John Briscoe v. President Directors Bank Commonwealth Kentucky

• Decision Date: 01 January 1837
• Citation: 36 U.S. 257,11 Pet. 257,9 L.Ed. 928,9 L.Ed. 709
• Parties: JOHN BRISCOE and others v. The PRESIDENT and DIRECTORS of the BANK of the COMMONWEALTH of KENTUCKY
• Court: U.S. Supreme Court

36 U.S. 257

11 Pet. 257

9 L.Ed. 709

9 L.Ed. 928

JOHN BRISCOE and others v. The PRESIDENT and DIRECTORS of the BANK of the

COMMONWEALTH of KENTUCKY.

January Term, 1837

[Syllabus from pages 257-259 intentionally omitted] IN error to the Court of Appeals of the state of Kentucky. In the Mercer circuit court, of the state of Kentucky, the president and directors of the Bank of the Commonwealth of Kentucky, on the 15th of April 1831, filed a petition of debt, stating that they hold a note upon the defendants, George H. Briscoe, Abraham Fulkerson, Mason Vannoy and John Briscoe, in substance, as follows, to wit:

'2048 Dollars, 37 cents. One hundred and twenty days after date, we jointly and severally promise to pay the president and directors of the Bank of the Commonwealth of Kentucky, or order, 2048 dollars, 37 cents, negotiable and payable at the branch bank at Harrodsburg, for value received. Witness our hands, this 1st of February 1830.

"G. H. BRISCOE,

A. FULKERSON,

MASON VANNOY,

JOHN BRISCOE."

The defendants appeared and filed the following pleas: 'The defendants, after craving oyer of the note, and the same being read to them, say, that the note was executed on no other or further consideration than that of another note which had been previously executed by them to the plaintiffs, for a certain sum, negotiable and payable at the branch of the said bank at Harrodsburg, and that the note so previously executed, was executed by them on no other or further consideration than that of the renewal of another note of the like tenor; and the defendants aver, that previous to the time of executing the note last mentioned, the legislature of the commonwealth of Kentucky, in the name and on behalf of the said commonwealth, by an act which passed on the 29th of November 1820, established a bank, the capital stock of which was declared to be $2,000,000, which said capital stock the said bank never received, or any part thereof, as these defendants aver; that by the provisions of said act, the president and directors of the said bank, and their successors in office, were declared and made a corporation and body politic, in law and fact, by the name and style of 'The President and Directors of the Bank of the Commonwealth of Kentucky;' that also, by said act, the president and directors of the said bank were, illegally, and contrary to the provisions of the constitution of the United States, empowered and authorized, for and on behalf of the said commonwealth, and upon her credit, to make bills of credit, to wit, bills or notes to an amount not exceeding $2,000,000, signed by the president and countersigned by the principal cashier, promising the payment of money to any person or persons, his, her or their order, or to the bearer; and the said bills or notes were so made, illegally, in violation of the said constitution, to emit, issue and circulate through the community, for its ordinary purposes, as money; that under the authority of the said act of the legislature, and in violation of the said constitution of the United States, the said president and directors had, before the date of the note last aforesaid, for and on behalf of the commonwealth, and on her credit, made various bills of credit, to wit, notes of various denominations, in amount from one to one hundred dollars, signed by the president of the said bank, and countersigned by the principal cashier, promising, therein and thereby, to pay the person in each note mentioned, or bearer, on demand, the amount therein mentioned in money, and were transferrible on delivery; and that for the purpose of circulating said notes through the community, for its ordinary porposes as money, the legislature of the said commonwealth, by an act passed on the 25th of December, in the year 1820, had, amongst other things, provided and declared, in substance, that upon all executions of fieri facias which should be thereafter issued from any of the courts of the said commonwealth, indorsed, that notes on the Bank of Kentucky or its branches, or notes on the bank of the Commonwealth of Kentucky or its branches, 'might, by the officer holding such execution, be received from the defendant in discharge thereof;' such executions, so indorsed, should only be replevied and delayed in their collection for the space of three months; but that all executions of fieri facias, which should thereafter be issued from any of the courts of the said commonwealth, without any indorsement for the reception of notes on the Bank of Kentucky or its branches, or notes on the Bank of the Commonwealth of Kentucky or its branches, should be replevied and delayed in its collection for the space of two years, or, if not so replevied, that property levied upon under the same should be sold upon a credit of two years. The said president and directors, for the like purpose, and with the like intent, afterwards, to wit, on the ___ day of _____ (that being the date of the note executed by the defendants last above mentioned), did, for and on behalf of the said commonwealth, for her benefit, and on her credit, illegally, and contrary to the said constitution of the United States, emit and issue the notes or bills of credit, so made as aforesaid, by the president and directors of said bank, to the amount of $2048.37, by loaning at interest, and delivering the same to the defendant Briscoe. And the defendants in fact aver, that the only consideration for which the note last above mentioned was executed by them, was the emission and loan of the said bills of credit, so made and issued as aforesaid to said Briscoe, by the plaintiffs, who are the president and directors of the bank aforesaid; wherefore, they say, that the consideration of the said last above mentioned note, executed by them, was illegal, invalid and in violation of the constitution of the United States; and that each of the notes thereafter executed by them as aforesaid, by way of renewal as aforesaid, of the said last above-mentioned note, was also founded upon the illegal, invalid and insufficient consideration aforesaid, and none other; and this they are ready to verify and prove; wherefore, they pray judgment, &c.

