Court Opinion

ID: 5552609
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:34:59.745637+00
Date Added: 2024-06-11T08:35:12.152111
License: Public Domain

*293
By the Court.

Benning, J.
delivering the opinion.
The first and second exceptions and the exception to the refusal to charge the plaintiff’s twenty-fourth request, may be taken together. They all relate to the admission of the transfer book as evidence.
On this transfer book there appeared a transfer of a certain number of shares, made by Robinson, the plaintiff in error. This act of his implied an admission by him, that he owned that number of shares. And it is generally true that an admission is good as evidence against the person who makes it.
Why, then, is it not true that this admission was good as evidence against Robinson ? Because, it is said, that there .was better evidence of the thing admitted. The best evidence of the title.to stock, it is said, consists in the stock certificate-book, the stock ledger and the stock transfer book taken together.
But, there is nothing in the bill of exceptions to show that .any of these books, except the transfer book, exists, or ever • existed ; and, of course, there is nothing in it to show what were the contents of any of those books, except the transfer .book, if any but that exists.
But if all these books existed, what law is there that says -that they shall be better evidence that a person owns stock .than his admission that he does? We know of none.
[1.] We think that the Court was right in letting the book ,go to the Jury as evidence.
The book having been let in, Robinson moved to rule it out, because, as he said and offered to prove, the persons who had transferred stock to him, had previously transferred to other persons more stock than all that, according to the book, they owned; and because, as he insisted, the book showed the existence of higher evidence of his ownership of the stock, if he was owner of stock, than his admission that he was owner.
Were these reasons a sufficient foundation for the motion ? .The latter of them has been considered and found not to be so.
*294As to the former, the virtue of it, if it had any virtue, was not such as was efficacious for taking the book away from the Jury, but only for countervailing the book in the hands of the Jury. If what Robinson offered to prove went to show that he was not owner of stock, his own admission went to prove that he was.
But this reason was one that could have had no virtue in it for any purpose, unless the law was such that a man could ■own no stock except what the transfer book showed him to own. The law, however, was not such. Stock, of necessity, was owned before there was a transfer book. Property must exist before the transfer of property can exist. These persons might have been original subscribers for stock.
It being proper, then, that the book should not bo ruled out, was what Robinson requested to be charged concerning the book proper ? Certainly not, for the reasons already given.
Was what was charged proper? A part of it was. A transfer of stock by A to B is, according to the view just taken, evidence against A that he owns the stock. So much ■of the charge as charged this was proper. And this, perhaps, is as much of the charge as the facts to which the charge particularly referred called for. The rest of the charge involves an important question, and one which was very little argued before us. We, therefore, do not decide it.
This disposes of the three exceptions first mentioned.
Carey, as assignee of the Bank of Columbus, gave to Chambers a discharge from all his liability, whether as a stockholder or as a director in the Planters’ and Mechanics’ Bank of Columbus, to Carey, as assignee of the former bank. Robinson, the plaintiff in error, offered this discharge as evidence. The Court would not receive it. This constitutes the next exception.
The plaintiff in error does not insist that the discharge, so far as it was a discharge of Chambers’ stockholder liability, was admissible. He contends, however, that it was admissible, so far as it was a discharge of his director liability.
*295His argument is, that the bills of the Planters’ and Mechanics’ Bank of Columbus, held by Carey as assignee of the-Bank of Columbus, made debts that were created in violation of the fourth part of the sixth section of the charter; that if' the stockholders are made to take up such bills, the^stockholders can then collect the bills from the directors, and therefore, that if the holder of such bills releases the directors from their liability to pay the bills, he, in effect, also releases the stockholders.
Is this a good argument ? The first proposition involves merely a question of fact.
