36 Conn. 325 | Conn. | 1870
This case comes before us on a finding of
The first question reserved is whether the case ought to be dismissed for the want of jurisdiction.
It appears from the facts found that prior to the commencement of this suit the defendant bank had failed to redeem its notes, and that the Comptroller of the currency, proceeding in accordance with sections 46 to 50 of the currency act, had found it to be in default, had declared the bonds deposited with the government to secure the circulation forfeited, had appointed a receiver who had taken possession of its assets, and that its affairs were being wound up. It further appears that the plaintiff bank presented its claims to the receiver, who denied their validity and disallowed them, and thereupon the plaintiffs brought suit to determine their validity. The suit is defended by the receiver, by direction of the Comptroller of the treasury, in the name of the defendants for the benefit of the stockholders and creditors. They set up in their notice, and urge in argument, a want of jurisdiction in the court, because the proceedings of the Comptroller in the premises, pursuant to sections 46 to 50, produced a forfeiture of the franchises and a dissolution of the -defendant corporation, and therefore no suit can lie against it, even to determine the validity of a demand by a creditor. We think that this claim is opposed to the well-settled principles and analogies of the common law, without support in any of the provisions of the act and contrary to its express provisions.
1. By the principles of the common law an absolute and unqualified dissolution of a corporation by a decree of forfeiture or legislative repeal, extinguishes all debts due to or from it, and puts an end to all its fights of action and property, and it can no longer sue or be sued or do any lawful act. To prevent a harsh operation of this rule, it is also a well-settled principle that a dissolution by forfeiture can only be effected by judicial proceedings against the corporation taken for that pux-pose, a hearing or an opportunity for a hearing had, and a judgment of forfeiture x’endered thereon. For the px’otection
With these principles in mind we listened attentively during the argument of counsel, and have since carefully examined their extended brief, to discover the modus operandi by which the absolute dissolution claimed was or could be effected by the winding up proceedings pursued in this case. On this vital point of the claim their ideas do not seem to be clear or consistent. In the opening paragraph of the brief it is said: “ Its franchises and every corporate capacity had been taken away.” How taken, is not there stated. In the next paragraph it is said that “ the refused to redeem its bills constituted a forfeiture of its franchises, which, acted upon by the Comptroller, produced a dissolution of the corporation.” The action of the Comptroller was confined to the winding up prescribed in sections 46 to 50, commencing with the appointment of an agent to examine into the default, and will end with the final order for the distribution of assets. At what particular point of time in his proceedings, and by what particular act the dissolution was produced, is not stated, and cannot be surmised. In another place it is said: “ The action of the Comptroller under sections 46 to 50, unless he is enjoined by a district, circuit or territorial court of the United States, operates to divest the association of every corporate franchise or capacity which it originally possessed, including suits by and against it; it divests the corporation of its assets by transfer to the receiver for the use of creditors after satisfying the United States to the extent of its claims proved to the satisfaction of the Comptroller, and a distribution of any surplus to the-shareholders and their representatives, and not to the corporation. The result of these provisions is a dissolution of the corporation. They are as effectual for this purpose as an express declaration that thei’eupon the corporation
2. This claim of the defendants finds no support in any of the provisions of the act.
There arc three special cases in which the Comptroller is
The fundamental and essential principles of the common law alluded to were well understood by the then Secretary of the Treasury and the jurists upon the committees of Congress who assisted in framing the act, and they are recognized upon its face. The act was a most important and far-reaching one. It was intended to provide a substitute system of banking and currency for the whole country, and a new substitute body of banking associations, all of which were to become connected and blended in the most intimate manner with all its business operations and trade. They did not intend to leave anything to implication, and the act is remarkably clear and specific in all its provisions, and it is quite too much to ask that we should hold that they intended that the winding up of the affairs of a corporation by the intervention of a receiver should operate to produce a dissolution per se, with all the consequences attending a dissolution by judgment of forfeiture. If such had been their intention they would undoubtedly have expressed it.
