Newspaper of The New York Herald, November 29, 1848, Page 1

Newspaper of The New York Herald dated November 29, 1848 Page 1
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T H NO. 5292.. Important Financial Decision. North American Trust and Banking Company. 8urneme Court ? Tn Equity.? David I.eavltt. reiilm of the North American Trust and Bulking Company, vi Richard M. Blatokford, James B. Murray, John Horsley Palmer, et al. The bill in this cause was filed by Mr. Leavitt, as receiver, in April, 1842. to set aside an assignment of iccnritiee. made by the North Amerioan Trust and Banking Company in November, 1840 to secure a debt due by that company to Messrs Palmer. Makillop, Dent & Co , bankers in London The cause was heard on pleadings and proofs at the general term of the Supreme Court, held in this oity in September last. by Justices MoHoun, Hurlbut and Kdwards, and was decided on the 13th of November, inttut. The unanimous opinion of the Court was delivered by Mr. Justice Edwards, and is as follows: ? By the Court ?Kdhaiuis, J.?Thk Rkccivrh or the North Amkhican Tbu?t and Banking Company asks the aid of this Court, Retting tn equity, to set aside and declare void forty-eight promissory notes, made in the name of the company, and signed by its president and cashier, in the sura of ?1.000 each, with interest, payable twelve months after date; and also to Bet aside an agreement, or trust deed, executed under the seal of the company, and signed by its president nd cashier, whereby the oompany assigned oertain stocks. bonds and mortgages in trust to seaure the promissory notes. The ground on which the plaintill' claims relief is, that the notes and deed were made and executed in violation of the laws of tbiH Statu, and are void. The statutes on whioh he mainly relies are applicable to moneyed corporations only. The first question then to be considered is. whether the North American Trust and Banking Company, being an association organized under the act to authorize the business of banking, passed April 18. 1838. was a corporation within the letter and spirit of the statutory proviaionK referred to. The numerous decisions which have been made in reference to banking associations have established, beyond a doubt, that the company in question was a corporation. (Warmer vs Beers, 23 Wend. 103; The People is. The Assessors of Watertown, 1 Hill, ti!6; The Supervisors of Niagara vs. The People, 7 lb 604; Gilford vs Livirgton, 2 Denio. 380 ) This was not disputed on the argument. But It was oontendod that it was not a corporation, in every acceptation of the term, and within the the spirit aud meaning of all the general laws applicable to moneyed corporations. In the case of Warner vs Beers, which was the first adjudicated case on the subject, it was held, and the same doctrine was reaffirmed in the case of Gilford ?.?. Livingston, that banking associations under the act of 1838, although corporations, were not such within the constitutipnal provision requiring the assent of two third* cf each branch of the legl> latnre to the oreatin^ my body politic or corporate The reason ^iven for tbe decision wax, that the general banking law did not secnre exclusive privilege* to any particular class of citizens, which might not be enjoyed in the name manner by all other*. In other word*, that banking associations were not monopolies?and that it was to institutions of that character that tb? coustitutional restriction was intended to apply. This decision establishes the principle that banking associations are not corporations within tbe meaning of the fundamental law of tbe State The question then arises whether they are such within the meaalngofits general statutory laws. Thcactswhioh are invoked by the plaintiff, in impport of his claim to the relief sought, are. first, that whioh declares that " it shall not be lawful for the directors of any moneyed oorporatlon to apply any portion of the funds of their corporation, except surplus profits, directly or indirectly to the purchase Of shares of its own stock '' (1 K. S. ".80, !;1 sub, 5, 1 ed.) And second, tbat which deol?res that "no convayancc, assignment or tranxft-r, nor any payment made, judgment suffered, lien created or security given by any suoh corporation when insolvent or in contemplation of insolvency, with the intent to give a preference to By particular ereditrr over other creditors of the company, shall be valid in law." (1R S 791 ^9. 1 ed.) These statutes were passed before the act of 1838, and It is contended on the part of the defendants that they do not apply to corporation* organized under that act, because, in the first place, the legislature, at the time of tha passage of the general ban king law. Intended to mate a legal exigence which would not bn a corporation, and believed that it bad done so?and that therefore it could not have Intended that tho general law annlicable to moneved cornoratlnna should mnl? tn banking associations; and In thnsecoud place. b-oause there are some provisions contained in the ant of 1888, applicable to subject* similar to those provided for In the general law in reference to moneyed corporations, and that upon tbe principle that try renin unius nt ezclutin uiUriut. the correct legal inference Is, that II the other provision*, not embraced in the act of 1838, were not Intended to apply to associations under that act. In reference to the first ground, although It is a fundamental rule that every lav must be construed according to the intention of the makers, still that Intention is never resorted to for any furtffer purpose than to ascertain what they in fact intended to do,a and sot for the purpose of ascertaining what they have done, or. to apply the principle to this case, we must look to the intention of the legislature to ascertain what powers hava been given to banking at?oolations by tbe general banking law. But the Intention of the legislature cannot govern in ascertaining what shall he tbe legal eflVet of such powers: neither is it to be reported to for the purpo-e of ascertaining what in the proper legal name and description of an association possessing the powers granted. When the question was before the Court for the Correction of F.rror*. there was no doubt as to tbe extent of the powers possessed by hanking associations; the only question was as to wnich class of legal existences bodies with such powers properly belonged Tbe court decided that they were j corporations; that is, that the thing which the legis- j lature intended to create, and did create, was, accord- I ing to tbe correct legal construction, a corporation. Now. the legislature which passed the general laws j In reference to moneyed corporations, intended that they should apply to all associations which came within that description. The legislature that parsed the aot of 1838 did not, by any provision in that act. ex- j elude associations created under it from the operation i of th? general laws It was intended then that those law* should be applicable to banking associations. If, ! according to correct legal Interpretation, thsy come within the meaning of moneyed corporations. As to the second ground taken bv the defendants, there Is no doubt that tbe general principles stated are corract: but in order to bring the eaaa within , those principles, it most, appear that tha paovisiaas , containad in the act of 1S38 are so far in<:on?tst?nt , with the provisions of the general law. that there Is a , clear intention _to exclude banking associations from j lift operation. There In nothing In the act of lS.'is i which I* either expressly or by implication Inconsistent with the general law in referenoe to aeeignment* I by moneyed corporations; the principle laid d^wn then | dors not apply to the provision of the statute on that subject; bat It la contended that the saction of the I general law whioh forbids the purchase of shares of I its own itock. by a moneyed corporation.was intended , to be superseded by tbe provisions of the act of 1W8, , which declares that "if any portion of the ordinal I capital of any banking association shall be withdrawn, ! for any purpose whatever, while anf debts of the : assentation remain nnsatisded, n dividends or prolUs on the shares of the capital stock of the association j shall thereafter be made until the deficit of oapital . hall be made good ; and If it shall appear that any each dividends have been made, It shall be the duty of the chancellor to mak* the necessary orders nri'l decrees for olosing the affairs of the association " ? (l aws 1S3H. p?