2 Denio 380 | N.Y. Sup. Ct. | 1845
In the case of Warner v. Beers, President of the North American Trust and Banking Company, (23 Wend. Rep. 103,) which came before this court during the session of the legislature in the spring of 1840,1 stated at length my reasons for believing that the associations authorized by the general banking law were in fact corporations; that is, that they undoubtedly belonged to the class of artificial but organized bodies, capable of holding property, rights and immunities in common, and of transmitting the same by an artifical succession, which in legal language were called bodies corporate, or corporations. I at the same time stated the reasons which had led me to the conclusion that they were not, however, such bodies corporate as came within the spirit and intent of the section of the constitution requiring a vote of two-thirds of all the members elected to each branch of the legislature: that is, that a general law authorizing all and any of the citizens of the state to organize themselves into artificial bodies for the purpose of carrying on any trade or business, or of holding and transmitting property in an artificial succession, was not within the spirit and intent of that provision of the constitution, and might be passed by a majority vote. Those reasons are published in the report of the case of Warner v. Beers, and it is therefore unnecessary to repeat them here. As the judgment of the court in that case was in accordance with my opinion, as then expressed, upon
The declarations in the case of Warner v. Beers, and in the case now under consideration, are the same in substance; that is, in each case the suit is brought iu the name of the president of the bank upon an alleged indebtedness to the association, and not to him. In both cases the declaration was demurred to, upon the ground that an indebtedness to the association was no sufficient foundation for a promise to the president, so as to authorize him to sue for the debt in his own name, if the law creating the association and authorizing it to sue for its debts in the name of its president was unconstitutional and void. In the case of Warner v. Beers the supreme court gave judgment for the plaintiff upon the demurrer, and this court affirmed that-judgment. In the present case, that court has given judgment for the defendant upon the demurrer on .the same state of facts presented by the pleadings. It necessarily follows, that if the judgment of the supreme court in the case now under consideration is right, the judgment of that court, as well as of this, in the previous case of Warner v. Beers, was erroneous. It is true the difference between these two judgments of the supreme court arose from the fact that in the case of Warner v. Beers, or rather in the case of Thomas v. Dakin, (22 Wend. Rep. 9,) which was the pioneer cause in that court, it was erroneously supposed by the two judges who concurred in the decision in favor of the plaintiff, that they could not take judicial notice of the fact that the law was passed by a majority vote merely. I was inclined to the same opinion at that time, as will be seen by the report of the case of Warner v. Beers; though I was careful to put my vote for the affirmance of the judgment upon the ground that the general banking law was constitutional even
The learned chief justice is under a mistake in supposing that the resolutions appended to the report in the case of Warner v. Beers were extra-judicial, or that they were adopted after the case was finally decided, and when there was nothing before the court for adjudication. He was undoubtedly misled by the fact that, by an error of the clerk of this court in making up his minutes, the judgment was dated on the seventh of April, when the first vote was taken, and not upon the twenty-second of that month, when the final judgment of this court was actually given. The cause was heard during the session of the legislature, when the court was in the practice of meeting semi-monthly only, for the purpose of hearing special motions. From the manner in which this court is constituted it is imposible for the members thereof to meet together in private and compare their opinions previous to a decision of the cause. Hence has arisen the practice of calling for the written and oral opinions of such members us think proper to give them, and then to take a vote upon the general question of affirmance, or reversal; which vote is only preparatory to the final judgment to be given by the court. And where different questions arise and are discussed, it sometimes becomes necessary, to enable the courts below to carry the decision of this court into effect, to ascertain the grounds upon which its judgment is based. The 26th rule of the court therefore provides, that where the decision of a cause depends upon distinct questions, the determination of either of which will dispose of the cause, the question shall be taken separately, if required by any three members. And the practice has always been, since I have been a member of the court, when a separate vote was to be taken upon different questions which had arisen
It remains to be seen whether any subsequent judgment of this court can properly be considered as having unsettled this decision upon the constitutional’question, as to the validity of associations organized under the general banking law, which had been thus distinctly and explicitly made here, in the case of Warner v. Beers. The learned chief justice, in the case of De Bow v. The People, (1 Denio’s Rep. 9,) supposes that the decision of this court in the case of Purdy v. The People, (4 Hill’s Rep. 384,) has, by overruling one of the reasons assigned by Mr. Justice Nelson for the judgment of the supreme court in the case of The People v. Morris, (13 Wend. Rep. 325,) necessarily impaired the decision of this court in Warner v. Beers, which was to some extent based upon similar rea .soning.. It is sufficient to say, that the judgments in all three ,of those cases may well stand together. The case of The People v. Morris did not, as in the case of Purdy v. The People, .arise upon the modification or alteration of the powers of a single municipal corporation, by an act of direct legislation altering -the chartered rights of powers of a particular corporation only. But the powers of the corporate officers of the village of Ogdensburgh, which were in question in the case of The People v. Morris, had been modified and altered by an act of general legislation, relative to the excise laws of the whole state; which atit affected the right to grant retail licences which that corporation, as well as the corporations of other villages and cities, -previously possessed, under their several charters. And one of the justices of the supreme court, in commenting upon that case in The People v. Purdy, (2 Hill’s Rep. 39,) says " the difference between a general excise law extending alike to .the whole state, and a law touching the charter of a
