Court Opinion

ID: 3586375
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:36:13.913313+00
Date Added: 2024-06-11T14:07:22.249191
License: Public Domain

The general questions in this case were so fully discussed in the opinions delivered in the case of the Million and First Half Million Trusts (Curtis v. Leavitt, 15 N.Y.R., 9) as to render it unnecessary again to examine them. The objections raised against the trust deed, founded upon the 8th and 9th sections of the title of the Revised Statutes relating to moneyed corporations, ought not to be sustained. The argument, contained in the opinions of Judges COMSTOCK and PAIGE in the case cited, to show that the title in question does not apply to the banking associations created under the act of 1838, is, to my mind, conclusive. It is true that part of the opinion in Gillet v.Moody (3 Comst., 479), and one of the resolutions inTalmage v. Pell (3 Seld., 328), as also the decision inGillet v. Philips (3 Kern., 114), affirm the applicability of that title to these associations; but, in the two first named cases, the decision of the question was not necessary to the decision of the *Page 543 
causes, and in the last, which was a case submitted without oral argument, the applicability of the statute seems to have been assumed without discussion, either in the printed points of the counsel or in the opinion delivered. The fact that these associations seem verbally to fall within the definition of moneyed corporations, upon the bare reading of the title, while the complete incongruity between the moneyed corporation system of the Revised Statutes and the free banking system needs to be brought out, by a careful consideration of each system, in order to be seen and felt, will make it easy to see how the point may have escaped that close attention which it deserved. Under such circumstances, I do not think this court bound to persist in that which it sees clearly to be erroneous. Where a rule of property is erroneously settled, courts will rarely, if ever, depart from the decision, because such a departure will disturb rights acquired under the sanction of the rule; nor will they determine that to be criminal which has been decided, though erroneously, to be innocent. The reason of these rules has obviously no application, when the decision sought to be corrected is one which disappoints the expectation of the parties to an act, and renders void their contracts. There can have been no dealing between parties on the faith of any such rule. To alter such a decision does not disturb property nor interfere with any vested rights which the law is to regard; on the contrary, that course gives effect to the intentions of parties and removes an obstacle which ought not to have been interposed in their way.
A decision of the character of that in question stands therefore upon the general doctrine of stare decisis,
unstrengthened by any peculiar considerations founded on the nature of the decision or the unjust consequences which might follow from its alteration. That maxim, although entitled to great weight, does not furnish an absolute rule which can never be departed from. That it does not, the number of overruled decisions, which have accumulated in the administration of the common *Page 544 
law, abundantly proves. To depart from a decision is undoubtedly an act by which a court incurs a high degree of responsibility; and it should certainly be satisfied that its course is such that the future judgment of the enlightened profession of the law will approve its determination. But when it is satisfied that an erroneous determination has been made, and that, too, without a full consideration of the merits of the question decided: when it sees that to correct it will render void no one's honest acts, nor disappoint any just expectation: when, in short, it is fully persuaded that there is no one reason why such a decision should again be made, except that it was once made before, then I think a court would be sacrificing substance to shadow if it refused to correct its error. Nor do I believe that by so doing a court would disturb the public confidence in the stability of its judgments. Courts are not inclined, any more than men out of courts, to admit that they have erred; and where the administration of justice is public and must proceed upon reasons assigned for every judgment, there is little danger from the exercise, under the responsibilities which necessarily attend its exercise, of the power which a court possesses to retrace its steps when it is satisfied that an error has been committed.
In the next place, the trust deed was not void, under the general provisions of the Revised Statutes as to fraudulent conveyances. The internal structure of the deed is precisely like that involved in the other cases, and, therefore, our decision that the Million Trust Deed was not void upon its face, as fraudulent as against creditors, must control our determination upon the face of this deed. Upon that question, as well as upon the question of fact, whether it was made with intent to hinder, delay or defraud creditors, I refer to the full discussion in the opinion of Judge COMSTOCK in the former case. I am satisfied, upon the evidence, that this deed was made and executed as a part of the general plan of the company to extricate itself from its embarrassments, *Page 545 
in which, unfortunately both for its creditors and stockholders, it was unsuccessful; but I cannot doubt that such was its purpose, entertained in entire good faith. It contemplated going on with its business, not winding up its concerns and preferring favored creditors, and this deed, as were the others, was made for that end. The postponement of its debts to the Philadelphia banks was just as important to secure the end in view, and just as effectual, as would have been the actual receipt of the money and its application in payment of the postponed debts. The company was, perhaps, hoping against hope in regard to its affairs; but I may be allowed to say that if so great a change had occurred in the value of its property as has taken place since the first argument of this cause in October, 1857, in the value of almost every similar species of property, of which, at that time, there was no greater apparent likelihood than existed when this company was considering its prospects of successful escape from its embarrassments, I consider it far from clear that it would not, at least for the time and in respect to operations then on foot, have retrieved its affairs.
The next question to be considered is whether these instruments, called bonds, are within the 4th section of the act of 1840. (Sess. Laws, 306.) That section prohibits any banking association to "issue or put in circulation any bill or note of said association, unless the same shall be made payable on demand, and without interest." It does not prohibit an association from entering into all kinds of engagements for paying money unless on demand and without interest, but only the specified kinds, bills or notes. In Leavitt v. Palmer (3Comst., 19), promissory notes were adjudged to be within this prohibition. The instruments, called bonds in this case, were undoubtedly intended by the parties to be sealed instruments, and if they are to be regarded either as English or Pennsylvania contracts, and governed by the law of those states, they are sealed instruments; *Page 546 
but tested by the laws of New-York and regarded as unsealed, they are not promissory notes nor bank notes, but special engagements to pay money, or to give stock at a certain rate in lieu thereof, in case the holder should so elect, before they become payable. (2 Strange, 1271; Martin v. Chauntry, Buller N.P., 272.) They are something more than an engagement to pay money, and by the terms of the contract they may not be payable at all.
It is insisted that the coupons for interest, attached, are bills of exchange. The words of those papers are those of a bill of exchange; but they, in the hands of the party who has the bond, are but a part of that agreement, and take their character from that of the instrument to which they are accessory. Could he present them to the Palmers for acceptance, and at once maintain an action against the banking company as drawers, upon non-acceptance? The answer to such an action would be plain, that from the whole instrument, they appeared not to be bills of exchange, but warrants for the semi-annual payments of interest on the principal obligations. These instruments, therefore, do not fall within the prohibition of the section in question. They are, neither in law nor in fact, notes or bills.
That the disposition made of these instruments was such as binds the corporation, is apparent from the evidence. They were used for the purposes of the association, and with the consent of the proper officers, and although not in precise accordance with the terms of the deed itself, yet for the same substantial purpose of enabling the company to escape from its embarrassments. A more serious question might exist, if the 8th section of the act in regard to moneyed corporations applied.
Upon the whole case, I think that no effectual distinction exists, to give it a different direction from the case ofCurtis v. Leavitt, and that the judgment appealed from should be affirmed. *Page 547