Planters' Bank v. Sharp - 47 U.S. 301 (1848)
U.S. Supreme Court
Planters' Bank v. Sharp, 47 U.S. 6 How. 301 301 (1848)
Planters' Bank v. Sharp
47 U.S. (6 How.) 301
Where a bank was chartered with power to
"have, possess, receive, retain, and enjoy to themselves and their successors, lands, rents, tenements, hereditaments, goods, chattels, and effects of what kind soever, nature, and quality, and the same to grant, demise, alien, or dispose of for the good of the bank,"
and also "to receive money on deposit and pay away the same free of expense, discount bills of exchange and notes, and to make loans," &c., and, in the course of business under this charter, the bank discounted and held promissory notes, and then the legislature of the state passed a law declaring that
"It shall not be lawful for any bank in the state to transfer by endorsement or otherwise any note, bill, receivable, or other evidence of debt, and if it shall appear in evidence, upon the trial of any action upon any such note, bill receivable, or other evidence of debt that the same was transferred, the same shall abate upon the plea of the defendant,"
this statute conflicts with the Constitution of the United States, and is void.
These were kindred cases, and were argued together. Although the Court pronounced an opinion in each case separately, yet the dissenting opinion of MR. JUSTICE DANIEL treats them as they were argued, and hence it becomes necessary to blend the two cases together. The facts in each case will be stated, then the arguments of counsel, and then the opinions of the Court, with the separate opinion of MR. JUSTICE McLEAN and the dissenting one of MR. JUSTICE DANIEL.
PLANTERS' BANK v. SHARP
On 10 February, 1830, the Legislature of Mississippi
passed "An act to establish a Planters' Bank in the State of Mississippi."
The sixth section of the charter enacts, among other things, that the bank
"shall be capable and able in law to have, possess, receive, retain, and enjoy to themselves and their successors, lands, rents, tenements, hereditaments, goods, chattels, and effects, of what kind soever, nature, and quality, not exceeding in the whole six millions of dollars, including the capital stock of said bank, and the same to grant, demise, alien, or dispose of for the good of said bank."
The seventeenth section gives power
"to receive money on deposit and pay away the same free of expense, discount bills of exchange and notes, with two or more good and sufficient names thereon, or secured by a deposit of bank or other public stock, and to make loans to citizens of the states in the nature of discount on real property, secured by mortgage,"
The twenty-second section enacted, "that it shall not be lawful for said bank to discount any note or notes which shall not be made payable and negotiable at said bank."
By a supplement to the charter passed in 1831 and accepted by the bank, it was provided that "such promissory notes shall be made payable and negotiable on their face at some bank or branch bank."
On 24 May, 1839, Sharp, Engelhard, and Bridges gave their promissory note to the Planters' Bank for one thousand dollars, due twelve months after date. A copy of the note is not to be found in the record, but the declaration states it to have been "payable and negotiable at the office of the Planters' Bank of the State of Mississippi, at Monticello."
On 21 February, 1840, the Legislature of Mississippi passed "An act requiring the several banks of the state to pay specie, and for other purposes," the seventh section of which was as follows:
"It shall not be lawful for any bank in this state to transfer, by endorsement or otherwise, any note, bill receivable, or other evidence of debt, and if it shall appear in evidence, upon the trial of any action upon any such note, bill receivable, or other evidence of debt that the same was transferred, the same shall abate upon the plea of the defendant."
In October, 1841, the Planters' Bank brought a suit upon the note in the Circuit Court of Lawrence County (state court). The defendants pleaded the general issue and a jury was sworn. The declaration and note having been read, the defendants filed the following plea:
"And now at this day -- that is to say on the second day of the term aforesaid, until which day this cause was last continued -- come the said plaintiffs by attorney and the said defendants
by attorney, and the said defendants say that since the last continuance of this cause -- that is to say since the sixth day of the May term, 1842, of this Court, from which day this cause was last continued, and before this day, that is to say, on 10 June in the year 1842, at the county aforesaid -- the said plaintiffs then and there being the owners of the said note sued on in this cause and then and there being a bank within the State of Mississippi, and within the intent and meaning of the statute of this state, entitled, 'An act requiring the several banks in this state to pay specie, and for other purposes,' transferred the aforesaid note to the United States Bank of Pennsylvania contrary to the statute in such cases made and provided, and this the said defendants are ready to verify; wherefore they pray judgment if the said plaintiffs ought further to be answered in this said action, and that the same may abate."
