Farmers & Mechanics Bank v. Nelson

Le Grand, G. J., delivered the following dissenting opinion: The bill filed in this case had for its purpose the passage of a decree compelling the Farmers and Mechanics Bank of Carroll county to make (he usual entries on its books, that the complainant was a stockholder of one hundred shares of stock in said bank, and to issue to the complainant the usual certificate to that effect, and to set forth an account of the arrears of dividends on said stock, and to pay said arrears to complainant, and that the defendant, Mathias, be decreed to pay over the proceeds of a certain single bill to the bank, in payment of said stock, and to pay over the balance, if any, together with all just and equitable interest, to the complainant, &c. The theory of the bill is, that the complainant became a subscriber to the capital stock of the Farmers and Mechanics Bank of Carroll county, to the amount of one hundred shares, and that this subscription was made through the agency of the defendant, Mathias, the then president of the bank,- and Jesse L. Warfield, then one of the directors thereof. The bill states the transaction of the alleged subscription to have been as follows: The complainant proposed to the said Mathias and Warfield, in their capacity of agents to the said bank, to subscribe for one hundred shares of stock,- provided Mathias and Warfield, as agents of the bank, and provided the bank, through and by their said agents, would undertake to raise the money for said stock on a note the complainant then held against Jno. T. Ward and Solomon Stoeksdale, under seal, in favor of complainant, for $1000, bearing interest from the first day of April 1848, bearing date the 10th day of October 1847, and payable the 1st day of April 1850; that Mathias and Warfield, as agents — 49 — of the bank, and the bank, by their said agents, agreed to this proposition, and, in compliance with this agreement, the subscription was made. The bank answered the bill, denying that the complainant was a subscriber, averring that the bank did not go into operation as a bank, with banking powers, until after the 25th day of January 1851; and, also, that War-field and Mathias “never were, neither was either of them, appointed agents for the defendant, to dispose of the shares of stock unsubscribed for, as alleged by the complainant, in his said bill of complaint; but this defendant admits that the said Jesse D. Warfield and Jacob Mathias were commissioners appointed under and by virtue of the second section of said charter, with power, together with others, to open books of subscription for six thousand shares of stock in said bank, and that they, together with others, did open books of subscription at sundry times and places, as provided for in said second section of said charter, but this defendant positively denies that the said complainant, Burgess Nelson, ever did subscribe for one hundred shares of stock in said bank, or any other number of shares, and pay for the same in conformity with the third and fourth sections of said bank charter.” The answer then proceeds to state several legal conclusions drawn from its construction of the provision of its charter, and then denies that it ever “in any way authorized Jacob Mathias, as agent, to make any contract or agreement with the complainant, or any one else, like the one set forth and charged in the bill.” The defendant, Mathias, denies positively that he ever made, as agent of the bank, any such contract as that set out in the bill of complaint, and also that the complainant is a stockholder in the bank. These denials are sufficiently full to put the complainant to the proof of his case. The answer of the bank, under its corporate seal, establishes nothing more than a denial of the allegations of the bill, it being only equivalent to the answer of an individual, not sworn to. 8 Gill, 170, Md. N. Y. Coal Co., vs. Wingert. The answer of Mathias, although it emphatically denies the agreement and subscription alleged in the bill, is not such a denial, — 50 — under the circumstances of this case, as to require two witnesses, or one, with strong pregnant circumstances, to overcome it. Although the rule, in the general, appertains to the denial of the defendant, there is, nevertheless, a class of cases wherein it is not observed, and this, in my judgment, is such a one. In the case of Jones vs. Belt, 2 Gill, 106, the court held, that where a complainant alleged the existence of a contract with the defendant, accompanied with collateral circumstances, and called upon him not to state what the contract was, but to admit or deny the existence of the agreement and circumstances set forth, and the defendant, in his answer, averred another agreement, and denied the collateral circumstances, the statement of the agreement by the defendant in such case is not simply responsive to the contract he was called on to admit or deny. It is not such a denial as requires two witnesses, or one, with concurring circumstances, to disapprove it; nor, in this case, was it necessary to disprove the denial of the collateral circumstances by the same amount of proof. And although, as was decided in Powles, et al., vs. Dilley, 9 Gill, 222, where a complainant calls upon a defendant to answer, he makes the latter a witness, and so far as the answer is responsive to the bill, it must be received against the complainant, and it cannot be excluded, because there is a co-defendant in whose favor it may and does consequentially operate; yet, in a case like this, the principle recognized in Jones vs. Belt, 2 Gill, 106, is not affected, but remains in full force. Here the answer of the bank merely puts the complainant to the proof of his case; and although the answer of the defendant, Mathias, under oath, is, so far as it is responsive to the bill, available to the bank, yet it is liable to be contradicted by proof of the contract, which proof may consist solely of its production and identification. Keeping these principles in view, we are to inquire — 1st, whether there was such a contract as that sought to be enforced? and 2nd, whether it was such a contract as it was competent to the bank to make, in the manner and under the circumstances detailed? These questions are to be answered — 51 — by the evidence in the cause, and the terms of the act of incorporation. There is no doubt that, to entitle a party to a decree for specific performance, his proof must correspond to the contract, alleged. What, then, is the contract alleged in this case? It is, in substance, this: the complainant claims to be a subscriber to the capital stock of the bank, to the amount of one hundred shares, and that he made