text:
    Woodruff & Beach Iron Works, Plaintiffs and Respondents, v. Henry A. Chittenden, Appellant. Same Plaintiffs v. Simeon B. Chittenden, Appellant; Same Plaintiffs v. Wm. H. Pomeroy, Appellant. Same Plaintiffs v. Isaac N. Phelps and John J. Phelps, Appellants. Same Plaintiffs v. Theodosius Strang, Appellant.
    1. In an action against a stockholder of a corporation, created under the “act to authorize the formation of corporations for manufacturing, mining, mechanical and chemical purposes,” (passed February 17, 1848, ch. 40,) to recover of such stockholder to the amount of the stock held by him; on the ground that the plaintiff owns a judgment against such corporation on which an execution has been issued and returned unsatisfied; it is not of itself a defense, that such judgment, though recovered upon a debt contracted with a person not a stockholder, was recovered by a person who was a stockholder, and was subsequently assigned to the plaintiff.
    2. The stockholders of corporations created under that statute, are, under seotion 10, severally, individually, liable to the creditors of the Company, only to an amount equal to the amount of the stock held by them respectively, until the acts required by that section have been performed. Their liabilities are fundamentally different from those of the Eossie Caleña Company, (as expounded in 1 Comst., 47.)
    3. The recovery from a stockholder, in a corporation created by the act of February 17, 1848, of an amount equal to the amount of the stock which he holds, by a creditor of the Company, would be a defense to a suit brought against him by any other creditor of such Company.
    4. If a creditor suing a stockholder also holds stock less in amount than that held by the person so sued, the defendant is not on any principle entitled to any greater relief than ’an abatement from the liability declared by statute, of a sum equal to the amount of the stock held by such plaintiff.
    5. But such a deduction, thus made, unless made to one who was at the time a creditor of the company, would not exempt such plaintiff from a recovery against him in a suit subsequently brought by a creditor of the Company.
    6. The mere fact, therefore, that the plaintiff, in a suit against the Company, in which a judgment was recovered against it, was a stockholder, is not available as a defense, either partial or total; in an action brought by the assignee of such judgment against a stockholder, especially when it is not alleged in the answer that the plaintiffs’ assignor was a stockholder; nor shown at the trial how much stock he held.
    (Before Bosworth, Ch J., and Woodruff, J.)
    Heard, November 11, 1858;
    decided, March 26, 1859.)
    This is an appeal by the defendant, Henry A. Chittenden, from a judgment, entered on a verdict rendered against him upon a, trial had before Mr. Justice Pierrepont and a jury, on the 18th of February, 1858, in an action in which the Woodruff & Beach Iron Works are plaintiffs.
    The action was commenced May 20th, 1856, by the plaintiffs, a corporation created under the laws of Connecticut, against the defendant, as a stockholder of The Hudson River Stone Dressing Company, a manufacturing Company organized under the general manufacturing law of The State of New York, passed February 17, 1848.
    The plaintiffs’ claim was upon a judgment recovered in the Superior Court of the city of New York, by Samuel Woodruff and Henry B. Beach against The Hudson River Stone Dressing Company, June 12th, 1855, for $23,366.61, and assigned to the plaintiffs.
    The complaint avers that on the 31st of March, 1853, at the city of New York, George Bliss, Charles Abernethy and Charles T. Shelton duly signed and acknowledged a certificate of incorporation of The Hudson River Stone Dressing Company, as required by law, and sets out the certificate, which states, among other things, that the capital stock of the Company is to be $200,000, divided into 200 shares; and that the trustees who shall manage its concerns for the first year are George Bliss, Charles Abernethy and Charles T. Shelton. That in April, 1853, the last said Company was duly organized, and prosecuted the business, for which it was incorporated, until after the debt (hereinafter mentioned) was contracted.
    That the whole of the capital, $200,000, was never paid in, nor was any certificate of the paying in thereof ever made or filed as required by section 11 of the act of February 17th, 1848.
    That the plaintiffs, in November and December, 1853, and January and February, 1854, sold and delivered to The Hudson River Stone Dressing Company machinery for its business, of the price and value of over $22,000, in payment for which the Company, by Charles Abernethy, its Treasurer, duly authorized, made and delivered to plaintiffs nine promissory notes; two for $2,000 each, payable to the order of Woodruff & Beach, and all the others to the order of Woodruff & Beach Iron Works.
    That none of the nine notes were paid at maturity, and that on the 14th of September, 1854, all the notes and the claim of the Woodruff & Beach IronWorks thereon were assigned and transferred to Woodruff & Beach.
    That Woodruff & Beach brought suit against The Hudson River Stone Dressing Company, on this claim, in the Superior Court of New York, April 11, 1855, and recovered judgment June 12th, 1855, for the amount and interest, $23,366.61, and issued execution, which was returned wholly unsatisfied.
    That this judgment was assigned by Woodruff & Beach to plaintiffs, February 22, 1856, and all the claims on which it was recovered.
    The complaint then alleges that defendant was a stockholder in the Company from the time of the making of the notes till the return of thé execution, to the extent of 33 shares, and demands judgment for $3,330.
    The answer denies each allegation of the complaint, and sets up as matter of defense, that the demands embraced in the judgment against The Hudson River Stone Dressing Company, set forth in the complaint, had been paid or secured to be paid by the trustees of the Company, for whose benefit this action is in fact prosecuted. It does not allege that Woodruff & Beach, the assignors of the plaintiff, were at any time stockholders in The Hudson River Stone Dressing Company.
    It appeared on the trial that the plaintiffs’ corporation was formed October 29, 1853, and was composed of no other parties as stockholders or parties interested, than Samuel Woodruff and Henry B. Beach, and one Charles L. Root, previously the bookkeeper of Woodruff & Beach.
    That the capital stock of this corporation was $225,000, being, the works of Woodruff & Beach, put in at a valuation of $225,000. That the firm of Woodruff & Beach has never been dissolved, but it has done no business in the way of manufacturing since the plaintiffs were incorporated.

      At the trial the plaintiffs proved the notes, judgment and execution, and the several assignments and transfers above stated; and also that the defendant was a holder of eight shares of the stock of the Hudson River Stone Dressing Company; and also that Woodruff & Beach had been stockholders in it from the time it was organized; but there was no evidence tending to show how much stock they, at any time, either jointly or severally held.
    It also appeared that Woodruff & Beach, before suing the Hudson River Stone Dressing Company, (as before stated,) brought suits against the Trustees of that Company. After the Trustees were sued, an agreement was made between them and Woodruff & Beach, that the suits against the Trustees should not be further prosecuted, until suits had been brought against the stockholders to recover the same demand, and the result had been ascertained. That Abernethy gave to Woodruff & Beach, under this agreement, his note for $12,500, and Bliss gave his note for $10,000, which notes had been paid. The witness (Samuel Woodruff) by whom the making of this arrangement was proved, testified, that “this arrangement with Abernethy and Bliss was made by Woodruff & Beach, and the notes were received by them; these notes were advanced by Abernethy and Bliss, not as payment at all, but as collateral security; we never received a dollar on account of the notes on which judgment has been recovered, * * we do not pay back unless we recover; * * whatever we first recover, goes to Bliss and Abernethy; we still have a claim against Abernethy and Bliss” for $14,000, “if we don’t get it in one way, we mean to get it another.” He also testified, that the suits brought against the Trustees were still pending, and that the agreement made with them was in writing, and present in Court.
    .It was not read or offered in evidence, notwithstanding the plaintiff objected and excepted to the admission of the parol evidence given in respect to the terms of such agreement.
    When the plaintiff rested, the defendant moved to dismiss the complaint, upon the grounds:
    1. That there was no proof that Abernethy had authority to execute the notes sued on.

      2. That the action is not properly brought; that all stock holders should have impleaded in one suit.
    3. That the defendant, being a holder of full paid stock, has complied on his part with the requirement of the statute, and is not liable. And that, at all events, the plaintiffs must first exhaust all their remedies against the delinquent subscribers.
    4. That Woodruff & Beach, being stockholders of the Hudson River Stone Dressing Company at the time the judgment was obtained by them, could not have brought their action against a co-stockholder in this form, and that these plaintiffs, as assignees, took no better or greater rights by their assignment.
    The motion was denied, and the defendant excepted.
    When- the testimony was closed, the defendant renewed his motion to dismiss the complaint, on the same grounds. It was denied, and he excepted.
    The counsel for the defendant further insisted that it appeared by the evidence that the claim on which the action was brought had been paid to the plaintiffs by Abernethy and Bliss, two of the trustees and stockholders, and that said Abernethy and Bliss are the real parties in interest in this action.
    But his Honor the Judge decided that there was not sufficient evidence to go to the jury on that point. To which decision the counsel for the defendant then and there excepted.
    And the Judge instructed the jury, as matter of law, that they must find a verdict for the plaintiffs for the amount claimed, with interest.
    To which decision and instruction the counsel for the defendants then and there excepted.
    The jury, under the instruction of the Court, returned a verdict for the plaintiffs, for the sum of -eight hundred and ninety-eight dollars.
    Judgment having been entered on the verdict, the defendant appealed from it to the General Term. Appeals by the defendants, irf the other suits brought by the same plaintiffs, viz., one against Simeon B. Chittenden; one against William H. Pomeroy; one against Isaac 1ST. and John J. Phelps, and one against Theodosius Strang, and presenting substantially the same pleadings, evidence, and exceptions, were argued at the same time, by the same counsel, and on the same points.

