The Mech.S' Bank v. Heard

• Decision Date: 31 December 1867
• Citation: 37 Ga. 401
• Parties: The Mechanics' Bank, plaintiff in error. vs. Stephen D. Heard, defendant in error.
• Court: Georgia Supreme Court

37 Ga. 401

The Mechanics' Bank, plaintiff in error. vs. Stephen D. Heard, defendant in error.

Supreme Court of the State of Georgia

DECEMBER TERM, 1867.

Assumpsit. Surrender of charter. Tried by Judge Augustus Reese. Richmond Superior Court. June Term, 1867.

Heard, (on the 8th September, 1866,) sued said Bank for $11,677.00, besides interest due on certain of its bills, which he owned, and which the Bank had refused to pay. The return of the sheriff was, "personally served a copy of the within, upon the defendant, this the 12th day of September, 1866. John D. Smith, Sheriff R. Co."

At June Term, 1867, this return was amended so as to read thus: " Personally served a copy of the within upon Thomas S. Metcalf, President of the Mechanics' Bank, this 12th day of September, 1866.

John D. Smith, Sheriff R. Co."

Thereupon, Metcalf tendered a traverse, averring that on said day of service, he was not, and for a long time before that day, had not been President of said Bank, nor held any office therein; that he was elected President of the Bank, on the 2d day of January, 1865, for that calendar year, and not since; that on the 20th day of February, 1866, at a meeting of the stockholders of the Bank, duly summoned in terms of the charter, by an unanimous vote of said Directors, the charter of the Bank was surrendered to the State, and notice of such surrender was, by order of said meeting, forwarded to the Governor of Georgia, and by him received, and ergo the Bank ceased to exist; he ceased to be its President, and ergo the said service was void.

And Metcalf's counsel moved that said traverse be tried by a special jury, as a collateral issue.

The Court refused so to submit the traverse, stating that he would permit the questions involved in said traverse to be plead along with other pleas, and required the defendant to plead if the Bank had any other pleas.

Then Wm. T. Gould, as assignee of the Bank, plead that plaintiff should not have his action, etc., because before this action was commenced, to-wit: on the 20th day of February, 1866, said Bank had ceased to exist as a corporation by the surrender of its charter, as aforesaid, and because, before that, to-wit: on the 20th day of January, 1866, the Bank had assigned to him, for the benefit of all its creditors, all its property, and notice of such assignment was given in the "Constitutionalist, " a public gazette, in Augusta, in said county, and after which surrender no corporate act was done by the Bank, nor any official act performed by any of its officers, and he prayed to go to the country.

And Joseph E. Brown, a counsel for divers stockholders of the Bank, to-wit: Metcalf, Sibley, Baker and Bishop, plead the surrender of the charter and vacation of the.officers of the Bank as aforesaid, with a conclusion that therefore the service was void.

It was admitted that Metcalf was the last President of the Bank, and that under the by-laws of the Bank its officers held their offices until others were elected.

Plaintiffs' counsel demurred to Gould's plea. The Court sustained the demurrer upon the ground that such surrender, till accepted by the General Assembly, worked no dissolution of the Bank.

Brown then withdrew the plea filed by him, as last aforesaid, and offered to file for William H. Hibler, one of the stockholders of the Bank, a plea averring " that no judgment of this Court can be rendered, in this case, against him, as a stockholder of said Bank, by virtue of any publication which may have been made, and notice given, under section 3283 of the Code of Georgia, nor can any execution issue against him, or any other person, as a stockholder, by virtue of any judgment rendered under any notice given under the provisions of said section."

The Court refused to allow this plea, ruling that Hibler could not defend for himself, though any stockholder might defend for the Bank.