The case of The Supervisors of Niagara v. The People, decided by this court in December, 1844, but not yet reported, as I understand that case, so far from impairing our decision of April, 1840, is a direct authority in favor of the constitutionality of the associations created under the general banking law. That decision does, it is true, declare them to be corporations. But the actual judgments given by the supreme court and by this court in that case can only be sustained upon the supposition that such associations were legal and constitutional corporations, so as to be taxable as corporations under the general tax law. For if they were merely illegal and unauthorized associations of individuals, their property would not have been taxable as corporate stock at the place where the office of the association was located, and by the corporate name; but each individual stockholder would be taxable for the actual value of his interest in such stock, so far as that interest consisted of personal estate, according to the directions of the general tax law. The mandamus asked for in that case was to compel the supevrisors of the county of Niagara to
If ever there was a case in which the principle of stare decisis should be applied to the decision of the court of dernier resort, so far as relates to subsequent judicial action upon the same question, this appears to be a proper case for the application of that principle. Since the decision of this court, in April, 1840, millions have been invested in the stocks of these associations, and loaned out to individuals upon the faith of that decision. The bills of .those associations to an immense amount are also in circulation and in the hands of the citizens of the state and others, who have no other security for their payment than the debts due to such associations and the bonds and mortgages and stock' which have been given to or purchased by 'these associations, and transferred to the comptroller for the pro
Senators Bqckee, Barlow, Lott, Folsom and Jomes also delivered written opinions in favor of reversing the judgment of the supreme court, on the ground that the question had been determined by the former decision of this court in the case of Warner v. Beers, but without expressing any opinion upon the point as an original question.
¡Hand, Senator. The inquiries, whether the question raised in this cause has been fully passed upon by this court in the case of Warner v. Beers, (23 Wend. 103,) and if so, whether the maxim of stare decisis should control our decision here, naturally first present themselves. If-the answers to these in
The history of judicial opinion upon the clause of the constitution in question (Art. 7, sec. 9,) is somewhat singular. In the case of The People v. Morris, (13 Wend. 325,) the supreme court in the year 1835 decided that public corporations, as cities, villages, &c., were not within the provision. The same court, in Thomas v. Dakin, (22 Wend. 9, determined in 1839,) held that an association under this general banking law was a corporation. A few months afterwards, this court, in the case of Warner v. Beers, after an elaborate argument, gave judgment for the plaintiff on a note given to one of these institutions. Two resolutions were at the same time passed by this court; one to the effect that the law was constitutional without having been passed by a two-third vote; the other, that these associations were not “ bodies politic or corporate within the spirit and meaning of the constitution.” In the case of The People v. The Assessors of Watertown, decided in 1841, (1 Hill, 616,) the supreme court held that these associations were corporations, and as such liable to be taxed. The next year this court, in the case of Purdy v. The People, (4 Hill, 384,) determined that this clause of the constitution included all corporations, public as well as private: And finally, at the last term, in December, 1844, this court in the case of The Supervisors of Niagara v. The People, held that these institutions were “ monied or stock corporations,” and liable to be taxed as such. So that we have a resolution of this court, that they are “ not corporations within the spirit and meaning of the constitution;” and also decisions of the same court that the constitutional provision includes all corporations; and then again, that these associations are “ monied or stock corporations.”
The case of Warner v. Beers had been decided in the supreme court in favor of the plaintiff, upon the ground that the court, on the pleadings in that case, would presume the law to have been passed by the constitutional number of votes. One judge dissented on the ground that only one corporation could be created by a single statute, even by a two-third .vote. Neither of tho
But again, if the judgment in that case was directly and necessarily upon the constitutionality of the law, is it a case to which the principle of stare decisis applies in its full force ? While another maxim, “ humanüm est errare ” remains true, there must occasionally be a reconsideration and overruling of human judgments. If on a re-examinati'on the former error'is clear) our duty i‘s plain. We must be as Lord Coke said Sir John Fortescue was, “ not amongst the number of those qui suds amassent errores,' but one of those who yielded to the truth when he found it.” (Preface to 10 Rep.) To overrule a decision clearly erroneous on principle, is always a duty, even where the constitution does not interpose; unless there has been a uniiofnl course of corroborating decisions for a series of years, and even then, the principle of stare decisis has been most strongly applied in real estate cases. I believe that a single decision has never, in any case, been allowed to stand if found opposed to principle. (Walingham v. Baker. Hardr. 52; Tapner v. Merlott, Willes, 182; Welles v. Trahern, id. 240; Vaughn, 382; Vere v. Ld. Cawdor, 11 East, 570; Williams v. Jermaine, 7 Barn. & Cress. 468; Smith v. Compton, 3 B. & Ad. 200.)
