Curran v. Arkansas

30á of Arkansas etal. v. State

Curran here ordered, it is now whereof, de- adjudged, consideration Circuit the decree of the said court, Court in creed by affirmed, with costs. same be, cause hereby, N. Error, Curran, in State v. The Arkan James Plaintiff M. Ross, Arkansas, State John sas, The Bank Carrol, W. Bank Attor Receiver, Financial David ney. 1836, banking a usual Legislature incorporated pow- bank with the In of Arkansas circulation, discount, being the sole stockholder. deposit, ers of form, November, operation, bills in but The and issued the usual bank.went 1839, suspended specie payments. Afterwards, description following : legislature passed acts several bank, 1843, subjecting January, continuing the existence of the corporate attorney, who were direct- management affairs -tothe ed to cancel certain bonds of the receiver and an financial bank, State, by money by held borrowed equal by in the bank an amount. reduce the State's 1843, specie, directing to the February, transfer a certain amount the officersto paying legislature. purpose for the membors of 1845, January, requiring the State which officers receive bonds of been payment due bank. for debts to the part cap'tal issued of the bank in , 1845, specie par purpose January, taking funds for the away another certain ae placing legislature, funds the credit of the paying membors of: other te State, subject by appropriation. to be drawn out 1846, vesting estate or taken the bank the State all real titles.to other debts payment for due to -it. receive, only requiring officersto of-debts due capital of flic issued to bonds of the which had been constitute the but banking capital of issued to constitute the cor- those also which had been which were then insolvent. porations pursue principles an can a creditor insolvent general of law Upón except purchasers, persons hands Iona creditors or into the all other assets fide parties present in the nothing in case or laws the character and-there transferring exception general rule. For Su- property, make it thqt the State can be sued in this case. has decided preme court of Arkansas demand, there contract with the being payable on was a holder of the bank bills The laws, them; withdrew the assets of the bank into different and these channel, impaired contract. of this legislature pre- repeal charter of the bank does the modification Nor charter of the being this conclusion from drawn. But in this case the vent repealed- never was a contract be- there the contract between bill-holder Besides ' placed pur- bank for the which liad funds the bill-holder and the tween " debts, right funds after the paying its and which had to withdraw those pose of right of creditor to them had accrued. circumstances, laws, pass either as creditor right to under the had no The of all taking possession of for the benefit bank or as a trustee the real estate of the the creditors. The several examined. valid, consequently the Supreme laws to be Court of State held thése judiciary act. jurisdiction under 25th section of the attaches , Court Ar- case was brought up This under section kansas, issued writ of error the 25th judiciary act- v. State of Arkansas et si. Pike, Mr. Lawrence Mr. It was argued plaintiff Sebastian, Mr. a brief error, and filing prepared Mr. the defendants in error. Hempstead, for both sides of counsel were in such an The arguments cannot train of reasoning, unbroken reporter compress as, and made into report; they them of mere together, upwards he of cannot entire. print, The publish sixty pages to examine desires can who into the case con- thoroughly,

