JAN. TERM, 1857. STATE V. BANK OF WASHINGTON. 5 per cent, interest, and not the rate fixed by law-upon con tracts generally; per Hanly, J.] It is not necessary that the holders of the State. bonds issued to the State and Real Estate Banks, should prove a demand of payment of the interest thereon, at the place stipulated in the endorsements of the bonds for payment : if the State had funds at the place of payment to meet the installments of interest it should be made to appear by way of defense. (14 Ark. 191.) Writ of Error to the Circuit Court of Pulaski County. ON. WILLIAM H. FEILD, Cir H cuit Judge. S. H. Hempstead, for the plaintiff: Pike & Cummins, for the defendant. -1-1ANLY, J. This is an ac- [*55 7 tion of covenant brought by the defendants in error—plaintiffs below—on THE STATE OF 1RKANSAS fifty-two State bonds, partly five pet V. cents, issued to the State Bank, and THE PRESIDENT AND DIRECT-partly six per cents, issued to the Real ORS OF THE BANK OF
Estate Bank—the interest on each WASHINGTON. being payable semi-annually. The lf the defendant file several pleas setting up pre-plaintiffs below claim title to the bonds cisely the same grounds of defense, though differ-declared on by assignment from the ently stated, the court may require him to elect obligees therein named through several upon which he will rely, than strike out the others (14 Ark. 186; 17 Id. 89 ): but the court would have by due course. no right to strike out either plea without all,wing The State, at the return term of the, the defendant to make his election. (5 Ark. 140 ; G writ, appeared to the action, and inter-Ark. 198 ; 14 Ark. 411.) posed her eleven pleas in bar thereof,. 01 an issue to the plea of nut liel corporation to a suit in (he corporate name of a which were, in substance, as follows, bank, it appeared that the charter of the bank had expired by limita-to-wit: tion, but that she made a general assignment of her 1. Nul tiel corporation. assets to trustees, who were authorized by law to 2. Inducement that the charter of the sue in 'the corporate name of the bank upon all choses in action,-etc., due to her : Held, that the Bank of Washington expired 4th July, bank was so far a corporation as to make it com-1844,and contained no provision author. petent on the part of the trustees to sue in her cor-izing it to sue after that time—with porate name on ariy of the chos-s in action trans-traverse, nul tiel corporation. ferred to them, notwithstanding the expiration of the charter. 3. That on the 3d July, 1844, the. A general deed of assignment to trustees does no Bank of Washington assigned her as– 5551 vest, in them the legal title to the *bonds sets, including the bonds, to one James held by the assignor, so as to authorize them to sue Adams, and he to eight trustees; by thereon in their own names. (11 Ark. 106; 12 Id. 74 ; 4 Ark. 361; 5 Id. 536.) which the legal title to the bonds in The State is not liable for interest on the semi-question vested in such eight trustees; annual installments of i nterest upcin the bonds is with traverse of title in the plaintiff sued by her to the State Bank and Real Estate below. Bank, upon default of the paymentpf such interest [But if the State were liable for interest upon the 4. Assignment by the Bank of overdue installments of interest upon such bonds Washington to the eight . trustees the rate would be 5 per cent, upon the bonds bearing namci in the third plea on the ad
STATE V. BANK OF WASHINGTON. VOL. n suly, 1844, with like traverse as in third tions asked for by the plaintiffs, against plea. the objection of the defendant. 5. That the bank was not holder 3. That the court refused to give the and assignee of the bonds as alleged. six instructions asked for by the de-6. That the plaintith below did not fendant. demand payment of the installments of 4. That the verdict is contrary to interest as they fell due, at the places law. where they were payable, averring 5. That the verdict is contrary to that, as a consequence, the defendant the evidence and not warranted by below became and was released and it. discharged from all liability thereon. 6. That the damages found by the 7. As to the 5 per cents, no demand j ury are excessive. on the Bank of the State, and no notice 7. That the court, against the ob-to the State of the non-payment by the jections of the defendant, allowed the bank was given to the State. plaintiffs to fill up the blank assign-8. As to the 6 per cents, no demand ments, on said bonds, at the trial, and on the Real Estate Bank, and no notice after the jury had been sworn. to the State of the non-payment by the This motion being considered by the bank. court, was overruled, and the defend-9. No suit against the banks to re-ant, by her attorney, excepted, setting rover the interest, nor were they pros-out, in her bill, all the evidence given ecuted to insolvency. at the trial, the facts relative to the 558*] 10. *Payment of all the in-filling up the several blank