Wray v. Tuskegee Insurance

A. J. WALKER, C. J. The material question presented by the demurrer to the first plea, is, whether the facts stated in that plea show that the bill of exchange sued upon was given for an illegal consideration. The power' of the corporation to discount the bill is not disputable, because by its charter it has express authority “to purchase, discount, and sell bills of exchange.” Acts of ’55 and ’56, page 259. Section 939 of the Code prohibits a foreign corporation, invested with the privilege of. banking, from exercising that privilege by agent in this State, exeept by the [63] exclusive use of gold and silver coin, and bank-bills issued by the authority of this State. The first plea- does not present a transaction violating that statute. It does not aver that the plaintiff was the agent of the foreign corporation, nor does it allege such facts as, per se, authorize the legal inference of an agency. The proviso to section 5 of the plaintiff’s charter prohibits it from making or issuing any bills, bonds, notes or other securities, to circulate in the community as money. See, also, Code, §§ 3268, 3269, 1484. It is claimed in argument for the appellant, that an infringement of this proviso is shown by the plea, and that the infringement consisted in an issue of the bills of the Farmers’ and Exchange Bank, as the consideration of the bill of exchange. The plea alleges, that the money with which the bill was discounted was loaned to the plaintiff) or deposited with it, by the Farmers’ and Exchange Bank. If the bills of the South Carolina Bank were received by the plaintiff on deposit, the plea does not permit us to suppose that the deposit was special, creating the relation of bailor and bailee between the South Carolina Bank and the Tuskegee Insurance Company, and binding the latter to keep and return the specific bank-bills received. On the contrary, the averments of the plea demonstrate, that the bank-bills were received to be used by the plaintiff) and not to be kept for the Farmers’ and Exchange Bank. For this reason, and because a general deposit among bankers is not deemed a bailment of specific articles of money to be returned, the plaintiff must be regarded as having received the money to be used by it, without any obligation to return the particular bank-bills. The deposit with the plaintiff by the Farmers’ and Exchange Bank, thus explained, constituted the former the debtor of the latter to the amount of the deposit; creating an obligation to pay upon the demand, or upon the check of the latter, without interest. Such a deposit is a gratuitous loan, and it makes the depositor a creditor, and the depositary a debtor. — Cromwell & Wing v. Lovett, 1 Hall, (N. Y.) 62; Chapman v. White, 2 Selden, 416; Com. Bank of Albany v. Hughes, 17 Wendell, 100; [64] Barnet v. Smith, 10 Foster, 264; Story on Promissory Notes, 614, § 487. As the deposit is to be regarded in the light above stated, it is not material to inquire which one of the alternative statements, that there was a deposit or a loan, should be adopted. Upon either alternative, the specific bank-bills received from the Farmers’ and Exchange Bank became, eo instanti, the property of the plaintiff': they were at the plaintiff’s risk; if lost, the plaintiff sustained the loss; and the plaintiff was indebted to the bank to the amount of the bank-bills received. The fact that the bank-bills were received on loan, or on such a deposit as we understand the plea to allege, affords a prima-facie negation that they were issued by the plaintiff. The word “issue,” when used in reference to bank-bills, is the antithesis of circulation. Chief-Jústice Marshall, in his decision in the case of Craig v. Missouri, 4 Peters, 410, treats “emit,” in that article of the constitution which prohibits a State “to emit bills of credit,” as synonymous with “issue.” Then, to “issue’' bills to circulate as money is to “ emit ” them — to send them out. It is an act antecedent to the circulation of the bills, and different from it. If the Farmers’ and Exchange Bank, by loan or deposit, transferred the property in its bills to the Tuskegee Insurance Company— deprived itself of the ownership of the bills, and made them the property of the plaintiff; and the plaintiff thereby became a debtor to the bank for the bills so received, the bills were issued by the bank itself Avhen they were delivered. When they passed from the bank, and became the property of the plaintiff, they were issued, or emitted; and the subsequent use of them by the plaintiff was a circulation, not an issue of them. We do not deny, that the deposit or loan might be a simulated transaction, used to disguise a real agency for the issue and putting in circulation at Tuskegee of the bills of the Farmers’ and Exchange Bank. The bills could pass from the Tuskegee Insurance Company, acting for the bank at Tuskegee, and the issue of the bills by such an agent would be an issue by the bank itself. But [65] such is not the case made by the plea. That case is one where the bank parted with the property in the bills, and the insurance company, in using the bills, used its own property, not the property of the bank; and the bank,in parting with the bills, did not place them in the hands of an agent, but emitted them. The plea does assert that the bank-bills were “issued'’ in Tuskegee. But this assertion is, prima facie, inconsistent with the other allegation, that they were loaned or deposited in Charleston by the bank. It may be that the two could be reconciled. They are, however, without reconcilement, inconsistent; and there is no averment of any matter which harmonizes them. We must, therefore, adopt that construction which allows force to the aver-ments which militate against the sufficiency of the plea. Upon the allegations of the plea, the bank-bills must be regarded as having been borrowed, or received on deposit, in Charleston. The plaintiff having by its charter power, in common with natural persons, to discount bills of exchange, its use of the bank-bills so received in the discount of paper would no more be an issue of those bills, than would the same act done by a natural person. Whatever may be the tendency of the allegation that the plaintiff agreed to redeem the bank-bills received from the bank, that fact, standing alone, is not sufficient to authorize the legal inference that the use of such bank-bills by the plaintiff was an issue of them. The second plea presents no feature necessary to be considered, after what we have already said, except that it does not, like the first plea, aver that the foreign bank-bills were borrowed. It says that they were procured “to issue and putin circulation as money in the vicinity” of the plaintiff. But the plea does not show that the issuance and putting in circulation of the bills occurred in the discount of the paper sued upon. It does not show any illegality in the particular transaction. It may be, consistently with everything disclosed in the plea, that it was after the foreign bank-bills were put in circulation, and returned to the insurance company, that the paper in suit was discounted. [66] In order to meet the questions argued by counsel, we have considered this case on the concession to the appellant that the appellee’s charter was before the court; but, in so doing, we do not desire to be understood as deciding that it was proper for the court below to have looked to the charter for any purpose. The judgment of the court below is affirmed.