reader Arkansas, of Court of delivered in sult opinion In that November, 1851. maintains doc- opinion earnestness! with trines great of CURTIS delivered court. Mr. Justice opinion to of the State is writ of error of This Supreme Court Arkansas. in filed bill in in the Circuit The error plaintiff equity Pulaski, State of of that the State Court county against Arkansas, of Arkansas, the State Bank financial of re- bank; of the and the defendants attorney ceiver having and thereto, the Court Circuit overruled the demurred demurrers} thereon, elected lo the defendants rest court made a and, as The favor of' the defendants complainant. in appealed decree Court, sustained, where the demurrers were to the Supreme to be ordered This decree the bill dismissed. and plaintiff reexamination, 25th here for under the section of has brought act. the judiciary on arise a demurrer to to be determined the questions As case, and the substance therein made confessed bill, stated, to démurrer, must on which grounds exhibit rests. decision our. State the Bank of the bill that Arkansas was shows The 1836, of that State in with the legislature incorporated circulation, and discount, and usual banking powers deposit, was, in fact wUs the State designed that That stock of the bank be, its sole stockholder. capitel to of bonds of the State, raised sale ¡$1,146,000, consisted sums other in with certain paid part together stock, aggregate sum amounting ah which was spe- the whole $1,496,753; being $350,753, its charter required bank was funds. That the cie, specie its bills on sufficient hand at all times pay specie to have on and bearer of bills owner That being plaintiff, demand. the bank which $9,000, upwards amounting suits and judgments had instituted recovered refused to pay, thereon, executions, against which law, running returned chattels, duly and lands goods, of Arkansas et al. bill, therefore, The iár scope unsatisfied. wholly to the general the aid as such assets equity obtain of a court reach to be satisfy ought appropriated judgment hands these assets alleged are, debt. in whose parties two defendants, who are the effects to have of certain behalf, alleged charge under the State. authority that To make a case and show parties, against hold ought to its belongs equity property, states, debts, the bill appropriated the bank issued bills to having gone operation, large amount, circulation, notice, which were in 1839, gave public then November, specie the 7th was day thenceforward, some suspended; definitely finally redeem refused comparatively exceptions, trifling bills. insolvent, That the bank still January, continuing settle an act was affairs. legislature liquidate passed by bank then That assets amounted $1,832,120, was collectible; the sum of $1,000,000, good then the sum of $90,301 on hand specie. This bank; the the existence of act affairs were continued corporate expressly the of a financial to receiver subjected management to and an who were the collected attorney, apply moneys by bank; to redeem them the same borrowed circulation of outstanding but, at time, held for State, bonds of the by money to least State, $200,000, at were by amounting cancelled, this act to be and and their required up by given be credited to the bank- to against amount part shows, capital of the State. The further stock other cers bill an- put act by by 1843, at session, the same offi- passed February transfer, bank to to the State the required were sum act to which was of $15,000 specie, appropriated by pay That 4th on the day members Janu- legislature. thé officers of 1845, another act was passed, authorizing ary, receivable, to its debts and take bank specific pro- compromise those to receive officers payment, pay- perty requiring to stock State, the bonds of issued raise .for: ment bills of the bank not have the been might notwithstanding taken up. act That the 10th was passed, another January, day funds, bank of all its .and specie appropri- depriving ating declaring par first, members of that specie, legislature, in the bank, which had-been certain funds the charter placed a. stock, form part by and made .its deemed there credit of the should be deposited drawn, subject out-by appropriations. TERM, 1853. of Arkansas v. on the 23d of December, act, day another passed That by kind, estate pur- all real every title to 1846, the to it, of debts due taken- in bank, or said by chased State, and titles to vested declared was received be thereafter to the debts due required on account State; avers, bill the name taken in mentioned of land different specifically parcels that many law, under this described, conveyed have by satisfaction, indebtedness. debtors that, on the 9th states, act, another by further passed bill officers of the to issued to 1849, the bank were required January, day debts, bonds of the in payment receive Arkansas, Bank other the Real Estate for raise capital the General Assem- chartered theretofore by banking corporations bonds amounted insolvent; which last-mentioned then bly, least $2,000,000. for satisfaction of the bill things, -The among prays, assets of the bank debt out of the thus judgment plaintiff’s stand in the name, or to to have come custody, shown use of the State force laws or to have gone court, of this under this above-mentioned; jurisdiction laws, that these invoked, error, is ground writ aof and that the contract, them, impair some highest valid, State has held them court of the reason dismissed the bill. decision, complainant’s are three our consideration. follows, questions that there been the un- complainant What would bill, if uncontrolled shown parti- the contracts der ? he of which complains cular - laws, them, or either those 2. Do ? contract complainant record, Court of 3. Does it appear, valid, to. be these laws reason thereof held a final decree complainant. made against be-answered without of these much questions The first is a creditor of an insolvent The plaintiff difficulty. banking of such a are a The assets fund for corporation corporation. are of its debts. If held they corporation the payment so invested as to itself, subject they legal process, may on If have been distributed such be levied process. stockholders, or into hands of others than bond gone among of or -debts creditors leaving purchasers, fide holders take the with the trust such unpaid, property charged enforce, in a court of favor of will equity of compel their the satisfaction application debts. 308 v. of et decided, and often rests upon has been This plain principles. “ is said,' 1252, 2 Jur. trusts this same Eq. In Story’s Perhaps, § intention, presumed of head implied upon (although under fall the head be deemed of well equally might implied we refer that class trusts law,) cases by operation other corporations private where stock of the debts of the a trust fund corpo- deemed or lien, creditors have a ration so that ; right priority it, thé stockholders preference payment corporation. Thus, for stock an The in- example: capital for deemed a trust fund all the debts of is. corporated entitle stockholder can himself to and no divi- corporation: dend all stock,,until the debts share of such capital paid, divided, stock should leaving and if the any debts capital stockholder, his share receiving unpaid, every stock, would, liable to contribute his pro in- be held raid equity, out of fund debts own hands.” discharge - this is doctrine held In Mumma with conformity Peters, 8 v. The Potomac Company, 3 Dummer, Mason, 308; The Wood v. cases v. Wright 319; v. Petrie, Nevitt Bank Port Gib 1 Smedes Marsh. & Thornton al. 8 R. son, ; Georgia 493; Id. 513 Hightower Edwards, C. R. affirmed Whitlock, Nathan v. elaborate' chancellory contain examinations of Paige, 152,) (9 it has affirmed' doctrine, and been applied many- cases. of this bank has as the therefore, So become far,, vested use, tb and used, the State or vested in gone in favor of this trust complainant, unpaid charged in the character of the creditor, unless there something par- which, or ties, or by consideration operation of which, transferred, force it has case taking

