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Casey v. Galli.

1. That the defendant is bound to contribute ratably, and that the proper amount can be ascertained only in equity.

2. That the defendant is bound to contribute ratably to pay a large sum; that this sum is not stated in the declaration, and hence what would be ratable and proper does not appear.

3. That the obligation of the defendant is to pay into the hands of the Comptroller of the Currency a ratable portion of the debts of the association proved before him, and that the declaration does not show that any debts had been so proved.

4. That the declaration demands a larger sum than the defendant is required by the statute to pay, and also an additional sum by way of interest.

In regard to the first three of these objections, it is sufficient to say that Kennedy v. Gibson and others, 8 Wall. 498, is conclusive against them. It is there said that the amount to be paid rests in the judgment and discretion of the Comptroller; that his determination cannot be controverted by the stockholders in suits against them; and that, when the order is to collect the full amount of the par of the stock, the suit must be at law. It is unnecessary to reproduce the reasoning of the court in support of these propositions. The sum to be paid being liquidated, and due and payable when the Comptroller's order was made, it follows that the amount bears interest from the date of the order. Otherwise there would be no motive to pay promptly, and no equality between those who should pay then and those who should pay at the end of a protracted litigation. The defendant filed three pleas in abatement: 1. Nul tiel corporation.

2. That there was not then, nor when the plaintiff was appointed, such supposed receiver of said New Orleans Banking Association, nor before, nor since that time, any such corporation in existence, because the Bank of New Orleans had no power by its charter, nor authority otherwise from the State of Louisiana, to change its organization to that of a National banking association, under the laws of the United States; wherefore it was prayed that the declaration be quashed.

3. That there was not then, nor when the plaintiff was appointed such supposed receiver of the New Orleans Banking Association, nor before nor since that time, any such corporation in existence, because the owners of two-thirds of the capital stock of the Bank of New Orleans did not authorize the bank to be converted into a

Casey v. Galli.

National banking association under the laws of the United States, nor to accept an organization certificate as such banking association; wherefore it was prayed that the declaration be quashed.

The plaintiff filed a joint demurrer to all these pleas. At the argument the first plea was abandoned. The other two remain to be considered.

The pleas were properly framed in abatement, and not in bar. Jones v. The Bank of Tennessee, 8 B. Monr. (Ky.) 122; Woodson v. The Bank of Gallipolis, 4 id. 203.

The second plea is clearly bad. No authority from the State was necessary to enable the bank so to change its organization. The option to do that was given by the forty-fourth section of the Banking Act of Congress. 13 Stat. 112. The power there conferred was ample, and its validity cannot be doubted. The act is silent as to any assent or permission by the State. It was as competent for Congress to authorize the transmutation as to create such institutions originally.

The third plea is also bad. The eighteenth section of the act requires the Comptroller to make a careful examination in all cases of original applications, and, if he found the association was "lawfully entitled to commence the business of banking," he was to give a certificate to that effect; and it is declared that the association "shall transact no business except such as is incidental to its organization, and necessarily preliminary, until authorized by the Comptroller of the Currency to commence the business of banking." 13 Stat. 101. 13 Stat. 101. A like examination and certificate are required by the forty-fourth section, where an existing bank organizes under the act. That section provides "that when the Comptroller shall give to such association a certificate, under his hand and official seal, that the provisions of this act have been complied with, and that it is authorized to commence the business of banking under it, the association shall have the same powers and privileges and shall be subject to the same duties, responsibilities, and rules, in all respects, as are provided in this act for associations organized under it." 13 Stat. 113.

The declaration avers that the association became such by due and regular proceedings under the act. The plea denies the regularity of the proeedings in the single particular that the owners of two thirds of the capital stock of the bank did not authorize the directors of said bank to convert it into a National banking asso

Casey v. Galli.

ciation, nor to accept an organization certificate as such banking association. According to the law of pleading, what is not denied is conceded. The giving of the Comptroller's certificate is covered by the averment in the declaration, is not denied by the plea, and is, therefore, to be taken as admitted. The plea proposes to go behind the certificate, and contradict it. This cannot be done. The Comptroller was clothed with jurisdiction to decide as to the completeness of the organization, and his certificate is conclusive upon the subject for all the purposes of this litigation.

It has the same effect, and for the same reason, as his determination and order with respect to the amount to be collected from each stockholder in the event of the failure of the association. No question can be raised in this collateral way as to either.

In Thatcher v. The West River National Bank, 19 Mich. 196, it was held that whether there was any defect in the process of organization was a question for the Comptroller to decide, and that "his certificate of compliance with the act of Congress removes any objection which might otherwise have been made to the evidence upon which he acted."

In this we concur.