(?e 2S2. !;J3 ) This provision is not inconsistent with the section above cited from the general law, whioh prohibits the purchase of shares of Its own stock by a moneyed corporation; on the contrary, it Is not strictly in reference to the>im? subjectmatter, and it sxetus to hare been Intended to provide agalfctt a mischief of a different character ; one law wa* I a ten clad to prevent the purchase, by a mineyel corporation. of shares of Its own stock, except, from its eorpins funds?the other was intended to prevent a drvidand by ? banking association after any portion of its capital stock should b? withdrawn, and whits any of the debts of the a~*ouiatiou remained unsatisfied. But to remoTd all doubt upon the subject. it seems to me that it Is now settled by authority, that the general la# In reference to moneyed corporations must apply to banking associations. In the ca?e of Warmir vt. Beers, it is true that it wan held that banking assocla tlons were not corporations within the spirit and meaning of the constltntion But In all other respect*, when the question has arisen, tbcv have been held to ? be corporations. In the case of The People r<. The \aaeseors of the Tillage of Watertown, It was decided by the Supreme court that they were moneyed corpirations within the meaning of the statute, which de1 elartl that moneyed corporations, deriving an Income i from tbe rspitai or otherwise, shall b - liable to taxation. (1 U.S. 414, ^ 1, 1st ed.) In tho caie of The Supervisors of NUirant r? The People, a similar doetrine was laid down by the Court for the Correction of Errors In tbe mu ter of the Bank of Dansrllle, (0 Kill. BTO ) in which an application was made for the rumoiary Interference or the court to set aside an eUotlon of directors by a bankiogasaofiation. tbe court Also held tLat generally the law* in referenoe to moneys J corporation" np,iii<d to banking associations, although they held that, in that case , the general law in reference to the election of officers of moneyed corporations (I K. S 60K. (v 47 to is SO ) could not be mad* applicable to banking a-seuiations. awing to the peculiar character ot their organization It follows, than, n* a conclusion, that both upon principle and authority, the statutes which have been refevrrd to in relation to money ?d corporations and whirh are relied upon by the plalntitT as one of th<i ground* on which ho claims the aid of this court are applicable to associations under the general banking tew. The next qnsstion which arises Is. whether tbe promissory notes and trust deed ware founded on a legal valid oontlderation. It is contended on tha part of the plaintiff that the money lent by Palmers, Mackillop, Dent & Co., to the .North American Trust and Banking Company, and which fotised the consideration of tha instrument* In question, was nsed by tha company for the purpose of pnrrhasing shares of its own (took, in violation of the provisions of the statnto above cited ; and that Palmers Mackillop, Deut fc Co.. at the tir.ie of tha loan, knew of the purpoae to whioh the money was to ha applied. J ibtll *?s?me Id the flrst ptae?; In omp'lanc* . E NE' MORNIl the view* that have already been expressed, that If Buoh a purchase of stock as la alleged was mads by the company In any other manner than out of ita surplus fnt.,1. ... ?... I11...1 I .Vi.U .na.imu tbat tile plaintiff In this suit who represents the credltori of tne association, has the right to set up auch illegality. Tbere are two questions then to be considered' ? 1. Whether the money lent was used as la alleged; and? 2. Whether the loan was made with knowledge on the part of the lenders of the uses and purposes to which the money was to be applied As these are questions of fact, it will be neoessary to Inquire into the circumstances connected with the loan, and to consider the manner in which it was made. It appears from the proofs that, shortly after the organization of the North American Trust and Banking Company, Shaw, a London banker, was in the city of New York, attending to the business of the house ef which he was a member. It farther appears, that while be addressed a letter to I'almers, Macklllop, Dent U Co., at London, in whieh, after representing with great earnestness the valuable nervines which he supposed would be rendered by the North Amuricaa Trust and Banking Company in assisting the suspended houses, and in alleviating the commercial distress of tbe country, ho introduces the company to the confidence of his London friends and correspondents. Upon this introduction, a business Intercourse between tbe parties commenced. At tbe time when the Banking Company had completed Its organization, it was supposed that by the sale of its own stook it could place itself in a condition to carry on the banking operations for which It had been formed. In this expectation It was disappointed; and, In order to meet its liabilities, itsent State stock", which it had purchased to a very large amount, to EDgland. for sale. Talmnrs, Maokillop, Dent a Co. were the bankers through whom a portion of these stocks were sold, and who were also employed by the oompany, in other transactions connected with its foreign business. These relations oontiaued until about the fourth day of April. 1840. when bills of ex change to the amount of ?33 ">00. drawn upon ralmers, Macklllop. Dent & Co., were presented to them for acceptance. Thee* bills had no connection wHh any previous transactions between the parties Thsy were ot drawn upon any funds which the Banking Company had in the hands of the drawers, nor upon any existing credits; and. owing to accidental causes, they were not accompanied by any letter of explanation. Under these circumstances, acceptance of the bills was refused, and they were noted for non-acceptance. On the Oth of April, in the same year, a letter was received from Beers, the president of the Banking Company bearing date the'2d of March. 1940. in which he stated that the company had authorized a credit in favor of Thos K. Davis, for ?18.875, the bills to be drawn at ninety day*' sight, and to be renewed in case certain bonds in thehands oflPalmer's.Macklllop, Dent & Co. should not have been previouply cashed. The letter speaks in high terms of the wealth respectability and prudence of Davis, and refers to their mutual friend. Fletcher Wilson, for an explanation of the motives which had induoed the company to grant the credit and of the advantages which might be expeoted to accrue from it Upon the strength of this letter, and of representations which were made to ralmers. Macklllop. Dent b Co., by a friend In London, as to the wealth of Davis, they resolved to accept the bills, aud afterward* did so, and, finally, after two renewals, paid th?m in full. It is alleged, on the part of the plalntllT, that ihefe bills were drawn for the purpose of enabling the company to purchase five thousand Hhares of Its own stock; and it is also alleged that this fact was known to the drawees at the time of their acceptance of the bills. The first question to be considered is, whether the oiiifl were drawn ana accepted, lor toe purpose and in tb? manner alleged. It appears by the testimony of Strong, who was one of th? directors of the company, and who Is the principal witness on part of the plaintiff , that on the 2$th of February, 1840, the company purchased fire thousand shares of its own stock. It farther appears that, in order to make such purchase, two sets of bills were drawn ; the first set upon Palmers, Mackillop, Dent & Co.. in favor of Huth & Co.. and other bankers in Kngland ; and the second set upon Huth it Co.. and the other houses in whore favor the first set of bills had been drawn; the second let of bills having been drawn against the anticipated acceptances of the first. The second set of bills was sold in the oity of New York, and it was with the prooeeds of suoh sale that the stock in question was purchased It appears, then, that the stock was not purchased by the bills drawn on Palmers. Mackillop, Dent & Co., but that it was purchased with the proceeds of other bills; and that the whole transaction had been completed not only before PalmerskMackillopt Dent & Co. knew of it, and before the bills drawn upon them were accepted, but before they bad been seat from this country It was contended, however, on the part of the plaintiIT. that altheugb Palmers. Mackillop. Dent & Co.. had no knowledge of the purchase before It was completed, still that Fletoher Wilson was their airent. and that hn had notice of the intended stock transaction at the time when the bills were drawn, and sanctioned it as such agent. The first, enquiry here is, whether Wilson was the agent of Palmers, Mackillop. Dent & Co. It seems t> me that the proof shows beyond a doubt that he was not The answer of Palmers, Mackillop, Dent & Co. which, in this respeot, is responsive