l%ws above laid down. out principles first, as the character Afid, parties. By became its sole of Arkansas stockholder. a distinct a com- the bank was trading corporation, having enabled to enter valid contracts separate-existence, plete alone, and stock, itself specific capital having pro- binding held out to the as the means to vided, and debts. public contracts,*the funds of its provided its creditors equitable rights performance, no fact, that a state in its paid way sovereign affected by to became When profits. entitled consequently capital, stock be- vested in corporation, paid trusts;, subject came once with chargeable extent, to the same charter, and fixed uses declared 1853. 309 Curran, v. Arkansas State .of reasons, same as it if contributed by persons. private That interested with others in a by becoming bank all or stock, does not ing corporation, impart that tions by owning to that of its or corporation any privileges prerogatives, down its as so far transac lays respects the sovereignty, exercises no or corporation, power privilege to those transactions not the charter, derived from respect been has affirmed court, in Bank of the repeatedly by v. The Planters United States Bank, 904; 9 Bank of Wheat. et v. Wistar al. Pet. 431; Briscoe v. The Bank of Kentucky Kentucky, 324; 11 Id. et al. v. The Bank Ala Darrington bama, 13 How. And is, our that the fact that the opinion stock of this came from the State interested was business, does not solely profits affect the creditor, to be out complainant’s of its right, paid which, as have seén, we follows the fund property; right the hands save a bond creditor or person, every pur fidé chaser, and court of is bound to enforce equity by decree such a creditor or against any party except purchaser within capable by being brought jurisdiction. That the State of Arkansas is . thus sued, capable being decided, has been after a examination, careful of that in this suit; Court and as this is' purely ques- of local law, tion the constitution and statutes óf depending on; the State, we follow decision, hold, there- conformity with, that its own consent the State become liable to a decree in favor of the ant suit, if the complainant complain- has valid him the relief grounds entitling prayed. Whether there was consideration or circum- thing transfers stances bank -to the its use, or to of which relieved that from the trust in favor best examined under the next question, do is, laws, which made, force of which these transfers contract with the complain- ant. This can be question answered only what by ascertaining existed, contracts and then and what were attached to them, of those actual by examining operation laws upon those contracts and their obligations. the bearer bills of the was plaintiff each of .of which the bank him, demand, on a certain sum promised were, Of course made out money. payments bank. the State, By existing when these bearer made, contracts were their had the right, legal process, performance compel levy COUET. v. State of chattels, lands, and tenéments execution 'of goods, to a debtors, and by resorting by garnisheeing assets, to reach*equitable property conveyed equity others creditors than and band fide n purchasers. it Such their obligations; were these contracts and would a to law authorizing seem and no that require prove argument to- distribute its a such requiring property stockholder, sole or it to its stockholders, its transfer among its bills unredeemed, would impair obligation leaving The cases of Bronson bills. v. contracts' those contained Id. v. 2 et al. 1 McCracken 311; Kinzie How. Hayward, hereafter, will be adverted leave which mbre particularly 1 been doubt it not no on that has attempted point. Indeed a on the of mere law, maintain, such a property operating could re- whose charter legislature private corporation, peal, case. That a be thát this is would valid! it is different argued has destroy power corpora- the.-legislature are no existence, tion its longer contracts -and and thereupon be enforced cannot against property corporatipn, to the which, charter, reverts grantors of its repeal to the State, it is escheats, its lands and far as personalty, if State thus that, it be hi the destroy power charter, their must creditor's, remedies of by repealing to the to bé will be considered entirely subject contracts, of their laAVcan because .no obligation to the be belongs Avhich passed very may laAV subjection any same ideas in Or, to of such contracts. express existence can the cor- Avords, destroy created that the State different can thus and, destroy as it contracts, and all its poration obstruct, and abridge it can charter, modify, by repealing rights contracts, with- of creditors and the the charter. out repealing them, deduced nor thé conclusion Neither premises, be admitted. can than stockholder no other This banking having corporation,’ its char might repeal that the not doubte such, be would ; repeal but that the effect ter destroy draw entirely and Avith corporation, contracts .the executory creditors, cannot claims from the just in an act of a the effect repeal If admitted. it of repeal, poAver a bank express corporating might containing the repealing1 objection, be difficult to encounter (cid:127) - of Constitution invalid, laAVAvas conflicting court, pressed States. This United argument'was Pet.) (8 of Mumma Potomac Company, v. The case language: was met by following explicit Curran, i>. are of «We opinion, corporation, dissolution Maryland, the acts oí under' cannot in- Virginia any just considered, sense "within the clause of Constitution of the on this United States subject, impairing that) States, contracts of the those the the tion vives; more company by n death can be said private to-impair person obliga' of those contracts.' The contracts sur enforce creditors their claims against an) ¡propertybelonging corporation, passed the hands of but is bond still held for purchasers, in trust fide thereof, the stockholders time of its company, dissolution, in local mode laws.” permitted by Indeed, if it once an insol admitted vent under the of its trading corporation,-while management officers, is a trust fund' in their- hands benefit credit (cid:127) ors, follows, that allows never equity, trustee, to fail see trust for want to the execution -of. trust, of that the dissolution of thfe although corporation, Mumma v. The title to changed. legal Petrie, 281; Pet. 1 S. Potomac &. M. Company, Wright ; v. The of Port ; Gibson, Nevitt Bank 6 M. Ch. R. S. & 319 513 Ch. Ed. C. 9 Read R.; Bank, 1 S. v. Frankfort 23 Paige; in view, of And, R. decision of Maine point court, v. Roberts, al. Wheat. Lennox (2 373,) applicable. - a suit It was whom, at the brought equity,, by persons of charter of the United the Baiik of States, its expiration effects were holdersl deed, in trust for creditor's and conveyed stock- these effects were -certain be can them considered power destrby how the-right to^ out of make a ? or how can a such prohibition power £row received assumed, the creditor knew when he rt be 'fairly because that, time at contract of the the could legislature the.bank there- it of to enter new deprive power engagements, of that must to have to the exercise be assented fore taken also at the the that he must discretion legislature, power exercise of different the. assenting considered totally the Le- made ? power viz. contracts destroy already power, ' over the con- contracts when gislative powers, existing lawfully