      William Allen Butler, for appellant (the defendant).
    I. The plaintiffs have no right to maintain this action, and the complaint should have been dismissed at the trial, as prayed, inasmuch as they derive their cause of action by assignment from Woodruff & Beach, who were stockholders in the Hudson River Stone Dressing Company, at the time the debt averred in the complaint was contracted, and at all times thereafter.
    1. Woodruff & Beach, being stockholders of the Hudson River Stone Dressing Company could not themselves have brought an action against any other stockholder for the recovery of the debt in question. (Bailey v. Bancker, 3 Hill, 188.)
    2. The reason of this inability is, that, until the capital stock was fully paid in, all the stockholders were answerable for the debts of the Company, and one stockholder could not maintain an action against the others for a debt due from the whole. The stockholders were not liable as sureties for the Company, but as principals and copartners. (General Manufacturing Law, 1 R. S., 4th ed., 1216, § 28; Bailey v. Bancker, 3 Hill, 188, opinion of Bronson, J., and cases cited there; Harger v. McCullough, 2 Denio, 119, 123; Corning v. McCullough, 1 Comst., 47.)
    3. The stockholders being thus liable, Woodruff & Beach could not, by assignment of the judgment recovered by them against the Company, confer any greater rights than they themselves had as judgment creditors. No transaction between them and third parties could give a right of action on the judgment which they did not themselves possess. (Bailey v. Bancker, 3 Hill, 188.)
    4. The difficulty is not removed by the assumption that the plaintiffs, the Woodruff & Beach Iron Works, and not Woodruff & Beach, were the original creditors.
    (1.) Conceding that the.Iron Works had a cause of action against the defendant and other stockholders before their assignment of the notes to Woodruff & Beach, it was extinguished by that assignment, and could not be revived by any subsequent assignment from Woodruff & Beach to them.

      (a.) The assignment by the Iron Works was absolute “ to them, the said Woodruff & Beach, and their personal representatives forever.” Though a formal instrument of transfer, it did not even contain power to sue and collect in the name of the assignors.

      (5.) Up/to the time of this assignment, Woodruff & Beach were liable as stockholders to the plaintiffs. By virtue of the assignment, the right of the creditor and the liability of the debtor met in the same persons, and the right of action was discharged. (Blanchard v. Ely, and cases there cited, 21 Wend., 343; Thomas v. Thompson, 2 Johns., 471, 474.)
    (c.) The fact that Woodruff & Beach were liable only to the extent of their stock, does not alter the case. The assignment to Woodruff & Beach, although it transferred the entire cause of action on the notes as against the Hudson River Stone Dressing Company, yet, as between them and their co-stockholders, gave them only a right to contribution; and no greater right could afterwards be conveyed by them to the plaintiffs.
    (2.) The Woodruff & Beach Iron Works had no cause of action against the defendant when they assigned to Woodruff & Beach. No judgment had been recovered against the Company, and when judgment was subsequently recovered by Woodruff & Beach, and the right to sue the stockholders was thereby perfected, it was only a right to sue for a contribution. No other right passed by the assignment to plaintiffs.
    5. Woodruff & Beach, and the Woodruff & Beach Iron Works, were, in fact, the same parties. The evidence shows that they used their firm name and their corporate name to suit their convenience. The assignment of the notes to the firm was evidently because the firm were the real parties interested in the transaction, and the assignment of the judgment by the firm to the corporation was a mere contrivance to evade the difficulty which stood in the way of a suit by the firm against their co-stockholders.
    II. There was sufficient evidence to go to the jury upon the questions whether the plaintiffs, or Abernethy and Bliss, the trustees of the. Company,' were the real parties in this action, and whether or not there had been a settlement, through the trustees of the plaintiffs’ claim. The Judge erred in directing the jury to find for the plaintiffs. The judgment should be reversed, and a new trial ordered.

      William M. Evarts, for respondents (the plaintiffs).
    I. The ruling of the Judge at the trial that there was no evidence to go to the jury, in support of the defense of payment of the plaintiffs’ claim by the trustees of the Stone Dressing Company and of the prosecution of this action for their benefit, was correct.
    1. The Manufacturing Corporations Act makes the trustees liable for the debts of the Company, to its creditors, in a variety of cases. But, in all these cases, the trustees are but sureties for the Company, the primary debtor; and, if charged, will have recourse against the Company for their indemnity.
    So the creditor has, by the statute, the direct liability of the stockholders upon the indebtedness of the Company, while the capital remains unpaid. This liability of the stockholders is not as sureties, but as partners; the immunity of mere corporate liability not being granted to the stockholders while the capital remains incomplete.
    When, therefore, the trustees are chargeable as sureties, under the statute, to a creditor, who has the double recourse against the corporation and the stockholders, on payment of such a debt, the trustees would be subrogated to the same double recourse.
    The provision of security to the creditor by a surety, in whatever form, cannot defeat the creditor’s right against the principal debtor.
    Nothing beyond this was intimated in any evidence in the case, much less proved. (See the Act, Laws 1848, p. 54, §§ 10, 12, 13, 23; Bailey v. Bancker, 3 Hill, 188; Corning v. McCullough, 1 Comst., 47.)
    2. The evidence given was illegal, being parol evidence of a contract which was in writing, and accessible as evidence.
    The refusal of the Judge to submit this evidence to the jury was correct, in this point of view.
    II. The only ground of nonsuit, requiring any consideration, is the fourth proposition of the defendant’s counsel on that motion.
    1. The circumstance that the plaintiffs—being the original creditor of the corporation, and having the liability of the various defendants (according to the statute) upon its debt—assigned the claim against the corporation to an assignee, who recovered judgment against the corporation, and then reassigned the debt, judgment and all rights pertaining thereto to the plaintiffs, is wholly immaterial.

      The objections to one stockholder suing another upon a debt of the corporation, and the rule which limits his remedy to an action for contribution, proceed upon the ground that the plaintiff, in such a suit, is under the same measure of liability as the defendant. This reasoning has no application to the present action.
    2. The judgment recovered, and remedy thereon exhausted, against the corporation,, make the condition precedent of the statute to the prosecution of an action against the stockholder. The statute in no manner requires that the remedy against the stockholder must be prosecuted by the plaintiff in the judgment against the corporation.
    The judgment and the remedies which adhere to it are assignable like any other rights of action. (Incorporations Act, §§ 10, 24; Bailey v. Bancker, ut supra.)

    HI. The defendant’s exception to the exclusion of evidence is untenable, the evidence offered being plainly irrelevant and immaterial.
    IV. The additional ground of nonsuit insisted upon in the action against Simeon B. Chittenden, and in that against William H. Pomeroy, is unsupported by the facts in either of those actions. The relation of stockholder was abundantly proved. (Incorporations Act, § 25.) The judgment for plaintiff in each case should be affirmed with costs.
   By the Court—Bosworth, Ch. J.

It appears clearly, from evidence which the Judge at the trial held to be competent, that the amount which the plaintiffs may recover in this action, is to be paid by them to Bliss and Abernethy.

Or, to state the fact with more precise accuracy, Abernethy gave his note to the plaintiffs for $12,500, and Bliss for $10,000, which notes have been paid. These notes were given and paid upon an agreement that the “ trustees ” of the Hudson River Stone Dressing Company should not be further proceeded against in the suits brought against them by these plaintiffs, until their suits against the stockholders of said Company were decided, and so much in amount of the sums which Abernethy and Bliss had so paid, should be refunded, as the, plaintiffs should recover in such actions against the stockholders.

These facts make Abernethy and Bliss interested in the event of this action, but not the actual parties in interest, as they have no right to the money which may be collected of. such stockholders, have no right to control the actions against them, and would not be liable to the stockholders for their costs of such actions, if they should succeed in- their defense.

Such facts are not a bar to the present action. The notes, advanced by Abernethy and Bliss, were not advanced or taken as a satisfaction of the suits • against them as trustees, (these suits are still'pending,) nor as a payment - of 'the claim which is the basis of this action, but as collateral security.

The liabilities of the stockholders of the Hudson River Stone Dressing Company, are very different from those of the Rossie Galena Company. The latter are severally and jointly and personally liable for all debts and demands contracted by the Company. (1 Comst., 47.) The former are severally liable to the creditors .of the Company, to an amount equal to the amount of the stock they respectively hold, until the event happens, which, by section 10 of the act of 1848, chapter 40, terminates such liability. (Laws of 1848, p. 56.)

If one stockholder of the Rossie Galena Company could sue another to recover a debt owing by the Company, and collect it, the latter would, it is contended, by such recovery and payment, become a creditor of the Company for the amount of such debt, and as such creditor might sue the plaintiff as such stockholder, and recover, it back, which would be absurd. In other words, such a debt is as absolutely the debt of each stockholder as of either,- and for its whole amount.

tinder the act of 1848, chapter 40, H. A. Chittenden is liable to pay $800 of the plaintiff’s .demand, and no more.

Assuming that Woodruff .& Beach owned stock to. the same amount, the defendant, on paying that sum in satisfaction of the recovery against him, might possibly have as much right as a creditor of the Company ,by reason of such. recovery and payment, to.recover the same sum of them, as one stockholder of the Rossie Galena Company, by reason of a recovery against and payment by himself, would. to recover, a like sum of any other stockholder of such Company; still we do .not- concede that this proposition is tenable.

But if Beach'& Woodruff owned stock to a less amount than $800, the defendant could, at most, recover only a sum equal to the amount of the stock which they held. And if it should he made to appear that Woodruff & Beach had been compelled to pay to other creditors of the Company, in satisfaction of just demands of such creditors against the Company, a sum equal to the amount of their stock, that fact would be a defense to any such action.

The case of stockholders of the Rossie. Galena Company is fundamentally different. They are jointly and severally and absolutely liable to creditors of the Company for all the debts of the Company, and are liable as, and on the ground that, interse, they are partners. That liability cannot be .extinguished, except by actual payment or satisfaction of such debts.

