7 Wend. 539 | Court for the Trial of Impeachments and Correction of Errors | 1831
The following opinions were delivered:
By the
There is no doubt that by the common law in England, and the settled law of this state, if a suit
It is well known, however, that there are and have been many joint stock, and even banking companies which are mere partnerships, as to every person except their own stockholders they never having been legally incorporated. Whatever name such a company may assume and use, in the transaction of its business, it is a partnership, and not a corporate designation; and every suit, upon a contract with the company, must be brought in the names of the several persons composing the firm. A contract made with the company by that name, is neither an admission or any evidence whatever that it is entitled to sue by that name as a corporation aggregate; and the fact that the party making the contract has once acted as president, or Other officer of the company, is not evidence that it was ever incorporated. If the contract, on its face, stated the fact that the company was duly incorporated, or that such was its corporate name, it probably would be sufficient evidence of the fact to authorize a recovery against the person making such admission; and unless he could show some mistake, or that the contract was in violation of some positive law restainitig such contract, the admission would probably be conclusive. Independent of the written laws of Michigan, I can see nothing, therefore, in the testimony in this case which could authorize a recovery of the note given to “ The President, Directors and Company of the Bank of Michigan,” on the ground that the name given to the payee was a corporate, and not a mere • partnership name.
Having arrived at the conclusion that the plaintiffs in the court below were bound to show upon the trial that they were incorporated, and that the giving a note to them by a particular name, and the admission of the defendant that he had
The ordinance authorises the governor and judges to adopt and publish in the territory such laws of the original states, criminal and civil, as may be necessary and suited to the circumstances of the district; and it is insisted that banks have been incorporated in the original states, and therefore that they had the right to adopt the principle and incorporate this company. The difficulty, however, which suggested itself to my mind, arose from the fact, that the power to create corporations with franchises, which belong only to the sovereign of the territory, does.not appear strictly to belong to the law making power. Under the common law of England it belonged to the king as a branch of the royal prerogative. Although parliament sometimes granted acts of incorporation, it was generally in those cases where some extraordinary powers and privileges were wanting, riot within the reach of the king’s prerogative. Even then the legal rule held good, that “ no corporation is valid without the royal sanctionfor the assent of the king is necessary to every parliamentary act. In this country the people of the states, the only legitimate sovereigns, have succeeded to the prerogatives which formerly belonged to the crown. Statutory incorporations here, are legislative grants by the people through their representatives, rather than laws, in the ordinary sense of the term. Notwithstanding these serious objections to the validity of this act of incorporation, we carinot shut our eyes upon the fact that it has been in operation within the' territory nearly fourteen years, without having been annulled or disapproved of by con-" gress; although they had abrogated an act incorporating the Bank of Detroit, adopted at a inuch earlier period of the territorial government. The judges too, who passed upori the validity of this act in their legislative capacity, also formed the highest judicial tribunal in the territory. • There is an obvious
I shall therefore, though with some hesitation, vote for an affirmance of the judgment of the supreme court.
By Mr. Senator Allen. The plaintiff in error objects to the judgment of the court below, on the grounds that there was no power in the government of Michigan in December, 1817, to incorporate a banking company, and that there was no evidence that the bank of Michigan was duly incorporated»
By the ordinance of congress, passed in 1787, the governor and judges of the territory nothwest of the river Ohio, were authorized to adopt and publish in the district such laws of the original states, criminal and civil, as might be necessary and best suited to the circumstances of the district, and report them to congress from time to time, &c. In January, 1805, Michigan was by an act of congress erected into a separate territory, with a government in all respects similar to that provided by congress for the government of the territory northwest of the river Ohio; and the inabitants thereof were to be entitled to, and to enjoy all and singular the rights, privileges and advantages granted and secured to the people of the territory of the United States northwest of the river Ohio. It appears therefore that similar powers, privileges and immunities possessed by the inhabitants of the territory of the United States northwest of the river Ohio, under the act of congress of 1787, were by the
It was contended by the counsel for the plaintiff in error, however, that, admitting the right to adopt the laws of the original states, they must be adopted verbatim. This could not have been the intention of congress, because, in most cases, it would be absurd in the extreme. An act establishing a superior court in the city of New-York, would hardly be applicable, word for word, for the purpose of establishing a similar court in the city of Detroit; and this unnecessary in•congruity would manifestly appear in all the acts of the government, were they adopted verbatim from the laws of the original states. The spirit of the ordinances of congress evidently is, that the subject of enactment by the original states must be adopted, and not that a law of New-York, or any other of the original states, should be adopted word for word, without alteration; and it is upon this principle, and in conformity with the spirit of the ordinance, as appears from the several enactments exhibited in the error book, that the government of Michigan has proceeded. We find that an act was passed concerning debtors adopted from the laws of four of the states ; an act for punishing crimes, also adopted from four states ; an act for the establishing a university, adopted from three of the states, &c. In these instances, therefore, as well as in others» so much of the subject matter of the laws of the several states as were suitable to the circumstances of the people of Michi gan, are combined in one act, and adopted by the government.
