George Minor, Philip Minor, Daniel Minor, William Minor and Smith Minor, Plaintiffs In Error v. the Mechanics Bank of Alexandria, Defendants In Error

• Decision Date: 01 January 1828
• Citation: George Minor, Philip Minor, Daniel Minor, William Minor and Smith Minor, Plaintiffs In Error v. the Mechanics Bank of Alexandria, Defendants In Error, 26 U.S. 46, 1 Pet. 46, 7 L.Ed. 47 (1828)
• Parties: GEORGE MINOR, PHILIP H. MINOR, DANIEL MINOR, WILLIAM MINOR AND SMITH MINOR, PLAINTIFFS IN ERROR, v. THE MECHANICS BANK OF ALEXANDRIA, DEFENDANTS IN ERROR
• Court: U.S. Supreme Court

26 U.S. 46

1 Pet. 46

7 L.Ed. 47

GEORGE MINOR, PHILIP H. MINOR, DANIEL MINOR, WILLIAM

MINOR AND SMITHMINOR, PLAINTIFFS IN ERROR,

v.THE MECHANICS BANK OF ALEXANDRIA, DEFENDANTS IN ERROR.

January Term, 1828

AN Act of Congress was passed on the 16th of May 1812, entitled 'An Act to incorporate a bank in the town of Alexandria, by the name and style of the Mechanics Bank of Alexandria;' which institution soon afterwards went into operation; subscriptions for filling up the capital stock of the corporation and bank, having been opened in the town of Alexandria, on the first Monday in June 1812, under the direction of fifteen commissioners, appointed for that purpose. On the 3d of September 1817, Philip H. Minor was elected Cashier of the bank; and, on the same day, by a resolution of the Board of Directors, it was ordered, 'that the present officers of the bank, do the whole duties of the bank.'

In the office of Cashier Philip H. Minor was the successor of William Patton junr., who diedin August 1817; and, before his appointment as Cashier, Philip H. Minor, (who had several years preceding served as an officer of the bank, for some time as discount clerk, and afterwards as book-keeper;) had, in March 1817, been appointed teller for one year, ending in March 1818, from the time of his appointment; and had given approved bond and security, conditioned that he would well and truly execute the duties of the office of teller. After the appointment of Philip H. Minor, in September 1817, to be Cashier of the bank; and the order of the Board, on the same day, relative to the whole duties of the bank being performed by the then officers of the bank; no renewal of the appointment

of teller was made, and he usually performed the duties of Cashier and teller.

On the 19th day of Marclr 1818, Philip H. Minor, and the plaintiffs in error, executed a joint and several bond, in the sum of twenty thousand dollars, which contained the following condition:——

'Whereas the above bound Philip H. Minor, hath been duly elected to the office of Cashier of the Mechanics Bank of Alexandria, the conditions of the above obligation are such, that, if the above bound Philip H. Minor, shall well and truly execute the duties of Cashier of the Mechanics Bank of Alexandria, then, this obligation to be void, but otherwise, shall remain in full force and virtue in law.

'PHILIP H. MINOR, (L. S.)

'GEORGE MINOR. (L. S.)

'D. MINOR, (L. S.)

'WILLIAM MINOR, (L. S.)

'SMITH MINOR.' (L. S.)

In the Circuit Court of the district of Columbia, for the county of Alexandria, the defendants in error instituted an action of debt upon this bond, against all the obligors; and the declaration filed in the same, was for the penalty, without taking notice of the condition.

Oyer of the bond and condition having been prayed, &c., the defendants being the sureties of Philip H. Minor, to wit: George Minor, Daniel Minor, William Minor, and Smith Minor, pleaded joint pleas, separate from Philip H. Minor, the Cashier of the bank. The substance of these pleas was as follows:——

1. The Mechanics Bank was not competent to sue, because the commissioners, who, by the Act of Incorporation, were authorized to open and take subscriptions to the capital stock of the company, and who took the subscriptions, had colluded with the subscribers to the stock, and that 180,000 dollars of the stock, had been fraudently subscribed; and that an election for directors of the bank was fraudulently and illegally held, by which the persons named as commissioners, were elected the directors of the bank; the votes of the fraudulent holders of the stock, amounting to 180,000 dollars, having been taken at the said election;—that afterwards, the sums paid by the fraudulent or collusive holders of the 180,000 dollars stock, were, by the President and Directors, paid back to them; and thereby the capital was diminished to 320,000 dollars; and, by the said proceedings, the capital stock of the bank was reduced below 500,000 dollars, as was collusively held out

to the public; without this, that the plaintiffs, the obligees in the bond, or any other person whatsoever, at the time and times of making the said bond, and of commencing the suit thereon, or at any time whatsoever used, claimed, or exercised, or yet use, claim, or exercise, the name and stile, privileges and capacities, of the said supposed corporation, or ever claimed to compose the same, otherwise, or by any other ways or means, or in any other manner or form whatsoever, than in virtue of the said subscription, conducted and concluded as aforesaid; and so the said defendants say, the said supposed writing, obligatory in manner and form aforesaid made, is utterly inoperative and void in law; and this, they are ready to verify, &c.

