22 U.S. 738 (1824), Osborn v. Bank Of U.s.

Citation:22 U.S. 738, 6 L.Ed. 204
Party Name:OSBORN and others, Appellants, v. The PRESIDENT, DIRECTORS, AND COMPANY OF THE BANK OF THE UNITED STATES,Respondents.
Case Date:March 19, 1824
Court:United States Supreme Court
 
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Page 738

22 U.S. 738 (1824)

6 L.Ed. 204

OSBORN and others, Appellants,

v.

The PRESIDENT, DIRECTORS, AND COMPANY OF THE BANK OF THE UNITED STATES,Respondents.  

United States Supreme Court.

March 19, 1824

        OPINION

        [CONSTITUTIONAL LAW. CHANCERY.]  

        APPEAL from the Circuit Court of Ohio.

        The bill filed in this cause, was exhibited in the Court below, at September term, 1819, in the name of the respondents, and signed by solicitors of the Court, praying an injunction to restrain Ralph Osborn, Auditor of the State of Ohio,

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from proceeding against the complainants, under an act of the Legislature of that State, passed February the 8th, 1819, entitled, 'An act to levy and collect a tax from all banks, and individuals, and companies, and associations of individuals, that may transact banking business in this State, without being allowed to do so by the laws thereof.'  This act, after reciting that the Bank of the United States pursued its operations contrary to a law of the State, enacted, that if, after the 1st day of the following September, the said Bank, or any other, should continue to transact business in the State, it should be liable to an annual tax of 50,000 dollars on each office of discount and deposit.  And that on the 15th day of September, the Auditor should charge such tax to the Bank, and should make out his warrant, under his seal of office, directed to any person, commanding him to collect the said tax, who should enter the banking house, and demand the same, and if payment should not be made, should levy the amount on the money or other goods of the Bank, the money to be retained, and the goods to be sold, as if taken on a fi. fa.  If no effects should be found in the banking room, the person having the warrant was authorized to go into every room, vault, &c. and to open every chest, &c. in search of what might satisfy his warrant.

        The bill, after reciting this act, stated, that Ralph Osborn is the Auditor, and gives out, &c. that he will execute the said act.  It was exhibited in open Court, on the 14th of September, and, notice of the application having been given to the defendant,

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Osborn, an order was made, awarding the injunction on the execution of bonds and security in the sum of 100,000 dollars; after which, a subpoena was issued, on which the order that had been made for the injunction was endorsed by the solicitors for the plaintiffs; and a memorandum, that bond with security had been given by the plaintiffs, was endorsed by the clerk; and a power to James M'Dowell to serve the same, was endorsed by the Marshal.  It appeared, from the affidavit of M'Dowell, that both the subpoena and endorsement were served on R. Osborn, early in the morning of the 15th.  On the 18th of the same month of September, a writ of injunction was issued on the same bill, which was served on R. Osborn and on John L. Harper.  The affidavit of M'Dowell stated, that he served the writ on Harper, while on his way to Columbus, with the money and funds on which the same were to operate, as he understood; and that the writ was served on Osborn, before Harper reached Columbus.

        In September, 1820, leave was given to file a supplemental and amended bill, and to make new parties.

        The amended bill charges, that, subsequent to the service of the subpoena and injunction, to wit, on the 17th of September, 1819, J. L. Harper, who was employed by Osborn to collect the tax, and well knew that an injunction had been allowed, proceeded by violence to the office of the Bank at Chilicothe, and took therefrom 100,000 dollars, in specie and bank notes, belonging to, or in deposit with, the plaintiffs.  That this money

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was delivered to H. M. Curry, who was then Treasurer of the State, or to the defendant, Osborn, both of whom had notice of the illegal seizure, and paid no consideration for the amount, but received it to keep it on safe deposit.  That Curry did keep the same until he delivered it over to one S. Sullivan, his successor as Treasurer.  That neither Curry nor Sullivan held the said money in their character as Treasurer, but as individuals.  The bill prays, that the said H. M. Curry, late Treasurer, S. Sullivan, the present Treasurer, and R. Osborn, in their official and private characters, and the said J. L. Harper, may be made defendants; that they may make discovery, and may be enjoined from using or paying away the coin or notes taken from the Bank, may be decreed to restore the same, and may be enjoined from proceeding further under the said act.