In the present case, each stockholder is liable, as such, to only the amount of his stock. When he has been compelled to pay that sum to any creditor, his liability as mere stockholder is at an end. He cannot recover any portion of such sum from any other stockholder who, before suit brought against him, has been eompelled-topay to creditors the amount of his own stock.

The mere fact, therefore, that one stockholder is suing another to recover, in whole or in part, a debt due from the Company, is not,"yie?’ se, either at law or in equity,.a bar to the action.

In the present case, it was proved that Woodruff & Beach were stockholders when the debt in question was contracted, and continued such down to the trial of this action. But how much stock they held was not attempted to be shown; nor is- it alleged in the defendant’s answer 4hat they were stockholders.

It must, perhaps, be presumed that they severally owned at least one share. I know of no principle on which it can be said that the law presumes they owned more.

The mere fact that they were stockholders, without reference to the amount they held, was relied on as being of itself a sufficient ground for a nonsuit. It was not attempted to be used as the ground of a partial defense, but was relied upon as a flat bar.

Hence, when the plaintiffs rested, the • defendant moved for a nonsuit on that ground. When the testimony was closed, a dismissal of the complaint was asked on the same ground.

The defendant’s position on the present appeal, (point I, sub. 2,) is, that “ the stockholders were not liable as sureties for the Company, but as principals and copartners.”

They are not liable as copartners; neither are they liable as principals to any particular creditor in any such sense, that a compulsory payment to one to the amount of their stock, will not be a perfect defense to a suit subsequently brought by every other.

If, therefore, this suit had been brought by Woodruff & Beach the fact that they were, from the outset, stockholders, would not of itself be a bar to the action. Whether, if it had been shown that they owned stock to an amount equal to, or greater than that held by the defendant, such fact would be a bar, is a question that does not arise in this case.

Simonson v. Spencer et al., (15 Wend., 548,) more closely resembles this case, than any one arising upon the Rossie Galena Company’s act

By the act incorporating The Harlem Canal Company, the stockholders, were jointly and severally liable for the debts of the Company, to the nominal amount of the stock held by them. (Session Laws of 1826, pp. 369 and 371, § 9; 14 Wend., 20.) In Simonson v. Spencer, supra, (15 id., 549,) the Court said, “ these parties do not stand in the relation of partners to each other; and the fact of their being all stockholders cannot present any valid objection to this suit” * * “ The statute creating the Harlpm Canal Company does not imply that the equities" between the parties are to be considered, and the language is, ‘and any person having any demand against the said Company may sue any stockholder singly, or any two or more .stockholders jointly, and recover in any Court having cognizance thereof.’ There is nothing here implying a liability in the other stockholders to contribution; there is no difficulty as to proper parties.” The head note to Bailey & Storm v. Bancker, (3 Hill, 188,) states that "certain dicta" in the case of Simonson v. Spencer, were overruled.

In Bailey v. Bancker, the Court assumed, that Chief Justice Savage, was in error as to the facts of the case of Simonson v. Spencer, when he, substantially, asserted that all the parties were stockholders. No notice is taken by Judge Bronson of the fact, that the two statutes are entirely different. It is in the recollection of one of us, that Simonson v. Spencer was not cited on the argument of Bailey v. Bancker, but a reference to that case was handed to the Court after the argument was concluded. Simonson v. Spencer was not discussed by counsel, nor was the difference between that act and the Rossie Galena Company’s act commented upon.

We think, therefore, that when Chief Justice SAVAGE, in Simonson v. Spencer, (15 Wend., 549,) states: “ These parties do not stand in the relation of partners to each other; and the fact of their being all stockholders cannot present any valid objection to this suit,” we may regard him as asserting as a fact in the case, that all the parties to that action were stockholders. And when the radical difference between the two acts is considered, we may regard whatever disapprobation was expressed of that case in Bailey & Storm v. Bancker, as obiter dicta.

' But the present action is not brought by a stockholder. The present plaintiffs are not liable as stockholders to any creditor of the Hudson River Stone Dressing Company.

The only defense, based on the fact that their assignors of the cause of action sued on were stockholders, is, that such assignors could not maintain an action like the present because they were stockholders, and therefore their assignees, the present plaintiffs, cannot. But we have seen that such fact is not of itself, and alone, a bar to such an action by the plaintiffs’ assignors.

That was the only point made, based on this fact, either on the motion to nonsuit, or to dismiss the complaint.

In any view of the case, the most that the defendants could have claimed, had. this suit been brought by Woodruff & Beach, was, that the recovery should be limited to the excess of the amount of the defendant’s stock over the amount of that held by Woodruff & Beach. But no such position was taken at the trial, nor are facts stated in the answer to which such a rule, .even if sound, could be applied. The position was that Wood-ruff & Beach, while they owned the cause of action in question, could not have maintained a suit against the defendant, and therefore, as it is argued, their assignees cannot.

We have already expressed the conclusion that this position is untenable.

It follows, that a nonsuit was properly denied, as was also the motion to dismiss the complaint.

To the instruction, that the plaintiffs were entitled to recover of the defendant to the amount claimed, (viz., the amount of the stock held by the defendant,) with interest, the defendant also excepted. The jury found a verdict for $898. The defendant held but eight shares of stock, instead of thirty-three shares as stated in the complaint. The $98 was the interest on $800 from the time of suit brought to the time of the trial. The parties agreed upon the amount of the interest.

The instruction to find a verdict for this sum was erroneous, if the recovery should have been reduced on the presumption, that Woodruff & Beach held severally, even one share of the stock, while the cause of action belonged to them.

We think no such deduction should have been made in this action even on that ground, and on that assumption of fact.

At the time of the trial the defendant had no demand against or debt owing to him by the Company. There was, therefore, no liability of Woodruff & Beach as stockholders for any such debt to be set off.

He was not a creditor of the Company, either at law or in equity, by reason of the cause of action in question, and could not become one, except by paying, in whole or in part, the debt in question.

A deduction from the recovery that has been had, of a sum equal to the amount of the stock held by Woodruff & Beach, would not exempt Woodruff & Beach from an action by an actual creditor of the Company to recover of them the amount so deducted.

And we do not accede to the proposition, that under the statute in question, a stockholder who has been compelled, as such, to pay debts owing by the Company to the amount of his stock, can maintain an action at law by reason thereof, against other stockholders, to reclaim the whole or any part of the money so paid.

Whether those who have been compelled to pay can, in equity, coerce a contribution from those who have not been so compelled, in an action to which all the stockholders are parties, is a question that does not arise on the present appeal.

We think none of the defendant’s exceptions are well taken. Evidence was admitted against the plaintiffs’ objection, which may have been incompetent.

But the defendant had the benefit of it, and the plaintiffs are not the appellants.

The judgment in this action, and in that of the same plaintiffs in the four other suits against other defendants, argued at the same time, must be affirmed with costs.

Judgment accordingly.


source: Caselaw Access Project

author: By the Court—Bosworth, Ch. J.