There is another ground upon which both pleas must be held bad. Where a shareholder of a corporation is called upon to respond to a liability as such, and where a party has contracted with a corporation, and is sued upon the contract, neither is permitted to deny the existence or the legal validity of such corporation. To hold otherwise would be contrary to the plainest principles of reason and of good faith, and involve a mockery of justice. Parties must take the consequences of the position they assume. They are estopped to deny the reality of the state of things which they have made appear to exist, and upon which others have been led to rely. Sound ethics require that the apparent, in its effects and consequences, should be as if it were real, and the law properly so regards it. Eaton et al. v. Aspinwall, 19 N. Y. 119; S. C., 6 Duer (N. Y.), 176; Cooper v. Shaver et al., 41 Barb. (N. Y.) 151; Camp v. Byrne, 41 Mo. 525; Danbury & N. Railroad Co. v. Wilson, 22 Conn. 435; Ellis v. Schmack & Thomas, 5 Bing. 521; McFarlan v. The Triton Ins. Co., 4 Denio (N. Y.), 392; Rector & Co. v. Lovett, 1 Hall (N. Y.), 191; Topping v. Bickford, 4 Allen (Mass.), 121; Dooley v. Wolcott, id. 407; Eppes v. Railroad Company, 35 Ala. 33; Hamtramack v. Bank of Edwardsville, 2 Mo. 169; Jones v. Cincinnati

Casey v. Galli.

Type Foundry, 14 Ind. 89;

Worcester Med. Ins. v. Harding, 11 Cush. (Mass.) 285; Hughes v. Bank of Somerset, 5 Litt. (Ky.) 47 ; Tar River Nav. Co. v. Neal, 3 Hawks (N. C.), 520.

Demurrer sustained.

At a subsequent day of the term, pursuant to leave granted, three pleas were filed. The question arising upon demurrers to the special pleas were argued by the same counsel.

Mr. Justice SWAYNE delivered the opinion of the court.

Since the opinion of the court was delivered in this case, the defendant obtained leave to plead further, and has filed three pleas. They are:

First. Nil debet, upon which the plaintiff has taken issue.

Second. That the Comptroller of the Currency has "determined and decided to exact from the defendant, and from a number of stockholders of said National banking association less than the whole, such sums of money as would suffice to pay all the debts and liabilities of the said National banking association, with the intent and purpose to compel this defendant and others of said shareholders who may be solvent to contribute the entire sum necessary to pay the debts and liabilities of the said National banking association, without any contribution from those who are insolvent."

It is a sufficient objection to this plea that the Comptroller has ordered that each stockholder shall pay to the receiver the par of his stock. This order cannot be controverted in a suit against the stockholder. It is conclusive upon him, and makes it his duty to pay. Kennedy v. Gibson and others, 8 Wall. 498. What may be done or intended with respect to other stockholders is immaterial in his case.

The plea is, also, manifestly bad for vagueness and uncertainty. Third. That the Comptroller has decided to pay a large amount of claims against the bank for which the bank is not responsible, and that, aside from these claims, there are means enough already in his hands to meet the liabilities of the bank.

The same objection lies to this plea as to the preceding one, and the same authority applies. If the receiver intends to violate, or shall violate, his duty in discharging the trust confided to him, the remedy must be sought in another proceeding. It cannot avail the defendant in this action.

Both demurrers are sustained.

Adams v. Mayor, etc., of Nashville.

The parties have filed a written stipulation submitting the issues raised upon the first plea to the court and waiving the intervention of a jury.

With respect to this issue, we find the proofs in the record amply sufficient to sustain the plaintiff's case.

Judgment must, therefore, be rendered against the defendant for the par of his stock, with interest, as claimed in the declaration, and costs, and it is

So ordered.

ADAMS V. MAYOR, ETC., OF NASHVILLE.*

(16 Alb. Law Jour. 416.)

State taxation of National banks.

The act of Congress of June, 1864, in relation to the taxation of National banks, does hot curtail State power as to the subject of taxation, or cut off the right to exempt certain kinds of property if a legislature chooses to do so. Its only object is to prevent unfriendly discrimination against National banks.

IN

N error to the Supreme Court of the State of Tennessee. Sufficient facts appear in the opinion.

Ed. Baxter, for plaintiff in error.

J. E. Basley and John Lellyett, contra.

Mr. Justice HUNT delivered the opinion of the court.

The plaintiffs in error, who are stockholders in the Fourth National Bank of Nashville, Tennessee, filed their bill in the chancery court of that State against the defendant in error, a municipal corporation, to enjoin the collection of a tax imposed upon their shares of stock by said corporation, and to have the tax declared illegal and void.

The bill was demurred to. The chancellor sustained the demurrer and dismissed the bill. Upon appeal to the Supreme Court of Tennessee, the highest court of law or equity in the State, the

*This case is not yet reported in the U. S. Supreme Court Reports.

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