Curran v. Statu of Arkansas et al. are the formed, affect nature and tracts enter into the obliga- of those tions contracts. But such can be exerted powers only the reference in served such particular to which cases have been re- they ; and in all cases. inoperative And, until a' be case arises, the of such obligation contract can no more than if were under no circumstances impaired sub- that, control. ject because legislative assumption a contract the charter legislature may destroy by repealing it, made therefore a contract corporation which may altered, or or mariner the charter, impaired, destroyed, legis- fit, think lature without may repealing wholly inadmissible. Now charter of .this has never been On repealed. section of 28th the act of 31st of Janu- contrary day That in this act shall provided, ary, be expressly nothing so construed as to or existence corporate destroy said Bank of State of Arkansas, of the but the said institution is intended to collect in be so limited and modi- only as that said debts, fied bank shall off her ab- notes, stain from and close discounting loaning money, liquidate as is her business hereinafter Subse- up provided.” n laws have further still limited and modified quent corporate but the existence been touched, has not powers, the corporate suit, is made corporation party appears record. We do consider, therefore, of the State to power this charter enables State to a law repeal pass impairing its contracts. have thus far considered the contracts between the We only out of bills of the-bank complainant held But arising him, and some those contracts. this is contract with the It is complainant. only that, as the sole true the State was stockholder to be as is charter cannot deemed such a between' e'ontract Constitution protected by the United States. different question very which, that charter does not contain whether when provisions, third cónstitúte in acted a upon by persons, them, cortract of which cannot binding be impaired. his he If hands person deposit agent, his at revoke withdraw agency plea- sure. But if should third request he accept persons them, time, bills, that he had agent’s informing same the bills at in the hands to meet .agent placed property faith of such'.assurance maturity, agent’s xv, VOL. su

