Robinson v. Lane

• Decision Date: 31 January 1856
• Docket Number: No. 68.,68.
• Citation: 19 Ga. 337
• Parties: Alexander J. Robinson, plaintiff in error. vs. Richard H. Lane, defendant in error.
• Court: Georgia Supreme Court

19 Ga. 337

Alexander J. Robinson, plaintiff in error. vs. Richard H. Lane, defendant in error.

No. 68.

Supreme Court of the State of Georgia

JANUARY TERM, 1856.

Debt, in Muscogee Superior Court. Tried before Judge Worrill., June Term, 1855.

This was an action brought in the name of Richard Lane vs. Alexander J. Robinson, for the redemption of certain bills of the Planters\' & Mechanics\' Bank of Columbus. On the trial, Ragan, the assignee of the bank, stated that he did not know the amount of bills in circulation; had within Jus control about $69,000; had received from J. A. Lee about $75,000. Defendant proposed to prove what Lee said when he delivered up the bills. The Court refused to admit this testimony, and defendant excepted.

The transfer book was given in evidence, showing four hundred and twenty-five shares of stock transferred to defendant by H. L. Smith, as agent for other stockholders. Defendant proved by the cashier, that defendant was absent from the State at the time these transfers were made; that when the semi-annual report was published, giving his name as a stockholder to this extent, defendant came to him and expressed surprise, and objected thereto; that witness told him it was done for the benefit of D. McDougald. Defendant and McDougald afterwards had an interview in presence of witness, when defendant told McDougald that stock must be transferred to some one else. This was not done, however, until June, 1841, when the same was transferred by defendant to the bank. Defendant never took a certificate for this stock, or received any dividends thereon. At the time of the final failure of the bank, the circulation amounted to $228,946.

S. R. Bonner testified: That he owned $1,500 of the bills sued on in this case; that he was one of the original stockholders.

Defendant then proposed to prove that the original organization of the bank was illegal, and in violation of law and of the charter. The Court refused to hear the evidence, and defendant excepted.

Wm. Dougherty testified: That he knew of $160,000 of bills in circulation, of which $104,000 belonged to the Bank of Columbus. Defendant then gave in evidence the judgment of forfeiture against the bank, rendered at June Term,

1843.

Defendant then gave in evidence the deed of assignment to R. Alexander, and proposed to show that the assignee wasted the assets, which were amply sufficient to pay the liabilities. The Court rejected the evidence, and defendant excepted.

Defendant proposed to prove, that the bills held by the Bank of Columbus were received by them on deposit, under a contract with John Banks, James M. Chambers and A. H. Flewellen, three of the directors and large stockholders of the P. & M. Bank—they giving bond to redeem the same and pay interest on such deposit; and farther, that these bills were an excessive issue, in violation of law, and within the knowledge of the Bank of Columbus, who was particeps criminis in the said illegal issue; and consequently, these bills form no part of the outstanding circulation of the P. & M. Bank. The Court rejected this evidence, and defendant excepted.

The Court charged the Jury, that they "must be satisfied that the plaintiff is holder and owner of the bills sued on; that it mattered not if $1,500 of them did belong to S. R. Bonner, unless the defendant had pleaded and proved a good and legal set-off against the said Bonner; not having done so, the plaintiff must recover on that point." "You must also be satisfied that the defendant is a stockholder in the P. & M. Bank. The transfer book is evidence to that point." As to defence set up by defendant, as to the shares transferred to his name without his consent, the Court said: "The duty which the defendant owed to himself and the public, required that he should have had it immediately cancelled; and if you believe he did not do so, then he is liable for the same. Furthermore, the cashier was not the proper person to whom the defendant should have complained—to the President and Directors he should have gone, and repudiated the transfers, and had the matter set right. If he did not do this, and suffered his name to be published again and again as the owner, he is liable on the stock as if he were the owner."

"To ascertain the liability of the defendant, you must determine the amount of his stock. If that amount exceedsthe bills sued on, you will find a verdict for the whole amount of the bills, with interest from the time of filing the declaration."