"Personally appeared in open court Thomas L. Sharp, one of the defendants in the above-stated case, who, being duly sworn, upon his oath says, that the matters and things set forth in the above plea are true in substance and fact. Sworn to and subscribed in open court."
"THOMAS L. SHARP"
The plaintiffs demurred to this plea upon the following grounds:
1st. Because said plea is not assigned by counsel.
2d. Because said plea does not state the day, year, time, and place of the transfer of said note.
3d. Because the plaintiffs have a right by law to deal in promissory notes, bills of exchange &c., secured by charter.
4th. Because the statute, the title of which is recited in said plea, is, so far as relates to transfers of notes, bills receivable, or other evidence of debt, unconstitutional.
5th. The said plea does not state to what term said cause was continued.
6th. That said plea does not allege that said note was transferred for value received.
7th. That said plea is a plea in bar of this action, but does not conclude in manner and form as provided by law.
8th. That said plea was not presented until issue joined under the plea of nonassumpsit, and the declaration and note read, and a jury empanelled to try said issue.
9th. That the statute referred to in said plea does not affect the plaintiffs.
10th. That the said defendants did not tender the costs of suit in said case, up to the time of their tendering said plea, with said plea.
11th. That said plea is not entitled in this cause.
12th. That the affidavit subjoined to said plea is not sufficient.
The defendants having joined in demurrer, the court, after argument, overruled it, and leave being granted to the plaintiffs to reply to the plea, an issue was joined in short by consent, and the cause proceeded, when the jury found a verdict for the defendants.
A bill of exceptions was taken by the plaintiffs' counsel, as follows, viz.:
"Be it remembered that on the trial of the above cause at the term aforesaid, after the case was submitted to the jury and after the plaintiff had introduced his evidence upon the issue joined, the defendant introduced a witness who proved that since the suit in the above case was instituted, the note had been transferred to the United States Bank of Pennsylvania, the defendants offered a plea, in the words and figures following, to-wit: [Then followed the plea above recited.]"
"To the reception of said plea the counsel for the plaintiffs objected, which objection was overruled; to which opinion of the court the counsel for plaintiffs except, and having reduced their exceptions to writing before the jury retired, pray the same may be signed [and] sealed."
"Given under my hand and seal this 6th December, 1842."
"[Signed] A. G. BROWN [SEAL]"
Upon this exception, the case was carried up to the High Court of Errors and Appeals, which, at December term, 1842, pronounced the following judgment:
"This cause having been submitted at a former term of this court and the same having been duly considered by the court, it is ordered and adjudged that the judgment of the Circuit Court of Lawrence county, rendered against the plaintiffs in error at the December term thereof, A.D. 1842, be and the same is hereby reversed because rendered as a judgment in bar, and this Court, proceeding to render the judgment that should have been pronounced by the court below, doth order and adjudge that the plaintiffs in error, the plaintiffs in the court below, take nothing by their writ, and that the suit be abated."
To review this judgment, a writ of error brought the case up to this Court.
BALDWIN, VAIL, & HUFTY v. JAMES PAYNE
Matthias W. Baldwin George Vail, and George W. Hufty, co-partners, brought this action on 15 April, 1841, in the
Circuit Court of Jefferson County, Mississippi, against James Payne Abner E. Green, and Robert Y. Wood, the makers, and the Mississippi Railroad Company, the endorsers, of two certain promissory notes, each in the sum of $6,283.95, payable at the Merchants' Bank, New Orleans, the first, sixty days after December 4, 1839, and the other ninety days thereafter. The notes were without date on their face, and were discounted, at the instance of Payne one of the makers, by the Mississippi Railroad Company, under their banking powers, on 4 December, 1839, to whose order they were made payable, and were by said company, on 1 April, 1841, endorsed over, transferred, and delivered to the plaintiffs, for a valuable consideration.