It was also insisted by the counsel for the plaintiff in error, that the acts of the original states, which the government of the territory of Michigan were authorized to adopt, were such only as were in force in 1787. That this is not a sound construction, I am well persuaded; but, if we admit its correctness, it has not been denied, that previous to 1787, there was at least one banking institution (the Bank of North America,) incorporated by an original state; and as the act incorporating the Bank of Michigan is an ordinary bank charter, and in accordance with the principles of the act alluded to, it was one of those acts of the original states, the subject matter of which the government of Michigan was authorized to adopt; and consequently the act chartering the Bank of Michigan is a valid and legal act of incorporation.
It was contended, however, that the judgment of the court below was given without evidence that the president, directors and company of the Bank of Michigan were duly constituted a body corporate, capable of suing and being sued, and by law entitled to demand of the defendant below the money mentioned in the note set forth in the record and proceedings in the case. That the plaintiffs were bound to shew themselves a corporation is admitted. In the case of The Utica Insurance Company v. Tillman, 1 Wendell, 555, it was held that a corporation was sufficiently proved by the protion of an exemplified copy of the act of incorporation, and evidence of user under it. The production of this document, however, appears to have been waived by the defendant in the court below ; for we are informed by the error book, that by the mutual agreement of the plaintiffs and defendant, all the acts set forth, as well those passed by the congress of the United States, as by the governor and judges, and by the legis. lative authority of the territory of Michigan, are to form a part of the verdict of the jury, andaré to have the same force, effect
I am of opinion, therefore, that the judgment of the court below was correct, and ought in all things to be affirmed.
By Mr. Senator Beardsley. It appears from the error book, that on the 19th December, 1817, the governor and judges of the territory of Michigan passed or adopted an act incorporating the Bank of Michigan ; that the plaintiff in error was one of the commissioners named in the act for receiving subscriptions and distributing the stock; and that he was afterwards one of the directors and president of the bank. The institution acquired public confidence, and for several years has been in successful operation under its charter; but if this defence can be sustained, it strikes at the vitality of its existence, and blasts the hopes, not only of the stockholders, but of the bill holders.
It would indeed be matter of regret, if those administering the law should find themselves constrained to sanction the doctrine of the plaintiff in error, that an individual may procure a banking charter, and under it become a stockholder, director and president, and thus, by his name and influence, give credit to the institution, and currency to its bills; and then, on becoming a debtor, set the institution at defiance, thereby impairing the ability of the bank to meet its engagements. Such injustice should not be sanctioned under the forms of law, unless the law clearly requires it at our hands.
The defence rests on the proposition, that the governor and judges of Michigan had no authority to pass the act of incorporation under which the parties have acted. Michigan was
It is objected by the plaintiff in error, that as there were but few banks in the United States in 1787, congress could not have intended to authorise banking institutions in the northwestern territory; and that incorporating banks implies a general power of legislation. It is very probable that the framers of the law of 1787 did not contemplate the creation of a bank; nor did the most vivid imagination foresee the vast increase of inhabitants, wealth and business which has sprung into existence north-west of the Ohio. Still there were banks in existence in several of the states previous to 1787—in Massachusetts, Pennsylvania and Delaware, and the Bank of North America, legalised by our own legislature in 1787. If the necessities or business of the territory should require a bank, it cannot, with propriety, be said that congress did not foresee
It is not pretended that within the territory the banking charter has been adjudged invalid, or in any manner called in question; and until congress or the local legislature disapproves of it, I feel constained to give it effect, unless other objections exist than bare want of power to adopt or pass the law.