Curran;.u. et'al. State of Arkansas bills are the- revoking accepted, principal-cannot, by agency, his, from-the withdraw hands of acquire right,to . . the agent. n -faith who, is no of its “They longer exclusively his. . condition, their have it. acquired rights deposit, changed; á revocable The matter no rests in mere longer delegation a agent, n ;but a contract has an" between the arisen authority made, from the and- third? representation principal persons it, and the acts on the cannot done faith the property, of that without contract. withdrawn impairing this, that it Now the bank shall provides, (cid:127)(§, I,) dollars, have a stock of one million . raised capital by also., State,, sale.of the bonds of-the (§ 13,) certain described, shall other.funds,.which aré. specifically deposited therein State, .capital a .part constitute State, that the the bill bonds amounting avers dollars, to one also other bonds of the million .and' dollars, thousand one- hundred and au- amounting forty-six sold, were a act subsequent, thorized Assembly, .with, mentioned, funds their the other proceeds, together stock. the. bank constitute paid capital ' bank received this from the the fund to -State money State, meet .its with third pérsons engagements charter, it to for authorized State. expressly profit make this fund thus set in the hands apart Having it,- credit'to under an assurance that invited the had public give .there fori the the liabilities purpose paying placed contract such credit bank', whenever was given, between fund, to the State and the creditor not to his in- withdraw charter, to an at once arose.: That the followed deposit jury, out. to assurance, held stock, amounted trust'the one should who public cannot And on that we doubt. might rely paymént, assurance, a-third acted on .this when parted person and. all of-it, on the faith the transaction elements the. contract, the State could not withdraw the . binding fund, of without it, obligation. or any part impairing of, laws therefore, We complained proceed, ..examine ': ascertain what is several contracts above declared to . operation which are and with' with the State - for the.State of exist. The -learned counsel a That these laws view has, presented with great ability, Arkansas (cid:127) this; consideration; as these far It is which requires bank, from the appropriate and funds specie withdraw of, the character acted in uses of the. State creditors, over other paying creditor; preference taking Curran v. State of debt; force laws, itself all the of which real the bank was vested in the are not to be deemed to have of the of creditors, denial passed rights to the effect but that better to give only protect rights; those trust subsists, the in favor of be to creditors-81111 worked out in such manner as the State deem shall proper. To maintain the first it must that the appear proposition, State stood in its to bank and creditors at such relation creditor, the could time these were it that was passed; its debt law provide by payment preference laws do other these not with- creditors; to secondly, sum to than draw the use apply greater any amount such debt. to have our In cannot considered' judgment, its bonds in the It had posses- position. occupied placed n hold-their of the \Vith to sell thém sion authority certain also over to bank It had capital.. proceeds paid in the thir- funds, declaration, contained with express also were to b° charter, section of the part teenth these to its were to- have proportion credited capital, All these of the business. moneys of dividend the profits bank, as a fund, set hands of the upon thus were apart, the^ bills, which was to it to issue which was the credit bank contracted' to its of the answer the to engagements liable it was authorized in the course of business which creditors, is Such for of the necessary State. to transact profit charter, that funds declaration 'in the .these the express effect of. of the bank. capital constitute its assets were in- insolvent, bank became all' When is manifest that its it to every sufficient engagements, perform' the contracts which had stood bound of these assets by. part thus set funds bank the faith been made clear, that bank no and it is charter;, equally, apart 'onger to-the stock' had its any belonging possession capital sustains, Whatever losses bank .losses State. it has fund stockholders; the.only paid by-its capital insolvent, it has all that become it has to lose. lost When In some its stockholders. has

'fund, and nothing belonging to its stockholders be said to indebted sense may leave of the have in. With the they paid capital and, debts are it, all paid, to withdraw right after it stockholder, withdraw is itself the sole if the State from But, nature shall remain. very while it capital an insolvent it from cannot withdraw things, capital When insol- .remaining. none of their because assets to its creditors. vent, solely belong .SUPREME