to the bill, unequivocally and positively denies such agency. There is no evidence that he was expressly authorised to act a1 agent, or that he was expressly acknowledged as such Neither does the testimony of Strong or Davts the two witnesaM who are relied on for this purpos?, show any act from which the agency of Wilsen can be implied. It is evident, too, that the oompany did not consider him an authorized agent. They* never treated him in the transactions as if thsy so regarded him. The letter of Beers does not preteud that Wilson had authorized, or that he bad anv right to authorise, the drawing of the bills of exchange to which tbe letter alludes He In spoken of as a our mutual friend." to whom Boer* refers for explanations which he thinks will satisfy the drawees of the bill*. Palmers. Mackillop. Dent k Co. oannot then he obargi-d with knowledge of the facts whloh were known by Wilson Such being the esse, the firm of Palmers, Mackillop. Dent & Co. had no knowledge ef the atoek purcbaf?. either aetual or constructive, till after the presentment of tbe bills of exohanga to them in London for aoceptanoe. The question then arises, how soon after so eh presentment tbey received notice. The letter of Beers was received on the 6th of April. In that letter, no actual notice was given; but it is contended that the reference which it makes to Wilson was of such a character as to pot the drawees of the bills on their inquiry. and operated as constructive notice to ttietn. n is not neo> sskry to examine as to how far the rule in reference to constiuctive notice extends. For, if we adopt the rule laid down by the counsel for the plaintiff. that whatever is calculated to oreate a suspicion as to the legality of a transaction, is constructive notice of the nature of such transaction, still there would be nothing in this case to oharge the drawees with constructive notice. The reference to Wilson was calculated rather to allay than excite suspicion. And it oertaioly sould never have been supposed by Palmers, Mackillop Dent k Co. when they were referred to the mutual friend of the parties for an explanation, whioh the letter evidently implies would prove satisfactory, that, on inquiry of tnelr friend. It would be disclosed to them that the tian">aotion was illegal The same remarks are applicable to the letter of Davis. If I am correct in these views, it follows that the first notice of the stock purchase which Palmers, Mscklllop. Dent h Co. received, was that whloh was contained in the letter delivered by Murray to Palmer, on the evening of the 7th of Aoril. It beeoiiisslmDnrtant hfcre to ascertain what was tbe situation of tbe bills of exchange at that time. In the ansivtr of Palmer. whlcb. in this respect, is responsive, he says that the bills which bad been presented, amounting in thi aggregate to ?3,1.500. had been annepted or agreed to he accepted. It appear* that ?19.000 were held by Huth & Co.; that ?.1 500 were held by Mastermin & Co.; and that ?Il.0GO were held by Palmers. Markllloo, Dent ti Co. It also appears by the testimony of Malt land, tbe olsrk of Palmers, Mackillop Dent tk Co . thn the bills in their bands were accepted and passed <o the credit of the compsny. In conse |Uenne of there oclpt of the letter of Beers, although h<> does not its tinctly state whetheT this was done before or af'e Palmer's interriew with Murray; and Murray state in his testimony thatin his interview with P*lm?r. the latter stated, that on the receipt of the letter of ere (lit. and on the wursni^ of his friend MiWIUt Wil *on. a* to the reapon*ibility of Davi*. he had *ent no tie* to Hu^h & Co., and to Maaterman k Co., that Palmera. Maeklllop. Dent & Co had decided to accep the bllla bald bv them It appear*, then, that a* to upward of jC20 000 of the bHU drawn on them Palmar*. Maeklllop. Dent fc Co. bad given notice of their Intended acceptance before the reoeipt of Fletcher Wilaon'a letter. It will he remembered that by the law of Kngland. a verbal aceeptance of a foreign bill of exchange is binding. (Chltty on Bill*, 172.) But It wu ooatended on be argument. that Inasmuch ax the hill* of exchange had not been delivered up to the holder*, after notice of their Intended acceptance, and a* there had been no expreaa a**ent to the acceptance on the part of the holder*, it wa* revocablt; and that Palmer*, Maeklllop. Dent & Co. were not honndhylt. (See Story on Bill*, p '161). It I* undoubtedly trae, a* a n*ner*l rule, that an acceptance of a hill not communicated to 1 the bolder*, I* revocable before th* bill 1* delivered up. Dut I* the rule the *anu? where the acceptance Is communicated. even although there in no delivery of the Accepted hill ' In the cane rtf Cox v. Troy. (5 Barn, h Aid, 474) Batley. J., *ay*. ' It I* not the mere aet of writing on the hill, but the making a communication r.f what I* ao written, that bind* the acceptor; for the making the communication I* a pledge by him to the party, and enable* the holder to ant upon It " Can It then be *al<l. with certainty, that In ea*e the bolder* of the bill* bad Ineiatadon the notiae wbleh they had received a* a binding acceptance. Palmer*, Manktl lop Dentfc Co. could have successfully reels ted *uch a claim ' To *ay the Iea*tof It, the aa*c admitted of a queation The holder* of the bill* might have male arrangement* In thalr bnaln***, founded upan th? notice which they had reeelrad; and even If Palmer*, Maeklllop, Dent t Co. warn not legally liable, atll I a regard for their faith a* merchant* would have required them to fulfil the promise which they had mad*, aed upon which other* had depended. A* to the hill* which had not been presented at the time of the receipt of tVil*on ? letter, Palmer*. Maeklllop. Dent fe Co ware uncommitted. But the lettar of credit waa an entire contract, and It wohH he** yatM* W M VWttMt M?t? MM I < VY YO NG EDITION?WEDNE liable to Palmers, Macklllop. Dent Co. In aase they t hid honored but a part of the bill* drawn under it It * might pofsihly be that if, immediately on the receipt h of Wilton's letter. Palmers, Macklllop, Dent b Co. had ( countermanded the notice of acceptance, they would 3 have escaped all legal liability. But If, in the embar- <" raising situation in whloh they then stood, they were t induoed to keep the promise which they had made, p and in order to remove all legal question, thought it expedient afterward to accept the other bills dra*n f against the entire credit, can it be said that a claim t thus created arose tx turpi cauta Particularly, when i upward of a month had elapsed after tho iHegal trims- 8 action had been consummated. It seems to me that t neither law, equity, nor morality would require such a <1 conclusion t The question has frequently arisen in Kngland. as to v bow far a contract for the repayment of money ad- t vanced by one party to another, to enable him to pay t an illegal debt, could be enforced, in the oast* of < Kaikney v Ralnous. (4 Burr. 2009.) two persons had i been jointly engaged in stook-jobblng transactions, s as d one of them had advanced money on behalf of the other for compounding difference*. It was held by o Lord viansfleld, that a suit could be maintained upon a bond given for the payment of the money advanced, t on the grounA that there was a new consideration. In t the case of Petrie v. Hannay, (3T. R 41t?,) whloh was '! n riuiimi imui>iutiwu, u ueiu iu?t tut) party w no " had advanced the money could reoover it bank, it hav- I ing been advanced for the benefit of the other party, n and with his privity and consent, and he having sub- * sequently to the advance made an express promise of " payment. In the ease of Booth . Hodgson, ((IT. K. P 403.) which alio arose out of a utook jobbing transac- " tion, it wa? held that one partner who had advaneed P money for the benefit of another oonld not reoover it P back on an applied assumpsit, and the court then r stated that an action could not be sustained, because on the whole case no promise oould be implied except B that which arose out of an illegal oontract. In the e ease of Aubert t. Maze, (2 Bon. fe Pul 371,) where one partner had advanced money for the benefit of ?no- " ther, in paymeut of losses on illegal insurances, it was <* held that no action would lie; and the soundnes< of P the distinotion taken in the case of Petrie v. Ilaunay, ' between an express and an implied promise,was doubt- 8 ed. It will be remembered that in all these cases the ? party who advanced the money had beeh partictpi crfminis in the original illegal transaction. I There is another class of ease* in whioh actions have * b<cn sustained for money advunce to a person, to ?, enable him to pay a debt which had b?en illegally con- t tracted, but where the lender was not a party to the r illegal transaction. In the case of Robinson v. Bland, 1 (2 Burr 1077 ) money lent to pay a gaming debt was a held recoverable. A similar tlecisien was made in Al- n cinbrook v. Hall, (2 Wils. 30'.)) Sec also Carson v. c Uanbat, (2 Bay. 6(30.) t In the case of Armstrong vs. Toler. (11 Wheat 2.