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State, who deposed, that the Tombeck bee Bank had not paid specie for its notes on demand, or when requeste, since the 1st of June, 1827, up to the time of trial; that he was the first Teller of said bank for many years previous Tember'lee
banks to and up to the time of its failing to make specie payments. That in its operations as a bank, when notes were by it discounted, the practice invariably was, on discounting notes at ninety days, to charge interest at six per cent per annum for ninety-four days; that the Bank had invariably alluvid to the drawers and securities three days grace on note so discounted.” And it was agreed that the legal questions growing out of said evidence should be referred to the Court for a decision, whether said bank charter had from the law and facts been violated and forfeited, or not; and a jurigment pro forma by consent was entered for the defendants.
This judgment is by the counsel for the State in this Court, assigned for error.
SALLE and KELLY, for the State. The obligation on the part of the Bank to pay specie for its notes, though not expressed in so many words, is plainly deducible from ihe charter, and, from the nature of the subject, must be held as an indispensible condition of the continuance of the frinchise: It is indispensible to the wholesome exercise of it; without the payment of specie, the object for which the a 2 Thomas's Bank was created fails. The public benefits which were
Coke, 1.2 to the equivalent to be received for the grant, are not realized. 4 Whea. 658. It certainly must be implied that the Bank will redeem its notes when presented; and if so, the obligation is as strong Woodward. as if expressed. It is then properly to be considered as an
4 Whea. 513
651,706. implied condition in law.a
A corporation created by the Legislature forfeits its char- R. Stebbing ter by non?ser or misuser, and in such case the State may, Istewart 299 by quo warranto, resume the franchise. The taking of 19 Cran. 15,51 interest, habitually, above six- per cent, the rate fixed by the charter, was a misuser amounting to usury,c And the
62 Cowen 769. failure to pay specie for its bills, was such a misuser and abuse of the franchise, in connexion with the usury, as amounted to a forfeiture.d The suffering of an act to be d6 Cowen 217 done which deprives a corporation of the power of continuing business, is sufficient to create a forfeiiure.e
e 19 John. 456. The act of 1821,5 provides the method of proceeding to flaws of Ala declare the charter forfeited. But it was forfeiied without page 62. the aid of his act, hr the violation of a j.plisi'si : 10. An act providing a particular form of remituy can as well
Dartmouth College v.
The State v.
be passed after the enactment of the charter as before. Be
siles this is not to be considered as a private corporation, The State
nor tested by the rules of private right. It is a quasi pubTombeckbee lic corporation, and such can be regulated by enactments
at all times, when the public good or public interest requires it.
Hopkins and Hitchcock, for the defendants. It is alleged that from the 17th June, 1927, till the 25th September, 1825, the bank failed to pav its notes in sperie on demand; and it is prayed that its charter may be adjudged
forfeited. In the case of Logwood et al v. The Huntsville Minor's 1. Bank,a this Court decided that a charter is a contract, the Rep.p. 23. terms of which cannot be varied by either of the contract
ing parties without the consent of the other. The Court in thit case use the following emphatic language, “any attempt to alter or abridge the provisions of that charter, without the consent of the individuals composing the corporation, would not be valid. So long as it confines itself to the provisions of its grant, the corporation is omnipotents and independent of any legislative control.” An importaot inquiry then is, whether there is any provision in the charter which declares that it shall be forfeited on a failure by the Bank to pay specie for its notes. It will be found upon examination that there is no such provision, and none such can be implied; but on the contrary, from the tenor of several of the provisions of the charter, an implication directly opposite arises. The general law of the land gov. erning all corporations and individuals, would give a remove ery of the amount of the note, and eight per cent inierest by way of damages. But the Legislature has given an additional remedy; for it is expressly provided that the stock, holders may be proceeded against, jointly and severally, and in a particular summary way, and yet this shall not exempt the corporation from liability. This is the
penalty provided for the non-payment, and the grantors of the charter did not think proper to auld any other: they never intended that the corporation should be dissolved on fail. ure to pay its notes, else they would have said so. If a dissolution was to take place on such a failure, how useless would be that provision in the charter which savs, that proceeling against the stockholders “shall not be construed to exempt the said corporation, or the lands, tenements, goods or chattels of the same, from being also liable.” cannot be supposed that the legislature presumed proceed
ings would be had against the stockholders when the Bank JULY 1980. had not refused to pay. They have then, in the event of
The State the Bank's refusal to pay its notes, provided certain remedies against it; against the corporation; which corporation Tombeckbee
. Bank. must, therefore, continue to exist after such failure to pay. Useless indeed would be that provision in the charter which gives to the creditor the right to sue, if the failure to pay, which alone gives the right to sue, should deprive the corporation of existence, and of course the suitor of the right to sue.
What would be the situation of the holders of the notes of the Bank, if the suspension of specie payments deprived the corporation of existence? It would be the same as if the charter had expired by its own limitation. When a corporation expires, all the debts due to and from it, die with it. The holders of the notes of the Bank would, therefore, upon a dissolution of the corporation, be without a remedy, and would sustain a loss to the entire amount of the . notes which might be in their possession. It is therefore manifestly to the interest of all who hold notes, that the charter should not be declared forfeited.