The second depends, for its truth, on the said fourth part of the sixth section of the charter. That part is in these-words: “ The total amount of debts which the said corporation shall at any time owe, whether by bond, bill, note- or other security, shall not exceed three times the amount of their capital stock actually paid in, over and above the amount of specie actually deposited in the vaults for safekeeping. In case of excess, the directors under whose administration it shall happen, shall be liable for the same in-their private and individual capacities, and may be sued for the same in any Court of record in the United States, by any creditor of the corporation, any condition, covenant or agreement to the contrary notwithstanding; but it shall not be so construed as to exempt the said corporation, or the lands, tenements, goods and chattels of the same from being liable for and chargeable with the said excess.”
The directors are to be subject to suit “by any creditor of the corporation.”
When a stockholder redeems the bills of the corporation, he becomes the “ creditor” of the corporation.
Therefore, the directors are subject to suit by such a Stockholder.
This conclusion seemed to be to the Court a necessary one.
If it is a necessary one, then, by familiar law, a release of the directors would be a release of the stockholders.
[2.] The Court, therefore, considering the argument a *296good one, think the discharge given to the director, Chambers, admissible as evidence.
This was the conclusion the Court came to when it made-its decision.
I must say, however, that on further reflection, I am not Satisfied that this is a necessary conclusion.
Suppose this case: The bank gives, say, $20,000, in its bills, for $20,000 in specie. The $20,000 in bills make, against the bank, a debt that is in “excess” of this debt limit prescribed by the charter. The $20,000 in specie is applied, not to the uses of the directors, but to the uses of' the bank, say in paying a dividend to the stockholder. Afterwards, the $20,000 in bills come back to the bank for payment, but the bank having become insolvent, they are not paid by it. In the end, they are taken up by the stockholders, and the stockholders then present them for payment to-the directors, as bills issued in “ excess” of the charter limit. The directors say to the stockholders, “ These bills were given in exchange for specie. The bank, not we, got the specie,. and you got the specie from the bank, paying nothing for it-If you require us to pay you these bills, you must pay us back that specie. You cannot have the specie and the bills both. You cannot, at one and the same time, stand on both sides of the contract.”
Now I must say that I do not perceive what answer the stockholders could make to this; and therefore, that I am not at all satisfied with the conclusion aforesaid, to which the Court came.
But assuming the conclusion to be true, the decision of the Court was manifestly right; for the other proposition necessary to the decision, viz: that the release of a party responsible over to another party is a release of that party also, is-not disputable.
Disposing of this exception, is disposing of the exception to the refusal of the Court to give in charge to the Jury the*10th and lltli requests of the plaintiff in error.
*297The refusal to give the twelfth request may be best dis-¿ posed of here..
That was a request to charge, that the liability of the directors of the Planters’ & Mechanics’ Bank of Columbus, under the part of the charter aforesaid, is a joint one, and’ that a discharge of any director by a bill holder, is, as to that bill holder, a discharge of all the directors.
This request contains two propositions. Of these, the last may be treated as disposed of by what has been said on the exception to the judgment excluding Chambers’ discharge ; for that the release of one of two or more joint debtors, is a release of the others, is too well settled to admit of being dwelt on.
[3.] The first seems to us to result necessarily from the-language aforesaid of the charter. That language is—“ In case of excess, the directors under whose administration it shall happen, shall be liable for the same,” &c.
The next exception was one to the refusal of the Court to permit John Banks to be asked whether he had not paid out certain bills on the bank, for a plantation in Stewart County. This exception was very little argued, and it is too important a one to be decided without argument, unless a decision of it were indispensable. We therefore do not decide it.
The next was an exception to the refusal of the Court to receive as evidence 59 “ suits,” they being suits in favor of various bill holders against various stockholders, other than H. S. Smith and John Banks, and suits in which Wm, Dougherty was plaintiff’s Attorney.
The issue was such, that it was material to know whothér the bills on which these suits were founded, made a part of the bills to the redemption of which the stockholders were liable.
It was not insisted, that if Smith had been released from those bills they would make a part of the bills, to the redemption of which the stockholders were liable. Smith had, at one time or another, hold stock enough to make the amount *298of bills, to the ultimate redemption of which he was liable, exceed the amount of all those on which the fifty-nine suits, were founded.