license: Public Domain

text:
    The City Bank of New Haven v. Simon Perkins.
    1. Where the Directors of a Bank allow its Cashier for several years in succession, without interference or inquiry by them, to transact the business of the Bank in such .manner as in his judgment may be proper and for its interest, they thereby, in effect, authorize him to make all and any contracts which he deems expedient in relation to its business which the Directors might lawfully make, and such contracts will conclude the Bank as between it and a party who has dealt with it through such Cashier, and on the faith of his having authority to make such contracts, has loaned money to such Bank; provided the charter of such Bank does not prohibit it from making such contracts through its Cashier.
    2. When such a Cashier applies to another Bank for a loan of its circulating MBs, upon the security of certain assets of the borrowing Bank, and on such apphcation a loan is agreed to be made upon security stipulated to be given, and in pursuance of such agreement the loan is made, and the MBs lent are forwarded from time to time to the borrowing Bank directed to its CasMer and are there received, and the borrowing Bank fails to perform the agreement made by its CasMer; and thereupon the stipulated security is transferred to the lending Bank as originaBy agreed, the latter may enforce the same to coBect the sum due it, and if it consists of MBs discounted by the borrowing Bank, the acceptors or indorsers of such MBs cannot set up as a defense to an action against them as such acceptors and indorsers, that the lending Bank by force of such transaction acquired no title, but that the MBs sued on, notwithstanding such transaction, continue to be the property of the borrowing Bank.
    3. Nor wiB it impair the title of the lending Bank to such securities, that the Cashier of the borrowing Bank gave a note for the sum so borrowed signed by Miuself individuaBy, and payable to his order as CasMer, if in fact the apphcation was for a loan to Ms Bank and on its credit, and the loan was in good faith so made.
    4. The mere fact, that some bids are forwarded by the lending to the borrowing Bank, under the contract to loan, the circulation of which as money is made Blegal by a statute of the State in wMch the borrowing Bank is located, (but not by its charter,) and of which statute the borrowing Batik had no knowledge, will not affect the validity of the contract to loan, nor the title of the lending Bank to the securities transferred to it by virtue of such contract.
    5. The fact that the money so loaned and sent to the borrowing Bank, was used by the Cashier of the latter for his individual purposes, and not in the business of lñs Bank, will not affect the validity of the contract to loan, nor the title of the lending Bank to the securities so transferred to it, so as to prevent its collecting the same and retaining from their proceeds sufficient to satisfy the sum justly due to it
    (Before Bosworth, Ch. J., and Woodruff and Moncrief, J. J.)
    Heard, February 15th;
    decided, March 26th, 1859.
    This action comes before the Court on questions of law arising at the trial, and there ordered to be heard, in the first instance, at the G-eneral Term, the entry of judgment in the meantime to be suspended. It was tried on the 12th of January, 1858, before Mr, Justice Woodruff and a jury, when a verdict was ordered in favor of the plaintiffs for $36,541.95.
    The defendant is sued, in this action, as the drawer of two several bills of exchange, for the sum of $10,000 each, one dated the 18th and the other the 28th of August, 1854, each payable three months from its date, at the American Exchange Bank, New York; and as the acceptor of two other bills of exchange, for the sum of $5,000 each, one bearing date September 5th, the other September 23d, and each payable three months from its date, at the same Bank. The plaintiffs sue as indorsees of these four bills.
    The defenses set up in the answer are, that the plaintiffs are not the lawful owners or holders of either of the bills; that they obtained possession of the bills unlawfully, and have no title thereto.
    The answer also states, as a separate, and as the fourth defense, that, on the 23d day of November, 1854, these bills were the property of the Bank of Akron, Ohio; that such Bank committed an act of insolvency on that day, and thereupon, by force of its charter, these bills, became the property of the State Bank of Ohio; that, on the 5th of December, 1854, the State Bank of Ohio commenced a suit in Ohio against the parties to this action and others, to collect the said bills; and that such suit was commenced according to the laws of Ohio before this action was commenced, and the same is still pending, and the pendency of such suit is set up in bar, or in abatement, of the present action.
    The answer also states, as a separate, and as the fifth defense, that these .bills belonged to the said Bank of Akron, and were lodged by it in said American Exchange Bank for collection, and the proceeds thereof were to be credited to the Bank of Akron, which, or the State Bank of Ohio, as' its representative, is now the lawful owner thereof; that while they were so in said American Exchange Bank, the plaintiffs improperly got possession of them, and are now attempting to collect them and apply the proceeds to pay a pretended debt due to the plaintiffs from one J. W. McMillen, the consideration of which grew out of certain Bank notes of the plaintiffs which said McMillen agreed to circulate for the'plaintiffs in the State of Ohio, illegally and contrary to the statutes of the State of Ohio; and that the claims, or pretended claims, of the plaintiffs against McMillen are illegal and void, and are the claims for which the plaintiffs now seek to hold the said bills of exchange or drafts as security. The answer concludes by denying that the defendant is indebted to the plaintiffs on account of said bills; and prays a dismissal of the complaint, with cósts.
    On the trial, the bills sued on were produced, and after the indorsement of them by the American Exchange Bank, and a delivery of them by that Bank to the plaintiffs, had been proved, they were read in evidence. The drawing, accepting and indorsement of the bills, (except the indorsements so as aforesaid proved,) were admitted by the pleadings.
    Ezra 0. Read, a witness for the plaintiffs, testified that he had been President of the City Bank of New Haven for the then last nine or ten years; that F. Bradley was Cashier until October, 1857 ; that he was introduced, in July, 1851, to John W. McMillen by a letter from the Cashier of the American Exchange Bank, New York, which letter was produced and read in evidence.
    That “ an application was made for a loan for $50,000 from the City Bank of New Haven to the Bank of Akron; the arrangement was closed in July, 1851; the rate of interest settled upon; an arrangement was made to send the money in installments ; the nature of the securities was arranged-; the money was to be advanced at our convenience in the bills of the City Bank; the security was to be collateral paper in the American Exchange Bank of this city, or which should be there for collection ; that is, the security was the pledge of the discounted bills of the Bank of Akron which were, or which should be, placed in the American Exchange Bank for collection; Mr. McMillen was to give his notes, indorsed by himself as Cashier of the Bank of Akron. * * Mr. McMillen offered security; he offered the notes of the Bank; I doubted the power or right of the Bank of Akron, whether it was competent for the Bank of Akron, and so stated to Mr. McMillen, to give their paper; I objected to it in that form; Mr. McMillen said he could obviate that objection by giving his own note, and indorsing it as Cashier; he said he had full authority from the Bank for that purpose; this loan was to be made for one year; before the loan was made, I received a written communication in relation to it The following is- the letter:
    “ Bank of Akron,
    “ Ohio, July 30, 1851.
    E. C. Read, Esq.,- Prest, New Haven:
    “Dear Sir—We will borrow of your Bank fifty thousand dollars of its issues for the term of one year, with interest, payable semi-annually, at the American Exchange Bank, New York, at the rate of four per cent per annum, and protect the same by a credit in the Am. Ex. Bank, to your acct., on its being advised by you each week, of the amount of such circulation redeemed by you, the circulation to be marked to identify it, say by the figure 12,’ in red ink; the amount to be furnished by you as fast as your convenience will allow; and packages to be delivered at the office of the 1 American Express Co.,’ in New York, to my address, care of Y. C. Severance, Cash., Cleveland, Ohio, and to be at my risk, and expense from New York; as soon as the whole $50,000 is delivered, I will furnish you-with a proper note and receipt for the whole sum, in the meantime will advise the receipt of the several packages by letter.
    “Very respectfully, &c.,
    “ J. W. McMillen, Gashr.”
    * * “We commenced sending [the bank notes] in August, 1851, the 10th or the 11th, and sent it in installments of from $4,000 to $6,000, and we ended sending in Jan., 1852; we received acknowledgments of the receipt of the money by letters; the following letters were the ones: ”
    The letters were read in evidence, and were numerous; the heading of them was printed; on some of them it was:
    “State Bank of Akbon,
    ■ “Bank of Akbon,
    “Akbon, Ohio,”---
    On the others it was “Bank of Akbon,” and they were all signed “ J. W. McMillen, Cash.”
    One of these letters, dated September 21, 1851, (among other things,) says: “ As desired, I inclose order to Cashier Meigs for the collaterals, which I drew up hastily, and if not in proper form please dictate one and return to me the inclosed. I presume, however, it is just what you want. Our collection paper in the hands of the American Exchange Bank is seldom below $200,-000, at this time it is about $300,000, and has been so the last' two months; our cash balance is over $40,000.” The order referred to was read in evidence, and is as follows:
    “State Bank of Ohio,
    “Bank of Akbon,
    “Akron, Ohio, Sept. 26th, 1851.
    “Chas. A. Meigs, Esq., Cash., H. Y.:
    “ Dear Sir—Eifty thousand dollars of the collection paper held by you at any time for account of this Bank, is pledged as collateral security to the City Bank of Hew Haven, for that amount of money loaned by said Bank to this Bank on the notes of J. W. McMillen, indorsed by J. W. McMillen, Cashr., payable one year after date, and I have agreéd that the amount of collection paper in your hands shall at no time be less than our indebtedness to the said City Bank.
    “ J. W. McMillen, Cash.”
    The evidence of Mr. Read, (with other evidence given,) tended to show that this order was placed in the hands .of Mr. Meigs, who said “ he would hold it subject to the claims of the American Exchange Bank.” That subsequently, the City Bank of New Haven requiring security for a larger amount, another order was sent in a letter dated January. 12,1852, signed “J. W. McMillen, Cash.,” (also read in evidence): The second order is in these words:
    “ State Bank of Ohio,
    “Bank of Akbon,
    “ Akron, Ohio, Jan’y 12, 1852.
    “Chas. A. Meigs, Esq., Cash., New York:
    “Dear Sir—Sixty thousand dollars' of the collection paper held by you at any time for account of this Bank is pledged as collateral security to the 1 City Bank of New Haven ’ for fifty thousand dollars, of money loaned by said Bank on the notes of J. W. McMillen, indorsed by J. W. McMillen, Cashier. And I have agreed that the amount of collection paper in your hands «hall, at no time, be less than sixty thousand dollars, so long as said indebtedness shall exist.
    “Very respectfully,
    “ J. W. McMillen, Cash.”
    The letter of January 12, 1852, (among other things,) says: “ I now hand order on Cashier Meigs tq hold sixty thousand dolls, of the paper in his hands, at. any time, as security for $50,000 borrowed of you, and will thank you to have him return to me the letter of 26th Sept., pledging $50,000.
    “ I inclose memorandum of agreement, that I suppose expresses our intended arrangement; if not, alter it so as to-do so, and return to me.”
    The evidence further tended to show that such memorandum of agreement was adopted and signed in duplicate, the one signed on behalf of the plaintiffs reading thus:
    “ Whereas, 1 The City Bank of New Haven ’ has loaned to J. W. McMillen, fifty thousand dollars, in the notes of said City Bank, marked 12,’ in red ink, for which loan the said McMillen has given his several notes, indorsed J. W. McMillen, Cashier, bearing interest at the rate of four per cent per annum, dated and payable as follows:

      “ One dated August 11, 1851, in one year thereafter, for.....$6,000
    One dated August 19, 1851, in one year thereafter, for______ 6,500
    One dated August 26, 1851, in one year thereafter, for..... 4,000
    One dated September 1, 1851, in one year thereafter, for ... 4,000
    One dated September 8, 1851, in one year thereafter, for ... 4,500
    One dated September 15, 1851, in one year thereafter, for .. 4,500
    One dated September 22, 1851, in one year thereafter, for .. 5,000
    One dated September 27, 1851, in one year thereafter, for .. 1,500
    One dated November 8, 1851, in one year thereafter, for ... 4,000
    One dated January 15, 1852, on demand, for............. 5,000
    One dated January 22, 1852, on demand, for............. 5,000
    Making a'total of fifty thousand dollars,..........$50,000
    “ For the payment of- which notes, according to their tenor, the bills receivable óf the Bank of Akron, now or hereafter lodged with the American Exchange Bank of Hew-York, for collection, to the value of sixty thousand dollars, are pledged as collateral security; as a condition of this loan it is agreed that the Bank of Akron will redeem the notes marked ‘ 2,’ in red ink, of the City Bank of Hew Haven, at the American Exchange Bank, in Hew York, as frequently as they may be returned to the said City Bank. How, it is understood and agreed, that the said loan is to be continued for one year from the dates, respectively, of the above notes given therefor; but if the said Bank of Akron shall fail to redeem the said notes, marked ‘ 2,’ in red ink, of the City Bank, as agreed, then this arrangement shall cease and each of the notes given for said loan shall become due and payable on the day the Bank shall refuse to redeem the notes of the City Bank, aforesaid, as agreed; and from the -day of such refusal, interest'at the rate of six per cent per annum shall be reckoned and paid to the time of the repayment of the loan.
    “ Hew Haven, January 22, 1852.
    “EzbaC. Read,
    . “ Prest, of City Bank.”
    He further testified, that the notes mentioned in the agreement of the 22d of January, 1852, remained outstanding until the beginning of 1858, when they were surrendered, and a note was taken in lieu of them, which reads as follows:

      “$50,000. Akron, Ohio, Feb. 1st, 1853.
    “ On demand after date, I promise to pay to the order of J. W. McMillen, Cashier, fifty thousand dollars, at the American Exchange Bank, New York, with interest at the rate of four per cent per annum, payable semi-annually, value received.
    “J. W. McMillen.”
    Mr. Read further testified, that “ the bank notes were' redeemed up to the middle of November, 1854; they were first returned to the City Bank, and there redeemed; they were kept until they amounted to parcels of $1,000, and then we sent them by express to the Bank of Akron, and received from the American Exchange Bank the amount we paid for their redemption for the Bank of Akron; the American Exchange Bank made payment on the behalf of and for the Bank of Akron; since November, 1854, they have been redeemed by the City Bank of New Haven; some have been retained and some destroyed; we have received nothing since from the American Exchange Bank or the Bank of Akron.” * * “ Tip to the 10th or 11th of November, 1854, no default was made in making the redemption; then the American Exchange Bank refused to redeem; I made a demand on the American Exchange Bank to redeem a package of our bills, about the 10th of November.” * * “ I do not recollect the terms of the refusal, but was, as I understood it, that it would not redeem; they said the account would not justify it.”
    The bills, (on which this suit is brought,) were taken by the' plaintiffs from the American Exchange Bank on the 11th of November, 1854, by virtue of the' order of January 12, 1852. In April, 1855, when this suit was commenced, the balance of the loan made by the plaintiffs, and then remaining unpaid, was $20,000, with interest from the 1st of October, 1854.
    When the plaintiffs rested, the defendant moved for a nonsuit" on various grounds (which need not be stated). The motion was denied, and he excepted.
    The defendant examined as witnesses on his part, W. S. C. Otis, who was a Director and President of the Bank of Akron, from the 1st of January, 1846, .until January, 1854, when he removed from Akron, and J. W. McMillen was appointed President, and A. M. Eberman, Cashier; also Joshua F. Shaw and Milton W. Henry, who were Directors from the time the Bank was organized until it suspended; also Amos M. Eberman, who acted as Teller from August, 1848, until he was appointed Cashier ; also, C. P. Wolcott, who was Attorney of the Bank of Akron for three or four years, and its President from the 16th of November, 1854, until it suspended.
    Their evidence tended to show that no Director of the Bank of Akron, knew or supposed, prior to the 16th of November, 1854, that any of the plaintiff’s bills had been borrowed by Mc-Millen on behalf of the Bank of Akron, or that he had attempted to pledge any of the assets of the latter Bank to secure the repayment, of such loan, and that he had no express authority to do either of such acts; and that the money so borrowed of the plaintiffs was not used by-McMillen for or on ‘account of the Bank of Akron.
    Mr. Otis testified that, according to his recollection, he noticed in the fall of 1851, that McMillen was receiving and paying out, at the counter of the Bank,’ (amongst other foreign bills,) “ the notes or bills of the City Bank of New Haven, marked with some figure'in red ink, - when he cautioned said McMillen against receiving or paying out the small notes or bills of other banks, as the same was against law, when he "replied, that he was receiving ” and paying out said notes as the Treasurer of the Akron Branch.Railroad Company, of which he was the Treasurer.'
    . The .sixth cross-interrogatory put to each bf these five witnesses (they having been examined upon commission), is in these words, viz.: “ Who had the principal management and direction of the-business of said Bank of Akron from the 1st day of January, 1851, until it was enjoined, or suspended business ?” ■ ' The-answer of Mr. Otis to it is,'“That during the whole time he (Mr. Otis) was connected with said Bank, he was - engaged in the practice of his profession; that sometimes he was frequently in the Bank, and sometimes he was absent several days, and even several weeks in succession, and the principal management and direction of the Bank devolved upon McMillen.”
    .Mr. Shaw’s answer is: “ J. W. McMillen." '
    Mr, Henry’s answer is, that “ J. W.,McMillen had the principal management of said Bank up to the time bf his-resignation, under the control of the Directors of said Bank.”

      Mr. Eberman’s answer is thus: “He saith, J. W. McMillen, up to the time when C. P. Wolcott was appointed President of the said Bank.”
    Mr. Wolcott, for answer to it, says.: “ J. W. McMillen, until a short time before the suspension of the Bank, when I took control of it.”
    Mr. Eberman also testified, that “the books of the Bank of Akron show the following balance in favor of Mr. McMillen, at the times specified below, viz.:
    “ 1851. Sept. 1, balance due J. W. McMillen,.....$12,822 85
    Oct. 1, “ “...... 20,479 02
    Nov. 1, “ “ 38,184 80
    Dec. 1, “ “ 17,146 44
    1852. Jan. 1, “ “ 43,738 30
    April 1, “ “ 1,102 04
    Also the following balances against J. W. McMillen, viz.:
    1852. Feb. 1,.............................. $834 20
    March 1,.............................. 4,136 62”
    The defendant’s counsel read in evidence the following stipulation, viz.:
    “ 1. It is hereby agreed that it shall be admitted, on the trial of this action, that the plaintiff, at the several times in the pleadings referred to, was, and now is, a corporation duly incorporated under the laws of the State of Connecticut.
    “ 2. That the American Exchange Bank, referred to in the pleadings, was, at the several times therein referred to, a corporation duly incorporated under the laws of the State of New York.
    “ 3. That the Bank of Akron, referred to in the pleadings, at the several times therein referred to, previous to the 23d day of November, 1854, was a corporation duly incorporated under and by virtue of the laws of the State of Ohio, entitled an act to incorporate the State Bank of Ohio, and other Banking Companies, passed February 24th, 1845.
    “ 4. That, on the said 23d day of November, 1854, the said The Bank of Akron committed an act of insolvency, by refusing to pay in gold or silver coin, the lawful currency of the United States, certain of its notes of circulation, on which payment was lawfully demanded, at the banking house of the said The Bank of Akron, during usual banting hours."
    The defendant’s counsel then read in evidence, the following sections of an -act entitled an act to incorporate the State Bank of Ohio, and other Banting Companies, passed February 24tji, 1845, from the printed laws of the Staté of Ohio.
    “ 1.— Upon Effect of Insolvency, &c.

    “ § 24. If any branch refuses to redeem its notes, it shall be deemed insolvent. If any branch of the State Bank of Ohio shall refuse to pay its notes of circulation, or any of them, in gold or silver coin, the lawful currency xof the United States, in which payment shall be lawfully demanded at its banking house, or customary place of doing banking business, during usual banting hours, such branch shall be deemed to have committed an act of insolvency, and thereupon all its property, credits, securities, liens and assets of every description, shall forthwith vest in, and be the property, credits, securities, liens and assets, of the Board of Control, for the uses and purposes declared in this act."
    “ § 16. Board of Control, a body corporate until the ls< day of May, 1866. The Board of Control, from the time of its organization until the first day of May, in the year one thousand eight hundred and sixty-six, and thereafter, until the affairs u of the several branches of the. State Bank of Ohio shall be finally closed up, shall be a body corporate, with succession, and by the name of the State Bank of Ohio, capable of contracting and of prosecuting, and defending in suits or actions at law, or in chancery, as fully as natural persons, and of doing all other acts and things necessary to effect the object contemplated in this act by. the formation of said board.

      “2.—Power of Directors.

      “ § 49. The number and qualifications of directors. The affairs of every Company, formed and organized to carry on the business of banking under the provisions of this act, shall be managed by not less than five, nor more than nine directors. Every director shall, during his whole term of service, be a citizen of the United States, and a resident of this State. At least three-fourths of the directors.shall have resided in this State two years next previous to their election as directors; each director shall own in his own name and right, at least one per centum of the capital stock of the Company, up to two hundred thousand dollars, and the half of one per centum on its capital, over two hundred thousand dollars. The directors of each Banking Company, collectively,. shall own at least one-tenth of its capital stock. Each director shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of the Company, and not knowingly violate, or willingly permit to be violated, any provisions of this act; that he is the bona fide owner, in his own right, of the stock standing in his name on the books of the Company, and that the same is not hypothecated, or in any way pledged as security, for any loan obtained, or debt owing; which oath, subscribed by himself) and certified by the magistrate before'whom it is taken, shall be filed and carefully preserved in the office of the Recorder of the county in which the Banking Company is located.
    “3.—Bills, &c., not Assignable.