Gurran therefore, decide what unnecessary, of these funds, in respect any portion powers n insolvent, When it the its entire solvent. while bank continued became debts, insufficient when was property' State, and, there- stock longer belonging fore, to withdrawn, none could be appropriating by without the use of the State what charter stood pledged contracts creditors, and such a law the obligations impairs between and also of the contract State and the provisions arising of the debts to the funds devoting the bank. that the In observed averments this, it must be addition bill, demurrer, show that the which are confessed by thirteenth section whole funds mentioned amount State had the claimed the charter, right amount with- withdraw, was $350,753; actually drawn and use of was least appropriated accounts, these of the averments On an $400,000. investigation are +-o but consider erroneous; we might appear obliged record. as are on true, them to confessed the they laws, withdraw from is, that .these the Our opinion to the averments in the sum of the bank $400,000, according the cannot be State had bill, upon ground supported bank, as a of the to these funds creditor appropriate the right, use. to its own for the other sufficient position, Nor can we find that support the bank'of the laws vesting divesting contracts, of the State, do not the plaintiff’s but in denial, furtherance of because passed and for creditors, and to them the afford remedy, the rights loss. of further prevention face, not with- which, their only over the Passing to those funds bank, but drew funds from the appropriated therefore, cannot be to which, use of the supposed or intended to in furtherance of the pro- be tect much rights to of their not to be in denial loss, them from rights, withdrawn, thus there the bank as was tfie examina- bill, four which require acts complained considered as can be tion, to see whether they with view of view with consistent remedial and in that only, point is the act The .first contracts obligations of plaintiff. act section of this The seventeenth 1845. January receive, to be required- financial receivers follows: That said' bank, debt due or in in whole part payment any which, faith to said good put were sold of the bonds of Arkansas bank and branches operation, notwithstanding outstand- of said bank circulation branches not be ing up.” taken may We attribute' to this cannot law provision any or effect than what on its meaning face. plainly apparent It authorizes assets of the bank to be requires appro- to debts State; of the and we cannot conceive priated pay how this can be reconciled with the of creditors to those assets, or how it can execution a trust in favor, consistwith or how it differs from the other laws appropriating to the use that insolvent and benefit State. sold these bonds were the State, circumstances obtain funds to constitute through agency do not make them debts of the bank. were bonds under the seal of the They signed by treasurer, governor, acknowledgment countersigned by containing State of stood indebted, Arkansas The and a and cashier promise pay. president of the bank are transfer by indorsement; empowered the conditional even of character which b.ut arises liability, from is nature indorsement negotiable paper merchant, indorsements, attached and, the charter of.the do not see such could case,"we how deem it to determine, We do not intended. under necessary whether, charter, the bank section fifteenth was made interest liable bonds. seem accruing section is board, merely directory general was intended to of interest out of' ex- provide be, but however profits; suppose pected intended raised the sale of these bonds, the fund held out to creditors as could, at time, be these'bonds, leaving credit- appropriated ors, who had dealt the bank on the faith of that Capital, it a would be construction wholly unpaid, by directly give supported we have been able to discover in any provision it, which and For conflict manifest purpose meaning. in no fair bank be considered to sense can the have had the as if it these bonds so much was liable, at proceeds capital, at State, of the to be moment pleasure swept away any debts which the State had contracted borrow it. In pay .the such would be condition proceeds things, nothing demand; than a to call' more on deposit, payable such, to them as to trust capital, allow public involve contradiction. plain Indeed, charter, taken in connec- construction upon tion with the at all the to withdraw pleasure alleged right