And whether Smith had been released from them or not, depended on the import of an affair to which Smith and Dougherty were parties.
The question whether that affair amounted to a release of Smith or not, was left by the Court to the Jury to be determined by them on the evidence. (See fourth charge.)
Suppose the Jury had determined that it amounted to a release ? Then, the next question for them would have been, what bills they were from which the release freed Smith?' And, to determine that question, the “ suits’ ’ — the declarations, were evidence almost indispensable ; for the bills from which the release freed Smith, were the bills on which those suits were founded.
The suits were, therefore, as we think, admissible in evidence.
A. B. Davis was the cashier of the Bank of Columbus, and as such, he issued a “ specie certificate” to certain persons, when those persons had no specie on deposit in that bank. It was a question in the case, how far this act of Davis bound ■ or affected the bank.
The answer to that question depended, of course, upon the extent of his authority to bind the bank. Any evidence, therefore, going to show the extent of his authority to bind the bank, would have been pertinent to the question.
A witness, Fontaine, was asked whether the cashier, Davis, had authority from the bank to give specie certificates, unless the specie had been deposited. The question was objected to, and the Court, over-ruled the objection. Ought the Court to have over-ruled the objection?
[4.] We think that the Court ought. The question was-directly pertinent to the issue in hand. Suppose Fontaine had answered yes, that the cashier had express power to issue such certificates; would not that answer have been pertinent? lie answered, no. But can the pertinency of a *299-question depend on whether it shall be answered yes or no? I do not mean to say that the answer, if no, would not have •been pertinent; but merely, that if yes, its pertinency would • have been more apparent.
It is no doubt true, that the question of the extent of an ; agent’s power, is a question of law as well as of fact. But, then, the law can only answer its part of the question properly, when it has before it the facts in their whole array. And what is the positive or express grant of power to the agent, is certainly one of those facts.
The assignee of the Planters’ & Mechanics’ Bank of Columbus had in his hands some $44,000 in bills of that bank. The assignee of the Bank of Columbus held a judgment against the former bank, to the amount of more than $100. -000, founded on the bills of that bank. It became a question, whether the $44,000 in bills held by the assignee of the former bank were not a part of the bills on which the judgment was founded. That assignee resided in the county. These things being so, the defendant in error exhibited a paper to a witness, and asked him whether the paper did not contain a true copy of the bills set forth in the declaration, belonging to the case in which the judgments aforesaid had been obtained. The question was objected to, but allowed -by the Court. Ought it to have been allowed ?
[5.] We think not. The question for the Jury was, whether the bills fitted the declaration. On that question, the bills, themselves, would have been better evidence than any man’s recollection of them, or any man’s copy or note ■ of them. This must be manifest.
That there was a question on the extent of the power of A. B. Davis, as cashier, has already been stated — stated in connection with the exception to Fontaine’s testimony. On this question, the plaintiff in error offered evidence of a number of acts done by Davis, as cashier: as, that Davis, without consulting the board of directors, authorized a person to check for cotton purchases, and if the person was “ short” $8,000 on $10,000, permitted him to settle the amount by “ a
*300local note” ; that Davis, without consulting the directors, was in the habit of discounting notes for a number of persons, and of giving them certificates of deposit. This evidence was repelled by the Court. Ought it to have been received ?
[6.] We think it ought to have been. The acts of which the evidence was offered were all of the same general nature, and they were numerous. It is, therefore, to be presumed, that the bank had given Davis authority to do them, and to do similar acts with other persons. And the question was, whether Davis had authority to do such acts ? (Story Ag. §§87, 127, 114; Ph. Ev. Cow. & Hill’s Notes, note 187.)
The charge of the Court was in five divisions.
A part of the first division was as follows: “I charge you that if you believe that the $44,000 in the hands of the assignee did belong to the Columbus Bank, and constituted a part of the bills sued on by Holt and Alexander, and that these are the same bills now in the hands of the assignee, then th q prima fade evidence, by possession of the assignee, is rebutted, and the $44.000 should be counted in the circulation.” This is the only part of this division of the charge complained of before us.