    “ § 64. All notes, bills, and other evidences of debt, excepting bills of exchange, discounted by any Banking Company, shall be made by the terms thereof, or by special indorsement, payable solely to such Company; and no such evidence of debt shall be assignable, except for collection, or for the following purposes:
    “ First. To pay and redeem the circulating notes of such Company. _
    _ “Second. To pay other liabilities of the said Company; and, after such liabilities shall have been discharged.
    “ Third. To divide among the shareholders on their stock.
    “ § 66. Directors knowingly violate any of the provisions of this act, charter forfeited,. If the directors of any Banking Company which shall have availed itself of any of the privileges granted by this act, shall knowingly violate, or knowingly permit any of the officers, agents or servants of such Company to violate any of the provisions of this act, all the rights, privileges and franchises of said Company, derived from this act, shall thereby be forfeited; such violation shall, however, be determined and adjusted by a Court of competent jurisdiction, agreeably to the laws of this State, and the practice of such Court, before the corporation shall be declared dissolved; and in case of such violation, every director who participated in, or assented to the same, shall be held liable in his personal and individual capacity for all damages which the Company, its shareholders, or any other persons, body politic or corporation, shall have sustained in consequence of such violation.
    “ 4.—Illegal to Circulate Foreign Bank Notes.

    “ § 63. Not to pay out depreciated notes. No Banking Company shall, at any time, pay out on loans, or discounts, or in purchasing of drafts or bills of exchange, or in payment of depositors; nor shall it, in any other mode, put in circulation the notes of any Bank or Banking Company, either in or out of this State, which notes shall not, at that time, be receivable at par in payment of debts, and by the Company so paying out or circulating such notes; nor shall it knowingly pay out or put in circulation, any notes issued by any Bank or Banking Company which at the time of such paying out or putting in circulation is not redeeming its notes in gold and silver; nor any notes issued by any Bank, out of this State, of a denomination less than five dollars.”
    The defendant’s counsel also read in evidence from the same volume the following sections of an act entitled an act to amend the act supplementary to the act to prevent unauthorized banking and the circulation of unauthorized Bank paper, passed February 24th, 1848.
    “ § 1. Notes of Banks of other States not to he paid out hy Banks of this State for circulation. Be it enacted, &c. That it shall be unlawful for any Bank or incorporated Company doing a banking business, or dealing in money as a business, or exchange broker, money broker, or private banker, or other person or persons who shall receive money on deposit, or buy or sell bills of exchange, or loan money, or exchange one kind of Bank bills or money for another, with a view to profit, to issue, pay out, or give in exchange for other money so as to go into circulation in this State, any circulating notes or bills, except the notes or bills of the Banks of this State, issued according to law.

      “ § 4. Notes purchased in violation of section 1, null and void. Every note, bond, bill of exchange, draft, check, or other evidence of debt, discounted, bought or otherwise obtained by any Bank, corporation, private Company or individual, described in the first section of this act, and paid for in whole or in part in Bank notes described in the first section, contrary to the true intent and meaning of this act, shall be held and adjudged null and void; and no suit or action for the recovery thereof shall be sustained by any Court in this State; and all contracts, „ promises and agreements, founded in whole or in part on the payment, exchange or putting forth of such Bank notes, contrary to the provisions of this act, shall be held and adjudged utterly null and void.” ■
    The defendant’s counsel then rested.
    The plaintiffs’ counsel then called as a witness,
    John Wi McMillen, who having been first duly sworn, testified as follows: “.I was formerly connected with the Bank of Akron; I was Cashier from 1845 to February, 1854; then I was President until November, 1854; while I was an officer I was a stockholder and director; W. S. C. Otis was President until January, 1854; he resided at Akron; he was a lawyer.
    “ Q. ■ What knowledge had Mr. Otis of the business of the Bank from July, 1851, to 1854 ?
    “ A. He gave very little time and attention to the business of the Bank.
    “ Q. How frequent during the time you speak of was Mr. Otis present at the Bank?
    “A. I could not state how frequently; he was absent from home a good deal; and when home did business with the Bank as other individuals did; he was a member of the State Convention, and practised in the various Courts.

      “ Q. When he came to the Bank, what part did he take in the transaction of its business?
    “A. He took no part in the transaction of the business.
    "Q. What examination or investigation into the business which had been done by the Bank did he make?”
    To each of these questions, when put, the defendant’s counsel objected. The Court overruled each objection, and the defendant’s counsel excepted to each decision.

      The witness answered: “ Not any; he was a director during the time he was President; the Board of Directors met generally in January and July; when the directors met in January and July, statements of the Bank’s business and a balance sheet were placed before them.’’
    The plaintiffs’ counsel then asked the witness the following question:
    “ Q. What other business was done at those meetings ?”
    The witness answered: “At January meetings officers and directors were elected and dividends were declared; in July, among other things, dividends were declared; I don’t recollect anything else in particular; I presume there was other business might have occurred that I don’t recollect; the Bank made discounts and purchased exchange in the form of bills and notes; I did that business while I was Cashier; the Bank, from time to time, borrowed money; I borrowed for it; Joshua E. Shaw was a Director; he resided in Norton, about ten miles from Akron; he was there usually at the semi-annual meetings of the board, and some other times; when he came to the Bank he examined the balance sheet, perhaps; when he came to the Bank at other times than the semi-annual meetings, I do not recollect that he made any examination; he would draw his checks; Milton W. Henry was a Director; resided in Akron; he was there at the Bank every day transacting business, as a dealer; nothing else was done by him except at the regular meetings; while I'was Cashier Amos M. Eberman was Teller, from 1848 to February, 1854; had another Teller and Bookkeeper part of the time; Eberman kept the books; Christopher P. Wolcott was Attorney of the Bank up to February, 1854; then he became Director, and after-wards President; I obtained from the City Bank the loan referred to; I made the application in New Haven; up to that time I had no knowledge of, or acquaintance with, that Bank or any of its officers; I made the acquaintance through the American Exchange Bank; when I made that application I asked to have the loan made to the Bank of Akron; I offered, as collateral security, the notes and bills of exchange of the Bank of Akron, in the American Exchange Bank for collection; as to the form of the security or evidence of the indebtedness, I think I first proposed to give a time draft of the Bank of Akron; it was objected to on'their part, that there was some doubt whether a Bank could issue time paper; it was finally agreed that I should give my own note, indorsed by the Bank of Akron, and collateral securities; I wrote the July letter; I received the money spoken of yesterday to the amount of $50,000, at the Bank of Akron, through the American Express Company, in packages, addressed either to The Bank of Akron or to J. W. McMillen, Cashier; at first they were sent to the care of Y. C. Severance, Cashier; they were sent to Severance, at Cleveland, because we had no express to Akron; afterwards we had one, and they were sent direct; packages received were opened by the Teller, Ebermanthe bills were kept in the vault except when paying them out during the day; the correspondence was received at Akron, through the Post Office; these letters were usually addressed to i the Cashier; when the correspondence was received it was addressed to the Cashier; if I was there I opened it; if not the Teller opened it; the letters were read and filed away, and kept in the pigeon holes in the Bank; these letters, in relation to this transaction, were kept with the rest; of the letters that were sent in reply, copies were kept; taken by letter-press.
    “Were copies of these letters kept?
    “ It was usual to keep copies; I presume copies of these letters from me, (which are here produced,) were taken as the others were.
    “ Q. All kept in regular books ?
    “A. I know nothing to the contrary; that was the custom; the $50,000 note was made and indorsed by me; the letter of the 30th of July contained the arrangement.” * *
    When both parties had rested, the Court directed the jury to render a verdict for the plaintiffs.
    To which direction and charge, the defendant’s counsel excepted. The jury thereupon rendered a verdict for the plaintiffs for $36,541.95.
    ■“ The Court then ordered that judgment be suspended, and that the questions of law arising herein be heard, in the first .instance, at the General Term, upon a case to be made by defendant.”
    . Some other portions of the evidence given are stated in the opinion of the Court.

      At the February General Term, 1859, the defendant moved, upon the exceptions, for a new trial; and the plaintiffs moved for judgment in their favor on the verdict. ,

      William Stanley, for defendant.
    I. The loan made by the City Bank of Hew Haven to the Cashier of the Bank of Akron, was not valid or binding upon the latter Bank. The Cashier of a Bank, as such, has no power to borrow money for the Bank. That is a power intrusted exclusively to the Board of Directors. A Cashier, or any other agent, undertaking to exercise such a power, must produce a special authority from the Board of Directors for that purpose. (Hallowell and Augusta Bank v. Hamlin, 14 Mass., 180; Hartford Bank v. Barry, 17 id., 97.)
    If the money borrowed had been applied to the use of the Bank, and the benefit of the loan thus received and retained, that might have amounted to a ratification of the loan. But it was proved, without contradiction, that the money was in fact borrowed by the Cashier for his own private use, and no part of it was ever applied to the use of the Bank. '
    II. Assuming the loan to have been valid and binding, the Cashier had no power to pledge the property of the Bank as security for its repayment. The fact that the property consisted of negotiable paper is wholly immaterial, the rights of a subsequent bona fide holder not being in question. (Hoyt v. Thompson, 1 Seld., 320.)
    III. The plaintiffs were not purchasers of the bills sued on for a valuable consideration. The money was all advanced before the bills were received, and no value or right was parted with on the faith of them. It will be contended that the bills were received in pursuance and in execution of a previous contract. But'this does not make the plaintiffs purchasers for value within the meaning of the rule. The contract was not applicable to any particular bills; and it appears that the President of the City Bank selected such as he chose. It is impossible that the mere election of the plaintiffs to take these bills, instead of others, should make them a purchaser for value. (Stalker v. McDonald, 6 Hill, 93.)
    IT. The contract between the plaintiffs and the Cashier of the Bank of Akron was illegal and void, as being in violation of the law of Ohio, where it was to be performed. The plaintiffs, there fore, acquired no title to the bills sued on.
    The case of Dewitt v. Brisbane, (16 N. Y., 508,) is directly in point to show that such would be the result upon a suit brought in the State of Ohio. The case of Hyde v. Goodnow, (3 Comst., 269,) is in point to show that our Courts will give the same effect to the laws of Ohio that the Courts of Ohio would do, even as against our own citizens. Much more will they do so in the present case, when a citizen of Connecticut sues a citizen of Ohio, in this State. The proof is clear that the plaintiffs had full notice that they were violating the law of Ohio, though Dewitt v. Brisbane shows such proof to be unnecessary.