assign-terest due on the bonds at the time suit ments on the different bonds set forth was brought. in the declaration, the several instruc-11. Covenants performed. tions given at the instance of the The 2d and 5th pleas were stricken plaintiffs below, and those asked for out, on motion of the plaintiffs below, by the defendant and refused by the and exceptions therefore by the defend-court, the several pleas stricken out, ant. Issue was taken on the 1st, 4th and such other facts as may be involved and 10th pleas. Demurrers were inter-in the various grounds set forth in the posed and sustained to the 3d, 6th, 7th, motion for a uew trial. We shall only 8th, 9th and Ilth pleas, and exceptions *set forth such facts as may be [*559 by the defendant below in consequence necessary to illustrate the s-veral thereof. points upon which the judgment of The cause, upon the issues thus this court is invoked by the assignment formed, was submitted to a jury, who and briefs of counsel, and, in doing so, found each issue for the plaintiffs be-shall introduce them at the time those low, and assessed their damages at points are respectively being consid-$52,513, for which judgment was ren-ered. dered by this court. The defendant below brought error, upon which the cause is pending in The State, by her attorney„moved this court. Sundry errors have been the court for a new trial on the follow-assigned; but several of them seem to tng grounds, to-wit: have been abandoned, or else waived 1. That the court permitted the by counsel in their respective briefs. plaintiffs to give improper evidence to We propose, therefore, only to consider the jury, against the objection of the those to which our attention has been lefendant. specially called and directed by the 2. That the court gave the instruc-counsel at bar.
-JAN. TERM. 1857. STATE V. BANE OF W ASHINGTON. 1. It is insisted by the defendant be-therefore, hold that the court below low that her second plea should not erred in sustaining the demurrer to have been stricken out ; whilst it is this plea. maintained by the plaintiffs that such 3. It is furtherinsisted by the plaint - plea was properly stricken out, for the iff in error that the court below erred reason, that it was substantially a repe-in giving the instructions asked for by tition of thefirst plea. the plaintiffs below, and refusing to The doctrine on this subject may be give those moved for by the defendant thus stated : Where the defendant below. files several pleas, setting up precisely Those given on the part of the the same grounds of defense, though plaintiffs below, are as follows : differently stated, the court may re-1st. That if it appears to the jury quire him to elect upon which he will that there is by act of Congress such a rely ; and when the election is made, corporation as the President aud Di-then strike out the other. See Sump-rectors of the Bank of Washington ter v. Tucker,14 Ark. R. 186; Davis v. still in existence for the purposes of Calvert, 17 Ark. R. 89. this suit, the jury must find for the We apprehend the court, without al-plaintiffs on the plea of no such cor-lowing an election of pleas, would have poration ; and it is sufficient evidence no power or right to strike out either, of that fact, if the trustees of that on account of the same facts being set bank are authorized to sue in the name up in each. See Sullivant & Thorn v. by which the bank was incorporated, Reardon, 5 Ark. R. 140; If ilson & Tur-nothwithstanding its charter had ex-ner v. Shannon & Wife, 6 Ark. R. 198; pired. Sanger et al. v. State Bank, 14 Ark. R. 2d. That if the jury find there was 411. no such assignment by the said bank We therefore hold that the calla be-as to vest the property of the bank in low erred in striking out the second the trustees in such manner as to re-plea of the defendant, without allow-quire them to sue in their own names, ing him to elect between that and the but they might by such suit use the first one. name by which the bank was incor-2. It is also insisted by the plaintiffs porated, then the jury will find for the in error that the court below erred in plaintiffs on the plea of assignment. sustaining the plaintiffs' demurrer to 3d. That if f he plaintiffs are entitled her , third plea. to payment, they are entitled, as a The motion set up in this plea is, in part of the damages, to recover interest effect, that the defendants in error had at six per cent. upon the amount of in-no title to the bonds declared on. As-terest on each bond falling due half-suming it to be true, as the parties in yearly from the time when each should the court below seem to have conceded, have been paid to the time of trial in that the several acts of Congrer-s, ab-addition to the sums of half-yearly in-5605] stracts from *which are stated terest. below, are private acts, and as such 4. That the bonds in the declaration should be proved as other material mentioned did not so pass by a general facts in the cause, we think there can deed of assignment to the trustees as be no doubt, but that the third plea is to pass the legal title to them, and re-good in substance and form, and con-quire them to sue in their own names. sequently an effectual bar to the action *Those instructions proposed t'561 to which it applies, if confessed, as it by the defendants below, and refused is, in effect, by the demurrer. We, to be given by the court, are as follows:
STATE V. BANK OF WASHINGTON. VOL. 15. 1. That unless it has been shown by reference to each other in their order the evidence, that the plaintiffs, as on the record. holders of the bonds mentioned, de- *As to the first instruction P562 manded the payment of interest semi- given at the instance of the plaintiffs : annually at the place named in the The plaintiffs introduced as evidence endorsement of said bonds respect- in support of the issues on their part ively, the plaintiffs cannot recover in sundry acts of Congress, in substance, this action. as follows: .2d. That unless it has been proved By act of 15th February, 1811 (2 Stat. to the satisfaction of the jury , that the at Large 625), a banking corporation plaintiffs, as holders of said bonds of- was created in the District of Colum-fered in evidence, demanded the pay- bia by the name and style of "The ment of interest semi-annually, at the President and Directors of the Bank places where the endorsements made of Washington ; " and the charter was the interest payable, and gave the to continue for ten years from the State notice of such non-payment, the 4th of March, 1811. By the 21st sec-plaintiff's' cannot recover in this action. tion it was declared that the act should, 3d. That on the law of the case the to all intents and purposes, be deemed plaintiffs are not entitled to recover in and held a public act. this action, and the jury should find On tbe 2d of March, 1821, by act of as in case of a non-suit. that date (3 Stat. at Large 618), the 4th. That the acts of Congress put said act creating that corporation was in evidence by the plaintiffs, are not extended and limited to the 3d day of sufficient to prove there is such a cor- March, 1836, and by sec. 20, the act poration, for the purposes of this suit, w as declared to be a public act. as alleged in the declaration, and the By act of February 9th, 1836, (5 Stat.
jury should find that issue for the de- at Large), the act of incorporation of fendant. the Bank of Washington was "renew-5th. That unless it has been proved ed, continued in full force and limited" to the satisfaction of the jury, that the to the 1st day of October, 1836. provisions of the act of Congress ex-By act of July 2d, 1836, the same
tending the charters of the district charter was extended till the 4th of banks, approved 17th June, 1844, were July, 1838. 5 Stat. at Large 69. accepted by the Bank of Washington, By act of 31st May, 1837, the same the plaintiffs in this suit cannot avail charter was extended to the 4th (lay of themselves of the benefit thereof ; and July, 1840, on certain conditions. 5 Stat. if the jury should further find from at Large 232. the evidence that the assignment was By the act of 25th May, 1838, the made as alleged in the 4th plea, they charter of the Union Bank of George-should find for the defendant. town was extended till the 1st of July, 6th. That if the jury believe from 1842 ; and the stockholders were au-the evidence that an assignment was thorized to elect uot more than three made as alleged in the 4th plea, they trustees to have the• same powers as should find for the defendant. the President and Directors; and to We propose to consider the several whom all the property, choses in ac-instructions given at the instance of tion, rights and interest of the corpora-the plaintiffs below, as well as those re- tion should be conveyed in trust. It fused by.the court proposed by the de- was provided that suits by or against fendant, in connection with the evi- the corporation should not abate or dence to which they relate, and in discontinue, and that there should be
JAN. TERM, 1857. STATE V. BANK OF WASHINGTON. no necessity for revivor, and that iu banks of the District of Columbia, all actions, legal and equitable, and in whose charter was to expire on the 4th all process by and against said corpora-of July, 1844, should not abate or be tion the name and style thereof should estopped by reason of the expiration of be the same. The president and di-the charter, but should proceed to final rectors were to file a declaration of as-judgment and execution as though the sent in writing, in the office of the sec-charter continued in existence. 