John Bacon and Thomas Robins, Surviving Trustees of the Bank of the United States, William White and John Hooper, Citizens of Pennsylvania, Lewis Phoenix and John Beers, Citizens of New York, Stockholders of the Late Commercial Bank of Natchez, Who Sue On Behalf of Themselves and All Other Stockholders of Said Late Commercial Bank of Natchez, Who Are Citizens of Other States Than Mississippi, Who Shall Come In and Seek Relief By, and Contribute To the Expenses of This Suit, Complainants and Appellants v. William Robertson, Philip Hoggatt, Henry Chotard, and John Gillespie, and Others Names Unknown Stockholders of the Late Commercial Bank of Natchez, and Citizens of the State of Mississippi

Decision Date01 December 1855
Citation18 How. 480,59 U.S. 480,15 L.Ed. 499
PartiesJOHN BACON AND THOMAS ROBINS, SURVIVING TRUSTEES OF THE BANK OF THE UNITED STATES, WILLIAM R. WHITE AND JOHN HOOPER, CITIZENS OF PENNSYLVANIA, LEWIS PHOENIX AND JOHN D. BEERS, CITIZENS OF NEW YORK, STOCKHOLDERS OF THE LATE COMMERCIAL BANK OF NATCHEZ, WHO SUE ON BEHALF OF THEMSELVES AND ALL OTHER STOCKHOLDERS OF SAID LATE COMMERCIAL BANK OF NATCHEZ, WHO ARE CITIZENS OF OTHER STATES THAN MISSISSIPPI, WHO SHALL COME IN AND SEEK RELIEF BY, AND CONTRIBUTE TO THE EXPENSES OF THIS SUIT, COMPLAINANTS AND APPELLANTS, v. WILLIAM ROBERTSON, PHILIP HOGGATT, HENRY CHOTARD, AND JOHN F. GILLESPIE, AND OTHERS, (NAMES UNKNOWN,) STOCKHOLDERS OF THE LATE COMMERCIAL BANK OF NATCHEZ, AND CITIZENS OF THE STATE OF MISSISSIPPI
CourtU.S. Supreme Court

THIS was an appeal from the circuit court of the United States for the southern district of Mississippi.

The transaction to which the suit relates was partly and incidentally brought before the notice of this court in 16 How. 106.

The facts are stated in the opinion of the court.

It was argued by Mr. Wharton and Mr. Yerger, for the appellants, and Mr. Lawrence, for the appellees.

Mr. Justice CAMPBELL delivered the opinion of the court.

This bill was filed in the circuit court against William Robertson, a trustee, appointed to liquidate the affairs of the late Commercial Bank of Natchez, Mississippi, and such of the stockholders of the bank as are citizens of that State, and is prosecuted by a number of stockholders, owning one fifth part of the capital stock, for themselves, and such of the stockholders as are not citizens of Mississippi, or defendants in the bill.

The Commercial Bank was incorporated and organized under enactments of the legislature in 1836, with a capital of $3,050,000, divided into shares of $100 each, which are now distributed among two hundred and eighty persons.

The corporation carried on the business of banking through the agency of presidents, directors, cashiers, and other officers, at Natchez, and four other towns of Mississippi, for a number of years. During this time there was a temporary suspension of specie payments, which the bill avers to have been accidental, and to have formed the only ground for the proceedings taken against the corporation. In June, 1845, the circuit court of Adams county rendered a judgment against the bank, upon an information in the nature of a quo warranto preferred pursuant to the act of the legislature of July, 1843. By this judgment the bank was 'prejudged and excluded from further holding or exercising the liberties, privileges, and franchises granted by the said charter;' 'the liberties, privileges, and franchises granted to the bank were seized' by the State; the 'property, books, and assets of the bank' were adjudged to be seized and delivered to a trustee, who might have execution therefor. William Robertson was appointed that trustee 'to take charge of the books and assets of the bank.' His duties are declared, conformably to the act of 1843, which will be considered in another part of this opinion.

The bank appealed from this judgment, and in the spring session of the high court of errors and appeals, in 1846, it was affirmed. William Robertson entered upon the office of trustee in July, 1846. He took possession of money, stocks, evidences of debt, and real estate having a nominal value of near four millions of dollars, and continues to hold them, except in so far as he has applied them to the payment of the charges of the trust, and the debts of the corporation. The bill alleges that all the debts have been paid, and that only a small sum is due for costs, and that property of great value, consisting of money, stocks, evidences of debt, bonds, and personalty, remains with the trustee, who refuses to account for them to the stockholders. The object of the bill is to establish the title of the stockholders to this surplus, and to obtain the ratable shares of such of them as are able and willing to join as plaintiffs in this suit. The bill names a number of the stockholders as parties, and is fitted to embrace all by the representation of these.