To each and all of these charges, defendant excepted. Defendant requested the Court to charge, among other things, as follows:

1. That the stockholders, if liable at all, are held and bound in proportion to the number of shares, and the value thereof, owned by each; that the plaintiff must prove the amount of his liability, in order to recover. The proportionate liability of defendant can only be ascertained by ascertaining the whole liability of the bank at this time.

2. That if the Jury believe that defendant was not, in fact, the owner of the 475 shares transferred to him, then he is not liable on said stock, unless the plaintiff shall prove that the defendant allowed the stock to remain in his name to defraud and deceive the public.

The Court declined to charge as requested, and defendant excepted.

B. Hill; H. Holt; S. Jones, for plaintiff in error.

W. Dougherty, for defendant in error.

The Court not being unanimous, the Judges delivered their opinions seriatim.

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

I propose to write a brief opinion in this case, not because the points adjudicated are unimportant, but for the simple reason that a decision in these bank cases settles nothing. I am warranted in saying this from the experience of the past six years. With every change in the Court, the same questions are reproduced for readjudication. And we are authorized to infer, that this practice, so subversive of the fun-damental object for which this tribunal was organized, is to continue so long as this litigation shall last. Why should I or any other Judge, under these circumstances, spend his time and strength for naught?

The first error assigned, is in ruling out the testimony of Ragan and Bonner, as to the illegal and fraudulent organization of the Planters' & Mechanics' Bank of Columbus, and the participation therein of Bonner.

Counsel for defendant in error confess that the Court was wrong in excluding this evidence, and state, by way of explanation, that the decision of this Court in Anne E. McDougald, adm'x, vs. Bellamy, adm'r of Bailey, at Americus, July, 1855, was not known when the bill of exceptions in this case was certified.

Was the Court right in rejecting the sayings of Lee, when he delivered a packet of the bills of the bank to Ragan, the assignee, showing from whom and where he obtained them? We think not, and upon the authority of Lockhart & Thomas against McNabb, decided last summer, and not yet reported.

Here the main fact is the delivery of the money by a third person to the assignee. Without something explanatory, the transaction is unintelligible. Should not the concomitant declarations of the actor, Mr. Lee, be received as to the place where, and the person from whom, he obtained these bills, as well as the directions given as to the disposition to be made of them? Admit this proof, and the transaction is illustrated and understood. Reject it, and it is stultified. We see the packet handed over, but for what purpose or with what intent, we are left in utter darkness.

Once concede that the amount of the outstanding circulation is a necessary element in ascertaining the stockholder's liability, and we hold that it is; and it follows, of course, that every inquiry is legitimate and proper which aids in the investigation of that fact. It is argued, with great earnestness, that to permit these collateral issues, is to defeat the possibility of a recovery; and consequently, is a practicaldenial of justice. At this distant day, since the bill-holder\'s right to sue accrued, it may possibly have the effect of driving him into Equity, or even out of Court. That is not the fault of the law.

But what insurmountable obstacle exists in this case more than in others? From first to last, there has been a factitious importance attached to these bank cases, which does not intrinsically belong to them. What are they more than others, either in principle or dollars, that they should disturb the equanimity of the Court, and compromit its dignity by the petty personalities of Counsel; that they should consume, to such an unreasonable extent, the time of the country; that they should be invoked to make and unmake Judges, and convulse the State from one end of it to the other? The fund of an insolvent is to be distributed—what a number and variety of issues must be formed, before the quota to which each creditor is entitled can be ascertained? But a suit at Law against an executor or administrator, is a strictly analogous proceeding. The trustee is sued by a creditor of the testator or intestate. He pleads, amongst other things, outstanding debts against the estate, of equal or higher dignity, of which he has been notified. Have not each of these claims to undergo a legal investigation, before a judgment, quando or prÅ“ter, can be rendered? And yet, this is a practice of daily occurrence in our Courts. We have no doubt the difficulty of determining the outstanding circulation is greatly exaggerated in the imagination of Counsel. But be this as it may, the principle is a plain one.

As to the 475 shares upon which it is sought to make Robinson liable, the evidence shows that this stock was transferred to him without his knowledge or consent, and without consideration; and that if he held it all, it was for the benefit of McDougald. Robinson, therefore, can only be made liable on the ground of fraud. If the Jury should believe, from the proof, that after the fact was brought to his...