Branch v. Baker

• Decision Date: 31 July 1874
• Citation: 53 Ga. 503
• Parties: John P. Branch, plaintiff in error. v. Alfred Baker, defendant in error. Miles G. Dobbins, plaintiff in error. v. Josiah Sibley, defendant in error.
• Court: Georgia Supreme Court

53 Ga. 503

John P. Branch, plaintiff in error. v. Alfred Baker, defendant in error. Miles G. Dobbins, plaintiff in error. v. Josiah Sibley, defendant in error.

Supreme Court of the State of Georgia

(Atlanta, July Term, 1874.)

[These cases were argued at the January term, 1874, and the decision withheld.]

Constitutional law. Banks. Stockholders. Before Judge Gibson. Richmond Superior Court. April Term, 1873.

It is only necessary to report the first of the above stated cases. The second is similar to it in all material respects.

Branch brought assumpsit against Baker, a stockholder in the Mechanics' Bank, to recover the amount due on certain bills or notes issued by the said bank, and which came into the possession of plaintiff in due course of trade, and for a valuable consideration, making the sum of $36,680 00 besides interest; and for which judgment had been rendered in favor of said plaintiff against said Mechanics' Bank at a previous term of said court, and executions issued thereon, which had been returned with the entry of nulla bona thereon, previous to the commencement of said suit.

The defendant pleaded as follows:

1st. That the evidences of indebtedness, to-wit: the bank bills on which said suit is predicated, and in said plaintiff's declaration named, were given, used, issued, and put into circulation by the said Mechanics' Bank during the late rebellion against the United States, to-wit: on the 22d day of *October, 1861, with die intention and for the purpose of aiding and encouraging said rebellion.

2d. That said bills were last issued and put into circulation by the said Mechanics' Bank to the late so-called Confederate States government, through its officers and agents, during the late rebellion against the United States, to-wit: on the 22d day of October, 1861, and on divers other days during the same year, as a loan to said Confederate States, and that it was the purpose and intention of the said Confederate States government, and of the said officers and agents in procuring said loan and receiving said bills, to aid and encourage said rebellion, and that fact was known to the said Mechanics' Bank.

3d. That at the time said bills were last issued by said bank, the said bank was amply able to redeem and pay the same, and the said plaintiff, or those under whom he claims, failed, andneglected to demand payment thereof, with full knowledge that the means of said bank were constantly diminishing, until said bank failed and became insolvent.

4th. That said plaintiff is not a bona fide holder for value of said bills, and did not receive the same in due course of trade, nor while said bills were circulating as money, but that he bought the same on speculation, at a very low rate, to-wit: at not more than five cents on the dollar, and after the said bills had ceased to circulate as money, and said bank had ceased to do business.

5th. That the capital stock of said bank is five thousand shares, of the nominal value of $100 00 each, of which this defendant owns three hundred and eighty shares, and that all the bank bills of said bank issued and unredeemed, amount to $1,500, 000 00 or less, and that all of said bills were issued before the first day of June, 1865, and none of them on or since that day, and that against said bank no action had been brought on any of said bills prior to the first day of January, 1870, except on $500,000 00 thereof, or a less amount.

6th. That of the total amount of outstanding unredeemed bills of said bank, not less than $1,375, 000 00 were issued to *the Confederate States and the state of Georgia, during the late civil war, for the purpose, and with the intention and with the knowledge that they would be so used, to aid and encourage the rebellion then being made against the United States, and have not been re-issued since said illegal issue.

7th. That before the commencement of said suit, to-wit: on the 18th day of December, 1869, and on divers other days before the 31st day of December, 1869, this defendant paid and redeemed bills of said Mechanics' Rank, then outstanding and unredeemed, to the amount of $58,000 00.

The plaintiff demurred to the first plea of defendant, on the following grounds:

1st. The clause of the constitution of Georgia, section 17, paragraph 2d, on which the plea is based, does not embrace bank bills or notes.

2d. The plea does not allege that any contract was made between the plaintiff and defendant, or any other parties, with the intention and for the purpose of aiding and encouraging said rebellion; nor that it was the purpose of any one of said parties to said contract to aid and encourage the said rebellion, such purpose being made known to the other party.

3d. Said clause of the constitution of Georgia is void, being in conflict with the constitution of the United States, as it impairs the obligation of these contracts.