5 631 **" re tary of the treasury, within And it was also provided, that the six months after the passage of the trustee or trustees, assignee or assignees act, accepting its provisions, and the receiver or receivers, who might be act was declared to be a public act. appointed to collect and receive the -5 Stat. at Large 229. assets of any bank whose charter By act of July 3d, 1840, the pro-should so expire, and to adjust, settle visions of the last cited act were ex-and liquidate its debts, should have tended to the Bank of Washington; it full power to commence and institute being provided that wherever the 1st all o necessary a,tion, suits or P504 of July, 1838, occurred in that act, it other proceedings, in law or equity, in should be read the 4th of July, 1840, the name of said bank, and prosecute and wherever the 1st of July 1842, oc-the same to final judgment and execu-curred, it should be read the 4th of July, tion. 5 Stat. at Large 677. 1844; by which provision the existence Under the provisions of the act of of the bank was continued to this the 3d July, 1840, extending the pro-- latter day. 6 ,Stat. at Large, 802. visions of that of May 25th, 1838 (con-On the 25th of August, 1841, by act of cerning the Union Bank of George: that date, the charter of the Bank of town), to the Bank of Washington, and Washington was revived, and all the other banks in the District of Colum-rights, powers, privileges, immunities, bia,an assignment was made to trust-limitations, prohibitions and restric-ees of all the assets of the Bank of tions contained in it, were renewed, Washington, on the 3d July, 1844, as extended and made applicable to said was shown by the defendant in the bank, and to its president, directors court below. The trustees, under this and other officers and stockholders in general assignment, it is manifest from the same manlier and to the same ex-the evidence furnished by the record tent as was granted and provided by before us, in bringing this suit, have said charter, and the laws in force on used "the name of the bank" as thcy the 1st of January, 1838. Provision seem to have been expressly authorized was made for the election of nine di-to do by the act of 17th June, 1844; rech ors, a president and other officers, that corporate name of the bank being to hold their offices in the same manner "The President and Directors of the as if the charters had not expired, and Bank of Washington," and we think as if such officers had been chosen at there can be no doubt of the fact, from the annual election. The act was to the evidence furnished by the record, continue in force until July 4th, 1844. that, at the time this suit was com-And the act of 24th May, 1838, to ex-menced, the president and directors of tend the charter of the Union Bank of the Bank of Washington were so far a Georgetown, was extended until J uly corporation as to make it competent 1st, 1847. 5 Stat. at Large 449. on the part of the trustees to sue in By act of June 17th, 1844, it was pro-that name on any of the choses in vided, that all suits then or afterwards action transferred to them by the gen-commenced, by or against either of the eral assignment given iu evidence at
STATE v. BANK OF WASHINGTON. VOL. 18 the trial, as appears by the transcript, 536. We therefore, hold there is no er-under the act of Congress before here-ror in this instruction? in specially noticed. The fact that the As to the third instruction given at chirter of the company had expired by the instance of the plain tittle— limitation, makes no difference. The The legal • effect of this instruction Lgeislature, in anticipation of its ex-was to direct . the jury in the computa-piration, on the 17th June, 1844, seems tion of damages, in case they should to have specially authorized the bank find the breaches aud issues for the to do what was absolutely performed plaintiffS, to allow interest upon the by them on the 3d July, 1844, and de-interest found due on the bonds declared thus in advance, that the trust-clared on, semi-annually, from the ees, to whom the assignment was con-times that each and every installment templated to be made, should possess of interest should have been paid to the the powers claimed for them in this time of the trial and date of the compu-suit. tation. The bonds in question do not Entertaining the views expressed on warrant this instruction. The State this point, we see no valid objection to only obligates herself by them to pay, this instruction, and therefore hold semi-annually, five and six per cent. that the court below did not err in giv-interest on the amount of each bond ing it to the jury. bearing the particular rate of interest. As to the second instruction given at No obligation is imposed by the terms the instance of the plaintiffs: of the bonds to pay interest upon in-The question involved in this terest, even if the State were a private instroctior has, virtually, been person. It has been said by this court, determined when considering and on a former occasion, that the State is disposing of the first one. In not liable for interest in any case, un-565 1 1 • addition to what has already less by express agreement she makes her-been said on the subject, we may here self so. See State v. Thompson, use, etc., add that the general deed of assign-10 Ark. 61. But regarding