and on that day,Semmes resigned his office of president. Now, is it not cleat beyond a reasonabledoubtthat allthese things occurred at the same time and place. I think so. If they did, then it follows, that this arrangement of Kyle's with Semmes and Smith,’’ was made in the-banking house, and under the very eyes of the directors whilst in session.
At all events, the board’s electing Smith a director, shows, that they ratified this arrangement, for, to ke eligible as a director, he had to be a stockholder, and it was only through this arrangement, that he could have been a stockholder. In making him a director, they must, therefore, have sanctioned the arrangement.
Secondly Kyle says that he paid the bank for Smith, what Smith, according to the arrangement, was to pay the bank.
In receiving such pay, the bank had, of course, to sanction the arrangement.
I think it clear, then, beyond a reasonable doubt, that the arrangement was, if not, authorized, at least ratified, by the bank.
And what is there in such an arrangement, that creditors of the hank, even if they were creditors contemporaneous, and, not long subsequent, could justly complain of? The bank thus squandered none of its assets. If it gave up to *550Semmes, $9,500, it got back in place of it $9,500 from Smith. Even if it gave up $9,500 to Semmes, in exchange for a debt of that amount on him, and then gave up that debt to Smith, for a like debt on him, what is there in it? Smith, for ought that appears, is as solvent as Semmes. The creditors of the bank are certainly, not entitled to have $9,500, twice, once from Smith, and once from Semmes.
These things being so, there is nothing in the charge, or the refusal to charge, to call for a new trial, so far as I can see.
Hence, I think that one ought not to be granted.