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GEORGE MINOR, PHILIP H. MINOR, DANIEL MINOR, WILLIAM MINOR AND SMITH MINOR, PLAINTIFFS IN ERROR, v. THE MECHANICS BANK OF ALEXANDRIA

January 1, 1828

GEORGE MINOR, PHILIP H. MINOR, DANIEL MINOR, WILLIAM MINOR AND SMITH MINOR, PLAINTIFFS IN ERROR,
v.
THE MECHANICS BANK OF ALEXANDRIA, DEFENDANTS IN ERROR.



AN Act of Congress was passed on the 16th of May 1812, entitled 'An Act to incorporate a bank in the town of Alexandria, by the name and style of the Mechanics Bank of Alexandria;' which institution soon afterwards went into operation; subscriptions for filling up the capital stock of the corporation and bank, having been opened in the town of Alexandria, on the first Monday in June 1812, under the direction of fifteen commissioners, appointed for that purpose. On the 3d of September 1817, Philip H. Minor was elected Cashier of the bank; and, on the same day, by a resolution of the Board of Directors, it was ordered, 'that the present officers of the bank, do the whole duties of the bank.'

In the office of Cashier Philip H. Minor was the successor of William Patton junr., who diedin August 1817; and, before his appointment as Cashier, Philip H. Minor, (who had several years preceding served as an officer of the bank, for some time as discount clerk, and afterwards as book-keeper;) had, in March 1817, been appointed teller for one year, ending in March 1818, from the time of his appointment; and had given approved bond and security, conditioned that he would well and truly execute the duties of the office of teller. After the appointment of Philip H. Minor, in September 1817, to be Cashier of the bank; and the order of the Board, on the same day, relative to the whole duties of the bank being performed by the then officers of the bank; no renewal of the appointment of teller was made, and he usually performed the duties of Cashier and teller.

On the 19th day of Marclr 1818, Philip H. Minor, and the plaintiffs in error, executed a joint and several bond, in the sum of twenty thousand dollars, which contained the following condition:––

'Whereas the above bound Philip H. Minor, hath been duly elected to the office of Cashier of the Mechanics Bank of Alexandria, the conditions of the above obligation are such, that, if the above bound Philip H. Minor, shall well and truly execute the duties of Cashier of the Mechanics Bank of Alexandria, then, this obligation to be void, but otherwise, shall remain in full force and virtue in law.

'PHILIP H. MINOR, (L. S.)

'GEORGE MINOR. (L. S.)

'D. MINOR, (L. S.)

'WILLIAM MINOR, (L. S.)

'SMITH MINOR.' (L. S.)

In the Circuit Court of the district of Columbia, for the county of Alexandria, the defendants in error instituted an action of debt upon this bond, against all the obligors; and the declaration filed in the same, was for the penalty, without taking notice of the condition.

Oyer of the bond and condition having been prayed, &c., the defendants being the sureties of Philip H. Minor, to wit: George Minor, Daniel Minor, William Minor, and Smith Minor, pleaded joint pleas, separate from Philip H. Minor, the Cashier of the bank. The substance of these pleas was as follows:––

1. The Mechanics Bank was not competent to sue, because the commissioners, who, by the Act of Incorporation, were authorized to open and take subscriptions to the capital stock of the company, and who took the subscriptions, had colluded with the subscribers to the stock, and that 180,000 dollars of the stock, had been fraudently subscribed; and that an election for directors of the bank was fraudulently and illegally held, by which the persons named as commissioners, were elected the directors of the bank; the votes of the fraudulent holders of the stock, amounting to 180,000 dollars, having been taken at the said election;–that afterwards, the sums paid by the fraudulent or collusive holders of the 180,000 dollars stock, were, by the President and Directors, paid back to them; and thereby the capital was diminished to 320,000 dollars; and, by the said proceedings, the capital stock of the bank was reduced below 500,000 dollars, as was collusively held out to the public; without this, that the plaintiffs, the obligees in the bond, or any other person whatsoever, at the time and times of making the said bond, and of commencing the suit thereon, or at any time whatsoever used, claimed, or exercised, or yet use, claim, or exercise, the name and stile, privileges and capacities, of the said supposed corporation, or ever claimed to compose the same, otherwise, or by any other ways or means, or in any other manner or form whatsoever, than in virtue of the said subscription, conducted and concluded as aforesaid; and so the said defendants say, the said supposed writing, obligatory in manner and form aforesaid made, is utterly inoperative and void in law; and this, they are ready to verify, &c.