>S. ? the Knglish canes were reviewed by Ch. J. Marshall) " and the rule which he deduoed from them is, that E where a oontract grows immediately out of. and is, 0 connected.with an illegal or'Immoral act, it oannot p be enforced. But if the promise la entirely discon- t nected with the illegal act, and is founded on a n?v tl consideration, it is net affected by the illegality of the aot, although it was known to the party to whom the E promise was made Thus, if the party who advanced '1 the money knew that it was to be paid in discbarge of t a debt not nflt recoverable at law, atill he oould main- 1 tain an action for its recovery The case of Cannon P vs. Bryce, ( '! Barn & Aid 179,) does not confliot with ? this rule. In that case money was lent to enable a party to pay an illegal debt, and the court held that it could not be recovered back by the lender. The i ground of that decision was, that in the oase then be- ^ fore the court, the ctatute made the aot of payment illegal, and the loan was consequently for the purpose of enabling a party to do an illegal aot. But where * the statute does not make the payment itself illegal, 8 a promise founded on a loan to pay an illegal debt does not arise out of an illegal transaction, and is not D connected with it) and the maxim ex turpi causa non oritur actio does not apply. 11 But if it should bo admitted that money lent to pay ^ an illegal debt cannot lie recovered, still I think that ^ the elaim of l'almers, Macklllop. Dent & Co. can be '' sustained; for as a question of fact, it seems to me that ( the loan made to the banking company was not only not made for the purpose of enabling it to puroliase its * AWn airwtlr Hnt. tVlut II .ITn nM main tfAt. Itia n# t enabling it to pay for stock already purchased An c has been before stated, It appears by the testimony of ri Strong, that the stock was purchased on the '28th of 1> February. 1840. that it was paid for out of the proceeds of other bills than those drawn on Palmers, Mao- ^ klllop, Dent Ik Co.. before the bills drawn on then had 11 been presented for acceptance. It must follow, then, that the bills were acsopted. not to enable the oompany to pay an Illegal debt, but, 1 to use the language of Murray, to tare it from a ' cri- * sis in its affairs which would have coiapadUd It to wnA l' up." The officers of the oompany had plaoad It la 8 snch a situation, that the aeceptanoo of the bills was * necessary to prevent its prostration and ruin. It was P In refere nce to this consideration, and for the purpose tl of avoiding a result which would have bsen so disss 1 trous. that Palmers. Mae klllop. Dent Hi Co., muoh r against their wish, were forced to become the credi- e tors of the company. 0 The next question to be eonnidered, is, h6w far the 1? North American Trust and Basking Company had Jj the power to borrow money. The general bonking law " give* no snoh power in express terms it opacifies the * general powers of banking Associations, and than confers such incidental ones as shall be necessary to ear- 0 ry on their business under the powers specifically f' granted. Without reference to the banking law, it is b a general fundamental principle, that when a right is D given, all powers are given which are neoessary to the exeroise and enjoyment of the right. Now, it cannot be questioned that a banking association may become >' indebted in the exeroise of its und inbted legitimate P business. It has the right to reoelve deposits, and it 11 must become Indebted for them. It has the right to -N purchase gold and silver bullion, foreign coins and bills '' of exchange, and it may become Indebted upon suoh 0 purchase. It requires State stocks as a basis of its cir- 11 culation ; and it may lawfully contract a debt in the Rl purchase of State stocks for that purpose. There may 0 be other ways in which a banking association can be- '' come legally indebted. If it has the right to become ri indebted, it may become liable for the payment of its rl debts, at a time when, owing to disappointment, un- " expeoted losses, or some unforeseen oasnalty. It has no >' available assets to meet Its engagements. This emergency may oocur in the soundest and best regulated 4 association. The question then must arise, whether a 11 solvent Institution is to .fail to meet lti liabilities, and K be broken up, and ruined, or whether it shall be per- 11 mltted to substitute a credit forsomeconvenient period 01 cf time, in the plaoe of a debt then due and payable ; ? or. in other words, whether it oan substitute one cr<>- t! dltor in the place of anotbar f The power to borrow, fi then, is a necessary incident to the power to become I <1 indebted It is a power without whiotrae booking aa I D soclatlon could safely oarry on its bu*lnew. * It Is contended, however, that the loan in this oaar'1' c< was never authorised by the company. On reference to tbo articles of association it will be teen thst all a] the powers, rights and privileges of the association c< were delegated to and vested in a board of direot'irs, in and such officers and agents as they should appoint. N (Art 2, fc 1, p. 6o.) It was also provided, In the ar- ()i tides or association, that the board of directors ti should have authority to make such by-laws, rules aid u] regulations for the management of the business of the i> wuoiftiion w (uej ungni iqidk expedient. ( \rt. 4, ci ? 2, p 61 ) Under and in pursuance of these pro vl- n Ions the directors adopted a Mt of by-lav*, anil If divided all the baslnes* of the company into two de- u partoient*. (By-Lawn, ^ 1, 3. p. 65 ) They then dele- re gated the power to conduot the business of out de- I) partment to a committee of Investments and finance, t> and the power to oondnot the business of the other I <]< department to a committee of foreign and demsstie I b exchange. (By-Law*, ^ 1, 2. 3. 4, p. 65.) All the busi- ' n> nets of the company was to be transacted by the*e 1 t) two committee*. In this distribution tho general i Si power* ef the director* oyer the finances were con | tt ferred upon the committee of investment* and finance fr ?and the power to borrow money, assuming it to have existed, muat have b*en a necessary incidental ptrt of pi the power of that committee. tc By reference to the printed case, (p 2SS ) It appears. that on the 28th of February. IS 10. a resolution was nria?*ed by the committee of investments anil flnanco, f? ustructlng and authorizing the drawing of hill* or ol the granting of credit* upon Palmers, Maokillop Dent 1 k Co. In pursuance of thlB resolution, a letter wa? l tt sent by Beer* the president of tho oompany. to ' cl Palmers. Macklllop, Dent & Co.. informing them that 1 u the Banking Company had authorized n credit in j, favor rf Davis t? the amount of X'44.875 It w\s jt against this credit that the bills accepted by Palmers. 01 Mackillop, Dent k Co. were drawn. The letter of ol credit was signed by Beers, as president of the corn- I tt puny- I t? The general banking law provides that contracts i made by any banking association, shall be signed by I j? the president or vice president, and etshier (l,*ws ?] JK?#, p ?.">0, ^ 12.) It I* contended on the part of the | p, plaintifT in this suit, that the lettar of credit bein< i w signed only by the president, did not bind the ccmpa- ? ny. It cannot be denied, that if It Is to be treated us h tho contract between the parties, it was not executad ? as ttie law required that written contracts should be; it but does it follow that the loan Itself, the receipt of ti wHch was authorized by thn association through the B( proper committee by a resolution duly passed and communicated to the lenders, does not create a llaVI- tl llty on the part of the company ? In the case of a de- ,i, posttc, tne depomor aoes not. exaepi in special ca?e*, p, receive a written contract. for repayment. Injthe pre- ti sent ca?e. the claim of the lenders is not founded on n, the letter of credit; it Id founded on the liability of the d company to repay ft cum of money which It legally borrowed, and for which, conaequrntly, It became legally Indebted. n< The next questions which arice are at to the legalt- cc ty of the promissory notes and of the agreement or c" truat deed. n' It appeara by the testimony, that the billa accepted , by Palmera, Mackillop, Dentfe Co. were twice renewed, P. and that on the 6th October, 1SW, and after the J" second renewal, but whila the bllla were running, , Blatchford, their attorney In faet, aldreaaed a tetter to "J Davis, stating that they were dealrou* of having the J* crtdlt cloaeil, and that they were unwilling to continue It beyond the aerond renewal, then in pro<re?s. *' After tba receipt of this letter by Davis, and the com- y1 mimical ion of its eontenta by him to the company It was agreed between the parties that certificates of deposit to the amoumt of ?4H00<) ahnald be given by * the company to Palmers. Maekillop. Dent fc Co , pay- *'