the State as ment from the bank did not invest in an individual or citizen, and we appre-the trustees the legal title to the bonds hend, as before intimated, she cannot sued on as to authoriz1 them to sue be held liable upon these bonds for in-thereon in their own names. The most terest upon interest; for it seems to be that the trustees could claim under the the better opinion that a contract en-deed of assignment, independent of the tered into, in advance of the accrual acts ef Congress in question, is an in-*of interest, to pay interest [*5 60 vestiture of an equitable interest in the upon it, should it not be paid at the choses in action belonging to the bank time agreed, will not be enforced, for at the time, and thus secure to them an the reason, as it is said, that courts will interest which a court Of law could only pot lend their aid to enforce the pay-respect and protect, but which could ment of compound interest unless upon only be enforced and be made fully ef-the promise of the debtor made after feetual to them in a court of equity. the interest, upon which interest is de-This we regard as the well settled doc-manded, has accrued; and this rule is trine of this court, and is not now open adopted, not because such contracts are to controversy or question See Biseoe usurious or savor of usury, unless very et al. v. Sneed et al., II Ark. 106; Roane remotely, but on grounds of public et al. v. Williams et at., 12 Ark. 74; policy, in order to avoid harsh and op-Conway, ex parte, 4 Ark. R. 361; Buck-t. The real party in interest must sue ; see Bis-ner et al. v. Real Estate Bank, 5 Ark. R. roe v. Sneed, note 1, l I-111.
J AN. TERBI, 1857. STATE V. BANK OF WASHINGTON. pressive accumulations of interest. See or oppressive upon the citizens, the 'Ir.. 2 Parsons on Cont. 430, and cases cited guments addressed to us by the coun-in notes; TVilcox v. Howard, 23 Pick. sel for the plaintiffs might be effective 167; 11 Paige B. 228; 1 Barb. R. 627; of some good, if addressed to the law-8 Blackf. R. 158 ; 2 Cush. R. 92; Doe v. making power of the State, whose duty Warren, 7 Greenl. R. 48;1 Amer. Lead. it is to weigh such considerations, and Cases 341, 371, and cases there cited ; deal with questions involving sucn in-also the cases cited by the defendant's quiries. We hold, therefore, in this counsel in his brief. case, regarding the State as a citizen or But, in the case we are considering, individual, that no obligation is im-there is no contract in express terms posed on her, by the terms of the bonds to pay interest upon interest. If the declared on, to pay interest upon inter-bonds in question impose any such ob-est, and that, therefore, the court be-ligation, it can only be derived from low erred in instructing the jury as implication, or the effect of the con-manifested by the one we are now contracts viewed in reference to the law as sidering. it existed at the time the bonds in ques-The instruction, however, is clearly tion were made. In such case, we ap-erroneous upon principle, on another prehend, but few adjudicated cases can ground, in my opinion. The jury were be found, even in this country, holding instructed that they might allow six that compound interest may be col-per cent. interest by way of damages, lected. We are aware that the spirit upon the computation of the interest of the law is somewhat undergoing due on all the bonds, as well those bear-modification on the subject, but the ingfive, as those bearing six per cent. modification, which the courts seem interest. If the State had obligated disposed to make, does not go farther herself in advance to pay interest upon than to enforce contracts, in express the interest, in case it was not paid at terms to pay interest upon interest, the time appointed, without express-made in advance of the accrual. See 2 ing what rate of interest she would Parsons on Cont. 430; Ilerce v. Rowe, T pay in that event . (conceding the prop-N. H. R. 183 ; Pawling v. Pawling, 4 osition that this contract would be en-Yeates R. 220 ; Kennbn v. _Dickens, forced under the law as it is generally laylor's R. 235; Gibbs v. thisolm, 2 administered), I apprehend that no Note ck MCC. R. 38 ; Mliafero's exr. v. greater rate of interest would be al-King's ad., 9 Dana. R. 331; also the lowed upon the interest in arrear than cases cited in the plaintiff's brief. that allowed upon the principal by the We do not feel ourselves authorized terms of the bonds themselves; for, in or warranted to go in advance of the my opinion, the law would intend in reform, if it may be justly considered such case, that the parties having fixed such, in the law, indicated by those by contract, the rate of interest for the latter cases, but must be content to forbearance of the principal, would es-endeavor to administer the law as we tablish the same rate for the withhold-find it in the elementary hooks, and ing or the forbearance of the interest the reports of the decisions of a major-accruing thereon; for the reason, that ity of the highest courts of the Union, it could not be presumed that the for-supported, as they evidently are, bearance in the one case would be 567*] *by a uniform and almost un-more deleterious or advantageous to broken current of authority from the the creditor or debtor, than the other, courts of Great Britain. If the law, as and consequently where the rate of in-we find it, is discovered to be impolitic terest for the forbearance of the princi-