3. And that such was not their intention clearly appears from express pi’ovisions in the act.
It has ever been the policy of the people of this country to afford to every man full and ample opportunity for the determination and enforcement of all his personal rights, and rights of action and of property. This policy is recognized
But there are other express provisions which are conclusive upon this point.' It is provided in the 8th section of the act, that every association formed under it “ shall have succession by the name designated in its organization certificate, for the period of twenty years from its organization, unless sooner dissolved, according to the provisions of its articles of association, or by the act of its shareholders owning two-thirds
The point has been made upon the brief and in the argument, that the presentation of claims to the receiver and their disallowance by him was conclusive in respect to their validity. In regal'd to this it is sufficient to say, that we find nothing in the act which expressly or by necessary implication authorized that officer to adjudicate conclusively, or at all, upon the claims of the creditors.
For these reasons we are of opinion that the court below had jurisdiction and that the case ought not to have been dismissed.
We come now to the merits of the case as presented by the finding.
It appears from the finding of the court that the plaintiffs’ claim was for “ notes, drafts and checks sent by the plaintiff bank to the cashier of the defendant bank for collection, of which the plaintiff bank was a holder for collection, but for which notes, drafts and checks the plaintiff had paid to other
But other facts were proved, which the defendants claim were sufficient to absolve them from liability. On the 28th day of February, 1865, there was due from the defendants to the plaintiffs on account of notes, drafts and checks sent by the plaintiff bank to the defendant bank for collection, a balance of 125,083.17, to provide for the payment of which the cashier of the defendant bank gave to the plaintiffs sundry drafts, made by third persons, the avails of which as collected were credited to the defendants upon the books of •the plaintiffs. These drafts were endorsed by the cashier of the defendant bank, and the sum of 17,475.65 remains unpaid thereon, and that amount the defendants claim should be applied in extinguishment of so much of the plaintiffs’ account. This claim is not founded upon any agreement that the drafts should be received in payment, for it is expressly found that there was no such agreement. But on the ground
We do not think it material to inquire whether the bank was liable for Judd’s endorsement upon the drafts, or into the extent of the authority given by the by-laws of the bank to Judd, the cashier, for the transaction of its business. It is perfectly apparent that the cashier of the defendant bank received the notes, drafts and checks sent by the plaintiffs for collection; that he had ostensibly the powers usually given to the cashier of such an association; that it was his duty to collect them or to pretest and return them; and that, by retaining them without collection, protest or notice, he made the defendant bank liable to the plaintiffs for their amount. The finding shows gross fraud on.his part, by colluding with Seeley to permit his paper to accumulate in the bank unpaid; by failing to enter the paper upon the books of the bank, and to inform the directors of its possession and non-payment; and in permitting the accounts of the plaintiffs to accumulate in such an unusual manner and to such an unusual extent, without informing them of it. It also shows gross negligence in the officers of the defendant bank,' in entrusting its entire management to Judd. But these facts do not constitute a defence, unless knowledge of them can be brought home to the plaintiffs.
The transactions were loose, and looking to the amount of the defendants’ capital unusual, and it would seem that suspicion at least must have arisen in the minds of the officers of the plaintiff bank; but the court below has not found
We are not able therefore to perceive in this finding any legal defence against the claims of the plaintiffs. There is nothing found in relation to the reception, collection or continued retention of the drafts furnished in 1865 which can be said to have extinguished the original indebtedness of February 28th, 1865, or bar the plaintiffs from the recovery of the balance of that indebtedness. Nor is there anything in the subsequent conduct of the business between the two banks, although very unusual in its character, which would justify us in holding, as matter of law, that the plaintiffs should be barred from recovering the balance of account which subsequently accrued and was admitted by the defendants’ cashier from time to time. It is not our province to find facts and we must decide the questions of law presented to us by the finding as it stands.
For these reasons we advise judgment for the plaintiffs.
In this opinion the other judges concurred.