Doubtless this is true, in ordinary cases. If A, having a note on B and B only, gets the note into judgment against B, the note becoming merged in the judgment, becomes useless to A. And A may give it up with impunity to B. In such a case, that the note happens to be found in the possession of B, does not, therefore, authorize the inference, that the note, or rather the judgment, has been paid to A.
But suppose the note to be also on C, as well as B; C, as surety for B. In that case, the note, as to C, is not merged in the judgment. The note, therefore, is still useful to A; and it remains useful to him as long as the judgment remains unpaid. But as soon as the judgment is paid, the note ceases to be useful to him, and he has no longer any reason for withholding the note from B. Indeed, he cannot, after payment of the judgment by B, withhold the note from B. B is entitled to the possession of the note for his peace’s sake, *301if not for his defence against possible suits that may be conceived. of, brought by the surety.
In such a case as this, it may admit of a grave doubt, whether the fact that the note was in judgment against B, would, of itself, sufficiently account for B’s possession of the note.
And the present is just such a. case. These notes were notes that bound the bank and bound the stockholders — the former, primarily; the latter, ultimately. The judgment was against the bank only.
We think, therefore, that this is what the Court should have told the Jury, viz: that it was a question for them, ■whether the fast that the bank bills were some of those on which the judgment was founded, had more weight to show the bills, or rather so much of the judgment, unpaid, than the fact that the bills were in the possession of the maker or •its representative, had weight to show the bills paid. We think the question was a question on the weight of evidence.
In the second division of the charge, there are to be found these words: “ To make these compromises a settlement in full, it devolved upon defendant to show the amounts paid by Banks, Smith and Mattheson, and-the amount of the judgments or claims settled. Without these data, you cannot determine the proportion received by bills of plaintiff.” What the plaintiff complains of are the words: “ It devolved on defendant to show the amounts paid by Banks, Smith and Mat■theson.”
[7.] And we think the words are exceptionable. No rule of proportion for finding the liability of the stockholders in this or any other bank, has as yet been suggested that would make the amounts paid, in such compromises as the charge refers to, one of the terms of the proportion.
It seems that Carey, as assignee of the Bank of Columbus, was the holder of bills on the Planters’ '& Mechanics’ Bank of Columbus to a large amount; and that it became a question, on the trial of the case, whether those bills were bills, to the ultimate redemption of which the .stockholders in the *302Planters’ and Mechanics’ Bank were liable. That question arose thus.
The second section of the charter of the Planters’ & Mechanics’ Bank contains these words: “The stock of the company shall consist of one million of dollars, in shares of one hundred dollars each; and the stockholders in said hank are hereby required to pay twenty-five per cent, on the amount of their capital stock in specie, before the board of directors shall he permitted to issue their bank notes.”
It appears from the evidence, that in February or March, 1837, when the stockholders of this bank assembled for the purpose of organizing the bank and setting it in motion, they made payments to the bank of twenty-five per cent, on their stock; payments consisting almost entirely in the notes of the stockholders themselves, only a small part being in specie and another small paid in the notes of other banks ; that the specie, the hank notes and the stockholder notes were turned over to a committee of the stockholders instructed to make an arrangement with A. B. Davis, cashier of the Bank of Columbus, for obtaining specie; that this committee did make an arrangement with Davis as such cashier for obtaining specie, namely, this arrangement: that he was to receive from the committee the hank notes and the stockholders notes aforesaid, and in exchange for them was to give the committee a specie certificate of deposit on the Bank of Columbus for some $250,000, with the understanding that specie was not to be ■demanded on it; that this arrangement was carried out, the certificate made, delivered to the committee and delivered by the committee to the stockholders; that the object of the arrangement was to make the certificate itself stand for so much actual specie in the organization of the Planters’ and Mechanics’ Bank; and therefore to enable the bank to evade the aforesaid charter provision that this object was accomplished and the hank organized upon the certificate, as if it had been so much specie; and that some time afterwards the bank commenced issuing bills. That soon after the organization of the hank, the stockholders borrowed from it nearly as much as *303the amount of the certificates and were paid in checks on the-Bank of Columbus; that on none of these checks except one, was specie demanded of that bank; that on that one payment specie was refused and Central Bank bills had to be taken as a compromise; that at the time when the certificate was. given, specie was at a premium of from 5 to 8 per cent, and that no premium was paid on the certificate; and that “ specie-was getting scarce every day after the organization in ’37.”'