And to the second plea on the same grounds. And to the third, on the ground that it does not allege that the plaintiff was the holder of said notes or bills, at any time when said bank was able to pay and redeem the same.

And to the fourth, on the ground that it is not a proper de-fense to said action, plaintiff being a bona fide holder of said bank notes or bills, for value, and entitled to recover the full amount named on the face of said notes or bills.

And to the sixth, on the grounds of demurrer set forth to the first and second pleas.

And to the seventh, on the following grounds: 1st. Said defendant has not redeemed the said amount ofbills named in his plea, at their value when first issued by *said bank, or at the value named on the face of said bills or notes; but that said defendant bought them at a depreciated rate since said bank became insolvent, to-wit: at not more than ten cents on the dollar, and after said bills had ceased to circulate as money, and said bank had ceased to do business.

2d. Said defendant is bound by the charter of said bank to redeem or pay the full value of said bills in proportion to his number of shares as a stockholder in said bank, as said value is stated on the face of said bills, at the time they were first issued by said bank.

3d. Upon the grounds of demurrer set forth to the 1st and 2d pleas of said defendant.

4th. Upon the ground that this suit is founded on a judgment against Mechanics' Bank, rendered in said superior court of Richmond county, at the.... term.... of said court; and the said defendant cannot set up as a defense to this suit any flea that would have been good as a defense to said judgment against said Mechanics' Bank, or that would collaterally attack or invalidate said judgment.

The court overruled the demurrers to defendant's pleas, except that to the fourth. To which ruling plaintiff excepted.

In the further progress of the cause, the following agreement of counsel as to the facts of the case, was submitted to the jury as evidence:

"In the suits in Richmond superior court, of John P. Branch against sundry parties (separate suits,) as stockholders of the Mechanics' Bank, in which the undersigned are opposing counsel, it is agreed that the following facts shall be considered in evidence—subject to objections to relevancy and legality— and subject also to be shown incorrect by either party by evidence.

"1 st. That the Mechanics' Bank was incorporated, and issued notes for circulation.

"2d. That the several defendants in said suits are stockholders to the amounts stated in the several declarations. "3d. That the plaintiff has the bills named in his suits, *and had them at the commencement of the suits, and their production in court is dispensed with.

"4th. That the defendants who have pleaded payment of bills, have the amount of bills stated in their pleas, and their production in court is dispensed with—but the time when they obtained them is subject to proof. "5th. That the total circulation unredeemed by the bank, but including what has been redeemed by stockholders, is $1,500, 000 00; of which the sum of $675,000 00 was paid out by the bank to the late Confederate government as a loan, and the sum of $700,000 00 was in like manner paid out to the state of Georgia as a loan; all which loans were made between October 1st, 1861, and December 31st, 1862.

"6th. That the capital stock of the bank is $500,000 00.

"7th. That the judgments against the Mechanics' Bank amount to $97,483 00, all on bills. That there are in suit in the federal court, bills amounting to $13,000 00, and in the city court of Augusta, bills to the amount of $1,000 00. That there are now pending in Richmond superior court against said bank, on bills, the following suits: S. D. Heard, to the amount of $38,025 00; William Dougherty, to the amount of $22,18100; Thomas P. Branch, to the amount of $96,000 00; John P. Branch, to the amount of $50,000 00.

"That all the above suits were commenced before January 1st, 1870; besides which were commenced the following before January 1st, 1870, and have since that time been dismissed for want of prosecution: W. L. High, (two suits,) for $1,168 00; M. G. Dobbins, for $200,000 00; W. M. & R. J. Lowry, for $10,000 00; A. D. Cothran, for $2,295 00; Daniel Miller & Company, for $4,161 00; William Hazlehurst, for $22,180 00. Besides which no suits against said bank are pending.

"8th. That said bank suspended specie payment in December, 1860, and has never since resumed payment; and since the close of the late war has kept no place for banking business, and has ceased ever since that time to do business as a *bank; and that its bills have not circulated as money in ordinary business transactions since the war.

"9th. That plaintiff received his said bills since the war, and before the adoption of the present constitution, in the due course of business, and that he paid for them various prices varying from five to ten cents on the dollar.

"10th. That previous to the commencement of these suits against the several stockholders, plaintiff had obtained judgment on ...