The decision of the Supreme Court of New York, shews that the suspension of specie payments is not a cause of forfeiture of a bank charter.a The refusal to pay specie is a The People a contingency contemplated by the charter of the Tombeck- ton and War: bee Bank,and is provided for, by authorizingasuit against the ren Bank, stockholders, as well as against the corporation, and the re
6 Cowen 215, covery of principal and interest. At the time the charter was granted, suspensions of specie payments by Banks were of common occurrence, and certainly in contemplation of the Legislature; and those remedies were provided. But if no provision had been made for such a case, it would not have been in the power of the Court to provide for it by judicial decision. The Court are not left in doubt as to the terms of this contract; it is reduced to writing; from that writing alone, the rights and obligations of the parties must be ascertained, and from it, the disabilities and forfeitures which may be incurred. It must be interpreted according to its terms: Expressum facit cessare tacitum.
If the suspension of specie payments, even for the most salutary purposes, would work a forfeiture of the charter of a bank, without any provision in its charter to that effect, not a bank in the Union, south of Boston, would have survived the termination of the late war. Every banking institution
south of Massachusetts frund it necessary, in those t'mes of
trouble and danger, to s'ispend specie pirments; and conThe State
tinued that suspension til the year 1917. At the latter Tombeckbee period, they resumed specie paymenis, and no one, howBank.
ever desirous to promote the public weal, ever questioned the right of any of them to continue as a corporation.
It is sail, th tly the aci oftl e 171h Djecomle, 1921, a Laws of Ala. power is given to declare the charter forfi'ited. According page 62.
to the decisions of this Court, and indeed all Courts whose decisions deserve respect, this charter, or this contract, carnot be affected by this act; it is the act of one of the contracting parties, without the consent of the other; therefore the power given by it is void; and it cannot authorize this Court to declare the charter forfeited, and the corporation dissolved. The passage of this act amounts indeed to an admission on the part of the State, th: t the suspension of specie sayments is not, according to the bank charter, a cause of forfeiture; and that it does not work a dissolution of the corporation: for if such was the case, where is the necessity of this act? It is then an adinission, that the power the State now seeks to exert over the corporation, was not reserved to it by the act of incorporation; and by the immutable law of right, that act could not give to one of the contracting pirties, this power over the rights of the other. It does not therefore exist.
The 6th rule regulating the establishment of banks, contained in the constitution of Alabama, is in the following words; viz: “In case any bank or branch bank shall neglector refuse to pay, on demand, any bill, note or obligation, issued by the corporation according to the promise therein expressed; the holder of any such note, bill or obligation, shall be entitled to receive and recover interest thereon, until the same shall be paid, or specie payments are resumed by the said bank, at the rate of twelve per
cent per annum, from the date of such demand; unless the Gen. eral Assembly shall sanction such suspension of specie payments; and the General Assembly shall have power, after such neglect and refusal, to adopt such measures as they may deem proper, to protect and secure the rights of all concerned, and to declare the charter of such bank forfeited.” It is manifest, from this part of the constitution, that the convention did not consider the charter of any bank in this State forfeited by a suspension of specie payments. They knew they had no power over any bank which then oxisted. By virtue of this provision, the charter of a bank,
even subsequently established, could not be declared forfeit- JULY 1820. ed by virtue of any law passed anterior to the suspension of
Tho Stato specie payments.
The contract made by the Legislature with the Huntsville Tombeckboe Bank, and the consideration given for the amendment of the charter, after the suspension of specie payments, is conclusive evidence that the charter was not forfeited by virtue of any provision in its charter, nor yet by the act of 1821. Nor can this last mentioned act, as it affects to do, dispose of the effects, rights and credits" of the Bank. When a corporation is dissolved, its "effects, rights and credits,” go with it to eternity. The proceeding, therefore, which seeks to dissolve the corporation of the Tombeckbee Bank, tends to inflict on the community irreparable injury. When the corporation is once dissolved, all the debts due from it are paid; its notes necessarily die in the hands of the holder. We therefore advocate the interest of the community as well as maintain the rights of the institution.
The act of 1821 does not however apply to the Tombeckbee Bank, and the proceeding instituted against it is founded in error. The third section of the act provides, that “if any incorporated bank within this State, shall not at the expiration of six months after the passage of this act, make regular specie payments for any of the bills or notes it may have issued, the Governor of the State shall give information of the fact to the Solicitor of the Circuit in which the Bank may be situated, directing him forthwith to proceed against the said bank, on a writ of
quo warranto. If therefore, the Tomheckhee Bank did, at the expiration of six months after the passage of the said act, pıy specie, it is not embraced by the act; and is not liable to the forfeiture which it attempts to impose. It is a fact, that the said Bank did on that day pry specie; and nothing to the contrary is alleged in the rocori. The penalty is not therefore incurred. It is not for us or the Court to say why the Legislature passed such an act. They have pissed it, and it is the province of this Couri to construz it. The words are plain, and admit of only one interpretition. If the Bank paid specie at the expiration of six months from the passage of said act, it is exempt, according to the terms of the act, from the penalties whie' it attempts to impose. If the words were doubtful, th: Courts duty would be rather to restrict, than to extend the operation of so penal a statute.
But it is to be suppose 1, that the Legislature intended that the act should conform to the provisions of the constitution