Did the directors of the Bank of Columbus know of this transaction at the time when it happened, or within any short time afterwards ? If they did not, it must have been because they failed to use ordinary care in the discharge of their duties as directors. The transaction was such, that the books of the bank must have contained some entry relating to it — some entry as to the certificate or as to the debt against the bank created by the certificate; and any such entry would, of itself, have been the beginning of a clue that, followed up by the directors, would have led them on to every part of the transaction. If the directors, on seeing such an entry, had inquired of Davis whatit meant, he would, it is probable, have put them in possession of all the facts of’ the affair. Why should he not have done so ? The affair was one, not for his private benefit, but one exclusively for the benefit of the bank. It was an affair which relieved the bank from exposure to the risk of having its specie drawn from it to the amount of $>250,000, ata time when specie was at a premium of 5 to 8 per cent, and when specie was every day growing scarce. Is there any falsehood which he could have told that would have proved as agreeable to the directors as would the naked truth? Besides, what falsehood is there to bo imagined that would not have met with instant detection ? The $>250.000 in specie were not in the vaults of the bank ; that was a fact of which any of the other bank officers could have told them — a fact of which, indeed, their own eyes must have told them.
Now the duties of the directors were such as to require of them that they should be familiar with the contents of the *304books of the bank. A provision of the charter was as fob-lows : “ The total amount of the debts which the said corporation shall at any time owe, whether by bond, bill, note or other contracts, shall not exceed three times the amount of their capital stock actually paid in, over and above the amount of specie actually deposited in their vaults for safer keeping. In case of excess, the directors under whose administration it shall happen, shall be liable for the same in their individual, natural and private capacities.” Under this provision, it could not but have been the highest duty of the directors, not less on their own account than on that of the bank, to keep themselves acquainted with the books of the-bank; and when they should see on those books, at any time, a single entry adding $250,000 to the debts of the bank, to investigate that entry, and especially to ascertain the quantity of specie then actually deposited in their vaults for safekeeping.
If, then, this affair was not, in act and object, known to the directors at or about the time when it happened, the reason must have been, a want of ordinary attention in the directors to their duties.
But it is to be presumed that the directors did their duty; and therefore, that they knew of the affair.
This being so, did the directors take occasion to repudiate the affair, or to condemn it, or to censure the cashier, or, most important of all, to advertise the public of the affair ?' Not at all. Whatever of profit to the bank there was in the arrangement, they silently acquiesced in the bank’s receiving. Whatever of danger to the public, they silently suffered the - public to be exposed to. They allowed the bank to receive the bills of the other bank as though these bills had notabeen issued in violation of its charter.
Indeed, it is not too much, perhaps, to say that they had expressly authorized Davis to make the arrangement, if they could, by any general grant of power, authorize any one to make such an arrangement. They had, as long before as 1833, passed this resolution: “ Resolved, that A. B. Davis,. *305Cashier of this bank, have discretionary power to make such,, arrangements as he may conceive beneficial to the bank, when' any emergency arises, and the board is -not in session.” Of necessity, this included the grant of authority to Davis, to determine what might be “an emergency.” This, therefore, was an express grant of authority to Davis to make the arrangement in question, provided the arrangement, was one that, in his conception, would be “beneficial to the bank,” and an “emergency” had, in his judgment, arisen, calling for the arrangement. Is it likely that he thought that an emergency had arisen calling for the arrangement? Suppose the board of directors had demanded of him his authority for making the arrangement, is it likely that he would have referred to this resolution, and would have declared that, in his conception, an emergency had arisen that called for the arrangement as the one most beneficial to the bank that could have been made — an emergency by which the-bank stood exposed to the danger of having specie drafts made upon it to the amount of $250.000 by the stockholders of the new bank, to enable them to comply with their charter and organize that bank ? Can there be a doubt that he would ? If he would, then the resolution was an express authority to him to enter into the arrangement.