that subscription under the superintendence of the authorized agents of the bank, and that be made the stipulated payments by handing to one of those agents a single bill, which he agreed to collect and appropriate accordingly, and that he was returned as a subscriber to the number of one hundred shares. This contract is denied by the defendant, Mathias, and the question is, is the contract alleged by the complainant made out by the proof? I think it is. I assume, for the present, that Mathias was the agent of the bank, and, if so, his acts, within the line of his agency, bind the bank. In his letter of the 20th of November 1850, addressed to the complainant, he so.ys: “ You (the complainant) then subscribed for one hundred shares of stock, and handed me a note against Ward and Stocksdale, drawn for $1000, with considerable interest thereon, with the positive understanding that we were to collect the money due on the note, and apply $1000 toioards the payment of your stock in the bank, and the balance paid to you.” Again, in the same letter, in allusion to some apprehension expressed by the complainant, he says: “1 do hope and trust that you will make yourself perfectly easy about this matter, for I am sure all will be right, and when this money is collected, it shall be honestly and faithfully applied, according to agreement, and every cent that may be due you, after paying for your stock, shall be paid to you, without one cent of charge.” Jacob Reese testifies that exhibit S. B, was handed to him by the defendant, Mathias, and, by it, it appears Burgess Neison is a subscriber to the amount of one hundred shares. It also appears, by the testimony of Mr. Reese, that in a book belonging to the bank, it appears, in the handwriting of Mr. Mathias, that Mr. Nelson, the complainant, was a subscriber — 52 — for one hundred shares. If these acts were a legitimate exercise of authority on the part of Mr. Mathias, then it is clear Nelson was a subscriber. By the minutes of proceedings of the bank, it appears that, on the 10th day of August 1850, the books for the further, subscription of stock to the bank were authorized to be opened in Westminster and in Uniontown, under the direction of Jacob Mathias and J. L. Warfield, or either of them, at Westminster, <fcc. It is under this resolution the complainant claims he has a right to regard Mathias as the agent, of the bank to take subscriptions, and 1 think.he is correct in his opinion. The 18th section of the act of incorporation expressly provides, that if there shall be any of the shares of the stock undisposed of and “unsubscribed for, the president and directors shall dispose of the same in such manner as they may deem most beneficial for the bank.” The authority given to commissioners, by the second section of the act, to receive subscriptions, has nothing to do with the case. The power conferred by it was to be exercised in the month of May 1850, and to exhaust itself in two days, the language being, they were to receive subscriptions “on the first Monday of May next, and remain open for two days.” And, in the case of Plank Road Co. vs. Hoffman, 9 Md. Rep., 568, this court said: “Commissioners are appointed to receive subscriptions to stock for the purpose-of giving the subscribers a right to organize as a corporation under a charter. So soon, however, as the organization takes place, the authority of the commissioners ceases, and all corporate powers conferred by the charter, vest in the body politic. Such, at least, is the general rule applying in every case whore there is no special provision to the contrary.” It appears, by the agreement signed by the counsel for the complainant, and Mathias, as president of the bank, “that all the requisites of the charier, as conditions precedent to the bank’s going into operation, and the president and directors commencing operations of the bank, were fully complied with previous to the 27tb day of January 1851; and that the bank did, in fact, go into operation, within the meaning of the 18th section of the charter, on that day.” — 53 — it is contended by the defendants, that until after the 27fh day of January 1851, the bank had no right to do any business, whatever, under its charter. This is obviously error. What is meant by the requirements of the 18th section, in this regard, is, that the corporation shall not be permitted to avail itself of the franchise of banking, in the manner pointed out, by its charter, until it shall have first complied with them. It had, as a corporation, full power to do all acts preliminarily necessary to put the bank in operation, such as receiving subscriptions, providing suitable buildings, &c. It is to be presumed that when the Legislature passed the act of incorporation, it designed the bank should go into operation. Now, by the second section of the act, the commissioners therein designated had but two days allotted to them wherein to receive subscriptions, and, if the view advanced on behalf of the defendants were tenable, and the necessary amount of stock was not subscribed within those two days, the act would, in point of fact, be of no avail. The 3 8th section guards against such a state of things from mere abundance of caution, giving to the corporation the power to dispose of the unsubscribed shares “in such manner as they may deem most beneficial for the bank.” This power the corporation rightfully exercised in the passage of its resolution of the 10th of August 1851, and, inasmuch as it constituted the defendant, Mathias, its agent to receive subscriptions, his acts, in this regard, bind it. I think, with all deference to others, that no one who reads the record in this case, ought to have a doubt that it was understood between Mathias and Nelson that he was a subscriber for one hundred shares. Indeed, the defence set up to the claim of the complainant is principally, if not entirely, technical. I discover no equity whatever in it, and, believing the complainant to have made out his case fully, am of opinion (hat the decree of the Circuit Court should be affirmed. Eccleston, 3., delivered the opinion of this court. We are of opinion that the complainant in this case is not entitled to the relief which he seeks. Were it conceded that, the corporation had the right to pass the resolutions of the 10th — 54 — of August 1850, authorizing Messrs. Mathias and Warfield, or either of them, to receive additional subscriptions, in taking that of the complainant in the manner they did, they exceeded the authority conferred upon them, and there is no proof their act was ever ratified by the bank. (Decided June 2nd, 1858.) Decree reversed and bill dismissed, each party to pay his own costs.