The able counsel who appeared for the plaintiff in error, pressed upon our consideration the importance of the stability of judicial opinion, and particularly in this court of final resort. Many reasons were addressed to us to show the importance of "a rigid adherence to the case of Warner v. Beers. The argument of public convenience, and also the wisdom of the ancients were pressed into their service; the ever venerated maxims of the peripatetic Stagyrite were cited. No one more than myself feels the force of the doctrine of stare decisis. As a lawyer, I am accustomed to revere the decisions of legal tribunals. They
Again; the case of Warner v. Beers seems to be shaken by every subsequent decision oh the subject; and in case of a conflict of decisions, the principle of stare decisis does hot hold. (Emanuel v. Constable, 3 Russ. 436.) The case of The People v. Morris, (13 Wend. 325,) no doubt had an influence upon
If, as this court held in the case of Purdy v. The People, the constitutional provision under consideration embraces all corporations, public and private, and if it be also true that the institutions organized under the general banking law are corporations, as was determined in The Board of Supervisors of Niagara v. The People, it is difficult to see how the case of Warner v. Beers can be sustained. It seems to me there is no escape from the charge of irreconcilable inconsistency in our decisions.
It is material also to consider that the case oí Warner v. Beers is a single decision. For this reason I think the principle of stare decisis does not preclude the examination of the main question in this case. The decision stands alone, and is of a recent date. It is not sustained by a long current of adjudications, but on the contrary, is shaken by every judgment which has since been given where the question was in any way involved. If in addition to. this it shall, on examination, be found not to be founded on principle, all the authorities concur that it cannot be sustained.
This brings me to the consideration of the great point, Is this law, which it is conceded did not receive the votes of two-thirds
I have no doubt but that a corporation may be shorn of some of the incidents, by the power giving it existence. Indeed, we have made -the members of manufacturing corporations personally liable to a certain extent. And on the other hand, in England at least, powers can be given to partnerships which are similar to some of those said to be incidental' to cor
Having discussed the nature of corporations, we are led next to inquire whether associations under the general banking law are corporations. This court has at least once, and the supreme court has repeatedly declared that they are; and even the case of Warner v. Beers does not decide the contrary. Indeed, I understand that the learned chancellor could not in that case vote for the second resolution as first proposed, because it declared unqualifiedly that they were not corporations. Do they possess the attributes of corporations within the settled definitions of that term? To determine this requires an examination of the nature and powers of .these institutions. They have their existence by an act of the government; the members are so combined as to lose their individual character, and they act solely as an artificial being; they have power to sue and be sued by an artificial name, and may use a common seal; they may appoint and remove officers, and can only act by those officers. The individuals cannot, as such, do any act to bind the association. A member may be sued at law by the association: the individual members are not liable for the debts of the association, and they hold their interest by transferable shares. There is perpetual succession, and immortality, by which I understand that the association is not affected by a change of members or the death of any number of them less than the whole. In short, every quality and power, express and incidental, that has ever been attributed to corporations, appear to be given by the legislature to these associations. One or two of these powers are not expressly mentioned in the statute, but we have seen that they are always implied. If, .then, they come into existence as corporations do, and have all the powers and qualities of corporations, can they be denied that character because the
This brings me to the consideration of the question, whether, "admitting these associations to be corporations, the act was constitutionally passed, it being conceded that it did not receive the assent of two-thirds of the members elected to each branch of the legislature. It is said that this law is not within this provision, because it is general and open to all, and therefore is not a grant of a franchise; and also, because the law itself does not 11 create ” the corporation. There are now a large number of these corporations in existence which could not create themselves ; for, as has been shown, a merely voluntary association is not a corporation. Whence then do they derive their existence ? It is not material that a corporation does- not instantly result from the legislative act; for almost every grant of a corporation requires a subscription for stock and other acts before a boby corporate comes into existence. The voluntary act of individuals, in conformity with the statute, is required to complete the corporation. “It is immediately by letters patent, a corporation in abstracto.; but not in concreto, till the naming of the-master.” (Sutton's Hospital case, 10 Rep. 23.) And the king, it is said, may even grant to the subject the power of erecting corporations. (Bacon's Abr., Prerog. 53; 10 Rep. 23; 1 Bl. Com. 474.) If the objection in question is well taken, how are our manufacturing, religious and other corporations created ? These have been treated as corporations in this and all our courts. (19 John. R. 473; 1 Hopk. 304; 25 Wend. 665.) It seems to me it would be as correct to say, the Great First Cause creates nothing in our fields because means are used to aid nature in her productions.
