Bank of Alabama v. Gibson's Adm'rs

| Ala. | Jun 15, 1844

COLLIER, C. J.

In Owen, et al. v. The Branch Bank at Mobile, [3 Ala. 258" court="Ala." date_filed="1842-01-15" href="https://app.midpage.ai/document/owen-v-branch-bank-at-mobile-6501598?utm_source=webapp" opinion_id="6501598">3 Ala. Rep. 258,] this court was of opinion that our Banks, of which the State is the exclusive proprietor, are corporations “created for the purpose of banking, not on the credit of the State, but upon a fund provided for that purpose.” That they could sue and be sued, and were invested with the attributes necessary to the existence of a corporation. Had we there attained the conclusion that the note issued by the Bank were in point of fact emitted by the State, we must have adjudged that these institutions were brought into existence by the legislature in violation of the constitutional restriction upon its power, which inhibits the emission of bills of credit by the States. [See Craig v. The State of Missouri, 4 Pet. 410" court="SCOTUS" date_filed="1830-03-12" href="https://app.midpage.ai/document/craig-v-the-state-of-missouri-85710?utm_source=webapp" opinion_id="85710">4 Pet. Rep. 410.]

The constitutionality of a law establishing a Bank, of which the State was the sole proprietor, came directly before the supreme court of the United States, in Briscoe v. The Commonwealth Bank of Kentucky, [11 Peter's Rep. 257.] In that case, the capital was two millions of dollars, and to be made up of various funds and receipts from several sources of revenue, which the statute particularized; and the Bank was authorized to do the ordinary business of such an institution, such as discounting notes, &c.; but its debts wore not to exceed double the amount of its capital. The court hold that the Bank was a corporation; that its issue were not made on the faith of the State, but they wore to be paid in gold or silver on demand, from a fund provided for that purpose, and placed under the control of the directory.

In the U. S. v. The Planters’ Bank of Georgia, [9 Wheat. Rep. 907,] the court were of opinion, that “the State does not by becoming a corporator, identify itself witli the corporation. The The Planters’ Bank of Georgia is not the State of Georgia, although the State holds an interest in it.” “Again, it is a sound principle, that when a government becomes a partner in a trading company, it divests itself so far as concerns the transactions of that company of its sovereign character, and takes that of a private citizen.” [See also the Bank of Kentucky v. Wister, et al. 2 Peters’ Rep. 318.] This reasoning we think, applies with all force where the {state is the cole corporator, as well as where it is associated with others. The Bank of the State is a mere creature of the legislature intended “to provide,” in the language of the preamble of the charter, “for the safe and profitable investment of such public funds, as may now, or hereafter, be in the possession of the State, and to secure to the community, the benefits, as far as may be, of an extended and undepreciating currency.” [Clay’s Dig. 77.] It cannot be endured, that the legislature, which is but the mere machinery of government, should be allowed to confer upon a monied corporation, established by itself, any portion of the sovereign power, which was inherent in the body politic.— Whether it would bo competent to prescribe a different limitation, to the recovery of its demands, from that which is applied to individuals and private corporations, is a question that need not be considered; for a dispensation from the influence of such laws is here claimed, not in virtue of expresses legislation; but as one of the prerogatives of government.

In the Bank of South Carolina v. Gibbs, [3 McC. Rep. 377,] the question was, whether a simple contract debt due the Bank, was a debt due to the public, within the meaning of the act, relative to executors, &c. which entitles the State to a priority of payment. The court determined, that it was not a debt due to the public, and that although the Bank was owned entirely by the State, it could claim no priority on that ground. And in the Bank of North Carolina v. Clarke, &c. [1 Hawks’ Rep. 88,] it was decided, that the State Bank of that State, was a mere private corporation.

The only case that we have been able to find, in which a different doctrine is maintained, is the State Bank of Illinois v. Brown, et al. [1 Scammon’s Rep. 106.] There the court cite some of its previous decisions, which determined that the directors of the Bank die not act for their own benefit, and that their omission and neglect did not work an injury to the State; that a release from all debts due'to the State was a release of a debt secured to the Bank by mortgage; and that the State is not barred by a statute of limitations, unless expressly named. It is also said, that “by the statute creating the State Bank, it is declared, that it shall belong to the State of Illinois. Hence,” say the court, “it follows that the people of Illinois are the real plaintiffs, and are alone entitled to the benefit of the recovery.” This reasoning, it must be admitted, is unsatisfactory, and altogether inconclusive; it entirely loses sight of the grounds upon which a State is held not to be bound by a statute of limitations, which does not apply to it eo nomine. The decision rests alone upon the basis that the State being the sole proprietor of the Bank, a debt due to the latter, is due to the State, and not barred by the statute. This conclusion cannot be supported.

The judgment of the county court of Dallas, is correct inlaw; and is consequently affirmed.