97 Cal. 28 | Cal. | 1892
Appeal from the judgment and an order denying defendant’s motion for a new trial.
The action is upon certain bills of exchange drawn by the defendant upon William T. Coleman & Co., payable to the order of defendant sixty, days after date, and by the defendant indorsed and delivered to said William T. Coleman & Co., who, before maturity, sold and delivered the same to plaintiff. These bills were afterwards duly accepted by William T. Coleman & Co., who failed to pay them at maturity, of all which the defendant was notified.
Defendant’s answer, in addition to denials not necessary to be noticed, alleged that after the defendant indorsed said bills of exchange, said William T. Coleman & Co., the drawee, paid the same to defendant, whereby the defendant was released and discharged from liability thereon as drawer and indorser; and for a further defense, alleged that plaintiff for more than two years last past was a banking corporation doing business in the city and county of San Francisco, state of California, and during all that time was and still is subject to an act of the legislature of that state, approved April 1, 1876, concerning corporations and persons engaged in the business of banking; that plaintiffs had not complied with certain provisions of that act (hereinafter mentioned), and because thereof was prohibited from bringing or maintaining any action in the courts of this state.
The court found that all the allegations of the complaint were true, and as to the answer found all the allegations untrue, except that plaintiff had been doing business as a banking corporation for more than two years at the place alleged, and that there were many newspapers of general circulation published in the city of San Francisco.
These statements are required to be recorded in the office of the county recorder, one in a book entitled “ Statements of Banking Capital,” and the other in a" book entitled “ Statements of Banking Assets.”
The third section of this act is as follows:—
“ Sec. 3. Directors making a false statement shall be jointly and severally liable to any person hereafter dealing with such corporation to the full extent of such dealing; and no corporation, and no person or persons, who fail to comply with the provisions, or any of the provisions, of this law shall maintain or prosecute any action or proceeding in any of the courts of this state until they shall have first duly filed the statements herein provided for, and in all other respects complied with the provisions of this law; nor shall any assignee or assignees of any such corporation or person whose assignment shall be made subsequent to any such failure to comply with the provisions of this law maintain any action or proceeding in any court of this state until his or their assignor or assignors shall have first duly complied with the provisions of this law.”
Appellant contends that the plaintiff has not complied with the requirements of said statute in several particulars: 1. That the statements published and recorded by the plaintiff do not show the amount of the capital actually paid in money, and in good faith, into the bank;
1. The statute contemplates two statements; but we are not prepared to hold that if the one statement contained all the particulars required by the statute it would not be sufficient, inasmuch as the statement was recorded in each of the books, and the information required could be ascertained from either. We think, however, that the statements put in evidence by- the. plaintiff .were not a substantial compliance with the statute. These - statements, omitting the figures, were: Under the head of liabilities: “ Capital ” $—, “ Circulation ” $—, “ Deposits ” $—-, “ Bills payable and other liabilities ” $—, “ Undivided net profits” $—, “Total ” $—; and’under the head “ Assets”: “ Specie on hand and cash at banker’s” $—, “Bills receivable and other securities” $—, “Investments” $—, “ Bank premises ” $—, “ Total ” $—, — a sum equaling the liabilities.
The statute requires a statement of the amount of capital actually paid in in money, and thus excludes subscribed capital not paid, and all securities of every description which may be held to represent capital. So in regard to the statement of assets, the statute requires the “value ” to be stated, and where the assets are situated. Bills receivable, for example, are never charged up to profit and loss by any banker or business man until collection is hopeless; but until that time they appear on every trial balance as assets at their face value. However that may be, the legislature required a sworn statement of the capital actually paid in, and the value of the assets, and where the assets were; and we must either hold that “ Capital,” in the statement, means only “ capital actually paid in money,” and that the words “ Bills receivable, and other securities,” of themselves,
2. But these tabulated statements are not only not :aided by the affidavit attached thereto, but are not ■“ sworn statements.” The affidavit is made by the managing agent at San Francisco, and is as follows: —
•“William Lawson, being duly sworn, says he is the managing agent at San Francisco of the above-named bank, and that said bank has no cashier or secretary at .such agency; that said bank is incorporated under the laws of Great Britain, has its principal place of business in the city of London, and carries on its business there, and through numerous branches and agencies in Canada, the city of New York, and this city; and further, that the accounts of the San Francisco agency .are made up to the 30th June and 31st December in ■ each year, and forwarded to the London office, where they are consolidated with the other accounts of the bank, and a general statement is prepared showing the entire assets and liabilities, which is sent to this office; that such general statements reach San Francisco about the middle of August and February in each year; that the foregoing is a correct copy of the last statement received. W. Lawson.
