Imágenes de páginas

Curtis and others against Leavitt.

which the pledge was made, and the bonds delivered to the lenders are the written contracts specifying the sums borrowed, the rate of the interest, and the time and place of payment. Some of the bonds passed directly to those who loaned the money and received them as the evidence of the investment. Others of them were delivered to and pledged with the Palmers, as security for the moneys advanced, and to be advanced, by them to pay the company's bills and certificates of deposit. The right to mortgage or pledge property as security for future advances, which may be made prior to the attaching of a creditor's lien, does not seem to admit of any dispute. (Bank of Utica v. Finch, 3 Barb. Ch. R., 293, and the cases there cited.)

It was a point much relied upon at the hearing, that these instruments were promissory notes payable on time and with interest, within the decisions before referred to, and not bonds or specialties, because there was no such seal upon them as is required by law. They certainly possess some of the qualities of promissory notes. They are written promises for the payment of money absolutely, and at all events. In this respect, bonds for the payment of money and promissory notes are not unlike. They have also the quality of negotiability in some sense, for they are payable to Walter Mead or his assigns, and upon them is written an assignment executed by Mead, under his hand and seal, with a blank, where the name of the assignee may be inserted. This formality of transfer is seldom found in connection with a promissory note. On the other hand, the form of the instruments is that of bonds. This is the designation given to them in the instruments themselves, and also in the trust deed. They have also a formal attestation clause, in which it is said the banking company have caused this bond to be attested in their behalf by their president and cashier, and their seal to be thereunto affixed. Then follows the corporate seal, impressed with a screw press, and standing in plain relief upon the paper. There

Curtis and others against Leavitt.

is no wafer, wax or other tenacious substance upon which the seal is impressed, and this is the point of the objection. The common law demands an impression upon wax, wafer or some other plastic substance. (4 Kent's Com., 452; Bunk of Rochester v. Gray, 2 Hill, 227; Farmers' & Mechanics' Bank v. Haight, 3 Hill, 493; Coit v. Milliken, 1 Denio, 376.) The act of the 7th April, 1848, which authorizes a corporate seal to be affixed, by an impression directly upon the paper, declares it shall not affect the rights or remedies of parties to suits or proceedings commenced before its passage; so that the ancient rule is in force as to these instruments. I regard it as of no moment by what name they are called. If they are not obligatory upon the corporation as bonds, they are as special contracts for the payment of the money obtained under them; and if the judicial conscience cannot be satisfied with anything less than the common law seal to make them effectual for the purposes intended by all the parties to them, then the court should relieve against the defective execution and reform them, upon the pleadings and proofs in these actions. The banking company intended to give, and the holders intended to receive bonds, under seal executed in due form. The former omitted to affix the seal, and the latter supposed it was duly affixed, and thus made a mistake of fact. The present instruments are not those which either party designed should be executed; and if they are reformed and the proper seals affixed, it will not be substituting one class of instruments for another. The principle is stated by Mr. Justice STORY (1 Eq. Jur., § 115), in commenting upon the case of Hunt v. Rousmaniere (8 Wheat., 174; and 1 Peters, 13), in the following words: "Equity may compel parties to execute their agreements, but it has no authority to make agreements for them, or to substitute one agreement for another. If there had been any mistake in the instrument itself, so that it did not contain what the parties had agreed on, that would have proved a very different case: for where

Curtis and others against Leavitt.

an instrument is drawn and executed, which professes or is intended to carry into execution an agreement previously entered into, but which, by mistake of the draftsman, either as to the fact or the law, does not fulfill that intention or violates it, equity will correct the mistake, so as to produce a conformity in the instrument." (Champlin v. Layton, 18 Wend., 407; Hall v. Reed, 2 Barb. Ch. R., 500; Many v. Beckman Iron Co., 9 Paige, 188.) The claim that a corporation may take to its own use money or property, under a contract, made at its own solicitation and for its own benefit, and then repudiate its obligation to pay the consideration, not because it is malum in se, or against any general principle of public policy, but simply upon the ground of excess of authority, was very justly and effectually overruled in Tracy v. Talmage (4 Kern., 162), upon principles and authorities which will command universal assent. The court did not approve of the company's traffic in stocks, nor would it lend its aid to enforce the collection of the certificates issued in payment, but it held the company liable for the value of the property purchased and received under the contract, and thus set its face resolutely and firmly against the system of spoliation which the defence of ultra vires, if successfully applied to such cases, is sure to create and