able In twelve month* after date, with the privilege J'1 of renewal for alx months'; and that, as collateral thereto, certain seeurlt s ahoild be ??e(^i?ed t.A * is uwij it waa *kv Mv hm? va- j l"' RK I SDAY, NOVEMBER 2 ( ttw.i.m aipovu karii #/%? ? 11 a Ai\n .kuk ikahm aati. tltute a put of the securities to be aligned, and that e rhoald be released by ralraers, MacMllop, Dent k o Id purnuance of thia arrangement, and on the Otb November, 1840. a resolution wan passed by the ommittee of inveatments and finance, approving of lie form of the proposed agreement, and authorizing the mper officers of the company to execute and deliver t. together with the certificates of denoaite therein refired to. and to assign the securities mentioned in be schedule thereto annexed, and to do all other acta >eces*ary to carry into effect the provisions of the .preement in pursuance of thia reaolutiou. and on be day of it* pannage, the agreement was executed and It-livered to Biatcbford and Murray, it appear*, howver. that inatead of certificates of depoaite being dellered, as agreed upon, promissory notea were issued to he amount of the indebtedness of the company, signed iy the president and cashier, payable to the order of onke, in twelve months after date, and endorsed by lim. and it does not appear that certificate* of depoite wtre ever given. It is contended by the plaintiff that the agreement r trust deed thus executed is illegal and void. The first objection which Is made is as ta its exeou'on It has already appeared that it was approved by he committee of investments and finance, and that is execution wan authorized by them It also appears, iy reference to the instrument Itself, that it was signed >y the president and oashier. pursuant to the proviions for tho general banking law. The question then rites, whether the committee of investments and inance luul the power to authorize its execution The owers of (his committee have already been examined, nd it seems to mo clear, that in the delegation of the owers of the directors to the two committees, this ower was oonferred upon the committee which authored the execution of the agreements. It is evident that the directors themselves supposed o, for there is no proof that any. doubt or dissent was rer expressed by any one. The next objections made by the plaintiff are to the greemant ortru' t deed itself. In the first plane. It is Viivtuuiw vw?? ?uv Jjiuiuiprin j uuwn gireu uj IUR UI > U1 any. beln* payable af'er date, are Illegal and vot<l By he act of May 14. 1840. It in provided that no banking xsociation bhall issue or pat in circulation any bill or iota of Mich association, unless the same shall be pavale on demand without interest (Laws 1810. p :!."<8.) t seems to me that the notes in question are clearly old by the provisions of this statute. It was oontendd on the argument on the part of the defendants that he act only refers to notes intended to be put in ovulation and capable of circulating an money; and bat the fact that these notes were drawn in large mounts, and made payable in London.'in sterling aoney. shows that there was no such intention, and ould be no such effect In this case The answer to his is. that there is no suoh qualification in the tatute. The object contemplated bv the Legislature inquestionably was to prevent the circulation as iuoley of notes not payable on demand ; but the method f effecting that ohject was to prevent the issuing of uch notes absolutely, without reference to the intenion or elfeot of such issne. But even if the qualiQoalon contended for should be adopted, it can hardly be Aid with certainty that commercial Ingenuity could lot have devised some scheme by which the notes in uestion might have entered into the circulation of his State In the cape of Swift vs. Beers, (3 Denio, 70.) he qualification which has been suggested wasexiesdy repudiated. (See also, Ontario Bank vs. SaherK-rhorn. 10 r&ige, 112.) But it wai farther contended on the part of the de ntlanis. that even if the statute does not apply to he notes in question, still the company is liable upon bem, and the only effect of their issue is to subject be t flicers of the company to the penalty prescribed it the violation of the statute. There are cases in 'liich a penalty it imposed for doing an aot where the ct itself is not Told. These, however, are ca'es where be penalty is Imposed merely for the purpose of raveue. and not where the net prohibited is against pubc policy (Bartlett t>. Vinor, Carthew, 253. I)e Bagis v. Armistead, 18 Bing 107. Foster ?. Taylor. .'1 lev &Man. 244; S. C. B k Ad. 887. Ferguson r. lorman, 5 Bing N C. 76. Hallett u Novlon. 14 Johns. '. 290. Cope v. Rowlands. 2 Maes. & Welsh 149. Iriffltli v. W'e'ls. :i Df nio. 226 ) In this case the mischief intended to be prevented as the circulation of the notes of banking assooiaions, not pavabie on demand.' The person who reeives them is supposed to know the law, and by eceiving and aiding in the circulation he becomes arlictpi criminn. l)y reference to the agreement, or trust deed, it will e H on that certificates of deposit, and not promissory otes, were to have been given by the company, and I ilatchford the attorney of ('aimers. Mackillop, Dent . Co.. says in his answer that he had the impression bat they had been given, until a long time after the xecution of the agreement. I will suppose, however, or the pices*!,* ttat Ut fMMlnwiy ntfntvnmi)tituted in tbeplaca ot certificates of deposit, by consnt of all the parties, or in other words that the notes iven era what it was Intended should be given, but hat they are miscalled in the agreement. The ques. Ion then arires, how far the illegality of the notes !>nder? the trust deed void. Ft is a well settled prinIple of law, that if then are different and distinct mlertlikings in the sacna contract. none of which are 'gal and some illegal, fha law win sustain the good, lad make void, only the %*d. ' The common law Is ke a nursing father, and Makes only void that part here the fault is. and preserfes the rest " When the Latute declares the iaetrumetft itself void, the rule is therwise. Now, in this case, the indebtedness which tie agreement was intended to secure was not oreated y- the promissory notes?it already existed. The otes are merely evidenoes of It. The otyect of the agreement waa to secure the Inebtedness, and not to secure the performance of an legal eontraot. The notes extended the time for the ayment of the debt of the company, and operated tther for Its benefit than for the benefit of Palmers, lackiklop, Dent It Co. If the notes had been deiroyed, the Indebtedness would have remained. One f the evidences of Indebtedness would be gone, and hat is all. llat suppose the promissory notes w*re a ecurity, as they were called on the argument, the onsequence then would be that,belng Illegal and void, aimers, Mackillop, Dent fc Co. wonld have onesecuity less it is well settled that where there Is a seenIty given lor the payment of a debt, although the scurity may be illegal and void, yet If tn the nsm lstrument there Is a contract to p?y the debt, the ontract may be enforced (Mouys v Leake, 8 T. R., 11; Kenison v. Cole, 8 East, 231; Ferguson v. Norlan. I) Bing, N. C. 78; IJtica Insurance Company v. ip. 8 Cowen, 30.) And it necossarily follows that if irre are two securities for a debt, and one fails, the Lher is not affected. But it is said that the agreelent in this case is. that the prooeeds of the seenries assigned shall not be paid over till there is a deialt in the payment of the notes, after they have been ue, aad that they being void ab initio, and therefore ot capable of becoming due, the contingency upon liicBktbe trustees will behonml tn mi ntr.tr tho eds of the B??uritlM will never occur. There are two elementary principle* applicable to 1 contractu ; first, that they must be construed ao rding to their legal effect?and second, that they lust be so construed ul ret magts raltal i/uam pereat. ow.the object aad intention of the agreement in jesticn wa? to seoure an existing indebtedneM. The iT.e when the notes were to become payable was fixed pen an a date when the right of