“ Subscribed and sworn to before me this fifth day of .July, Í888.
[Seal] “Jambs L. King,
“ Notary Public.”
It is nowhere intimated in this affidavit that any of
In Whitney Arms Co. v. Barlow, 63 N. Y. 66, 20 Am. Rep. 504, the court had under consideration a similar statute, requiring the trustees of manufacturing corporations at stated times to publish and file a verified report, “ which shall state the amount of capital and of the proportion actually paid in, and the amount of its existing debts.” It was there said: “The reports should in all essential particulars comply with these statutes. The facts need not necessarily be stated with technical or grammatical precision and accuracy, but they must substantially appear and be verified by the oath of the president and a majority of the trustees, and so distinctly stated that if untrue perjury could be assigned, or an action maintained by any one sustaining legal injury from the misstatement.”
It is true, as said by counsel for respondent, that our statute is in some sense penal, and should receive a liberal interpretation; but the fact that a statute is penal does not authorize the court to refuse to enforce it where the failure to comply with its provisions is, as in this case, palpable and material.
The fact that the San Francisco agent of the plaintiff could not personally know the truth of all the matters required to be embodied in the statements is not sufficient to relieve the plaintiff from such compliance as was within its power; and if it be said that it is not possible for the plaintiff to comply substantially with
In Bank of British North America v. Cahn, 79 Cal. 463, this court held that a failure on the part of the plaintiff to comply with the provisions of the act in question was a sufficient defense to the action. Counsel for respondent contends, however, that in the case above cited it w'as held that the publication and recording of these documents is mainly for the benefit of those locally interested, by giving information to them through local publication and recording, and that therefore the statute was not intended to have an extraterritorial effect; that in this case the bills of exchange sued upon were purchased by plaintiff at its agency at Vancouver, in British Columbia, and that the “ banking business,” so far as these bills were concerned, was done in a foreign country. The record shows that these bills were purchased at plaintiff’s Vancouver agency, and paid for by drafts drawn by that agency upon the San Francisco agency; that the bills were forwarded to the latter agency, and by it presented for acceptance, and after acceptance retained for collection. Upon this state of facts, respondent contends that it should not be deprived of the right, “ accorded to all foreigners, of pursuing their remedies against residents of this state upon personal contracts made out of the state.” But the personal contract in this case sought to be enforced was a California contract, made here and to be performed here. The Alaska Improvement Company, the defendant in the action, did
In Bank of British North America v. Barling, 44 Fed. Rep. 641, an action against a stockholder of the Alaska Improvement Company, upon his personal liability as a stockholder for these same bills of exchange, cited by respondent's counsel, the court held that the right of the plaintiff to maintain an action in the federal courts was not affected by the state statute under consideration here. Having so decided, the court also expressed the opinion in that case in the circuit court, and also in the same case in the circuit court of appeals (50 Fed. Rep. 260), that as the purchase of the bills of exchange occurred beyond the limits and jurisdiction of the state of California, the case was not within the statute; but this was clearly obiter dicta, and not authority upon the point here. But the whole question as to where the “ banking business ” was done, or the purchase was made, if material in any sense, is not conclusive. It is conceded that the plaintiff is, and during all the time covered by this transaction has been, doing a banking business in this state. The requirements of the statute are impera
The view we have taken does not, as we think, conflict with the New York cases cited by the respondent, but, on the contrary, is clearly supported by them. Those cases proceed upon the theory that the duty of the corporation to make these reports is one which it owes to the public generally for the protection of all persons who may have occasion to deal with it; that the duty is'a corporate one; that the state confers upon the corporation valuable privileges, and to carry out its policy exacts the performance of specified duties which they must perform as the condition upon which they are entitled to enjoy these privileges. It does not affect the analogy between those cases and the ease at bar, that the penalty for a failure to comply with the statutory requirements was in some cases a pecuniary liability of the members of the corporation and in others a forfeiture of the corporate franchise. The duty was the same, imposed for the same reason; the only difference being in the mode of securing its performance.
3. The statute, doubtless, intended that these statements should show the condition of the bank as of a time immediately or shortly preceding the publication of the statement, as otherwise there could be no object in re
The conclusions at which we have arrived upon the questions above considered render it unnecessary to consider other questions presented by appellant.
We advise that the judgment and order appealed from be reversed.
Foote, C., and Vanclief, C., concurred.
For the reasons given in the foregoing opinion, the judgment and order appealed from are reversed.
McFarland, J., De Haven, J., Sharpstein, J.