Branch v. Baker

Warner, Chief Justice. The Mechanics’ Bank was chartered prior to the war, and authorized to issue bills to circulate as money. By the terms of its charter “the persons and property of the stockholders, for the. time being in said bank, shall be pledged and bound in proportion to the amount of the shares that each individual or company may hold in said bank, for the ultimate redemption of the bills or notes issued by or from said bank during the time he, she or they may hold such stock, in the same manner as in common commercial cases, or simple cases 512 of debt.” When the stockholders accepted the charter of the bank it became a contract between them and the state, by which they were bound, in accordance with the terms thereof. The plaintiffs in the several suits now before the court are the billholders of the bank, suing on that contract, and are endeavoring to enforce the same. . The pleas of the defendants do not allege that contract to have been illegal, because it was in aid of the rebellion, and if the several matters of defense set forth in the defendants’ pleas are authorized by the seventeenth section of the fifth article, paragraph two of the constitution of 1868, the same is unconstitutional and void as to contracts made prior to the date thereof, because it impairs the obligation of the contract sued on by creating-a defense to that contract, which did not exist when the contract was made, and otherwise invades the rights of the plaintiffs-as to their remedy to enforce that contract, which did not exist at the time the contract was made. The pleas of the defendants and the evidence offered thereunder as to the illegality of the contract sued on by the plaintiffs, constituted no legal or valid defense thereto as against the plaintiffs, who are the holders of the bills of the bank issued in pursuance of its charter. If the stockholders of the bank had redeemed bills of the bank prior to the commencement of the plaintiffs’ suits, to the amount of their respective shares of stock therein, or a proportional part thereof, then such stockholders might plead such redemption of the bills of the bank in discharge of their liability as stockholders to the extent of such redemption of the bills of the bank by them, before the commencement of the plaintiffs’ suits. The plaintiffs, as the billholders of the Mechanics’ Bank, are entitled to recover from the stockholders thereof, in the proportion which the amount of the shares that each individual stockholder held in said bank bore to the indebtedness of said bank to the billholders thereof, at the time of the commencement of the respective suits against the bank and the stockholders therein, for the l’edemption of the bills issued by the bank in pursuance of the terms of its charter. Iu 513 other words, whatever amount the bank was indebted to the billholders thereof at the time of the commencement of the plaintiffs’ suits on their bills, the stockholders are liable to redeem the same, in proportion as their respective shares of stock in said bank bears to the indebtedness of the bank to the bill-holders thereof — that is the measure of their liability under the charter of the bank as accepted by them. In my judgment, the judgment of the court below should be. reversed in each of the cases against the stockholders of the Mechanics’ Bank, as well as that against the Mechanics’ Bank. Judgment reversed.