Palmer*, Macklllop. ' ent Kt Co., to receive the prooeeds of t>M assigned ?e- | lrlties, ebould become absolute A* an *vldence that i n il wa* the intention of the parties, the agreement self acknowledged the indebtedness and etatei that i e company was desirous that the whole of it should ft on It* responsibility, and that Palmer*. Mackillop, ent and Co. should make olalm for it only against I e company and against the securities agreed to be { 'posited for their in Jemnity ; it was never Intended y the parties t hat If. owing to any informality in the ! rites themselves, they should not be legally payable, ! ie assignment of the securities should become void, itch was not the objeot and intention of the parties > the agreement, and such is not its legal efTeat If, r any cause other than the discharge of the indebtlnas*. the nites were not paid at thetimewhen male ?yable, the rights of i'almers, Maakillop. De-t Si Co. i the securities under the agreement became absolute. Hut it Is contended that, by the terms of the agree ent. the securities are. In cas? of default, to be hel 1 r the l>*neflt of the holders of the notes; and that, consequence,any claim made by such holders mn<t > made by virtue of the note>, and. if they are void, io claim must be void. It appears as a t'?ct iu the use. that all the notes are now held by I'almers, Mao- [ illop. Dent k Co., and their agents. The original inpbtedness existed and still exists, in their favor; and was to indemnify them that the trust dee 1 was excited. Shall they then be permitted to lose the benefit ; the indemnity because the agreement contemplated i?t the note* might be transfwrred to others, and In'nded, In cane of such transfer, to indemnify the ildeisf The agreement says that after default shall nfltfle In the payment of the note*, the securities ball be sold shd the proceeds shall b? paid over to nimers. Mackillop, Dent te Co., or any other parties hn t-hihll them he holders nf tha nurtidABtua. th.. (arm holders" i* merely Hrtcrifiiio p^rtonm; and If the ulders of the noted are also the original creditors, for hone benefit alone the securities were assigned, shitl be said that they must lose the bent fit of the securl< *. because a farther provi?lon is made, winch is not :tempted to be enforced, and In reference to which, la.'niuch as there has been no transfer of the notes, j i? question whether it can be legally enforced or not I >es not and cannot arise? The provision as to othsr I rtons than original creditors, in a distinct altera*- . te undertaking, and ought not In equity to b* paritt) d to destroy] the claims of I'alm'jrs, Mackiilop, i cat k Co. But It Is skid that a court of equity arm nit. create a bw security. This Is unquestionably true, and If the instruction whioh I hare glren has that effect, it mnot besustalned. In the oase of Hunt vs. Rousm*ler, (3 Mason, 304,) which vras cited on the argument, le true princ pie was laid down. In that o<ue. the aintlff. instead of taking a bill of sale of a vessel for s security, had taken a power of attorney author!zg the execution of a bill of sale The re.isin given 1 him for doing so was that he did not wish to take it new papers in kls own name. After the execum of the power of attorney, and before anything is done under It. the maker died. The plaintiff en olalmed that the persons! representatives of the 'ceased should execute a bill of sale, the oourt held at as the plaintiff had refused to take a bill of sale, id had designedly taken a security of a different kind, bleb had become unavailable, they could not tubnlite a new security. That oase differs widely from e present. Here nothing new Is to be done All at la necessary is to sustain what has b<eu done, so r It M -*/ ? - ? m J m W-i* Mi e *- 1 t J IE R A: * 9, 1848. Iieparate the sound from the unbound parts of the agree- I tbe lEtnt, o?nl unuuibu inuniiereu tuis case an u me promn- i-rui fory notes were the oertlttea'es of depoalte alluded to mist in the agreement. It now become* necvasary to con- : takt aider what would be the effect upon the agreement iu "re ca*e they should not be ho regarded The oonse- BPP' que nee, of coune, would bo that In thin reapect the r, u agreement baa not been performed. But a court of thei equity considers that done which ought to b? done. *n and the agreement irust be construed in the **ma the manner aa if certificates of deposit had been givsn in 1 to Palmera, Maokiilop, Dent & Co , and wore now held '' hy them. P*" The next qneationa to be considered are: ? whl 1. Whether the agreement or trust deed wa* executed when the banking company wan insolvent, or Prci in contemplation of insolvency 2 Whether it w:ta ? y executed with the intent to give a particular creditor 8\?l a preference over other oreditor* of the company the It appear* by the testimony, that the trust deed w.n \ trui executed on the 30th of November. 1840. It also ap- "'a peara, that on the let of Oot 1840. a committee waa t" t appointed by the company to examine into the condltlon of its affair*. On the 23d of December, in the Pro fame year. the committee reported. In their report, n'e' they date that ' the accounta of the company hare ?| 1 been, for aome time past, in a course ef critical inrea- P1"' tlgatlon. and that a statement has been made up to 'n < the lat of October. 1840, aince which period, they have undergone little if any relative change." That report was eigned by the committee, and published, and atatai M a balance of available assets over debta amounting to he* *2 321.30ft 36. In oppoaition to thia report, and for con the pi rpoae of showing its entire fallacy, and that the for company waa at that time Insolvent, Strong, who was a'8? then a director of the ooropany. waa examined a* a wit- den ness on the part of the |plalntiff. Ilia testimony la d?e< general He states, in reference to a portion of the miti assets, that he should " think probably one. third were Kng not collectable " In reference to other assets, he saya baa that he " should think that but a small proportion wua Ins collected." The rest of hi* testimony iaof theaame in- put definite obaracter Strong ia the only witnesa on thia kin1 point on whom the platntilT relies. and it la from thi-t T testimony that we are to infer that the company waa the insolvent. plac It will be remembered. In considering how much Mr. weight la to He attached to the testimony, that in the resn autumn of 1840, the Commercial Bank of the otty of the Naw York, pf which the witness was at the time presi- tor dent, lent between $3(1000 and $40,000 to th? oom- and pany. and that the loan waa made with hia approbation and advice It will also be retnaked that in or about tha month of January, 1841. he waa Interested to the N amount of at leasr one-fourth in the purchase ol from thm two to three thousand shares of the stock of the com- Blon f~ ? j , - " ?-- .w M-viu ?anwv.vi-u?ij, no, an uun UI bun. the committee who hail mads a critical investigation N of the affairs of the company, signed the report of th? 23a December. 1840, showing a surplus of upward of $2,COO 000, and published it to th? world, with his as- B durance of its verity N There must generally be a difficulty in ascertaining cnri what was the value of liabilities ana things in aotion all c at any particular antecedent period But certainly fron there can be a nearer approximation to it, and upon orde more satisfactory testimony, than is offered in this beat case. who The proof is equally unsatisfactory to show that the neig agreement in question was exeouted in contemplation tit li of insolvency. The company did not stop payment Pe until some months afterward, and all their nets show hew that at that time not only its earnest hope, but its moli sincere expectation was. that it would avoid inaol- Soul vency. lie * But irrespective of these considerations, it dons not to a appear that any preference was Intended or has in tivel fact been made, or that there are not now sufficient and assets In the hands of the receiver to pay all the lawful r? debts of the company. upoi It Is farther ebjected to the agreement that it was cou| made to hinder, delay and defraud creditors. Before plaii examining this part of the case, I would remark that lode the decision which was made by the Vioe Chancellor brin of the first circuit, in the case of Leavitt v?. Vates et from a)., does not apply to the instrument in question. In tone that case, the trust deed executed by the company to the t Yates and others was made, not to secure debts pre- Patr: viouply contracted, but to secure future liabilities 4th i about to bo contracted, and which might not be oon- man tracted for the period of thirteen months afterward. yes s The property assigned was thus looked up in trust ed lo for that space of time, when there might not be, dur- ends ing the whole period, any cestui i/iir. truit who would publ acquire an Interest in It. In this ca?e there was an hood existing indebtedness. The creditors, in very decided of th terms, announced their resolution not to oontlnue thn and credit any longer in its then existing state It was at *hi< that time, and for the purpose of obtaining an exten- Hi ( ion, and upon the additional consideration of the re- -Al Irate of Davis that the arra nfvutat wbiok resulted la yowl the" efedOTIOTr of the trust deed was entered Into ? Mi The deed declares that till default is made in the pay* (k-xi mvnt Af fho ?? *? ' 1 U. WV. ?..