Savage v. Walshe

26 Ala. 619

• Court: Supreme Court of Alabama
• Decided: January 15, 1855
• Status: Published

Opinion

CtOL’DTHWAITE, J.

—The first question presented on the record, is, as to the sufficiency of the declaration.— The action is brought by the appellees, as the assignees of Sidney Smith and Daniel Stodder, trustees of the Planters and Merchants’ Bank, a late corporation ; and describes the note sued on, as dated in May, 1847, and negotiable and payable at said Bank. It further alleges, that before the execution of the note, the corporation was dissolved, and its charter and franchise of banking surrendered to the State, but by virtue of the provisions of the statute of 1843, and the acts amendatory thereto, the charter was continued, and the trustees named elected and appointed ; and that they, on the 21st September, 1851, sold and assigned the note to the plaintiffs.

In determining the question on the demurrer, it is necessary to refer to the various acts which have been passed by the Legislature bearing upon the points involved, with the view of ascertaining whether the facts alleged were sufficient to constitute a legal liability on the part of the defendants. The act of 18th February, 1843, (Acts 1842-3, p. 70,) provides for the final settlement of the affairs of the Bank by commissioners, and confers upon them the authority to take into possession the dioses in action and other property. It provides for the salé of the real property, and the collection and extension of the debts, and authoi’izes the use of the corporate name of the Bank in the collection of debts, and for the purpose of maintaining suit. It also provides for judicial proceedings to be instituted against the Bank, with the view to a forfeiture of its charter, and declares, that upon a rendition of judgment in favor of the State in such proceeding, the other provisions of the act are to have full force and effect; and it also declares, ‘‘thatif no cause of forfeiture shall be found, this act shall have no force or validity.” On the 24th January, 1845, (Acts 1844-5, p. 46,) an amendatory act was passed, which, amongst other things, provided for the election of two trustees by the stockholders — made it the duty of the commissioners to pay over and deliver to them all moneys, dioses in action, &o., except the amount necessary to pay the outstanding claims against the Bank ; and also gives to the trustees the authority to use the name of the Bank in the collection of its debts, in the same manner as if the charter had never been forfeited. And finally, on the 12th February, 1850, (Acts 1849-50, p. 125,) another act was passed, which, by its second section, provides “ that within thirty days after the first Monday in November next, the said trustees shall sell, for cash, all remaining property, claims, rights and assets belonging to said bank fund, and realize the same for the purpose of final settlement.”

We have given the substance of such portions of tlic several acts as have any bearing upon the points involved ; and the first question, which meets us upon the threshold, and which has been strongly pressed upon us by the counsel for appellants, is, whether the validity of the several acts to which we have referred is not dependent upon a judgment of forfeiture being first had against the Bank, which (it is evident) was contemplated under the act of 1843, and without which, as the proviso of the first section declares, the act is to be of no validity. If the several acts are nugatory and void without such a judgment, then it is evident that the declaration is defective, for it does not aver the rendition of any judgment of forfeiture, and without an averment to that effect, the courts could not take judicial notice of it, if it existed. It is clear, however, that the only object which the Legislature could have had, in requiring a judicial proceeding to be instituted against the Bank, was to obtain a dissolution of its charter agreeably to law ; and it is equally certain that it was competent for the State, at any time, with the assent of the corporation, to resume its franchises, and provide for the winding up of its affairs. In construing the act of 1843 and the subsequent acts, we must regard them as affecting the corporation alone, and viewed in this light, we are of opinion that the requisition on the State to obtain a judgment of forfeiture might be dispensed with by the Bank ; that the result, which it was the sole object of the Legislature to accomplish by the judgment of forfeiture, could as well be attained by a voluntary surrender by the Bank of its franchise, and that the proviso was not intended to affect the validity of the act if its terms were accepted by the corporation. We concede, that where a statute affects a community, and requires, as a condition to its validity, that something should bo done before it goes into operation, in such a case the act has no force or effect, until the thing required to be done is performed. But where the statute affects but one or more designated persons, it matters not whether they are natural or artificial, those interested in the object of the act may always dispense with a preliminary of this character, and claim the benefit of its provisions, without requiring the performance of a condition which can affect themselves alone. A statutory enactment may be waived by the party entitled to the benefit of it (Williams v. Potter, 2 Barb. Sup. Ct. R. 316); and precisely upon the same principle, the Bank could dispense with the judicial proceeding, by a surrender of its charter and assenting to the provisions of the act. The declaration, as we have seen, contains an averment that the corporation surrendered its charter to the State, as well as an allegation that the note sued on was transferred by the operation of the act of 1843, and the other acts amendatory thereto, to the trustees elected and appointed under those acts, which is equivalent to an acceptance of their provisions by the corporation, which would, of itself, operate as a surrender of its franchises (Ang. on Oor. 658, and cases there cited) ; and as the Bank had the right to dispense with the judicial procedure required by the act of 1843, by placing itself in the same condition in which a judgment of forfeiture would have placed it, an allegation which shows they did this, and that they assented to the several acts referred to, dispensed with the necessity of any averment that a judgment of forfeiture had been rendered.

It is urged on the part of the appellants, that the averment that the charier was continued by the acts referred to, is repugnant to the previous allegation of the surrender of its franchises by the corporation. But, construed with reference to those acts, we understand it to mean simply, that although the charter was surrendered, the corporation was not, ipso facto, dissolved, but its existence was continued by operation of law, for the purpose of settling its affairs according to the provisions of the statutes.