'And the defendants, for further plea in this behalf, say, that the plaintiffs, their action aforesaid against them ought not to have and maintain, because they say, that the only consideration for which the note in the petition mentioned was executed, was the renewal of a note which had been previously executed by them to the plaintiffs, for the sum of $2048.37, negotiable and payable at the branch of the Bank of the Commonwealth of Kentucky, located at Harrodsburg. And they aver, that previous to the date of the note, so renewed as aforesaid, the plaintiffs, under the provisions, and by the authority of the act of the legislature of the commonwealth of Kentucky, establishing the Bank of the Commonwealth of Kentucky, approved the 29th day of March 1820, and contrary to that provision of the constitution of the United States, which inhibits any state from emitting bills of credit, had, on behalf of the said commonwealth, and upon her credit, made various bills of credit, signed by the president of said Bank of the Commonwealth of Kentucky, and countersigned by the principal cashier therein; and thereby promising to pay to the person in each of said bills mentioned, or bearer, on demand, the respective amounts in each of said bills expressed, in money; and the said bills so made and signed by the said president and cashier, the plaintiffs, afterwards, to wit, on the day of the date of the note last aforesaid, for the purpose of circulating the said bills of credit, so as aforesaid made, through the community, as money, did, for and on behalf of the said commonwealth, and for her benefit, and upon her credit, illegally, and contrary to the aforesaid provisions in the constitution of the United States, emit and issue said bills of credit, so made as aforesaid, to the amount of $2048.37, of the said bills, by loaning and delivering the same to the defendant, Briscoe, at interest, reserved and secured upon said loan, for the benefit of the said commonwealth, at the rate of six per centum per annum upon the amount aforesaid; and the defendants, in fact, aver, that the only consideration for which the note last above mentioned was executed by them, was the emission and loan of the said bills of credit, so issued as aforesaid, by the plaintiffs to the defendant, Briscoe. And so they say, the consideration of the said last-mentioned note was illegal, invalid, and in violation of the constitution of the United States; and that the consideration of the note sued on, executed by these defendants, in renewal of the said last-mentioned note as aforesaid, is likewise illegal, invalid, and contrary to the constitution of the United States; and this they are ready to verify and prove; wherefore, they pray judgment, &c.'

To these pleas, the plaintiffs demurred, and the defendants joined in the demurrer. The circuit court of Mercer county gave judgment for the plaintiffs; and the defendants appealed to the court of appeals of Kentucky. In the court of appeals, the following errors were assigned by the appellants. 1. The court erred in sustaining the demurrer of the defendant in error, to the first plea of the plaintiffs in error. 2. The court erred in sustaining the demurrer to the second plea. 3. The decision of the court upon each demurrer, as well as in rendering final judgment against plaintiffs in error, is erroneous and illegal. On the 5th day of May 1832, the court of appeals affirmed the judgment of the circuit court. That court delivered the following opinion:——

'We are called upon in this case, to re-adjudicate the question of the constitutionality of the Bank of the Commonwealth; and its right to maintain an action upon an obligation given in consideration of a loan of its notes. We consider this question as having been settled in...