      Wm. Curtis Noyes and B. W. Bonney, for the plaintiffs.
    I. The bills in suit were respectively accepted and indorsed by the defendant, and regularly discounted by the Bank of Akron. The defendant owes the amount of those bills, and admits his indebtedness, but denies that plaintiffs are the lawful holder of the bills or entitled to collect them. So far as appears in this action, he is the only person who questions plaintiffs’ title.
    II. It is conclusively proved that the plaintiffs, in February, 1851, at Hew Haven, in Connecticut, agreed to lend to the Bank of Akron $50,000, on the security of a pledge of bills of exchange belonging to the Bank of Akron, and sent to the American Exchange Bank, in Hew York, for collection. That the sum of $50,000 was, pursuant to such agreement, advanced and lent by the plaintiffs to the Bank of Akron, and, by order' or letter addressed to the American Exchange Bank, bills of exchange discounted by and belonging to the Bank of Akron, sent to the American Exchange Bank for collection, to the amount of $60,000, were duly pledged to plaintiffs, to secure the payment of said loan. That in October, 1854, $20,000 of said amount loaned remained due to plaintiffs, and the bills in question, which belonged to the Bank of Akron, and had been sent to the American Exchange Bank for collection, were received by the plaintiffs from the American Exchange Bank under said pledge, and are now sought to be collected by the plaintiffs as such pledgees.
    III. The bills in question are all regularly indorsed, and plaintiffs’ prima facie title thereto is perfect.

      IV. The pledge, made to the plaintiffs by the Bank of Akron, authorized the plaintiffs, at any time before the said loan was paid off, to take and receive from the American Exchange Bank bills of exchange belonging to the Bank of Akron, sent to the American Exchange Bank for collection, to an amount not exceeding $60,000, and, as such pledgees, to demand and collect such bills of exchange, as the lawful holders thereof.
    V. John W. McMillen, Cashier of the Bank of Akron, had, as such Cashier, authority to borrow money for the use of said Bank, and to secure the repayment of the loan by pledge of the bills of exchange or other property of such Bank. (Curtis v. Leavitt, 15 N. Y. R., 51, 62-66, 169, 219-223, 262, 267-270; Lafayette Bank v. State Bank of Illinois, 4 McLean’s R., 208; Angeli & A. on Corp., 5th ed., §§ 299, 300; Bank of Vergennes v. Warren, 7 Hill, 91; Com. Bank of Buffalo v. Kortright, 22 Wend., 348; Hartford Bank v. Barry, 17 Mass. R., 94; Folger v. Chase, 18 Pick., 63.)
    Besides his implied authority as Cashier, it is proved that said Cashier, at the time of the transaction in question-, was intrusted with and exercised the control of the Bank of Akron, and the management of all its business.
    VI. The contract for the loan in question was made at Hew Haven, in the State of Connecticut, and with reference to the laws of that State, and there the money was to be repaid.

      The contract must be construed and its legality determined by the laws of the place where the contract was made, and where it was to be performed. (Curtiss v. Leavitt, 15 N. Y. R., 91, 230, 296, and cases there cited; Babcock v. May, 4 Ohio R., 334, 348; Van Cleef v. Therasson, 3 Pick., 12.)
    Vn. There is no allegation or pretense that the contract between the plaintiffs and the Bank of Akron violated any law of the State of Connecticut, or would be in that State invalid, or that any right or interest of the State of Hew York, or of its citizens, can be thereby injured or impaired.
    The Courts of the State of Hew York will, therefore, enforce the contract. (Merchants' Bank v. Spalding, 12 Barb., 302; S. C., 5 Seld., 53; McIntyre v. Parks, 3 Metc., 207; Pellicat v. Angell, 2 Cromp., Mees. & Rose., 311; 15 N. Y., 101, 231; 4 Kern., 162.)

      VIII. There is no proof or ground for pretense that the plaintiffs, in the transaction with the Bank of Akron, intended to violate any law of the State of Ohio, or did any act intentionally to promote or aid any such violation; or even had knowledge that, by any law of the State of Ohio, the circulation of the bills of foreign Banks by the Banks of Ohio was prohibited, and this action would be sustained in Ohio. (Merchants' Bank v. Spalding, 5 Seld., 53-63.)
    IX. The Court will not be astute to so construe the law or apply the evidence as to sustain the defense in this action. It is proved, and not denied, that the defendant owes the amount of the bills in ■ suit, and that the plaintiffs hold them for full consideration paid in good faith.
    The defense is, therefore, unjust and inequitable, and, to be successful, must be fully and strictly made out. Every intendment will be against it.
    X. There was no error in any ruling or decision of the Judge presiding at the trial, nor in his direction to the jury to render a verdict for plaintiffs.
    Judgment should now be rendered for plaintiffs for the amount of the verdict, with interest and costs.
   By the Court—Bosworth, Ch. J.

The drawing, accepting and indorsing of the bills, as alleged in the complaint, except the indorsement of them by the American Exchange Bank to the plaintiffs, are admitted by the pleadings. The indorsement to the plaintiffs, by that Bank, was proved at the trial, and thus the apparent legal title in the plaintiffs was established.

Whether the plaintiffs are the legal owners and holders of the bills, or whether they continue to be the property of the Bank of Akron, depends upon the authority of J. W. McMillen, the Cashier of the Bank of Akron, to transfer them to the plaintiffs as they were transferred, and whether the contract as part of which the transfer was made is valid, or void as being prohibited by any law of Ohio by which the plaintiffs’ title can be affected.

The defendant has no defense to a suit upon the bills, by and in the name of the lawful owner of them. His defense is based solely on the alleged absence of any lawful title in the plaintiffs, and on the allegation that the Bank of Akron is the true and lawful owner.

In July, 1851, McMillen, then being Cashier of the Bank of Akron, applied, as such Cashier, to the plaintiffs for the loan of $50,000, of their bills, to the Bank of Akron, for the term of one year.

The plaintiffs agreed to make the loan to the Bank of Akron,' upon the terms; of interest at the rate of four per cent, payable and to be paid semi-annually at the American Exchange Bank, New York, and of the bills so lent, being redeemed weekly at such Bank by the Bank of Akron, as they should be returned to the plaintiffs, and of $60,000 of the collection paper belonging to the Bank of Akron, and held at any time by the American Exchange Bank, being pledged as collateral security to the' plaintiffs, and that while such loan continued there should be at no time less than $60,000 in amount of such paper held by the American Exchange Bank.

A paper directed to the Cashier of the American Exchange Bank, and signed by McMillen as Cashier of the Bank of Akron, stating the fact and terms of such pledge, was delivered to the plaintiffs, and notice of it was given to the Cashier of the American Exchange Bank, who assented to it and agreed to hold the paper so pledged, subject to any claims of the Bank, of which he was Cashier.

The bills to beso loaned were tobe marked in a manner agreed •upon to secure their identification, and were to be furnished to the Bank of Akron, as fast as the convenience of the plaintiffs would allow.

Under this arrangement, the plaintiffs, in August, 1851, commenced sending their bills to the Bank of Akron, and in January, 1852, had -forwarded the whole $50,000. They were forwarded in packages, by express, directed to McMillen, as Cashier of the Bank of Akron, and were received b3r him at that Bank.

As fast as the bills, after they were put in circulation, were returned to the plaintiffs, they were redeemed at the American Exchange Bank, for the Bank of Akron, and on its account, and out of its funds, and thereupon the amount thus redeemed was again returned to the Bank of Akron by the plaintiffs, in the same manner as those originally loaned had been forwarded.

The interest on the $50,000 was regularly paid semi-annually by the American Exchange Bank to the plaintiffs, for and on account of the Bank of Akron, and out of its funds. The loan was continued beyond the time originally agreed upon, and upon the terms on which it was originally made. This course of redeeming the notes, as they came back to the plaintiffs, and of re-issuing and sending to the Bank of Akron the same amount as was from time to time so returned and redeemed, and of paying interest semi-annually on the whole sum loaned, was continued until about the 11th of November, 1854. The American Exchange Bank then declined to redeem notes that had been so returned to the plaintiffs, and thereupon the plaintiffs obtained from that Bank, under the pledge and agreement in relation thereto, a transfer of collection paper held by it belonging to the Bank of Akron, amounting to a little over $59,000, and the paper so transferred included "the bills on which this action is brought.

McMillen, as such Cashier, had authority-to borrow money for the Bank of Akron. To what extent he borrowed for the Bank, the evidence does not disclose. He had, practically, the whole management of the business of that Bank. Its Board of Directors met semi-annually, but according to.the evidence before us, did not, at those meetings, or at other times, inquire as to the details of its business, the mode of its operations, or into the manner in which the Cashier was prosecuting its business.

Under such circumstances, we think the plaintiffs are entitled to have this controversy determined upon the principle, that as between them and the Bank of Akron, the Cashier of the latter was fully authorized to borrow money for it, and in' its name, and that any loan made by the plaintiffs, in good faith, on an application of the Cashier of the Akron Bank, as such Cashier, to borrow for it, is a loan to that Bank, and that such Bank is primarily liable for such loan, as the party borrowing.

In Beers v. Phœnix Class Company, (14 Barb. S. C. R., 858-861,) it was held, that in order to make particular transactions of the officers of a corporation binding upon the corporation itself, it is not necessary to prove they were directly authorized. “ If the directors of a company, no matter whether through inattention or otherwise, suffer its subordinate officers to pursue a particular line of conduct for a considerable period, without objection, they are as much bound to those who are not aware of any want of authority, as if the requisite power had been directly conferred.”

