Jones, &C. v. Bank of Tennessee
| Decision Date | 27 December 1847 |
| Parties | Jones, &c. <I>vs</I> The Bank of Tennessee. |
| Court | Kentucky Court of Appeals |
THE President and Directors of the Bank of Tennessee, brought this suit against the plaintiffs in error, on a note executed by them, for four thousand six hundred and seventy three dollars. The suit was by petition and summons. The defendants filed a demurrer to the petition, and ten pleas. The plaintiffs in the petition demurred to nine of the pleas, and took issue on the other. The defendants' demurrer to the petition was overruled, and the demurrers filed by plaintiffs to the pleas, were sustained. On the issue made up, a verdict was returned for the plaintiffs, and a judgment rendered thereon.
The only questions presented, relate to the validity of the pleas. The petition is in due form; no objection to it is pointed out, nor is any perceived. The demurrer to it was therefore properly overruled.
The first, eighth and tenth pleas present the same defence, and may be considered together. The eighth and tenth pleas, which are more specific than the other, alledge that the Bank of Tennessee was incorporated by the State of Tennessee, and the whole stock in said Bank, was at the date of the writing sued on, and at the commencement of this suit, owned by said State, and that the writing sued on was executed by the defendants, for and in consideration of bills of credit, emitted by said Bank, and delivered to one of the defendants, and upon no other consideration, all of which was in violation of the Constitution of the United States, and therefore the writing sued on was void.
In regard to these pleas, it is only necessary to remark, that the facts which they aver, were considered insufficient by this Court, in the case of Briscoe vs Bank of the Commonwealth of Kentucky, (7 J. J. Marshall, 349,) to constitute a valid defence to a suit by the Bank; and also by the Supreme Court of the United States, in the same case: (11 Peters, 257.) So that by the doctrine settled by these adjudications, these pleas are clearly bad.
The second plea alledges that the charter incorporating the Bank of Tennessee had been forfeited before the commencement of this suit, and there was not, at the time of its commencement, any such corporation in existence.
A debtor to a corporation cannot absolve himself from the payment of his debt, by alledging a forfeiture of its charter, in general terms. A forfeiture can only be established by a direct proceeding instituted for that purpose; and until so established, cannot be relied upon collaterally: Hughes vs Bank of Somerset, (5 Littell's Rep. 47; 6 B. Monroe, 601.) It is however contended the additional averment in the second plea, that there was no such corporation in existence at the time the suit was commenced, presents a substantial defence to the action.
By executing the note payable to the corporation, the defendants were estopped to deny its existence at that time: (1 J. J. Marshall, 380; 6 B. Monroe, 601.) If its existence had terminated before the commencement of the suit, the plea should have averred the facts which produced this termination, to have enabled the Court to decide whether or not they had this effect. This the plea evidently attempted, by alledging a forfeiture of the charter, and a consequent cessation of its corporate existence. As that part of the plea which alledged the cause of the...
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