        The defendant, Curry, filed his answer, admitting that the defendant, Harper, delivered to him, about the 20th of September, 1819, the sum of 98,000 dollars, which, he was informed and believed, was a tax levied of the Branch Bank of the United States.  He passed this sum to the credit of the State, as revenue; but, in fact, kept it separate from other moneys, until January or February, 1820, when the moneys in the treasury were seized upon by a committee of the House of Representatives; soon after which he resigned his office, and the moneys and bank notes, in the bill mentioned, still separate from other moneys in the treasury, came to the hands of S. Sullivan, the

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present Treasurer, who gave a receipt for the same.

        The defendant, Sullivan, failing to answer, an attachment for contempt was issued, on which he was taken into custody.  He then filed his answer, and was discharged.

        This answer denies all personal knowledge of the levying, collecting, and paying over, the money in the bill mentioned.  It admits that he was appointed Treasurer, as successor to Curry, on the 17th of February, 1820, and that he entered the Treasury on the 23d, and began an examination of the funds, among which he found the sum of 98,000 dollars, which he understood was the same that is charged in the bill; but this was not a fact within his own knowledge.  He gave a receipt as Treasurer, and the money has remained in his hands, as Treasurer, and not otherwise.  The sum of 98,000 dollars remains untouched, out of respect to an injunction said to have been allowed by the Circuit Court, on a bill since dismissed.  He admits the sum in his hands to correspond with the description in the bill, so far as that description goes, and annexes to his answer a description of the residue.  He has no private individual interest in the money, and holds it only as State Treasurer; admits notice, from general report, and from the late Treasurer, that the said sum of 98,000 dollars was levied as a tax from the Bank, and that the Bank alleged it to be illegal and void.

        The cause came on to be heard upon these answers, and upon the decrees nisi, against Osborn and Harper, and the Court pronounced a decree

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directing them to restore to the Bank the sum of 100,000 dollars, with interest on 19,830 dollars, the amount of specie in the hands of Sullivan.  The cause was then brought, by appeal, to this Court.

        COUNSEL

        Mr. Hammond, for the appellants, contended, that the decree was erroneous, for the following reasons:

        1. Because, no authority is shown in the records, from the Bank, authorizing the institution or prosecution of the suit.

        2. Because, as against the defendant, Sullivan, there are neither proofs nor admissions sufficient to sustain the decree.

        3. Because, upon equitable principles, the case made in the bill does not warrant a decree against either Osborn or Harper, for the amount of coin and notes in the bill specified to have passed through their hands.

        4. Because, the defendants are decreed to pay interest upon the coin, when it was not in the power of Osborn or Harper, and was stayed in the hands of Sullivan by injunction.

        5. Because, the case made in the bill does not warrant the interference of a Court of Chancery by injunction or otherwise.

        6. Because, if any case is made in the bill, proper for the interference of a Court of Chancery, it is against the State of Ohio, in which case the Circuit Court could not exercise jurisdiction.

        7. Because, the decree assumes, that the Bank of the United States is not subject to the taxing

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power of the State of Ohio, and decides that the law of Ohio, the execution of which is enjoined, is unconstitutional.

        1. A sufficient authority must be shown for the institution of every legal proceeding.  This principle is peculiarly applicable to suits brought in the name of corporations; because, such a body must always appear by attorney, either to institute or defend a legal proceeding.  It cannot appear in person, and it can only constitute an attorney by written power, under its common seal.  This doctrine is not impugned by the decision of this Court in the case of theBank of Columbia v. Patterson.  [a]The old doctrine, that a corporation could not contract or promise, except by writing, under its common seal, is overruled in that case; and it was adjudged, that a contract made by a committee duly authorized for that purpose, binds the Corporation.  It seems, also, to be intimated, that a Corporation may, by resolution, or other act, not under their common seal, duly appoint and authorize an agent, whose contracts would bind them; and the case of Rex v. Bigg, [b]is referred to as authority.  But, upon looking into that case, it will be found, that the principle is merely laid down by counsel arguendo; and the counsel, by whom it is advanced, add, 'But in case of any thing of consequence, or the employing any one to act in their behalf, in a matter which is not an ordinary service, a corporation

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aggregate cannot do that without deed.'  Now, what can be of more consequence, than...

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