It is also urged, that as the note described in the declaration was made negotiable and payable at the Bank, the legal presumption is, that it was discounted, instead of having been taken in settlement of a debt due, and that neither the Bank, nor its commissioners or trustees, after the surrender of its charter, had the authority to discount paper. • This position cannot be sustained. The form in which the note was taken is usual and customary in mercantile transactions, and ap-fords no evidence whatever that it was not taken under the power conferred by law upon the trustees.

Another ground of demurrer, strongly pressed, is, that the trustees had no power to invest the purchaser, by their assignment, with the right to sue upon the note in his own name. We deem it unnecessary to inquire whether the legal title to the choses in action of the Bank was vested in the commissioners or trastees by the acts of 1843 and 1845, giving them the authority to use the name of the corporation in suits if they thought proper ; or whether it remained in the Bank, which was by the operation of these acts kept alive for that purpose. By the act of 1850, the trustees are authorized to sell all the claims of the Bank — a power which was not conferred upon them under any of the previous acts ; and this power, we think, by necessary implication, conferred upon them the aulhoritjr to transfer negotiable securities so as to pass the legal title to the purchaser by their assignment. If they were invested with the legal title under former acts, the proposition is too plain for argument, while, if the existence of the Bank was prolonged for the purpose of preserving the title in it, acting for it pro hac vice, and for the parties in interest, we must regard them, under the last act, as having the authority to transfer by their assignment to the purchaser the legal title.

The only remaining question, upon this branch of the case, is, as to the power of the trustees to sell at the time specified in the declaration, which is September, 1851 ; and this depends upon the construction to bo given to the clause of the second section of the act of 1850, which requires the trustees to sell ‘’within thirty days after the first Monday in November” of that year. If it is mandatory, the sale made at a period beyond the time specified in the statute is void, and the purchaser acquires no title ; while on the contrary, if the clause referred to is directory merely, the objection cannot prevail. It is to be observed that the statute does not say that the sale is nugatory for the failure to observe the requisition in regard to time, and this alono is regarded by the courts as a strong ground for construing the words as directory rather than imperative.—Pond v. Negus, 2 Mass. 230; The King v. The Inhabitants of St. Gregory, 2 Ad. & El. 99; Cole v. Green, (5 Man. & Gran. 872. Here there are no words of prohibition to the exercise of the power after the time specified in the statute, but the power itself is of a nature which would not justify the inference that it was intended by the Legislature to operate as a limitation on the authority of the trustees. We all agree that the clause referred to was directory merely.

In tlie action of the court in sustaining the demurrer to the first, second and fifth picas, there was no error. The first plea was defective, for the reason, that the averment that the charter of the Bank was not forfeited, is no answer to the declaration which contains no such averment. It is true, that if the plea contained other matter, properly pleaded, sufficient to bar the action, the averment we have noticed might bo rejected as mere surplusage; but the objection to the other allegation is, that it is matter of law, rather than of fact.— Gould’s Pl., ch. 3, §12. It is, that the corporation was not dissolved. It does not deny that the charter was surrendered to the State, as is averred in the declaration, but answers the immaterial averment as to the effect-of the surrender, which is mere surplusage and matter of law. The same objection applies to the second and fifth pleas, both of which assert legal conclusions instead of facts. Whether .a transfer by endorsement, made by the trustees to the plaintiffs below, is legal, or whether the Bank had authority to make a contract at the date of the note, arc pure questions of law. Neither was there any error, of which the appellants can claim advantage, in admitting the endorsement of the note in evidence. Its genuineness could, under our decisions, only be impeached by a sworn plea (Bragg v. Nall, 14 Ala. R. 619; Tarver v. Nance, 5 ib. 712; Dew v. Garner, 7 Port. 503); and if it were necessary to prove that it was made at the time alleged in the declaration, the bill of exceptions shows that this proof was afterwards made, which, under our decisions, was sufficient.—Lawson v. The State, 20 Ala. 65.

Neither was there any error in the refusal of the court to give the several charges requested by the appellants. The first two simply assert the propositions, that a judgment of forfeiture was necessary to enable the plaintiffs to recover, and that the trustees could not, by their endorsement made upon the sale to the purchasers, confer upon them the right to sue in their own name, each of which we have already considered.

The third and fourth charges were, as we understand them, to the effect, that-to enable the plaintiffs to recover, proof must be made, independent of the note, that it was given for a bad or doubtful debt, or in liquidation of a previously existing debt due to the Bank before its charter was dissolved. Our opinion is, that the note itself is evidence, vrima facie, that it was lawfully given under the acts of 1843 and 1845 ; but under the issue presented by the pleadings, the only question of fact for the jury to determine, was, whether the persons named as such in the declaration were the trustees of the Bank. We say this, because the fourth plea presents purely an issue of law arising upon the fact put in issue by the second plea ; and it is a well settled rule in pleading, that where a party puts himself on one issue, he admits all the rest.—Cow. & Hill’s Notes to Phil. Ev., vol. 3, p. 608, 3 ed. Under the influence of this rule, no other evidence was necessary than that which established the fact that the persons named in the declaration were the trustees under the law.

The only remaining assignment of error is, that the judgment below was rendered against John B. Savage, who, as the record shows, was not served with the process, and who did not appear. The cases of Grayham & Christian v. Roberds, 7 Ala. 719, and Del Barco v. The Br. Bank at Mobile, 12 ib. 238, show that upon thse facts the judgment must be regarded as not affecting any other persons than those who were before the court,'and that the judgment entry as against Jno. B. Savage may properly be regarded as a mere clerical mistake, and that it might have been rectified in the court below under the statute (Clay’s Dig. 322, § 56; Code, §2401); and under the same statutes, as no such motion was made and refused, the cause cannot be reversed on that ground.

Judgment affirmed.