Mcdougald v. Lane

• Decision Date: 31 July 1855
• Docket Number: No. 58.,58.
• Citation: 18 Ga. 444
• Parties: Ann E. McDougald, adm'x, &c. plaintiff in error. vs. Richard A. Lane, defendant in error.
• Court: Georgia Supreme Court

18 Ga. 444

Ann E. McDougald, adm'x, &c. plaintiff in error. vs. Richard A. Lane, defendant in error.

No. 58.

Supreme Court of the State of Georgia

JULY TERM, 1855.

Debt, in Muscogee Superior Court. Tried before Judge WORRELL, December Term, 1854.

This was a suit by it bill-holder against a stockholder, in the Planter's & Mechanic's Bank of Columbus, to enforce the liability to redeem sundry bills sued on, amounting to $1900.

The defendant moved the Court to dismiss plaintiff's suit, on the ground that certain interrogatories which had been propounded to the plaintiff, and allowed and ordered, by the Court, to be answered, had not been answered by the plaintiff, and produced the original interrogatories, with an entry made on the same by H. J. Devon, Attorney for the defendant, dated the 22d of March, 1853; that he had served a true copy of the within interrogatories and notice, on Wm. Dougherty, the Attorney for plaintiff. It was also proved to the Court, that the plaintiff did not. reside in the Co. of Muscogee, and that Devon was dead. The Court did not consider this sufficient evidence of service. Defendant then offered Mr. Dougherty as a witness, to prove a copy of the interrogatories was left at his office more than 00 days before the present term of this Court. To which Dougherty, as Attorney for plaintiff, objected to testifying. The objection was sustained by the Court, and the defendant excepted.

The plaintiff, before submitting his cause to the Jury, demurred to certain pleas filed by the defendant, marked and distinguished as Nos. 4. (i and 7, which pleas were as follows: No. 4. That the bills sued on are void, because the stockholders never paid in the 25 per cent. in specie, as required by the charter. No. 6. That the plaintiff and his Attorney had made an illegal agreement, by which the Attorney was to pay all costs and receive one half of recovery for his services. No. 7. That the whole of the bills sued on were an excessive issue by the directors, and that under the charter, the stockholders, if liable at all for them, were only ultimately liable, after the personal liability of the directors was exhausted; which demurrers were severally sustained by the Court; and thereupon, the defendant excepted.

The plaintiff introduced A. B. Ragan as a witness, and" proved that the signature of certain bank bills shown, as declared in his declaration, against this defendant, were genuine, and that the persons purporting to sign them as president and cashier, were acting as such at the date of said bills. Said Ragan also proved, that in February or March, 1837, the stockholders, or some of them, met for the purpose of organizing the P. & M. Bank. Some paid in specie—not a large amount—some paid in bills of the banks of the State, and some made notes, indorsed to the satisfaction of the Bank of Columbus. They appointed Gen. S. A. Bailey, John Banks and H. S. Smith a committee, to take charge of what the stockholders had paid in, and make an arrangement with the cashier of the Bank of Columbus about specie; that said committee reported that they had made an arrangement with A. B. Davis, cashier of said bank, and that he would give them a specie certificate of deposit; that the stockholders then proceeded to the election of directors, of whom S. A. Bailey, John Banks and himself were three, and he believed Mr. Gold McKinley.and Bonner were the others; that said directors then elected II. S. Smith president, and Peck cashier; that Peck was not present, and witness acted as cashier.

Ragan further testified: That after organizing, they did not do any business. In May following, 1837, Smith resigned his appointment as president, and S. A. Bailey was then elected president. After his election, the president and several of the directors, and he among them, went to the Bank of Columbus and asked for the specie, and Davis told them that the kegs and boxes he showed them contained about.$230.000, and that he, Davis, had procured them a certificate of specie deposit from the cashier of the Insurance Bank, for the balance, about $20.000, to make up the sum of $250.000; that said Davis told them the said specie was at the control and order of the said P. & M. Bank, and might be taken away by them; that said directors did not go to the Insurance Bank, to demand or make any inquiry for the specie in that bank, but took the word of said Davis for it. The defendant objected to giving the statements of the said Davis in evidence; which objection was over-ruled, and defendant excepted.

