Hall v. Carey

• Decision Date: 31 July 1848
• Docket Number: No. 25.,25.
• Citation: 5 Ga. 239
• Parties: Henry T. Hall, et al. plaintiffs in error. vs. Edward Carey, assignee, defendant.
• Court: Georgia Supreme Court

5 Ga. 239

Henry T. Hall, et al. plaintiffs in error. vs. Edward Carey, assignee, defendant.

No. 25.

Supreme Court of the State of Georgia

JULY TERM, 1848.

Assumpsit, tried before Judge Alexander, in Muscogee Superior Court, May Term, 1848.

This action was brought by the defendant in error, vs. assignee of the Bank of Columbus, for the use of Seaborn Jones, against the plaintiff in error, upon their promissory notes, amounting together to over $17,000 principle. These notes were made payable "to the order of A. B. Davis, Cashier." The declaration alleged that they were made and delivered to Davis, and then proceeds to describe them, and alleges that it was meant and intended to make them, (by the expression "A. B. Davis, Cashier, ") payable to the Bank of Columbus. It also alleges that the Bank assigned said notes to plaintiff. The defendant pleaded several pleas. The defendant on the trial demurred to the plaintiff's declaration, on the ground that the property in said notes did not appear by the pleadings ever to have been in the Bank of Columbus. The demurrer was overruled, and defendants excepted.

The plaintiff then demurred to the second and third pleas of the defendants. The second plea alleged that the Bank never did assign said notes to plaintiff. The third plea alleged that the Bank had been dissolved by the judgment of the proper Court, and at the time it was dissolved, it owed the notes sued on. The Court below sustained the demurrer to the pleas, and they were stricken, and the defendants excepted.

The first plea was the general issue, and the fifth was that the assignment was made to defeat the operation of forfeiture. Issue was taken on these last.

The plaintiff then offered in evidence the notes described, without an assignment; the defendants objected. The Court allowed them to be read, and defendants excepted.

The plaintiff proved a manuscript book to be the minutes of the Bank, and offered to read some portion thereof, in evidence, to-wit, a recital therein that the Board, on June 10th, 1843, met, present, P. T. Schley, Pres.; L. J. Davis, H. Holt, and A. B. Davis; and that it was resolved by the said Board that the Bank make an assignment of all its property, and that the President and Arthur B. Davis be instructed to execute it, which deed to be executed was copied on the minute book, and the copy so entered was also offered in evidence. The defendants objected, and the Court permitted the same to be read, and defendants excepted. The plaintiff proved, that when the resolution to make the deed was adopted, Schley was acting as President, and A. B. Davis as Cashier, and that none but four directors were present, including A. B. Davis, Cashier. Plaintiff proved the loss of the deed of assignment, and offered to read a copy thereof, from the record book of said Superior Court. The defendants objected. The Court permitted it to be read, and defendants excepted.

The plaintiff proved that the deed was executed as the copy purported, and also that the Bank owned the notes when the deed was made. The defendants then proved by Schley that he never purchased any shares in said Bank; that A. B. Davis, or one Smith, transferred to him thirty shares to make him eligible as director, that he never paid for them, and did not know whether he ever had a certificate therefor, and if so, what he did with it The defendants then read in evidence the judgment of the Superior Court of Muscogee county, dissolving said Bank, dated Juno 13th, 1843. The deed of assignment to plaintiff, also the resolution of the Bank on its minutes, directing an assignment, were dated June 10th, 1843.

The defendants contended that said deed of assignment wasvoid. The Court charged the jury that its validity could not be inquired into, and the defendants excepted.

Upon which exception the following assignment of errors was made:

1. Overruling the demurrer to plaintiff's declaration.

2. Sustaining demurrer to 2d and 3d pleas.

3. Permitting the notes to be read without an assignment.

4. Permitting a portion of the minutes of the Bank to be read.

5. Permitting the copy deed of assignment to be read in evidence.

6. In charging that the validity of said deed could not be impeached.

John Schley and Johnson & Williams, for plaintiffs in error.

Dougherty, and Jones, Benning & Jones, for defendant.

By the Court.—Warner, J., delivering the opinion.

The first ground of error assigned to the decision of the Court below, is the overruling the demurrer to the plaintiff's declaration.

This objection to the declaration was taken at the trial term, and if good at any time, certainly was not good in arrest of judgment. It is contended, that the plaintiff should have alleged, the note was made payable to the Bank of Columbus, and given a correct description of it, inasmuch as Davis, the Cashier, was only the agent of the Bank. By the 14th Common Law rule of practice, all matters appearing on the face of the declaration, or process, that would not be good in arrest of judgment, shall be taken advantage of at the first term of the Court Hotchkiss, 948. In any event, the declaration would have been amendable, and the objection would not have been good, in arrest of judgment and was properly overruled by the Court at the trial term.

The general ground of error taken, is to the decision of the Court below, in sustaining the demurrer to the defendants' second, and third pleas. The position assumed by the plaintiffs in error is, that by the Common Law, on the dissolution of a corporation, all the debts due to, and from the corporation, are extinguished: and that when the notes sued on were executed to the bank, the makers contracted, with reference to this contingency, and that the Acts of the Legislature of 1840, which provided against that contingency, by requiring the assets of the Bank to be placed in the hands of a receiver, for the benefit of the creditors thereof, as well as the Acts of 1841, 1842 and 1843, being amendatory of the Act of 1840, upon that subject, necessarily impair the obligation of that contract, and are therefore unconstitutional and void. In this State, on the dissolution of a corporation, without any special provision by Statute, all the personal estate of the corporation vests in the people, as succeeding to the rights of the crown at Common Law. Whether in equity the debtors to the corporation would be held as trustees, for the benefit of its creditors, it is not necessary now to decide. The people of the State, in whom the personal property of the Bank would have vested, have, in their sovereign capacity, by a legislative enactment, provided against such a contingency, and afforded a remedy, by declaring that the assets of the Bank shall be placed in the hands of a receiver, for the benefit of the creditors of the bank. The legal presumption, is that the makers of the notes received from the Bank a valid consideration therefor. But it is said, the makers of the notes contracted with the Bank with a direct reference to this contingency, of the dissolution of the corporation, and it constituted an important element in the consideration of the notes. It is possible the contract may have been made with the Bank in view of this contingency, that the Bank would lose all remedy by which it could enforce a collection of the notes in the event of a dissolution of the corporation, against the makers; but they must also be understood to have contracted, in view of the right of the people, in whom the assets of the Bank would have vested, on a dissolution of the corporation, by a legislative enactment, to provide a remedy against such a contingency, and to provide a remedy for the creditors of the corporation. The several...