<w??r?w. MOpwnaw, ?UO f/t UJ/Dl IJ artQIK u * U (ball b? held in trout for the company. It ! contend- UP ? d that by this provision the company became the Bud dole cettui que Irutt. and that for that reason the trust cusei is void. Such however. I* not the legal effect of the drlnl agreement. On the contrary Palmers, Mankillop, 'l*>or Dent Si Co acquired an Interest in the securities I in- bark mediately on the ezecotloB of the deed. Not absolute, who: it ia true, bat as absolute an Interest a* a pledge ever eouli acquires before default, in property deposited aseolla- start teral security for the payment of a debt. The com- "n F* pany could not resume possession or ownerahip of the place securities assigned, neither could It contrel them. It bavli ooald not make nee of, nor'receive the Interest or pro- noisj fits arising from them. It had ao greater interest In hous< them, nor advantage arising out of them than belongs disci to every pledgor. tfce The case cf Goodrich r. Downs (6 Hill. 438,) wm par- h'* ?1 tlcularly relied upon, on the argument, In support of makt the views taken on behalf of the plantlff I n that case, retur an insolvent debtor, aialnut whom a judgment had larce been recovered, within the thirty days' stay of execu- *c fU tlon then allowed by law. assigned nearly all his pro* the n perty to his son. to pay four of his creditors, and to pay over the surplus. If them should be any. to him- g?< P' self. The Court held that this was an attempt by an *4 b; insolvent debtor to put his property b?yond the reaoh rema of legal process, and at the same time to reserve a por- no sj tie a of it for bis own benefit. The statement of this case shows that it is distinguishable from the one before us. In the first place, the assignor was admitted- B ly insolvent, and a judgment recovered against him No remained unsatisfied. In the next place, there were a moi other creditors whose debts were then due. wh*? were warn hindered and delayed by the assignment In this case, Lord on the contrary, It appears that the ooraoany ?aid its name ascruing debts and liabilities till some time after the andj execution of the deed. 1 he < The only thlBg which distinguishes this from an or- biai I dinary case af a pledge, is that the persons who were bavii to receive the benefit of it were not made the deposi- 1S>47. tories of the property pledged If they bad been they comn would have become trustees for the benefit of the ceedi pledgors, except to the extent of the security for their court own debts In this case, other persons are substituted instil as trustees for both parties. valid But Jt Is contended that the agreementisvoid.be- Th cause the trustees, in addition to the right to s^ll the I conv securities, also had a right to borrow money upon thein | temp In case of default. That is. they are authorised to , act i substitute a new pledge in the place of the one created book by tho deed ; this would be the whole elTeet of borrow. eoui ing money on the securities. Now if one pledge is le- petit gal, it is not obvious why n substitution of another cont contract of precisely the same character, should not gued be equally so?certainly it ought not to vitiate the agreement Itself. The next qutstlon to be considered i* as to the effect Befoi of the alignment of stocks of the Apalaclitcola Land Th Company, the American Land Company, and the that Miarissippi Land Company. n urd It appears from the testimony that the Apalaahcola i the I stock was transferred to the company b* O^den.as of th security for his bond conditioned for the payment of | 1S49. $10 000?that the stook of the American Land Com- I to an pany wan transferred to the Hanking Company by lord Beer* as seenrity for his bond conditioned for the Supr payment of J.7.ri IHK)-and that the Vli^sinsippi atook whet was transferred to the company by Sherwood as *?- etr?e entity for his bond conditioned for the payment of f>;lU ( CO. It also appear* that neither of the bond* waa aligned to Blatchtord& Murray. It i* contended on the part of the plaintiff, that an Ck the b' nd* of Ogden, Beers and Sherwood were never Jon. assigned. the stock* never passed to the assignees? j * *? Blatchford and Murray state In their answer th*t j el.ari they were not aware that the e were any such bond*. j P""' The company ofcoarse had nolntereet In the stock*, I n.ato than to the extent to which th^y were pledged a* so. curity lor the payment of the bond* and they could .. assign no other or greater interest This Interest they _ mast have Intended to assign, and tt mast have been , either through oarflessr.cs oversight or frand that : ' the bonds were not assigned. The question then l?. vT* , the bonds anil stocks bei u< seperated, which shall fel- ' ' low tbe other? In respect to tht* matter, the re !/?' celrer t-tauds In the place of the company and the ?v question Is to be decided In the nine manner as It ?? would be If this suit bad been brought by the company. P*1? The company intended to asfigu its interest intlie bad (ticks, an J it was necessary, in order to nuke thn transfer effectual, that the bonds should pa?s with f t them It follows, as a consequence, that the company j. ln ought to have UltlMd the boad*. A Court of K I'ltty , cousMei* that as dene which ousht to be done, and hour the bonds mu.it be considered as having been assigned ?hjc wltn the atockr, and this court should enfoice an as- w. aigmncnt in tact, if neciKssry. The next question which arises is, a* to the bond of SrBeers for >'^0,000. This was not included !n the list of securities set forth in th-* original report of the coin- I Kult' mittee of inri-stmi i.tN and fluaoce " It appeal* to ?ntir ba?e b> i-n substituted in the place of another bond Hlcki mentioned in that report, but In the final resolution o the con.mitter authoring the execution of the trust d?ed, It is stated that the form of the ajfreement In 1 *' question was mbmitted to them for their approral, and "J*1", that they thereby approred of it and authorised Its *- lJV" 1 eeiitloD. and ali>n author I i-d the officer* of thecoropauy T to assign the securities mentioned In the schedule ?*r ' thereto annexed. ju Th? bond of Beet* 1* one of the seinrities mentioned ditto In thl* schedule, and of coursu passed under the as fourt slgninent. VJ'J Kinaily it ia contended that the oripinal Indeb'edness of the company *u founded on an u<urioui con '' sidvration. The ertdence relied up?>n a* to 'his branch ditto of the cane, la that Palmer*, ManHillop, Ueot St (Jo , hariied * commission ofone percent, ?od In the flrU Thcr Account which they rendered to the company, charged 7 per cent interest. Palm?ri raja in his answer, which M] ic responsive to the bill, that no acre-ment was m*de from aa to Interest; that the custom of hi* house. In similar g?rn transactions,? was to ebir?e on? psr cent ra ?ro tiiia and I t?.. rvH ?' l.n't 1 *> ** )>? ' ?? I ' ?I'I U?v ? vA Um*lm v* ? | 1 L D. TWO CENTS. ticre of the traD'actlnr* in question, wan fly* per t. He further 'tatee that the charge of mstmo per 1, contained in the first account, wa? mad* by m k? of the clerk, *0(1 that on a?<:?rtainlog the mtai, and before the commencement of thlx anlt. the <ara from the teatimony that such corrected acnt wax rendered To matte out a caae of UHury, e rouft be a corrupt agreement; or. la other wordt, igrcement Co reaerve more than per cunt for loan or f? rbuarance of money There la no proof, his caxe. of an; nuch agreement he ooneluclon. from the view* which h?ye b?en exiaed, i?. that the debt, to aeciire the paymeat of ch the agieement or trust deed waa given, was iey contracted, and is still due and payable ? that the missnry uot> a given by the company, being payable ar alter date, were iaaued in violation of the provlla of the statute, and ouaht to be delivered over to plaintiff to be cancelled that the agreement or <t deed ia legal and valid?and that all the aecariiM-ntioned in the pcbedule annexed to it paaaed lie trustee*. anbjeet to the trusts contained in th? d. atid a decree must be entered to that efTeet. A vl-inn roiiHt ?No be made lu the decree for the payot of the costs of the defemianta out of the proceed* .he A'r-icoed securities. and that the coata of the ntilT be a charge a/ainut the aaaeta of the company Ms batdtf an reoi ivrr Th* Telegraph. rn. Bk-i?piitTT : ? In your journal of Knnday. the ding of ii telegraphic de>pa< oh from Washington tnina an Important error. I aay the' heading," the body of tha deapatnh doea not warrant wh*t ia rted in the caption, that Mr Baln'a patent or?d to be laaned la for a mugnetio telegraph, nr. InI, for any telegraph If Mr. Bain has been p?r:ed, by the Commlaaioner of Patent*, to patent hi.