Now if this resolution was an authority to Davis to make the arrangement, then the arrangement became the act of' the directors.
And the arrangement equally became the act of the directors, if they knew of the arrangement, or might have-known of it, but -for their own gross neglect of their duties; and instead of repudiating it, or exposing it to the public, silently suffered the bank to be gainer by it and the public to be loser. •
If the tort of an inferior agent is one, the bad effects’of which it is in the power of the superior agent to neutralize by some act of his, and he fails to do that act, he cannot excuse himself by saying that his failure to do the act was be-. *306'cause he had not known of the tort, provided the act was one,, to the knowledge of which, bestowing ordinary attention on< his duties of supervision, would have led him, and he, from taere neglect, did not bestow as much as ordinary attention on those duties. In such a case, the act of the inferior agent • becomes the act of the superior agent.
And in this case, if the directors had repudiated the arrangement of Davis, oiv had exposed it to the public, and had’ refused to receive the bills of the Planters’ & Mechanics’' Bank, issued on the basis of the arrangement, the bad effects of the arrangement would have been neutralized. . And they either knew of the arrangement, or if they did not, it must have been because they failed to give ordinary attention to their duties of supervision over the affairs of the bank..
This being so, the arrangement of the cashier became the act of the directors; and that even if the aforesaid authority, giving resolution of the directors be left out of the question,, is it to be said, that as the arrangement made by the cashier was illegal, it was one which, to be the.act of the directors, had to be expressly authorized-or expressly ratified by them?
But it does not follow, that because the act of an inferior - agent is illegal, it cannotbecome the act of the superior-agent, unless it has been expressly authorized or expressly-ratified by him.
Any act of negligence in the Deputy Sheriff, is an act of negligence in the Sheriff; any act of negligence in the mate of a vessel, or in any other inferior officer, or in any seaman, is the act of the master. Yet, in neither case need there be any express authorization or ratification of the acts, respectively, by the Sheriff or the master.
And this Court has held, that the bills of the-Planters’ & Mechanics’ Bank issued under this very arrangement, and therefore, issued in violation of the charter of the bank, bound not only the directors of the bank, but also the stockholders. And yet, the arrangement was one as to which it is not pretended that it was expressly authorized? or . expressly ratified *307by the stockholders. (18 Ga. McDougald vs. Bellamy; McDougald vs. Lane; Banks vs. Darden.)
And if the fact that the Act is illegal, is sufficient to prer vent the act from becoming the act of the superior, unless it be expressly authorized or expressly ratified by him, the fact must be equally sufficient to prevent the act from becoming his act, even if it be expressly authorized or expressly-ratified by him; for the express authorization or ratification of an illegal act, must be just as illegal and just as void as any implied authorization or ratification of the illegal act could be. And therefore, to say that an illegal act of the inferior, cannot be the act of the superior, unless the superior-expressly authorize or expressly ratify it, is to say that an illegal act of the inferior cannot become the act of the superior at all.
Assuming, then, the conclusion to be true, that this arrangement of Davis, the cashier, was the arrangements of the .directors, the question becomes this: Was it the arrangement .of the bank — the act of the bank $
Why was it not ? Because it'was an illegal arrangement?
• Now if it were true that no illegal act of the directors of .a 'bank, who are its highest officers, could become the act of the bank, it would be more true that no illegal act of any lower officer of the bank could become the act of the bank ; .and therefore, it would be true that no illegal act of any officer of the bank could become the act of the bank. And if,-: .this were true, then it would be true that no illegal act what-.- ■ ever could possibly be the act of the bank, for the bank is a'' ...corporation ; and therefore, all its acts have to be acts done ■ ■>by agents; and consequently, if no illegal act of any of its" . agents could be the act of the bank, no illegal act at all could be the act of the bank.
