People v. Backus

• Decision Date: 26 November 1889
• Citation: 22 N.E. 759,117 N.Y. 196
• Parties: PEOPLE v. BACKUS et al.
• Court: New York Court of Appeals Court of Appeals

117 N.Y. 196

22 N.E. 759

PEOPLE

v.BACKUS et al.¹

Court of Appeals of New York.

Nov. 26, 1889.

Appeal from supreme court, general term, third department.

This action was brought by the people against the defendants, as guarantors upon the following bond or contract of the National Bank of Auburn, to-wit: ‘Whereas, certain moneys of the state of New York have been, and are proposed to be, deposited in the First National Bank of Auburn, under the direction of the comptroller of the state, by the agent and warden of Auburn prison, to the credit of the treasury of the state, for safekeeping and for interest, now, therefore, the said First National Bank of Auburn, in consideration does hereby agree to pay on demand does hereby agree to pay on demand to the order of the state treasurer, or other officer of the state having lawful authority to demand the same, such deposits, and any and all parts thereof, together with interest on daily balance at the rate of three per cent. Witness the seal of said bank, and the signature of its president and cashier, this 14th day of June, 1880.’ On the same day, the defendants, under their hands and seals, executed the following guaranty, to-wit: ‘In consideration of the making the deposits by the people of the state of New York in the First National Bank of Auburn, in the agreement mentioned, and for value received, we, the undersigned, Clinton T. Backus, Manson F. Backus, James Kerr, and William E. Hughitt, do hereby jointly and severally guaranty the full and punctual performance of the condition of said agreement on the part of said bank, and that all such deposits and interest shall be fully paid on legal demand. The said guarantors may serve upon the comptroller a written notice terminating or limiting their liability under this guaranty after a date to be specified in said notice, which shall not be less than ten days after the service of said notice.’ The agent and warden was by law the official manager of the state-prison at Auburn, and was required to deposit all moneys received by him each week to the credit of the treasurer of the state in a bank located at Auburn, and send to the comptroller weekly a statement showing the amount so received, and from whom or where received and deposited, and the days on which such deposits were made; such statement to be certified by the proper officer of the bank receiving such deposits. The agent and warden was required to verify by his affidavit that the sum so deposited was all the money received by him from whatever source of prison income during the week, and up to the time of the deposit, and all moneys so deposited by him were subject to the quarterly drafts of the treasurer of the state. The law required that any bank in which deposits should be made should, before receiving any such deposits, file a bond with the comptroller of the state, subject to his approval, for such sum as he should deem necessary. 3 Rev. St. (7th Ed.) 2594 et seq. By section 6, c. 107, Laws 1877, it was provided that ‘the system of labor in the stateprisons shall be by contract, or by the state, or partly by one system and partly by the other, as shall be in the discretion of the superintendent deemed best.’

From the time of the execution of the bond until December, 1884, the business of the Auburn state-prison was carried on under what was known as the ‘contract system.’ By chapter 21 of the Laws of that year, the renewal of the then existing contracts, or the making of new contracts for convict labor, was prohibited; and after that the prisoners were employed in manufacturing on state account. The bank was incorporated under the National Banking Act of 1863 on the 31st day of December of that year, and by its articles of association it was provided that it should continue until the 25th day of February, 1883, unless sooner dissolved by the act of a majority of the stockholders thereof. By the act of congress passed July 12, 1882, (22 U. S. St. at Large, 162,) national banks were authorized to extend their corporate existence; and in January, 1883, such proceedings were taken under that act as to extend the charter of the bank and its corporate existence until the 24th day of February, 1903. By section 4 of that act it was provided ‘that any association so extending the period of its succession shall continue to enjoy all the rights and privileges and immunities granted, and shall continue to be subject to all the duties, liabilities, and restrictions imposed, by the Revised Statutes of the United States, and other acts having reference to national banking associations; and it shall continue to be in all respects the identical association it was before the extension of its period of succession.’ After the giving of the bond by the bank, and the guaranty by the defendant, the agent and warden of the prison made deposits in the bank, from time to time, down to February, 1888, on which day there was upwards of $65,000 on deposit in the bank, which it refused and neglected to pay upon the draft of the state treasurer, it having become insolvent; and this action was brought against the defendants, as sureties, to recover the amount remaining on deposit. The action was referred to a referee, who found in favor of the plaintiffs, and from the judgment entered upon his report the defendants...