In respect to the claim of Holford & Co., and the transactions with the Philadelphia banks, I deem it unnecessary to say more than to express my concurrence in the opinion just read by Judge COMSTOCK.

SHANKLAND, J. I shall, in the first instance, examine the primary and fundamental question, viz., what power or capacity this bank possessed of incurring obligations, and whether it extended to the borrowing of money. This question is antecedent to and independent of the further

Curtis and others against Leavitt.

one, as to the nature and form of the written evidences with which it could furnish its creditors.

It is admitted the legislature had the constitutional power to create banks, with such faculties as they chose, in respect to the business they were to transact, the obligations they could assume, and the evidences they could furnish of such obligations. The question is, therefore, not one of power but of intention. The act itself is the only legitimate source of the bank's powers, and to its language the court must be confined in the work of construction. But in legal enactments, as in all human composition, words are often used symbolically, or with a secondary meaning. Hence, frequent ambiguity, and hence the necessity of exegesis and construction. In determining the powers of this bank, while we must confine ourselves to the language of the act, yet we may look to all other sources of information to evolve the true meaning of that language.

The fifteenth section of the act authorizes persons to associate, and establish offices of discount, deposit and circulation, on the terms prescribed. The eighteenth section confers the power on such associations to "carry on the business of banking, by discounting bills, notes and other evidences of debt, by receiving deposits, by buying and selling gold and silver bullion, foreign coins and bills of exchange, in the manner specified in their articles of association, for the purposes authorized by this act, by loaning money on real and personal security, and by exercising such incidental powers as shall be necessary to carry on such business." It will be seen this language confers the same powers as were possessed by the old banks, by virtue of their charters (Laws of 1831, ch. 178, and other acts), and was probably intended to put them upon an equality in regard to their powers; although the old bank charters contained restrictions peculiar to them, and not found in this general act. The receiver's counsel contend that the powers enumerated in the eighteenth section exclude all

Curtis and others against Leavitt.

others, except the necessary incidental powers to consummate those enumerated, and, as the power to borrow money is not enumerated, it must be excluded. But this mode of testing the power of banks is quite too summary and dogmatical. It assumes, first, that the capacity or faculty of borrowing money is a power; secondly, that it is not a power necessary and incidental to any one of the enumerated powers: and thirdly, that the capacity to borrow cannot be evolved from any of the enumerated powers.


The power to receive deposits is given specifically, and without limitation. But what are deposits, and what, in commercial law, are the obligations which are, or may be, assumed by the parties to that species of contract? Originally, a deposit of money was made by placing a sum of money in gold or silver with a bank or other depositary, to be returned, when called for, in the same indentical coin, and without interest, the depositor paying the depositary a compensation for his care. But, for more than a century prior to the passage of the act in question, the term deposit" had come to mean quite a different transaction, as to the rights and liabilities of the parties to it. It became customary to deposit money for a particular period, and on interest, or payable at certain prescribed periods after notice. In short, the term deposit became a symbolical word to designate not only a deposit, in its original sense, but all that class of contracts where money in any of its forms, as specie or bank bills, was placed in the hands of banks of bankers, to be returned in other money, on call or at a specified period, and with or without interest. The transaction it designated, in this figurative use of the term, was in reality the same as that called a loan of money, when it occured between individuals. In this last and widest acception of the term deposit, it was most probably used by the legislature of 1838; for it was well know in all commercial communities, at that period, and to all competent legislators, that borrowing money to lend again is a part of

« AnteriorContinuar »