Now it has been said of the king, that the king can do no wrong; but this has never been said of any other corporation ; and although it has been said of the king, it has not .always been sufficient to save the king’s head. On the contrary, it has been said, and been decided often, that other *308corporations may be guilty of torts — torts for which they may be sued in case, trover or trespass-^ — may be guilty of the misuse or the non-use of their franchises, for which they may have to incur a forfeiture of those franchises, or even of their corporate existence. But such torts, such misuse or non-use of their franchises, must consist of illegal acts or illegal omissions. And all illegal acts or illegal omissions in the case of a corporation, must be the acts or omissions of some agent of the corporation ; for a corporation can act or forbear to act, only by agent; therefore, that an act of an agent or officer of a corporation is illegal, does not necessarily prove that the act is not the act of the corporation. In a word, there may be acts of the directors of -an incorporated bank, that will be the acts of the bank, although the acts are illegal.
Which, then, of the illegal acts of the directors of a bank, are those that are the acts of the bank? At least the following, I take it, viz : those as to which it is the intention of the directors that they shall enure to the benefit, not of themselves but of the bank, and which do enure exclusively to the' benefit of the bank, and which are such that the directors ■are enabled to do thém, only by being in the office of directors.
Now the act in question, viz : the arrangement" aforesaid of the cashier, which, as we have seen, became, in law, also the arrangement or act of the directors, was such an illegal act as this. It was an arrangement that was beneficial, not to the directors, but to the bank; and that was so, intended to be; and it was an arrangement that could not have obtained any efficacy from becoming the arrangement or act of the persons who were the directors, if those persons had not been in the office of directors.
This, arrangement, then, is to be considered as having been the act of the lanío.
Indeed, if I understood aright the argument of the Counsel for the defendant in error, the argument did not deny but .that if this arrangement could be one made out to be the *309.•arrangement of the directors, it would, as a matter of course, ¡have to be considered the arrangement of the bank itself. 'The chief labor of that argument consisted in the effort to show that the illegal arrangement of the cashier, could not be considered as the arrangement of the directors, except so far merely as to render the certificate valid.
Assuming it to be true then, that this arrangement of the cashier became the act of the directors, and that the act of .the directors became the act of the bank, the only question ■.remaining is, was it one of the consequences of the arrangement to debar the bank from resorting, by suit, to the liability of the stockholders of the Planters’ & Mechanics’ Bank for the ultimate redemption of the bills it held on that bank. And that question has been twice decided by this Court— • once in McDougald, adm’x, vs. Bellamy, adm’x, (18 Ga. R. 425,) and once in McDougald, adm’x, vs. Lane, (18 do. 456.) In each of those cases, the principle decided was, that who- • ever participated in the arrangement aforesaid, was debarred from the right of resorting, by suit, to the liability of the stockholders of the Planters’ & Mechanics’ Bank, to redeem the bills of the hank. If, therefore, that arrangement was in part the arrangement of the Bank of Columbus, then, according to these decisions, the Bank of Columbus was not entitled to sue the stockholders of the Planters’ & Mechanics’ Bank on the bills of the latter bank, held by the Bank of Columbus.
These decisions this Court is not asked to review and over rule ; they áre decisions which were made, I believe, (I did not preside in the cases in which they were made,) after full argument. They ought certainly, therefore, to stand at least until the question they decide has been re-argued, unless they are so plainly erroneous that their erroneousness may be seen without argument. And surely this much may be said of them: that if erroneous, their erroneousness does not reach that height.
Considering, then, these divisions as governing on the present point, our conclusion must he, that the assignee of *310the Bank of Columbus was, by reason of the illegal arrangement aforesaid, debarred from the right of resorting to the stockholders of the Planters’ & Mechanics’ Bank of Columbus, for payment of the bills which he held on the latter bank.