STATE V. BANK OF WASHINGTON. VOL. 18 pal was fixed at five per centum semi-As to the first instruction offered by annually, it was also agreed, by impli-the defendant, and refused by the -cation, that if the interest should ,not court: be paid at the stated times, that the No demand of the interest on the amounts of interest withheld should bonds declared on, accruing semi-an-568*] only draw *interest at the same nually, was necessary to be made at rate, that is to say, five per centum the place where the payment of the in-semi-annually. Thus leaving the interest was fixed by the terms of the terest on the interest to be determined contract, before the State could be by the contract of the parties instead of sued, as assumed by this instruction. the effect and operation of the law held in Curran v. The [*569 on the subject of interest. It is but State and State Bank, 15 How. U. S. R. just to the chief justice that I should 304, the State, by the terms of the bond say that the opinion expressed on this sued on, is the principal, and, indeed, latter view of the subject, is my indi-only primary debtor. No demand of vidual opinion, and for which the court eii her principal or interest was there-is in no wise responsible. My apology fore necessary to fix the liability of the for obtruding my individual opinions State in a suit on those bonds. See upon the professional public in the case Pryor v. Wright, 14 Ark. 189; Story on before me, is derived from the novelty Prom. Notes, sec. 228. of the question itself, and its peculiar If the State had really made a de-appropriateness in this connection, posit of funds where the interest was coupled with a desire on my part, that payable, and those funds had been per-the attention of the bar should be di-mitted so to remain, without produc-rected to it, in the hope, that if another ing anything to defendant, from that occasion should arise the question time to the period of the trial, and would be so presented to the court as those facts had been made to appear by Lo require of them an expression hav-proof, then there can be no doubt, we ing the sanction of an adjudication, think, that the plaintiffs could not when, aided by the learning and re-have recovered interest from the State. searches of counsel, my mind would be But this concession does not establish either confirmed in its present impres-the proposition, that demand of inter-sions, or else disabused of them. est was necessary to fix a liability to We hold the instruction as un-pay interest, on the State. In the case warranted by the law, and therefore we have supposed, it would have been erroneous. a defense against the demand of inter-As to the fourth instruction given at est based on equitable principles; such, the instance of the plaintiffs: however, as the laws recognize, and are We have already disposed of this ever ready to enforce and protect. when considering the second instruc-As to the other instructions moved tion, and therefore hold as to this, as for by the defendant, and refused by we have held in reference to that. the court, they have either been dis-As to the instructions proposed by posed of in the foregoing, or else seem the defendant below, and which were to have been waived or abandoned by refused by the court, we will proceed to the counsel for the defendant in his consider and dispose of them in their brief. We do not, therefore, purpose order, so far as they have not already noticing them more at length. been disposed of whilst considering and It may not be amiss for us to state, passing upon those given at the in-before dismissing the entire cause, that stance of the plaintiffs. the rec ird presents several minor
JAN. TERM, 1857. points which we have not noticed in this opinion. Our apology for not doing so is derived from the fact that the counsel have not'seen lit to- press them upon the consideration of the court, but on the contrary, appear rather to have abandoned them, relying upon the more important and imposing ones which we have just considered aud disposed of. On view of the whole record, and the several errors held to exist therein, the judgment of the Pulaski circuit court is, therefore, reversed, and the cause remanded with directions that a new trial be awarded the defendant below, and that the cause be proceeded in consistent with this opinion. 5701 "Let the judgment be reversed and the cause remanded for a new trial, etc. Absent, Mr. Justice Scott.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.