The second plea states, that the defendants ought not to be charged, &c. &c., because the plaintiffs demand the said debt, and bring this action, as pretending and claiming to be a corporation aggregate, in and by virtue of the Act of Congress, mentioned in the first plea, by the name of the Mechanics Bank of Alexandria, to be composed of the subscribers to the said Mechanics Bank of Alexandria, which subscribers were not in being at the time of the passing of the said Act, but were to be composed of such persons only, as thereafter might subscribe thereto, according to the provisions of the Act; whereas the subscriptions were not taken according to the said provisions, so as to entitle the persons pretending to be subscribers to the said Bank, and their successors and assigns, to compose the said corporation, wherefore there was not any person authorized, or lawfully competent to take the bond, which is the subject of this suit; nor was there any such person, at the commencement of this suit, capable of instituting and prosecuting the same, but that the said persons did, unjustly and illegally arrogate to themselves to compose the said corporation, without the capital stock having been filled by subscription, or the supposed corporation having been composed of actual subscribers to the Bank, pursuant to the directions of the said Act of Congress, or other lawful warrant whatsoever, contrary to the purview and effect of the said Act of Congress; and so the defendants say, that the said writing obligatory, was at the time of making the same, and is, utterly void in law, &c.

The third plea alleged that the Cashier had well and truly performed the condition of the bond, according to the tenor and effect, and the true intent and meaning of it.

The fourth plea alleged that the Cashier had performed the condition of the bond, 'to the best of his ability, skill and judgment,' without any fraud, deceit, or wilful default, or breach of duties, whatever.

The fifth plea alleged that the Cashier had performed his duties,

in obedience to, and in pursuance of, the rules, orders, usages and customs of trade and business, ordained, established, and practised in the Bank, by authority of the President and Directors thereof.

The sixth plea asserts, that although the duties of the Cashier had not been performed by him, yet the non-performance was by the wrong, connivance and permission of the President and Directors of the institution.

The seventh plea states, that the Bank had not been damnified by the acts of the Cashier.

The eighth plea was, that although the Bank was damnified by the acts of the Cashier, yet it was by the wrong and connivance of the President and Directors, &c.

The ninth plea states that the business and affairs of the Company, and the conduct and duties of the Cashier, were performed under the regulation and management of the President and Directors, who had been chosen according to the provisions of the Act of Incorporation; and if, at any time, the corporation has sustained damage, since the making of the writing obligatory, by reason of any matter contained therein, it has been by the wrong, connivance or permission of the said President and Directors.

To the first and second pleas, the plaintiffs below put in general demurrers, and on each of the seven remaining pleas, issue was taken by general replications; all precisely in the same terms, as follows:

'And the said Mechanics Bank of Alexandria, by Thomas Swann, their attorney, say they ought not to be precluded, &c. because they say that the said cause of action, in the declaration mentioned, did accrue as in the said declaration and breaches are set forth; without that, that the matters set forth in the said plea, are true; and this they pray may be inquired of by the country, and the defendants likewise.'

But at the next term, the plaintiffs withdrew these general replications as to the 3d and 4th pleas; and to these two pleas put in special replications, leaving the issues on the remaining five to stand on the general replications and issues as above. The replications thus put in to the 3d and 4th pleas, and rejoinders of the defendants, taking issue upon the same, (being precisely in the same terms, mutatis mutandis, to each,) were as follows:

'And the said Mechanics Bank of Alexandria, by Thomas Swann, their attorney, say, that they ought not to be precluded from having and maintaining their action aforesaid against the said defendants, George Minor, Daniel Minor, William Minor, and Smith Minor, by any thing alleged by the said defendants in their third plea, pleaded as aforesaid: Because they say

that the Board of Directors of the said Mechanics Bank of Alexandria, in pursuance of the authority granted to them by the Act of Congress, incorporating the said Bank, did duly make and declare sundry by-laws for the government of the said Bank, its officers and affairs, and, among other laws so made and declared as aforesaid, they did enact and declare, in substance, as follows, to wit:

Section 2d, article 5th. It shall be the duty of the Cashier to countersign, at the Bank, all the bills or notes to be...