And if this must be the conclusion on the point, the charge of the Court on the point was erroneous. That charge seems to have amounted to this: that the act of issuing the certificate by the cashier, became the act of the bank, so far as to make the certificate binding on the bank; but yet, that as the act, the purpose for which it was done considered, was an illegal act, it could not become the act of the bank, so far as to debar the bank from resorting, by suit, to the stockholders of the Planters’ & Mechanics’ Bank for payment of the bills which it held, on that bank, unless the act was one that it had specially authorized, or* specially ratified. That this is the import of the charge on this point, is to be gathered, I think, from what the Court gave in charge, contained in the third division of the charge, and from what the Court refused to give in charge, contained in Robinson’s first four, and his seventh and eighth, requests to charge.
[8.] Instead of being this, the charge, according to the conclusions come to above, should have been, that although the act of Davis, the cashier, in participating in the arrangement, with respect to the certificate, was an illegal act; still, as it was an act done by him, not for himself or his own benefit, but for the bank and the bank’s benefit, and was an act beneficial to the bank, and-one which was known to its directors ; or which, if unknown to them, must have had for the cause of its being unknown to them, that they were guilty of the want of ordinary attention to the duties of their office; -and which act, yet, was not, by them, repudiated or exposed to the public, or in any way neutralized, it was to be considered as the act of the bank; and that, considered as the act of the bank, one of the consequences of it to the bank was, to debar the bank from resorting to the stockholders of the *311Planters’ & Mechanics’ Bank for payment of the bills held by it on that bank.
This disposes of the third division of the charge of the Court, as well as of the first four, and the seventh and eighth requests to charge, made by the plaintiff in error.
The 13th, 14th, 15th, 16th, 17th, 18th, 19th, 20th, 21st, 22d and 23d requests of the plaintiff in error, relate exclusively to the question, what is the period of time which bars the present action ? That question is also involved in the sixth request. These requests the Court rejected.
On this question, the two members of the Court presiding in the case, Judge Lumpkin and myself, differ in opinion. Consequently, no judgment of the Court can be rendered on the question. The effect of this will no doubt be, that the judgment of the Court below will remain in force. '
It may not be amiss, however, merely to state the opinions entertained by the two members of the Court, respectively.
Judge Lumpkin’s opinion is, that the period of limitation is twenty years; and the opinion goes, I believe, upon the idea, that the cause of action is a statutory liability.
My opinion is, that six years is the period; and the opinion goes upon the idea, that the bank bills are the foundation of the suit; and that the bank bills are nothing but the promissory notes of the bank, and the stockholders of the bank as principal, and of the stockholders, as sureties; and therefore, that whatever is the period of limitation, as to the bank, the principal, is the period as to the stockholders — -the sureties. And six years, I think, is the period as to the bank.
There is also a difference of opinion between Judge Lump-kin and me, as to what is the rule or proportion for finding the liability of the stockholders in the hank? On this question our respective opinions, stated at large, may be seen in Lane vs. Harris, (16 Ga. R.) See, also, The Darien Bank cases in 17 Ga. R.
Had the Bank of .Columbus the right to insist upon being guaranteed the payment of the bills of the Planters’ & Mechanics’ Bank of Columbus, as a condition of receiving those *312bills ? Most assuredly it had. Any person might have required such a guaranty. What law would requiring such a guaranty violate ? None.
And as to the policy of sanctioning such a guaranty, what would probably be the effect of the giving of such a guaranty ? The bills in circulation would all seek to get into the hand' that held the guaranty. The effect, then, would be good as to the ordinary bill holder. And as to the stockholders, their liability would be lessened to the extent of the guaranty.
This disposes of the exception to the refusal of the Court to give in charge the twenty-fifth request of the plaintiff in error; and that exception is the last point in the case.
The result is, that a new trial is granted. The grounds upon which the grant of the new trial is put, have been indicated in the course of this opinion.