The defendants joined in a general demurrer to the bill; a decree of dismissal was rendered at the hearing at the circuit, and, by appeal, was taken up to this court to revise that decision.

When the defendant, Robertson, assumed the office of trustee, his duties were defined by two acts of the legislature of Mississippi. The act of July, 1843, directed the institution of suits against such of the banking corporations of the State as had violated their charters in such a manner as to incur their forfeiture, and prescribed the form of the suits for the enforcement of that forfeiture. It enacted 'that upon a judgment of forfeiture against any bank, the debtors of the bank shall not be released from their debts and liabilities to the same; but it was made the duty of the circuit court, rendering the said judgment, to appoint one or more trustees to take charge of the books and assets of the banks; who should sue for and collect all debts due such bank, and sell and dispose of all property owned by it, or held by others for its use; and the proceeds of the debts, when collected, and of the property when sold, to apply, as may hereafter be directed by law, to the payment of the debts of such bank. The trustee was made subject to a criminal prosecution for embezzlement, conversion of the trust property, as a failure to account for it according to law; and both acts prescribed a bond to be given to secure the faithful performance of his duty. The act of February, 1846, amended and enlarged the scope of the act of 1843, and was applicable to all trustees appointed under either.

This act provided a summary remedy in favor of the trustee to obtain the control of the corporate property; for an inventory to be made to the first court, after his appointment; for an order of sale of all the corporate property at auction, for cash, after a notice of ninety days, at specified places; for commissioners to audit the claims against the banks, and for their presentation to these commissioners; for early decisions upon the exceptions to their report; for a final decree of distribution, first, in the payment of expenses, then public dues, costs, and fees, the debts reported, and, lastly, 'the surplus, if any shall be ratably distributed among the stockholders.' There was a provision that the bills of the bank should be receivable for debts, and that the debtor might redeem from any purchaser of his debt or obligation, (so sold,) during two years, by paying the purchase-money, all costs, and twelve and a half per cent. interest. The object of the two statutes can hardly be misconceived. They are parts of a system, the latter act being auxiliary to, and adopted in aid of, the provisions of the earlier act of 1843—the two acts containing the full expression of the will of the legislature. The circumstances of the legislature enabled it to defer the promulgation of its entire policy until the year 1846. The exigencies of the State were entirely answered by the directions given in 1843 to the executive officers to take initiatory measures for placing these corporations under restraint, and for the security of their property. To effectuate these, involved delay and litigation, and the legislature might well await their issue, before unfolding their whole plan of liquidation and settlement. The two statutes which embody it have formed the subject of much discussion in the courts of Mississippi, and difficulty has been experienced there in carrying them into execution. No suit has been instituted there by the stockholders, though their rights have been incidentally debated, both at the bar and by the supreme appellate court. To comprehend the import of this legislation, we must consider the mischiefs it was designed to prevent or remove, and the mode adopted to accomplish the end; for the legislation is of a character wholly remedial. The common law of Great Britain was deficient in supplying the instrumentalities for a speedy and just settlement of the affairs of an insolvent corporation whose charter had been forfeited by a judicial sentence. The opinion usually expressed as to the effect of such a sentence was unsatisfactory and questioned. There had been instances in Great Britain of the dissolution of public or ecclesiastical corporations by the exertion of the public authority, or as a consequence of the death of their members, and parliament and the courts had affirmed in these instances that the endowments they had received from the prince or pious founders would revert in such a case. Stat. de terris Templariorum, 17 Edw. II.; Dean and Canons of Windsor, Godb. 211; Johnson v. Norway, Winch. 37; Owen, 73; 6 Vin. Abr. 280. What was to become of their personal estate and of their debts and credits had not been settled in any adjudged case, and as was said by Pollexfen in the argument of the quo warranto against the city of London, was perhaps 'non definitur in jure.' Solicitor Finch, who argued for the crown in that cause, admitted, 'I do not find any judgment in a quo warranto of a corporation being forfeited.' Treby, on behalf of the city, said, 'the dissolving a corporation by a judgment in law, as is here sought, I believe is a thing that never came within the compass of any man's imagination till now; no, not so much as in the putting of a case. For in all my search, (and upon this occasion I have bestowed a great deal of time in searching,) I cannot find that it ever so much as entered into the conception of any man before; and I am the more confirmed in it because so learned a gentleman as Mr. Solicitor has not cited any one such case wherein it has been (I do not say adjudged but) even so much as questioned or attempted; and, therefore, I may very boldly call this a case primae impressionis.' The argument of Pollexfen was equally positive. The...

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