The defendants, Payne Green, and Wood, were served with process, and appeared and pleaded the general issue. They also pleaded the following special plea, viz.:
"That the said promissory notes, in the declaration of the said plaintiffs mentioned, were executed and delivered by them, the said defendants, to, and discounted by, the Mississippi Railroad Company, on 4 December, in the year 1839, at the county aforesaid, and thereby became and were the property of the said Mississippi Railroad Company, to-wit, on the day and year aforesaid, at the county aforesaid, and that the said promissory notes continued to be and were the property of the Mississippi Railroad Company from the day and year last aforesaid until and after 26 April, in the year 1840, at the county aforesaid; after which 26th April, in the year 1840, to-wit, on 1 April, in the year 1841, at the county aforesaid, the said Mississippi Railroad Company, by their endorsement thereon, transferred the said two promissory notes, in the said declaration mentioned, to the said plaintiffs; and this they are ready to verify. Wherefore they pray judgment, if the said plaintiffs ought to have or maintain their aforesaid action thereof against them."
To this special plea the plaintiffs demurred, and the defendants joined in demurrer.
The circuit court, on 11 November, 1842, sustained the demurrer, and awarded judgment of respondent ouster, but the defendants refusing further to plead, the court thereupon gave judgment upon said demurrer to the second plea for the plaintiffs.
On the same day, the cause, being dismissed as to the Mississippi Railroad Company, came on for trial before a jury, on the general issue, against the other defendants; and a special verdict was found, as follows, viz.:
"We the jury, find that defendants, James Payne Abner E. Green, and Robert Y. Wood,
executed the two several promissory notes (described in the plaintiffs' declaration) on 4 December, 1839, and on the same day delivered the said notes to the Mississippi Railroad Company, to be discounted for and on account of said James Payne; one of which said notes is for the sum of $6,283.95, payable sixty days after the said 4 December, 1839, to the order of the said Mississippi Railroad Company, at the Merchants' Bank in the City of New Orleans; and the other of the said notes is for the sum of $6,283.95, also payable ninety days after the said 4 December, 1839, to the order of the said Mississippi Railroad Company, at the Merchants' Bank in the City of New Orleans. That said two notes were discounted by said Mississippi Railroad Company, under their banking powers, on the said 4 December, 1839, at the instance of the first drawer, said James Payne and the proceeds thereof were received by him, and the said company thereby became the holder of said notes. That the said notes, or either of them, were not paid at maturity, and were presented for payment at maturity, and protested for nonpayment, and that no part of them, nor any interest, has been paid by said defendants, or either of them. That the Mississippi Railroad Company, on 1 April, 1841, being indebted to the plaintiffs, Baldwin Vail, and Hufty, transferred and delivered said two several promissory notes to said plaintiffs, for a valuable consideration, in payment of said debts. If, upon the facts, the court is of opinion that the law is in favor of the plaintiffs, we find for the plaintiffs, and assess their damages at $15,300.90. But if, upon these facts, the court is of opinion that the law is for the defendants, Payne Green, and Wood, then we find in their favor."
The circuit court gave judgment upon this special verdict in favor of the plaintiffs, and the defendants thereupon took a writ of error to the High Court of Errors and Appeals. The cause was argued in the court of errors, and on 11 November, 1844, the said court rendered their final judgment, viz.:
"That the judgment of the Circuit Court of Jefferson County be reversed and for nothing held, and that the defendants in error, the plaintiffs below, take nothing by their writ, and that the suit is abated."
The charter of the Mississippi Railroad Company was conferred by an Act of the Legislature of Mississippi approved February 26, 1836, entitled "An act to incorporate the Mississippi Railroad Company." By the first section of a Supplementary Act passed May 12, 1837, the company were
"authorized and empowered to exercise all the usual rights, powers, and privileges of banking which are permitted to banking
institutions within this state, subject to the limitations and restrictions hereinafter mentioned."
And by section eighth of said supplementary act, the company were, among other things, made capable
"to purchase and sell real and personal estate and to hold and enjoy the same to any amount not exceeding in value at any time $500,000 over and above the property in and necessarily connected with said railroad."
By the same section, its "banking privileges, rights, and powers were secured to said company until 30 December, 1858."
The Planters' Bank of the State of Mississippi was an incorporated banking institution existing within said state at the date of the foregoing charter.
From the above statement of these two cases it is apparent that in the first one, viz., that of the Planters' Bank, the suit was in the name of the original payees of the note, and in the second it was in the name of the endorsees, being brought in both cases against the makers of the notes. The main question in both was the constitutionality of the statute of Mississippi passed on 21 February, 1840.