These transactions extended over a period of three years. The bills originally loaned, and those sent as a substitute for bills returned to the plaintiffs in the ordinary course of circulation for redemption, were sent to the Bank of Akron directed to its Cashier, and were received at that Bank by such Cashier.

The bills loaned, as they came back to the plaintiffs, were redeemed from time to time in the name of the Bank of Akron, by its agent in Hew York, the American Exchange Bank, with the funds of the Bank of Akron; and the American Exchange Bank, as such agent, also paid the semi-annual interest on the sum loaned by the plaintiffs to the Bank of Akron, and out of the funds of the latter Bank.

All the letters from McMillen to the plaintiffs relating to his transactions with them, (which are of any importance,) are either dated “Bank of Akron,” or “State Bank of Ohio,” “Bank of Akron, Akron,» Ohio,” and are signed by him as Cashier.

These letters are numerous.

It was said in The New Hope & Delaware Bridge Company v. Phœnix Bank, (3 Comst., 166,) that “ a letter from the Cashier on the business of his Bank is a letter from the Bank; a letter to the Cashier relating to the business of his Bank is a letter to his Bank; and the Bank is chargeable with knowledge of the contents of such letter.”

The American Exchange Bank, as it redeemed' for the Bank of Akron and with its funds, from time to time, the bills returned in the course of circulation to the plaintiffs, and as it also paid' interest for the Bank of Akron out of its funds semi-annually, on the sum loaned, must be presumed to have advised the Bank of' Akron of the fact of such payments. There is no pretense, nor attempt to show that this was not done, nor that the Bank of Akron objected to such acts, or refused to allow such payments, or questioned the power of its Cashier to authorize or direct such payments to be made.

We think it, therefore, quite clear, that the Cashier of the Bank of Akron had authority as such to borrow money for that Bank. That the sum. loaned by the plaintiffs on the application of such Cashier to borrow for that Bank, was a loan to that Bank, and that such Bank is liable for its repayment as the principal in the transaction, and the party borrowing. And that the bills in question were transferred to the plaintiffs to enable them, by a collection of such bills and out of their proceeds, to obtain payment of a debt due to them from the Bank of Akron, and not, as the answer alleges, to obtain payment of a debt due from McMillen to the plaintiffs.

■ There is no force in the objection that the bills so borrowed of the plaintiffs were not, in fact, used by the Cashier of the Bank of Akron, for its benefit and in prosecuting its business, even if the evidence given, is, for the purposes of this action, to be treated as competent and sufficient to establish, prima fade, that fact.

The bills were borrowed for the Bank of Akron, and were loaned to it, and on . its credit and on the security of a portion of its assets, and were sent by the plaintiffs to that Bank, and were received at the Bank by its Cashier, and were retained in its banking house until they were paid out at its counter.

In judgment of law, they came into the possession of the Bank of Akron as absolutely as if they had been delivered to the Board of Directors at a regular and full meeting of its members. What the Cashier or the Directors, or either of them, subsequently did with the bills, cannot impair the plaintiffs’ claim, either at law or in equity.

There could be no doubt of the validity of the transfer of the bills of exchange in question, if it had been directly authorized by the Board of Directors.. There is nothing in any part of the charter of the Bank, which has been given in evidence, that prohibits the delegation of authority to the Cashier to borrow mofiey upon such terms as the loan in question was made, or to transfer such portion of its discounted bills as may be reasonable in amount, for collection, and to pay its just liabilities out of the proceeds thereof when collected. (The City Bank of Columbus v. Bruce & Fox, 17 N. Y. R, 514, 515.)

When, as in this case, the Cashier of a Bank has actual authority to borrow money for it, and the whole management of its business and the mode of conducting its operations are confided by the Directors to him, and so absolutely so, that his operations and mode of doing business are not examined into by them at all for years, a party who deals with and loans money to such Bank, on the faith that, the .acts of such Cashier, in borrowing and securing it, are authorized by his Bank, is as much entitled to protection as if such acts had béen directly authorized, when such acts are of a character that it may reasonably be supposed they have been authorized by the Bank, and the business transactions between such party and such Cashier have been done openly and publicly, and in such manner that the Directors, if they had given even ordinary attention to its business, would have been informed of such transactions, and of the particulars thereof.

Especially should it be-so held, when the contract sought to be enforced is one which the Bank was competent to make, and upholding it violates no rule of law or principle of public policy.

There is no pretense that the nature and extent of the authority of the Cashier of the Bank of Akron have ever been defined by any direct act of the corporation. On the contrary, he has been permitted, as being within the scope and limits of his authority, to exercise a large range of powers, and his own judgment as to the transactions which he deemed to be for the interest of the Bank, and the terms on which he should contract, in ■ making engagements as its agent, which the Bank might lawfully make.

, Such exclusive control and management for so long a period by the Cashier, with the assent of the Directors, amounts to an authority to him to make contracts, in relation to its business which the bank might lawfully make, and will conclude the Bank as between it and a party who has dealt directly with it through such Cashier, and who, on the faith of his having authority to make such a contract, has loaned money to, or paid it for such Bank.

The circumstance, that McMillen gave his own note to the plaintiffs for the sum borrowed, we regard as of no consequence under the particular facts and circumstances of this case. It cannot detract from the force of the fact that the loan was made to the Bank of Akron as the party borrowing, nor impair any obligation which it assumed by the contract made in its behalf and in its name by its authorized agent, to repay the sum borrowed, or in relation to the securities promised, and subsequently in execution of such promise actually transferred to the plaintiffs, as the means and for the purpose of obtaining payment of the sum lent.

If the views already stated are sound, the remaining questions presented by the case can be disposed of briefly.

Such parts of the charter of the Bank of Akron as were given in evidence do not prohibit the Bank of Akron from paying out or putting in circulation any notes issued by any Bank which redeemed its notes in gold and silver, and which the Bank of Akron received at par in payment of debts, if of a denomination not less than $5.

The contract relating to the loan contains no provision conflict, ing with this part of the charter. It "was no part of the contract that the plaintiffs should furnish, or that the Bank of Akron should receive, from them, as part of the loan, any bill of a denomination less than $5.

There is no evidence that the plaintiffs knew of the existence of the general statute of the State of Ohio, entitled, “ An act to amend the act supplementary to the act to prevent unauthorized banking and the circulation of unauthorized bank paper, passed February 24,1848,” sections 1 and 4 of which are inserted in the case.

On the 9th of October, 1854, the Cashier of the Bank of Akron returned to the plaintiffs a package of 5s, amounting to $4,600, with notice that the law of Ohio prohibiting the circulation of foreign bills under 10s took effect on the 1st of that month, and causes them to return so rapidly that we are obliged to return these, asking you to please to substitute 10s in their stead, and also for all others you may redeem hereafter.”

There is, therefore, no evidence that the plaintiffs knew, or had reason to suspect, when they agreed to loan the $50,000, or when they furnished the bills to that amount under their agreement to loan, or returned bills which they had redeemed, that the Bank of Akron, or its Cashier in behalf of that Bank, intended to use the bills in a manner or for a purpose prohibited by any statute of the State of Ohio.

Whatever the undisclosed purpose or intent of such Cashier may have been, there is no ground for pretending that the plaintiffs stipulated, as a part of their contract, that anything should be done with the bills loaned that would violate any statute of that State.

' The Merchants' Bank of New York v. Spalding, (5 Seld., 53,) and Tracy v. Talmage, Pres't, (4 Kern., 162,) are decisive of any defense based on the allegation of its being part of the agreement that acts should be done that would violate a known, or, in fact, any statute of the State of Ohio.

The point of the fifth defense is, that “ the plaintiffs improperly got possession” of the bills of exchange on which this suit is brought, “and are attempting to collect them of this defendant,” -x- * “and to apply the proceeds thereof to the payment of a pretended debt due from one J. W. McMillen to the plaintiffs, the consideration of which pretended indebtedness arose out of certain Bank notes of "the plaintiffs, which said McMillen agreed to circulate for the plaintiffs in the State of Ohio, illegally and contrary to the statutes of the State of Ohio."

What the terms of these statutes or their titles are, or when they were passed, is not alleged nor intimated. Nor are the terms of the alleged agreement, as to circulating the plaintiffs' bills, stated either in detail or generally. ,

No agreement to actually circulate is proved. It was undoubtedly expected that they would be paid out in Ohio, and the circulation obtained that might result from such an act. But there was no agreement in respect to the fact of circulation.

No statute is proved, of which the plaintiffs are shown to have had any knowledge or notice, which could have been violated by the circulation of any bills which the plaintiffs agreed to furnish, or, at the time of making the contract, were asked to furnish under it. ,

The plaintiffs hold the bills of exchange sued upon as regular indorsees, and are attempting to collect them to obtain payment of a debt justly due to them from the Bank of Akron. They were delivered to the plaintiffs under a written authority and pledge of them, or a pledge which operated upon them from the moment of such delivery, formally executed by the Cashier of that Bank, upon the faith of, and in reliance upon which pledge, the loan has been continued and extended from one year to three years in duration.

The plaintiffs, if the views we have expressed are correct, did not “improperly get possession” of these bills of exchange, but, on the contrary, obtained possession of them lawfully and for a just purpose, and are attempting to collect them to satisfy" a valid debt owing to them by the Bank of Akron.

They should not be defeated in their action to recover upon them, upon the evidence given at the trial in support of the issues raised by the defendant’s answer.

The motion for a new trial must be denied, and a judgment in favor of the plaintiffs entered on the verdict.

Judgment ordered accordingly.