It was contended on the argument, that in adopting laws for the territory, the governor and judges were to adopt from such laws as were in force at the time the ordinance of con
Where a law is ambiguous on its face, and will admit of different constructions, without doing violence to the terms of its enactment, it is right to adopt a liberal construction, and such an one as will best sustain the interest, and comport with the genius of our citizens, and the progressive improvement of the country. It therefore appears to me, that we may, with propriety, say that any state that should be in existence at the time a law was to be adopted, was an original state, within the meaning of the act of congress; and that any laws then in force might be adopted which the governor and judges should deem expedient. If this proposition is correct, then there is no difficulty in the case; as in 1817, all the principles contained in the charter might be found in the laws of New-York, Massachusetts and Ohio, from which they were adopted. It cannot be pretended that the laws were to be adopted in hmc verba, but merely the substance of them was to be applied to the then existing state of the territory.
Having satisfied myself that there is nothing in the ordinance of 1787 which militates against the power of the governor and judges to incorporate a banking company, and they in their legislative capacity, having adjudged it expedient, and congress not having disapproved of it, I think theBank of Mich
The jury, by their special verdict, find that the governor and judges passed or adopted the charter, and the act of congress is evidence that they were authorized to do so; these points being established, the only additional fact necessary to sustain an action is to show a User under the act of incorporation, in conformity to its provisions. This, as between the present parties, -is sufficiently proved from their acts, if no other proof was afforded. The plaintiff in error was a director and president of the board of directors; this pre-supposes the stock to have been subscribed, and all requisites of the charter complied with up to the choice of directors and choice of president. He gave his note to the bank, payable to it in its corporate capacity, and by its corporate name ; and more than a year afterwards he made a payment on the note. So far as user becomes a question, these facts surely ought to be conclusive on the defendant below, and estop him from denying its hav-' ing been in operation. If I am wrong in saying it should be conclusive upon him, it is at least prima facie evidence, and that' until rebutted, is sufficient. It is a corporation de facto, and -binding upon the parties till set aside. 6 Cowen, 23.
A foreign corporation may sue in our courts ; the authorities fully support this position, and it has not been controverted.
In coming to the cdnclusion that the governor and judges were authorized to incorporate the bank, it has appeared to me unnecessary to resort to the various acts of general legislation in the territorial governments which were cited on the argument; nor has it appeared to me necessary to review the cases, or to decide the questions so ably discussed by counsel whether the giving the note and other acts of the defendant below admitted the corporate rights of the plaintiffs, and estopped him from denying them. The other view of the case satisfies me that the judgment of the supreme court ought to be affir
By Mr. Senator Seward. I concur in the opinion delivered by the Chancellor as to the following points:
It was incumbent upon the plaintifis below to prove affirmatively that they were a corporation, having power to make the contract on which the suit was brought, and to maintain their suit. This fact may be proved by producing the act of incorporation, and proving acts of user under it. The act of incorporation is made evidence by the special verdict; the proof of the acts and confession of the defendant is prima facie sufficient evidence of user. I concur also in opinion that the governor and legislative counsel of Michigan had competent power to create the corporation, and I therefore am of opinion that the judgment of the supreme court ought to be affirmed. But I cannot concur in the opinion delivered by Senator Allen, that the defendant below is estopped by his acts and admissions proved, from controverting either the validity of the act of incorporation, or the fact of user under it.
By Mr. Senator Sherman. The defence set up in this suit was not a denial that the defendant owed the money to the plaintiffs, but that they had no right to recover it in their corporate capacity, in which it was alleged they advanced it-The defendant put himself upon his strict and technical rights, and in order to ascertain what his rights are, two questions present themselves to my mind : First, did the government of the territory of Michigan in 1817 possess the power, and legally exercise the same, of passing the act incorporating the Bank of Michigan ? Second, was the act of incorporation proved upon the trial of the cause in the court below ?