Then Brown, as counsel for Hibler, filed another plea, averring that the charter of the Bank was a contract between the State and the stockholders and bill-holders of the Bank, by which the State bound itself that the Bank should exercise its corporate rights without interruption; in consideration of which promise the Bank undertook to redeem its bills with specie, on demand, and the stockholders, upon that consideration and not otherwise, agreed to be personally liable for such redemption in proportion to their stock; that plaintiff accepted the bills of the Bank with full notice of these facts; that, while the Bank was performing all its duties, the General Assembly called a convention of the people of Georgia, which convention passed an ordinance of secession from the Union, and aided in bringing on a war, which caused a blockade of the ports of Georgia, destroyed commerce, etc., so as to force a suspension of specie payment by the Bank, and that the General Assembly had declared the charters of Banks subject to forfeiture for such suspensions. Further, that during the existence of said law, " the stay-law" was passed, and was kept in force by re-enactments, and thereby kept the Bank from collecting its assets, which were greatly in excess of its liabilities, and thereby forced the Bank to suspend. Further, during such suspension, the State, by another act, compelled the Bank to receive, on deposit and in payment of its gold debts, Confederate States treasury notes and Georgia treasury notes; that they did receive such currency to the amount of $1,500, 000 00 at per, in payment of such debts, when said currency was worth only five cents in the dollar in specie. And further, that plaintiff, at and before the war commenced, owed the Bank $15,000 00 in gold, which he refused to pay (taking advantage of said "stay law") until the currency had depreciated as aforesaid, and then offered, with it, to pay his said debt; which, under said act, the Bank was compelled to receive in payment, and did receive it, under compulsion, which was only in law a payment of the gold value of thesaid currency. He further plead "set off in the sum of $13,000 00 on said debt due and unpaid, " and prayed judgment against plaintiff for the difference, etc.

For further plea, he averred that the State, on the 1st day of January, 1863, under penalty of forfeiture of its charter, compelled the Bank to lend the State $500,000 00 in its bills, and to take therefor $500,000 00 of the notes and bonds of the State, and afterwards, by convention, repudiated the notes and bonds. And further, that plaintiff received these bills sued on from the Bank in July, 1863, and that this is therefore a contract falling within the scaling ordinance of the convention of 1865, and that when plaintiff took the bills they were worth only ten cents in the dollar, and it Mas inequitable he should recover the face of his notes.

Plaintiff's attorneys moved to strike all of this last plea except that relating to the set-off and scaling the demand. This motion was sustained by the Court.

The case then went to the jury. Plaintiff submitted his bills to the jury as evidence and closed.

The counsel for Hibler then introduced as witnesses the plaintiff and John A. North, late teller of the Bank.

Heard testified that when the war began, he owed the Bank nothing; his firm, Heard & Simpson, did owe a considerable amount, (he did not know how much,) he could not say it was less than $20,000 or $25,000, or that it was so much. The firm kept an account with the Bank, checked on their deposits and discounts and had monthly settlements; they owed the Bank sometimes more and sometimes less, till the latter part of 1863 or first of 1864, when they were notified by the Bank to close their account, and they paid off all they owed in Confederate notes. He, at that time, held none of these notes sued on; he took some of them in payment of debts and bought some of them since the settlement. Said firm was dissolved after the settlement, and he continued business in his own name; and he did not recollect that he owed the Bank anything after the settlement. After Confederate money became current, all payments and discounts were made in it. He got none of the bills from the Bank, but did not recollect from whom he got them. While his firm was dealing with the Bank, they had collaterals lodged there, which were given up on the settlement.

North testified that Heard & Simpson owed the Bank $30,000 00 when the war began, and were endorsers for $25,-000 00 more; they did not settle with the Bank till the latter part of 1863; but, without reference to the books of the Bank, he could not say what Heard & Simpson owed the Bank at any particular time, after the war began. The account was closed and settled in full in the latter part of 1863.

The Court charged the jury that no set-off could be allowed unless some definite sum was shown to be due from plaintiff to defendant; but that in this case there had been monthly settlements, but did not show how much remained due and that " there was nothing proved in this case that entitles the defendant to either a legal or equitable set-off, and that the plaintiff was entitled to a verdict for the amount of the notes sued on, with interest from the commencement of the suit." The jury found for plaintiff accordingly.

There was no motion for a new trial.

Gould, as assignee in person, and Hibler, by Brown as his counsel, assigned as error—

1st. The refusal to allow Metcalf's traverse of the return to be tried by a special jury.

2d. The holding that the surrender of the charter was invalid till accepted by the General Assembly, and that the officers of the Bank were not discharged from their offices by said assignment and surrender.

3d. The ruling out Hibler's pleas, except as to set-off and the scaling of the demand.

4th. The charge to the jury that the evidence showed that there had been monthly settlements, but did not show how much remained due.

5th. The charge to the jury that there was nothing proved in this case that entitles the...