Then, does the generality of the law take it out of the restrictive clause ? We are told it is not a grant, because not a monopoly. The clause reads, “ any body politic or corporate not “ any monopoly.” The meaning of the words used is entirely clear and unequivocal. Manufacturing companies, reli
Various rules have been laid down for the interpretation of our constitutions. We are told that we must look to the history of the times and examine the state of things existing when they were formed and adopted. (Baldwin, J. in the State of Rhode Island v. The State of Massachusetts, 12 Pet. 723.) The ex post facto clause is mentioned as an illustration. There is no doubt but that the use of technical words should receive the accepted and practical meaning contemporary with their use in the instrument. So, too, we may look at the general history of the country and the state of things at that period, to find what ttie people understood by the expressions used. But with great deference, I object to limiting their supposed views to the consideration of any temporary existing evil, when adopting a phraseology perfectly plain, and which they intended should be the language of the organic law in all time. Their views l night well extend beyond any present grievance; and no one has a right to enlarge or restrict the sense of words having a distinct meaning, because of some temporary influence which it is conjectured may have induced their adoption. We should read them as they intended succeeding generations should read them according to their plain import, and the then use of the language employed. This language cannot be limited, because it may happen to be in derogation of the common law: for it is paramount to all former laws and customs. It is better too, and the only safe way, at all times, to be careful to add nothing to the powers con
We find no analogy to our political institutions in the systems of other nations. In England there is no written constitution. The celebrated magna carta is at the mercy of par-, liament, and has been already modified. There, in the language of Wilson, J., (2 Dall. 462,) “ from legal contemplation, the people totally disappear.” Parliament is omnipotent, and it would seem may declare a corporation a partnership, and a partnership a corporation, and perhaps an animal a vegetable. According to Blackstone, the “jura summi imperii” resides in parliament. (1 Com. 49.) Its legislative power “is the highest authority which the kingdom acknowledges on earth.” (Dwarris on Stat. 668; 1 Bl. Com. 185.) But with us the .case is entirely different. We have written constitutions, in which, to use the apt language of Patterson, J. in Van Horne’s lessee v. Dorrance, (2 Dall. 308,) “ the forms of government are delineated by the mighty hand of the people, in which certain principles of fundamental law are established,” “The constitution is the work and will of the people themselves in their original sovereign and unlimited capacity. Laws are the work or will of the legislature in their derivative and subordinate capacity. The one is the work of the creator, the other of the creature. The constitution fixes limits to the exercise of legislative authority, and prescribes the orbit within which it must move.” These doctrines appear to me to be sound. With us “legislation is (not) the greatest act of superiority one being can exercise over another;” and.“ sovereignty and legislation are ” not “ convertible terms,” as in England. (1 Bl. Com. 49.) Our people have delegated certain powers of sovereignty to the legislature to be exercised strictly according to the written constitution ; and any act exceeding that authority is void. The legislature cannot “mould.and model the exercise, of its powers” irrespective of the constitution. (Story, J. 4 Wheat. 304.) The remainder of the “jura summi imperii,” lies dormant in the people until they shall see fit further to exercise fit. (Chipman’s Principles of Government, 181.)
After a most careful examination of this subject, I am convinced that the associations authorized by this act are 14 bodies politic or corporate,” and clearly within the restrictive clause of the constitution. My mind, is forced to the irresistible conclusion that the general banking law is unconstitutional, and I shall therefore vote for the affirmance of the judgment of the supreme court.
Senators Lester and Wright also delivered written opinions in favor of affirmance.
On the question being put, “Shall this judgment be reversed?” the members of the court voted as follows :
For reversal: The President, The Chancellor, and Senators Backus, Barlow, Beers, Bockee, Burnham,
For affirmance: Senators Hand, Lester, Scovil, Smith, Talcott, Yarney, Wright—7.
The following resolution was then offered for adoption:
Resolved, That the judgment of the supreme court is reversed on the ground that the decision of this court in the case of Warner v. Beers, decided that the law entitled “ an act to authorize the business of banking,” passed April 18, 1838, is valid and was constitutionally enacted, although it may not have received the assent of two-thirds of the members elected to each branch of the legislature; and that the decision in that case is conclusive.
On the question being put on adopting the said resolution, the members of the court present and voting voted as follows: In the affirmative: The President, The Chancellor, and Senators Backus, Barlow, Beers, Bockee, Burnham, Deyo, Emmons, Folsom, Hard, Porter and Sedgwick—13. In the negative: Senator Scovil. The resolution was accordingly adopted.
Judgment reversed.