Witness further testified: There was no examination made by them, to ascertain if the kegs and boxes did contain specie; and no count was made to see how much there was, but were satisfied with the statements of Davis, that they did contain specie, and also as to the amount. And the said witness testified, that they then retired, and the directors had a meeting and determined to do no banking business, and passed an order to loan out the money to the stockholders; and if they did not want it, to loan it out to others, except about $2.000, which was retained to pay expenses; that the stockholders generally borrowed the money; that when the stock or shares were subscribed for, only one firm, Kelber & Watkins, of Coweta County, paid in about 6 or 700 dollars in specie. Some of the rest paid in their subscriptions in bills of other banks, but most of them in promissory notes, discounted by the banks of Columbus, which were put under the control of the committee. The witness, who acted as cashier, gave to them who borrowed from the P. & M. Bank, checks on the Bank of Columbus; he did not hear of any demanding specie, but one man, and the bank refused to pay him specie. Witness did not hear why the bank refused. The matter; was compromised, by paying Central Bunk bills, which were at a discount, but witness did not recollect how much. The directors determined no bills should be issued in 1887, because the bank thought, that in the condition of the country, banking could not be made profitable, and none were issued until lb 38. In February, 1888, agreeably to the charter, the annual election came on for directors, and H. S. Smith, D. McDougald, M. W. Deny, John Banks, Hiram Reid and others, were elected directors, and McDougald was elected president. An order was then passed, that the stockholders who had borrowed of the bank the preceding year, should reduce their debts by paying in one half. Those who complied, did so by paying in, mostly, the notes of suspended banks—very little specie was paid in—not more than $800 or $1.000. The new stockholders, among whom was McDougald, put in their notes in the place of those from whom they purchased. The board of directors then ordered about $250.000 of bills to be issued. Order to issue means preparing the bills for circulation. The largest portion of the bills were put in circulation, but could not tell how much; could not identify any of the bills shown or put in circulation; has no reason to believe they were put in circulation, but that they are now shown to him. Many of the bills put in circulation, were returned and re-issued, but how many witness cannot state; does not know that any prepared for circulation had been lost or mislaid, or deposited with the Bank of Columbus, or with John L. Mustian; docs not know whether there was a deed of assignment to It. B. Alexander. Alexander commenced to act as assignee in the Spring of 1843. Defendant then offered to prove by the witness, that Alexander, while he was assignee, declared and alleged, that he acted under the deed of assignment, and not under the Act of the Legislature; that ho accepted under the deed, not under the Act of the Legislature. Plaintiff objected; the Court sustained the objection. Defendant thereupon excepted. Witness also proved that the transfer to defendant, of 38 shares of the stock of the bank was on the transfer book before he was elected director and president. Plaintiff then read in evidence the bills mentioned in the declaration. He also read in evidence, an exemplification of the record of a declaration judgment, and execution and return of nulla bona by the Sheriff. This exemplification showed the number of bills sued on, their amounts and dates of their signature, but did not specify them by number or letter. The defendant objected to said exemplification being read in evidence, except to prove thejudgment and return of nulla bona; and that the recitals in the declaration against Alexander, assignee, was no evidence of the identity of the bills sued on. The Court over-ruled the objection and permitted said exemplification to be read as evidence of the identity of said bills sued on, to which said defendant excepted. The plaintiff hero rested his case, and the defendant then introduced Seymour R. Bonner, who testified that he was one of the original stockholders and directors in said Planter\'s & Mechanic\'s Bank, in the year 1837; and that John Banks, S. A. Bailey and H. S. Smith were a committee to make arrangement with the bank of Columbus; and he was informed that a specie arrangement had been made with the Bank of Columbus by the committee. The directors went to see if there was a certain amount of specie at their control in the Bank of Columbus. Davis, the cashier, said there was there $226 or $230.000 on deposit, subject to their control, and belonged to the Planter\'s & Mechanic\'s Bank; that he, Davis, had arranged with the Insurance Bank for the balance, and that he had a certificate to make up the deficit. I knew nothing of the arrangement but what one of the committee told me. The Planter\'s & Mechanic\'s Bank had no banking house at that time, or place for specie. The $226 or $230.000 was all the specie in the bank of Columbus. Specie was then at a premium of from 5 to 8 per cent. No premium was paid for the specie certificates as witness knew of. The stockholders paid into the Bank of Columbus, bank-bills and...