State v. Brown & Johnston

| Miss. | Apr 15, 1858

HANDY, J.,

delivered the opinion of the-court.

This was a proceeding in the nature of quo warranto against the defendants in error, for carrying on the business of banking without authority of law, and in the name of the Commercial Bank of Manchester. The case was formerly in this court upon the question of the right of the defendants, as individuals, to carry on the business of hanking in the name of the Commercial Bank of Manchester, in virtue of their being proprietors of the stock; and, upon demurrer to their plea setting up that defence, it was held that they had no right or authority to carry on the banking business as individuals, under the charter, and the demurrer was sustained, and the cause remanded for further proceedings. When the case went back, and at the November term, 1857, the defendants pleaded a plea of not guilty generally; which, upon motion of the district attorney, was stricken out as frivolous. At the same time, the district attorney moved the court for judgment, for want of a plea; which motion was overruled, and the defendants were allowed to plead over, and exception was taken thereto, in behalf of the State. And this is the first error assigned.

If the plea, which was ruled out, had been demurred to, and held insufficient, the statute directs that the defendants should he required to answer over; but, as no demurrer was filed, it was a matter depending upon the sound discretion of the court, whether, upon the rejection of the plea tendered, the defendants should be allowed to plead further; and we think that the court acted properly in allowing that liberty, and in refusing to render judgment against the defendants.

The defendants then filed a plea of general denial of the allegations of the information, and disclaiming the right to use, exercise, or enjoy the franchises in the information mentioned. And thereupon the district attorney moved the court for judgment against the defendants, by reason of the disclaimer; which motion was overruled. After verdict for the defendants, the district attorney moved for a new trial, and for a judgment non obstante veredicto, because the State was entitled to judgment on the disclaimer of the defendants. And this presents the second ground of error to be considered.

The statute allowed the defendants to plead not guilty to the information (Rev. Code, 294, art. 16, 17); and upon that plea, it devolved upon the State to establish the charges contained in the information. For what purpose the disclaimer was added to the plea, does not appear by the record. If it was inconsistent with the defence of not guilty contained in the former part of the plea, the course of the district attorney was to demur to it. But, instead of that course, he took issue, upon the plea of not guilty and the disclaimer.

The two grounds of defence do not, however, appear to be inconsistent under the circumstances of the case as presented by the record.

The defendants were charged, as individuals, as having usurped, and being in the unlawful exercise of the franchises of the Cona-mercial Bank of Manchester. They deny that they are guilty of the charge, and at the same time disclaim any right to exercise these franchises, — both grounds of defence, of course, having reference to them as individuals. There is certainly nothing inconsistent in this; for they might not be guilty of the usurpation, and still disclaim any right of banking as individuals, as charged. Whatever right the State might have had to take judgment against the further exercise of the franchises upon the disclaimer, if that had been the only defence; or, whatever should have been the judgment upon a demurrer to the plea for duplicity, it was certainly not competent for the court, upon the mere motion of the district attorney, and without evidence or trial, to disregard the plea of not guilty, and to render a judgment against the defendants against the further exercise of franchises, which, by their plea, they denied that they had exercised.

The court, therefore, acted properly in refusing to render judgment upon the disclaimer, either before or after the trial of the issue.

Upon the trial, the State offered evidence for the purpose of showing that the defendants were carrying on the business of banking as individuals, but under color of the charter of the Commercial Bank of Manchester, and to that end introduced and examined Samuel Y. Mitchell, the cashier of the concern, who testified that the defendants had invested upwards of one hundred thousand dollars in the Commercial Bank of Manchester; that there was a banking-house under that name in Yazoo city, doing the usual business of banking, having commenced the same in October, 1855, and continued the same up to the time of filing this information, issuing notes signed by the defendant Johnston as president, and by witness as cashier. That they had a directory, consisting of five named persons; that the witness, by order of the directory, procured notes for issue, through the house of Brown, Johnston & Co., of New Orleans, in the early part of the year 1866, and they .were signed as above stated, and issued in the usual form of bank notes. That witness only knew the defendants as owners of stock to the amount of $100,000, and defendant Johnston as president of the banking company; and that in May or June, 1854, the defendants bought of the assignees of the Commercial Bank of Manchester, the charter of that bank, and paid therefor $5000.

The defendants then proposed to cross-examine the witness, to which the district attorney objected ; but the objection was overruled, and the witness stated, on cross-examination, in substance, that the defendants were the largest stockholders in the Commercial Bank of Manchester; that all the acts done by Johnston as president, he claimed, were done by him as president under the charter of the bank, and by order of the board of directors, and not by him individually; that he knew of no banking-house carried on by defendants as a firm, or by Johnston individually ; that the banking-house spoken of was that of the Commercial Bank of Manchester ; that Brown and Johnston owned $100,000 of stock in the bank; Holmes owned $25,000 worth; Harrison, Woolfolk, and Mitchell owned $2000 worth each; and that these persons constituted the board of directors. This testimony was then moved, by the district attorney, to be ruled out; but the motion was overruled.

The defendants then offered in evidence a printed charter of the Commercial Bank of Manchester, passed in the year 1836, and amendments thereto, and offered to prove that a banking corporation was organized under the same in the year 1836, which was objected to by the district attorney; but the objection was overruled, and the evidence permitted to go to the jury.

It is now insisted, 1st, that the court erred in permitting this evidence on the part of the defendants to go to the jury; and 2d, that upon the evidence the State was entitled to judgment.

As to the first point, the issue was, whether the defendants had, as individuals, usurped and were exercising the banking franchises of the Commercial Bank of Manchester ? The evidence on the part of the State had a tendency to show that they were acting as individuáis under color of tbe charter of the bank. And the testimony attempted to be brought out upon cross-examination of the State’s witness, and also offered by production of the bank charter, and proof of the organization of the bank under it, was directly responsive to this evidence, and pertinent to the issue. It was, that the bank had been duly chartered and organized as an incorporated bank, and that the defendants were only concerned in the operations carried on as stockholders, and that Johnston’s agency in its operations was as its president; that the acts complained of in the information were the acts of the president and directors of a legally constituted bank, and not of the defendants or either of them as individuals. The testimony was, therefore, clearly legal.

We also think that it was sufficient to sustain the verdict. If the testimony of the witness Mitchell was entitled to credit, and it cannot be impeached in this proceeding by the State, whose witness he was, it is manifest that the operations carried on in the name of the Commercial Bank of Manchester, were not the acts of the defendants .or either of them, but those of the President and Directors of the Commercial Bank of Manchester. Whether, as such, they were authorized and in conformity to the charter, is not a question now for our consideration. ■

Let the judgment be affirmed.

See The State v. Brown & Johnston, 33 Miss. R. 300; The State v. Commercial Bank of Manchester, Ib. 474.