[*] 27

318 bank had which capital was proper funds deposited, render it and this would contracts; extremely bound by the charter under the tenth to maintain validity difficult section- of the Constitution of the article United the first bills of States from States, emitting credit. prohibiting several States to create that the power is known well for and transact business the sole bills, to issue corporations, officers, and State which corporate benefit appointed bank, been from time to time was alone interested in cases of Briscoe v. The Bank of The seriously questioned. v. The Peters, 257, Bank Darrington Kentucky, 12, nave settled this Howard, refer Alabama, question; in those eases. involved But ence to such banks were such were on bills distinguished principal ground do State, was, that not emitted rest bills of credit they but on the credit of the credit of the on the from its stock. derived bank has not provided charter of the fund, if. of its bills, with the if what redemption effectually chargeable to be is liable withdrawn pleasure is called bills remain, no means should redeeming the then the though faith State and bills rest upon wholly founded on its ot the-' the' credit corporation, property; of the State Bank of Arkansas, in the charter We do perceive, bills; a bank and emit such create such on the' intention to to have been intended to we think plainly appears contrary on the credit a real of'which its a bank having capital, make intention is transacted;' was necessarily business of the after it anywhere conflict with power appro- existence insolvent, became the funds pay priate which con- the State contracted borrow the. money debts ' - that capital. stituted recéivers 23,1846, the financial were of December act By creditors iii al. of Arkansas et v. make and and be authorized to same, titles governor take act shall same; the this effect acquittances give forpe in from and after its passage.” the the first vesting If this law contained only section^ in remedy of the bank no real providing property could' as a which this creditor complainant, by reach contracts. it, we think it would obligation impaired the. action True, it does .touch against right reach if bank; the real withdraws only it no affects the thus legal process, remedy.- it follows, means law affects remedy, because only The obligation does of a impair obligation .contract. are used contract, those in which words sense Constitution, it, which is recognized duty performing so if the changed and enforced And law that. laws. are impaired, the means the materially legally enforcing duty same. remains no longer the. contract court from been the doctrine very This has early 1, Mr. Justice Biddle, 8 Wheat. Washing In Green v. period. is no court, said: answer ton, the opinion delivering now that the Kentucky question, regulations acts so If these acts not of the the lands. remedy right extent of as naturp remedies existing change materially owner, and interests of as are just impair rights a violation of the as overturned much compact they diréctly if Kinzie, 311, interests.” In v. Bronson 1 How. of his rights court, Chief Justice Mr. Taney, opinion delivering Biddle, as in Green v. rule, above laid down speaking “ We rule above said: concur in the entirely correctness stated. The is the which municipal remedy part .law enforces protects maintains stitution was obligation,by right, the Con it. "Itis this this clause in protection ” intended secure mainly . cases, The some whether determining, difficulty in- change materially impaired remedy do not think terest of the must admitted. But we creditor, of this court exists in this case. decision difficulty must considered McCracken v. 2 How. Hayward, under consideration In that case question. settling levied on be made that a sale should not provided under of its execution, unless it thirds would bring.two law, valuation that such three It was held householders. obstructed the as to con-. remedy -tract. a far more The law now question presents certainly serious obstruction, for withdraws real from the reach altogether provides legal process, of Arkansas Cnrran creditor, as is and leaves the said substituted truly remedy, in Arkansas, case, of in Court in opinion the Supreme in and his live but reme- a condition in which grace, rights in dies only.” entreaty the real does this law withdraw from property only the State, section, it in but .second the arid vest the the by ,of been the withdrawn which have is given, terms of the to the bonds State. An ap- appropriated pay expressly stated, which, as has been above cannot recon- propriation, of the of whether ciled with the preservation remedies, or in are to legal those rights protected by existing manner. n to of the act same observations so much of the apply officers of 1849, as the the to 9th of re- required January, due to of the in of debts bonds State ceive payment in to issued to obtain the.Beal Estate capital put operation Arkansas, of bonds are averred Bank of State which in the to law to have amounted If $2,000,000. bill withdrew sold, to raise the bank to bonds assets of im- capital, pay contracts, of it the complainant’s paired not be that such law assets to supposed applying probably of sold to raise bonds the State for another bank, pay free that could be objection. the third remains to consider question: whether it It ap- only that Court the record of Arkansas held Supreme by. pears valid, to be reason thereof laws dismissed by these bill. complainant’s referred'to in the bill, laws Each'of specifically thpse of bank averred, made the.property upon operation If a had received assets private complaint.. person subject same manner in the bank in bill alleged of the he must have been been received have held ame- by as a of the creditor a court complainánts nable that, stated the local ¥e law of already equity. stands the same as a Arkansas, State predicament private a trustee, chargeable respect being person,, unless It question. laws force fol- necessarily exempted Court of the State held therefore; that lows, force of them the State valid,, and that was laws subject would otherwise have principles chargeable.. this, sufficient, under 25th give jurisdiction . record act, section that that appears judiciary of a State whether question, impaired decision, contract, involved was necessarily law was and the decision made against held valid, 1853. 821 TÉEIt «..State s error reason of its Arm supposed validity. plaintiff Peters, 16 281; The Treasurer Athens v. County, trong Carroll, Peters, v. Randell, 392; Crowell McKenney Peters, the said so much each of is, The result as authorized cancellation Arkansas, required State of borrowed of the Bank the of the bonds of given money Arkansas, or authorized and with- required State of that bank, or other drawal specie any part thereof or author- use of the the appropriation assets ized and required application any part bank to bonds issued and sold State property to of Arkansas, or for the raise for the Bank Arkansas, or authorized and Estate Bank of the State of Real real for the Bank required purchased Arkansas, or of debts due the Bank taken to and the title thereof of Arkansas vested conveyed of contracts Arkansas, in the State obligation impaired ajid bearer holder made the lawful with the complainant and were Arkansas, bills of .so inopera- the Bank of State of the Su- And, tive invalid. judgment consequently, reversed, and re- be the cause Court State must of that preme as the manded, that it Constitution may proceeded States requires. United DANIEL, Mr. CATRON, Mr. Jus- Mr. Justice Justice n dissented. NELSON, tice Justice Mr. CATRON. under the 25th this case court As comes a State up from is, first act, question section presented judiciary ;.and the merits decide I am we have whether jurisdiction violation of. rendered, contract which the no opinion, complainant sense of the occurred within recover, has sets up right the State of Constitution, the laws parsed laws, of in the bill. Arkansas, and complained formed merits, opinion/not On the I have no having authority them, as I to inquire apprehend Mr. Justice. DANIEL. 1 am of this announced con- court, From decision just to declare dissent. strained According my apprehension my and of there is no course jurisdiction, legitimate ground intent, case, within the interference of just, 1st of the Constitu- objects of the 10th section article tion. tiie Arkansas, State By legislature '