-* ;liah patent of 1843 in thin country, that patent nothing to do with any telegraph (if the writer been truly informed), and, if thia la the caae. the Ho should not be deceived Into any belief of the 1. bat there Is an error In this reapeot. la evident {tarn fact that a thorough Investigation has lately taken e. 01 in* interfering claims of I'roressnr Mom and Bain, before the Commissioner of Patents, nod the lit. was officially announced, Oct. 24th, ISIS. that paid S K. B Morse Is the tlrst and original invenof the aforesaid alleged improvement in telegrnjih* , an such. is entitled to receive a patent therefor." Signed, EDMUND BURKF, Commls?loner of Patent*, ow it nan hardly be supposed, that after having officially decided, only a month ago. the comints>er has granted Mr. Bain a patent for the same ig The patent must he for something else, r.w York, Not 28,1848 SCRUTATOR. Court of Sp?'?-liU Seaslona. nforo the Recorder and Aid. Smith and Franklin, or 28.?There were about thirty-Are persons as?d before the court this morning They were of on<plexions and of both sexes, anj varied in age i six to sixty years-some were charged with dUrly conduct, some wero accused of a'sanltlnz and ing their wives and a returnable number of the le were charged with having appropriated their hbon'goods to their own use. Among these poircenists was ter Trainer, who went on a train, and when 'as pretty well by th? head, stole a uogsliead of isses, worth $25, the property of Charles Holt, of th street,on Thanksgiving day. Peter averred that rai employed by another man to take the molasses certain place in Cherry street. It was not posl ly proven that he intended t? steal the molasio, so the court allowed Trainer to go trick McCuire anil Margaret Mc< Juirc were oallod ii by the clerk to take their place* at the bar. Th'j tie were man and wife, and the affidavit of mmit aga'nst them was endowed " Alllduvit of Cross icency." The witness for the people could not g his mind to give his testimony in load tone the witness' stand, so he told his story in und*:s to the Judges, and we could only hnar scraps of estimony, thus Sunday morning, 10 o'clock, ick met his wife in Thirtieth s'reet, near ivenue ; she had been absent two week*; only -led a month ?go-very affectionately, and then ? ir, In tha aot of Judges smile, and ancus>ok ashamed ?Alderman reads complaint, which with ? '- In public view, to the great Injury of the Ic morals and the great scandal of the neitfhborl.and their conduct waasuoh astendedtoabre icli ie public peace." (Judges put tbeir beads together consult; conclude there is here no case over ;h this conrt has jurisdiction.) [cosdkr.? Patrick and Margarnt. you may go. d FhANKLin.?Margaret, when you want u *** ' kaabsird kkiIo, ytnI naa nsrtsr go honu fnr it. ikjarrt.? Yes sir ; it's that I will, yer 'oners.? t Margaret and Patrick.) >10 to art Change.? Stewart Ferguson was brought n a charge of stealing a $5 bill from Stephen C. null. It appearec', from the statement of the aoJ, that he waa Icvitid by lomplainant to go and k at a neighboring grocery. Hiving got the II. Blrdeail offered a f 5 bank note in paymant. The eeper could not chacgx the note, und Ferguson, le quite a young?ter, picked it up aaying that he 1 get change at a grocery opposite. and away he ed. The uian opposite could not change it, and trguson muHt needs go further, drinking at web >, and at each offering the f.6 bill. At length, og imbibed quite too often, he got disorderly, r. and quarrelsome, and brought up at the station a. In custody of a number of policemen. He was iargcd In the morning, but found that Moat of icney * as gone. He could not, therefore, face Id friend, and went to work to earn money to i good the deficiency, but just aa be waa about to n the amount (?) he was arreated on charge of i.y, und ao stood here accused The court agreed spend judgment provided that he would refund loney This he agreed to do, a ad left the room large of an officer, who was instructed to let him rovidrd he made good to Biril*?ll the loss sustain' r him in the above mentioned transaction. The Ining cases were of the usual cbaractor, offering jecially interesting features. Supreme Court. cfore Juitlcaa Huribut, MoCoun and Kdw?rd?. v 28?In the Matter of John H. Lord ?This waJ tion to review the proceeding* had on Stlilwell mt, granted by Judge Ulshoeffer. It appears that became bail, in the Court c f Sessions, for a man id Ilosa. charged with larceny. Ross absconded, udgment waa entered up against Lord for $3 000. liatrict attorney issued a Stillwell warrant agalnat or the purpose of collecting the amount, Lord ig sworn he waa worth $47,000, on the loth March, On the 1 *>th of April. lf<7, fudge Ulshoeffer aitted Lord to prison, under the Stillwell prongs, where he has since remained. The Supreme ; decided that the diatrict attorney had a right to Lute the Stillwell nrocttedinvs und that. th?? worn t People vi Baxter ? In thl? cm* the prisoner win? lcted, in ib? Court of Uaneral Seaalona, of an att to conmit grand iaroeny. He km caught In th? Df takirg f im a iceotleinan'a pocket a pocket containing more than $'ii 1'be defandent'a iM'l Inaiaud be oouid be convicted only of laro nj. aa be did not knoir what the pock?t book alni d y.rrcr waa eaainned. and the question arto-day. Judgment reeervrd Court of Oyer n?nl T. rmtiier. re Judge Kdmonda A d Stevens and Hatfield ePtople ri Thumut Hayes It will b-i to lidinb-rud Hayea waa convicted la September inat of th^ ler of hie wife, and avntenced to b* executed on 7th or 18th of thl? prec*nt month; the execution e f<-ntt*ni'x waa respited until tb- 21atof January, Hia counael made an application tbia morning lend the bill of ciceptiona which bad been taWi. Je purpose <f havin bia cure carrit d before the eme ( ourt. in regard to the chill*ng?a; that 1?, ht r for principal cauae, or for form Declaiou reid. Vnlti il Mfntes Cuiuinlaloner'a Offlcc. Hefore George W Moron, Eaq. arge aj Larceny nn the Huh Sea* ?Robert Hatoue of the er?"w of the American ahlp St George, irreated yeaterilay morning aad oora ait'.eil on a <? of at* allng a freak coat anil a pair of oaaaimera alooun ftom George > haiiihtria.n, one of hia ahlpa. I<aw Intelligence. h*t o? Arreai.s?NoT?njo?r Term?NoremNr Mr. M Hoffman resumed hia argument in cane* !<, on part ol appellant. Mr C P Kirkland w*e 1 on paitof reapondent, end Mr IIofTmia closed. !'J Benjamin Swett adinlniatrator, ato appellant, ra Chare *?l ol, executors. &c respondent! VV. Tracy for nppeilant.il Drnio for re<p>ndent. Traey opened the argument of thi? csuse on of app>-ll%Ht, and at the adjournment ?f Court uot concluded Brooklyn Intelll**n??. tai. At'cidkmt ? A mannnmid Low wm soaeverejurad by beiDg thrown from tils wagon, in Harriitreot. ou Monday evening thnt h* died in a f?w a after Hia florae b?r frightened nod ran off. h caused the wairon to upaet aud fall upan him. raided in Smith itreet. niet aLr Hrar ?A horae attached to coal cart, n by a lad. commenced kicking, yeatarday, in on atreet. whirh ca'iaed the lad to fall between tho nl and the cart. when he received leveral severe i, which icjured hiin aerloualy. \aval liitclll^eiK-e. e 1'nlti d atatea ahlp Geruitutown. Lownda Com" Ifr, rn.iu Fen'acoU. remained at St. ThooiM on th Inst to aail on the Vth for Aui Cayes and We*t India Island* The following i? a list of fllcm CbarlM Lownd* fisq 'on uander; Jas. cKinsty. first lieutenant ; lticnard for. seeoad , ' barles Th< man. tlird ditto; Ja* (?. Shipley, h ditto; I. C. Lanunaer. surgeon ; Kd ward Stain, parser ; J. Matthew*, master: Thomas H. Looker, ilpman ; Julius (J. Ilegiemua, ditto ; VVilra:n T. tell ditt" ; John K. Lagow, ditto ; W. II. To >oe, K.dwaTd Harrison, ma?t*r's mate; A Por<ey, lin'a elerk ; W C. Thomnwn. gunner ; U?>rg? naa, tail makrr; II. A. Da Cnmui, purser'a olerk. it. Clay?We have a telegraphic despatch Lexington. communicating the sgreeabla iot?ii'?that Mr ( lay "a eoodtilou has gr-aUy improved, that he I* now oonsl'tereil out of i> r??n dirgT. ila 'tljihia Soi IK .!k i it . u.