All the power possessed by the government of the Michigan territory is derived from the act of congress, referred to hereafter. Territories have no reserved power as in the case of states admitted into the union; but the authority of congress I take to be supreme and unlimited, unless made other
The plaintiff in error objects and denies that the governor and judges, by virtue of the ordinance of congress, had the power to incorporate a bank; and if they had, the act should have been adopted entire from the laws of one state, and not parts or sections from the laws of several states; that
It was no doubt the intention of congress, by confining the government of the territory to the adoption of laws of the original states, to put them under all the limitations imposed on the original states, contained in the constitution of the U. States, without enumerating them; that the territory should exercise no greater legislative power, nor enact new laws that might admit of new and doubtful construction. If, then, the govern- or and judges of Michigan have not adopted a law, containing greater powers than is contained in the laws from whence it was taken, and it does not appear that they have, they are within the intentional limits of their charter. It is not, then, in my mind, very material whether two or three formal sections of this bank charter were taken from a different state from whence the main body of the act is taken; it is still adopting, according to the meaning I attach to the term. Much was said in argument about the meaning of the terms adopt and enact, and there is no doubt a difference. To enact, implies the creating anew a law which did not exist before; but adopt, no doubt implies the making that our own which was created by another, as the adoption of our statute laws of Great Britain, as they stood, by the colonial government. In this case, the bank charter was taken from acts in the statute books of the individual states, without any alteration of their meaning or import. The alteration of formal words and phrases, to adapt the law to local circumstances and persons, I do not consider material.
It was contended in argument that the act of congress of 1792, giving to the governor and judges of Michigan the power of repealing their laws when found inconvenient, was inconsistent with the. idea of granting corporate rights, and an expression of the sense of congress on that subject. I do not so consider it, and I think it is susceptible of a different and more proper explanation. If such was the intention of congress, how cap it be reconciled to the fact, that congress approved the act constituting the Bank of Michigan, for a certain number of years ? But the ordinance of 1787, declares
The second question: Was the act of incorporation proved upon the trial below ? In the absence of all other circumstances, no doubt the plaintiffs would have been held to produce an authenticated copy of the act, with some proof of acceptance or user under it. But this evidence the defendant might admit on the trial, or he might waive it, or dispense with it, either in court or by acts tantamount to it out of court. This question arises on a collateral fact, and is not the gist of the action; and on such questions it is a principle that slighter evidence of the fact is sufficient. The facts in this case are, that the defendant gave the promissory note to the plaintiffs in their corporate' capacity, whereby he recognized and acknowledged them as such ; that he received from them the consideration money, and paid them interest money on the same. These facts, it was contended, constituted a dealing with them, and amounted to an admission of their incorporation ; and that the defendant was estopped from denying that the plaintiffs were a corporation. The strict doctrine of estoppel, as defined by Lord Coke, is that the party is not only estopped from denying the fact, but his mouth is closed from shewing the contrary. This doctrine, the books say, is not to be favored, as the effect is to shut out investigation of the truth before the jury ; and the principles of estoppel in pais, which is set up, as applicable to this case, has by recent decisions in many cases, and ought to be general, become relaxed into a
In the case of the Dutch West India Company, prosecuting in England, where the defendant having entered into a recognizance with them, by their chartered title, was held to have thereby admitted their existence as a company. 2 Ld. Raym. 1535. So in a suit by a collector of tolls, as agent for the company, the defendant objected that the plaintiff had not proved his authority under the statute; the court decided that the defendant having accounted to the plaintiff in the capacity of collector, and having received credit from him for tolls, he was not permitted to dispute his authority. 10 East, 104. So where an information was filed against a corporation by the solicitor general, in England, to enforce a forfeiture, the judge said, by filing it against them by their corporate title, you have admitted them to be an incorporation. 2 Kid. on Corp. 486. Where the plaintiff sued by his title of farmer general, the defendant having done business with him in that capacity, was •held to be estopped in court from disputing the plaintiff’s title and authority until he had proved the contrary. This is a case of a prima facie estoppel. 4 Bos. & Pul. 210. A parish certificate was held to be an estoppel against certain parishers, but enquirable into by others. 4 T. R. 254. A defendant by accepting a bill of exchange drawn on him by a copartnership firm, was held on the trial to have admitted the firm, by his acceptance. 4 Maulé & Sel. 13. So the Dutchess Cotton Manufacturing Company, having prosecuted Davis in the supreme court of this state, on a stock note given to the compa
The Court being unanimously of opinion that the judgment of the supreme court ought to be affirmed, and it was accordingly affirmed.