Curran v. State Arkansas assailed, the contract is of no denied. The claims noteholder of the Bank of stockholder every every to that are, in reference State corporation, fully The utmost that objected action recognized. can.be contest is, creditors of amongst State,asone of those creditors, and failing corporation, number, creditor appropriated to largest herself of the assets of that than a portion corporation greater would have been warranted or other by perfect equity, eauality, con-, all the creditors. But should this conclusion amongst ceded, the concession or implies attempt deny of the bank to' creditor. any obligation satisfy every might raise of fraud or unfairness in the action of question in reference to creditors of but it carries with it no or con- interference sanctity the. tract with the question whatever that be. The mere corporation, might fraud, execution of con- non-performance tracts, the Constitution never intended to surely constitute as a means polity which the federal authorities were tó supervise and acts of the State Such a governments. claim of in the federal power would government interference justify this, with, and the court of- act of the' supervision by and of legislatures, -transaction Of life, and in the every private imperfect exercise necessarily attempts power, encumber it with a mass business, which would disappoint of its entirely prevent performance duties. legitimate

Order. cause This came heard on the transcript re- cord from the Court óf Arkansas, and.was Supreme argued by counsel; On whereof, consideration here now- ordered this court, that thé adjudged the said judgment cause-be, Court in this and the same is reversed, with hereby, costs, be, and that this'cause and the same is hereby, remanded to the said Court, in order that such further proceed-' ings therein, in conformity opinion as to court, law and justice, Constitution United States, shall appertain. notes Among promissory defendant, the' the bill indorsed which he be prayed might The not title compelled complainants legal pay." transferred to held indorsement notes. This court maintainable. And this suit was decision necessa- two First. That the of the expiration char- points. involves rily not released the indorser. Second. a ter had That court of its-aid to trustees for would lend creditors' equity - to enforce the notes. We do not .of think that the payment trustee,'would omission stantial the bank to the sub- appoint-a vary - a in court of creditors equity. exist in Whatever technical difficulties an action maintaining or law after charter been re-' against a.corporation a there is no pealed, apprehension equity, in a creditor difficulty following corporation into-the hands one a bond creditor or purchaser, fide thereon, his lien satisfaction' of obtaining asserting . debt set just out fund for its apart of-that payment -specifically ted and. trust for when debt ail charged with was contrae Curran v. State of Arkansas et trust creditors when in the hands of the the corporation; n Kent, does Chancellor the charter repeal destroy. not. law has 307, n., 2 Com. The common rute says, insolvent become fact It has never applied obsolete... The sound doc dissolved or England. corporations moneyed decisions, that is, now trine as shown statutes and judicial (cid:127)the and debts of and other corpora capital, moneyed banking of cre tions, constitute a fund trust pledge wifi hold stockholdérs, ditors and a court equity lay fund, and see that it be applied. duly collected Thornton, R. cáse cases'before referred to and other Hightower Georgia are in conformity this-opinion, this, and, doctrine; in our pro judgment, distributing of an corporation insolvent or trading banking among perty Stockholders, or it to the use of seizing strangers, giving would the effects its contracts clearly impair of a as a law to the heirs deceased natural giving of his would the obli exclusion person, his contracts. gation maintained, if it be that charter thq repeal could destroy of.this of its operative,to obligation short of a contracts, it .would follow any thing that effect. could have The only ground upon repeal that inasmuch as the is, Such power power could claimed as the made, exists contract is inasmuch repeal when end effect of repeal put necessary of a. are made all contracts contracts corporation, .the an inherent tó be and with contingency,, liability subject to. said, We is not the neces- destroyed. already thus effect destroy .of sary of repeal were, if it entered into contracts.; subject but maintained, it be could ground liability, upon what. to.t.his certain its exist- powers Corporation, mérely suspendihg ence ? can followed consequence by any preserved, being to transact not the necessary prohibition effect Surely ,to not, and if made; contracts business, new destroy already

Notes

cases notes in certain judgment authorized of non-resident creditors would debtors, judgment provided of the bank on State all lands convey the same all act, another levied; passed day, convey- of, taken for, or estate ances debt due to' the all such titles were real purchased tó be made to the required State. to be vested in the declared words: That second following section authorized property, exchange any governor hereby amount of the: bonds equal said for an taken ;, said institution the benefit of provided executed with the holders not be shall exchanged such'property the bank such bonds at less were allowed prices than

Case Details

Case Name: Curran v. Arkansas

Court Name: Supreme Court of the United States

Date Published: Dec 29, 1853

Citation: 56 U.S. 304

Court Abbreviation: SCOTUS