Manderson v. The Commercial Bank

• Decision Date: 01 January 1857
• Citation: 28 Pa. 379
• Parties: Manderson versus The Commercial Bank of Pennsylvania.
• Court: Pennsylvania Supreme Court

28 Pa. 379

Manderson versus The Commercial Bank of Pennsylvania.

Supreme Court of Pennsylvania.

THIS was a motion for a special injunction against the Commercial Bank of Pennsylvania, and William Wainwright, James Dundas, S. Morris Waln, and others, directors of said bank, to restrain them from discounting or purchasing promissory notes except at regular meetings of the board of directors; and also from discounting or purchasing said notes at any time for any greater rate of discount than one-half of one per cent. for thirty days.

M. Russell Thayer and St. George T. Campbell, for the motion. —The practices complained of are contrary to their fundamental law, and a gross violation of their public duty. They have no right to discount except at a meeting of the board of directors at which at least five must be present; and under no circumstances can they charge a higher rate than one-half of one per cent. per month. The affidavit they have read in reply does not contain an explicit denial of the charges. It is general, vague, uncertain, and evasive.

E. Waln, C. Ingersoll, and W. M. Meredith, contrà.—The complainant is not a bona fide stockholder. He has obtained his shares for the purposes of this case. The defendants have denied the charges in their affidavit, and in the face of that denial the injunction cannot be awarded.

The opinion of the court was delivered by LEWIS, C. J.

This is an application for a special injunction to restrain the officers of the Commercial Bank of Pennsylvania from discounting promissory notes, excepting at a regular meeting of the board of directors, and from discounting the same at a greater rate of discount than the one-half of one per cent. for thirty days. If the affidavits of R. H. Beatty and Charles S. Wayne (recently clerks in the institution) are credited, the president and cashier have been in the habit of discounting notes after the adjournment of the board of directors, at rates greatly exceeding the rate of one-half of one per cent. per month. The officers of the board joined in an affidavit, of the nature of which there is some difference of opinion on the bench. By a majority of the judges it is not understood to be an explicit denial of the charges. As is usually the case with ex parte affidavits, there is a want of precision and particularity on both sides in the statement of the circumstances of the transaction referred to, which would, of course, render such evidence an unsafe and unsatisfactory foundation for any final judgment; and we do not regard it as settling the question of fact relative to the conduct of the officers of the bank in the matters complained of. Nor is it material, on the present motion, that the charge should be conclusively established. Conceding that the facts remain in doubt, the law of the case is not so. If it be clear that the officers of the bank have no right to make use of its funds in the manner charged, an injunction can do no injury, and is no more than giving the stockholders a proper measure of protection.

By the Act of 25th March, 1824, it is provided that the affairs of the bank shall be conducted by thirteen directors, "a majority of whom, the president being one, shall form a board...