President of Lincoln & Kennebec Bank v. Richardson

Mellen C. J. This case comes before us upon an agreed statement of facts, and was submitted without argument, on the ground that all the general reasoning in relation to the subject had been gone into in the case of Foster v. the Essex Bank;* which cause has been recently decided by the Supreme Judicial Court of Massachusetts; and we are now merely called, upon to decide whether the difference between the two cases as to some of the facts will vary the principles of law by which the case must be determined. There are only two points in which the cases differ. In the case before us a bank is plaintiff—in the other a bank was defendant;—and in the present case the act of June 1, 1812 continued the powers of this and other banks until the first Monday of October 1816; and the seconded for continuing or reviving the powers of banks did not pass till December 14, 1816, more than two months after the first extending act had ceased to operate ;—whereas in the other case the extending act was passed some weeks before the expiration of the charter of the Essex Bank. We have examined the opinion of the Court in the latter case, and are perfectly satisfied with their reasoning and con81 elusion; and we are of opinion that the same principles ought to govern both cases. The Chief Justice, in pronouncing the decision of' the Court in the action against the Essex Bank, observes—“We think it no objection that this additional term should be granted by an act made subsequent to the time when the charter was granted. A debtor to the bank could not object to a suit on the ground that the original term of the charter had expired ; for the very bringing of the action would be an acceptance of the charter.” We apprehend that the same principle of law applies to an act continuing a charter beyond its original term, as to the act which granted the charter ; that is, in both cases the grant or chartered powers, must be accepted: because a charter, and the extension of it, are, till so accepted, inoperative; but when accepted, they become contracts. Nor do we perceive that, on this principle, it is of importance whether the extending act is passed before or after the expiration of the original charter. Acceptance is necessary, in both cases. By bringing the present action the plaintiffs have declared their acceptance of the new powers granted to them by the extending or reviving act of December 14, 1816; and of course are liable to be sued by their creditors, as well as empowered to enforce payment by their debtors. It would be a harsh and unjust principle, which would compel them to pay their debts because they have accepted the new powers ; and-yet deny them the use of legal process to enable them to collect the funds necessary for the purpose. If it should be urged, as it has been, that there is no assent on the part of the debtors of the bank to the extension of the charter, and that the bringing of this suit, though it may be proof of acceptance on the part of the bank, is not so on the part of Richardson; it may be replied, in addition to what has been before observed, that it appears by the agreement of the parties that the note in suit is a stock note, and of course Richardson is a stockholder. He is then bound by the act of acceptance on the part of the directors,— the prosecution of this action.—The stockholders are bound by their official acts, within the limits of their ordinary duties. Besides, it is for the interest of the defendant, as one of the [82] stockholders, that the debts due to the corporation should be faithfully collected and applied. R. Williams for the plaintiffs. Longfellow and Ames for the defendant. We all are of opinion that the action is maintainable, and according to the agreement of the parties the defendant must be defaulted. Footnotes [*] Since published in 16 Mass. 245.