Court Opinion

ID: 5549642
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:31:18.694907+00
Date Added: 2024-06-11T08:35:01.959229
License: Public Domain

The Chancellor.
If the charges in the complainant’s bill are true, the discounting of this note by Bruen, as the president and agent of the Commercial Bank of New Jersey, was not a single or isolated transaction; but it was in violation of the provisions of the laws of this state against unauthorized banking. And the complainant and his endorsers have a good legal defence to the suit, upon such note; which suit has been brought for the benefit of the bank. The sixth section of the title of the revised statutes relative to unauthorized banking, (1 R. S. 712,) applied to foreign corporations, as well as to those which were incorporated by the laws of this state. And foreign corporations are still prohibited, by that section, from keeping any office in this state for the purpose of receiving deposits, or for discounting notes or bills. And where such a corporation authorizes one of its officers, or an agent, to attend from time to time at certain known places, in this state, for the purpose of receiving deposits, or for the purpose of discounting notes or bills with the funds of the corporation, and for its benefit, such known places of attendance must be considered as the offices of discount and deposit of the corporation, illegally kept for the purposes prohibited by the statute.
The bill in this case distinctly charges that the suit at law is brought in the name of Bruen for the sole benefit of the bank, and for the purpose of defrauding the defendants in that suit of the benefit of his testimony on the trial. Bruen is therefore bound to make the discovery sought for by this bill, if he could have been compelled to give evidence of the facts charged, upon the trial of the suit at law, in case such suit had been brought m the name of the bank as the real party in interest. And he could, in that case, have been compelled to give such evidence, unless the facts charged in the bill show that he has been guilty of an offence which is indictable, or which will subject him to a penalty or forfeiture. (Matter of Kipp, 1 Paige's Rep *304601. City Bank of Baltimore v. Bateman, 7 Harr. & John. Rep. 104.)
It remains to be considered, thérefore, whether the bill-in this case shows that the appellant Bruen has been guilty of any thing"for -which -beds liable- to' an indictment/ or which ctitild subject'-or expose him to a penalty or -forfeiture; - For if it does, he is not bound- to.answer and»disclose-the facts. (2 R. S. 405, § 71.) And upon a careful examination of the several provisions of the title"of -the revised statutes relative to-"unauthorized banking, . I have arrived at the conclusion that if the appellant, as the agent- and.’.president of' this-foreign corporation, has carried bn- the business of discounting' notes and bills in tlie'-city of- New-York,. as-charged by 'the- complainant,-' and -under-the circumstances mentioned in the bill in this cause, he has rendered himself personally liable-tó’the penalty-prescribed by - the seventh' section of that title:. (1 R. S. 712.)
By referring to the fourth section,-it will’ be seen" thaty for--an offence of a similar character, the -directors and other officers and agents -of‘the* corporation-are, in' terms, made. personally liable-for the--penalty;-for a violation- of the "provisions of- the statute which-'-are prohibitory upon- the; corporation:-- And in reference to the offences prohibited in: the sixth section; of which the offence charged id the complainant’s bill is one,"the seventh section-declares that-every -person,, and every'corporation, and every member of a corporation; who shall contravene ¡either of the provisions of the sixth section, or-shall directly or; indirectly assent -to- such-violation;-shall-forfeit $1000.' The-terms-“"every -member of a corporation,”-are'-certainly "broad -enough to reach the--defendant Bmen, who is charged' , to have'acted as the president-of the Corporation, as well; as its agent, in the violations of the statute mentioned in the complainants -bill: The statute also-subjects every'person to -the-penalty who assents-to the'violation of-its-provisions:’• And Bruen must certainly .be considered as-having assented-to the violation'of thestatute/by the corporation of which he was president, when-he actually acted as its agent for the- purpose of contravening - the ¡provisions -of the law. He cannot, therefore, be'- compelled -td make the dis*305covery, sought by this bill, in aid of the defence at law. And for that reason, the injunction restraining him from proceeding in the suit at law until he should have an wered this bill, and made the discovery called for therein, should not have been granted.
The order appealed from is erroneous and must be reversed. And the injunction must be dissolved with costs.