The second plea states, that the defendants ought not to be charged, &c. &c., because the plaintiffs demand the said debt, and bring this action, as pretending and claiming to be a corporation aggregate, in and by virtue of the Act of Congress, mentioned in the first plea, by the name of the Mechanics Bank of Alexandria, to be composed of the subscribers to the said Mechanics Bank of Alexandria, which subscribers were not in being at the time of the passing of the said Act, but were to be composed of such persons only, as thereafter might subscribe thereto, according to the provisions of the Act; whereas the subscriptions were not taken according to the said provisions, so as to entitle the persons pretending to be subscribers to the said Bank, and their successors and assigns, to compose the said corporation, wherefore there was not any person authorized, or lawfully competent to take the bond, which is the subject of this suit; nor was there any such person, at the commencement of this suit, capable of instituting and prosecuting the same, but that the said persons did, unjustly and illegally arrogate to themselves to compose the said corporation, without the capital stock having been filled by subscription, or the supposed corporation having been composed of actual subscribers to the Bank, pursuant to the directions of the said Act of Congress, or other lawful warrant whatsoever, contrary to the purview and effect of the said Act of Congress; and so the defendants say, that the said writing obligatory, was at the time of making the same, and is, utterly void in law, &c.

The third plea alleged that the Cashier had well and truly performed the condition of the bond, according to the tenor and effect, and the true intent and meaning of it.

The fourth plea alleged that the Cashier had performed the condition of the bond, 'to the best of his ability, skill and judgment,' without any fraud, deceit, or wilful default, or breach of duties, whatever.

The fifth plea alleged that the Cashier had performed his duties, in obedience to, and in pursuance of, the rules, orders, usages and customs of trade and business, ordained, established, and practised in the Bank, by authority of the President and Directors thereof.

The sixth plea asserts, that although the duties of the Cashier had not been performed by him, yet the non-performance was by the wrong, connivance and permission of the President and Directors of the institution.

The seventh plea states, that the Bank had not been damnified by the acts of the Cashier.

The eighth plea was, that although the Bank was damnified by the acts of the Cashier, yet it was by the wrong and connivance of the President and Directors, &c.

The ninth plea states that the business and affairs of the Company, and the conduct and duties of the Cashier, were performed under the regulation and management of the President and Directors, who had been chosen according to the provisions of the Act of Incorporation; and if, at any time, the corporation has sustained damage, since the making of the writing obligatory, by reason of any matter contained therein, it has been by the wrong, connivance or permission of the said President and Directors.

To the first and second pleas, the plaintiffs below put in general demurrers, and on each of the seven remaining pleas, issue was taken by general replications; all precisely in the same terms, as follows:

'And the said Mechanics Bank of Alexandria, by Thomas Swann, their attorney, say they ought not to be precluded, &c. because they say that the said cause of action, in the declaration mentioned, did accrue as in the said declaration and breaches are set forth; without that, that the matters set forth in the said plea, are true; and this they pray may be inquired of by the country, and the defendants likewise.'

But at the next term, the plaintiffs withdrew these general replications as to the 3d and 4th pleas; and to these two pleas put in special replications, leaving the issues on the remaining five to stand on the general replications and issues as above. The replications thus put in to the 3d and 4th pleas, and rejoinders of the defendants, taking issue upon the same, (being precisely in the same terms, mutatis mutandis, to each,) were as follows:

'And the said Mechanics Bank of Alexandria, by Thomas Swann, their attorney, say, that they ought not to be precluded from having and maintaining their action aforesaid against the said defendants, George Minor, Daniel Minor, William Minor, and Smith Minor, by any thing alleged by the said defendants in their third plea, pleaded as aforesaid: Because they say that the Board of Directors of the said Mechanics Bank of Alexandria, in pursuance of the authority granted to them by the Act of Congress, incorporating the said Bank, did duly make and declare sundry by-laws for the government of the said Bank, its officers and affairs, and, among other laws so made and declared as aforesaid, they did enact and declare, in substance, as follows, to wit:

Section 2d, article 5th. It shall be the duty of the Cashier to countersign, at the Bank, all the bills or notes to be signed by the President, by order of the Directors; carefully to observe the conduct of the persons employed under him; duly to examine into the settlement of the cash account at the Bank; count the money deposited in the vaults every evening; compare the amount thereof with the balance of the cash account of that day, and, in case of disagreement, report the same to the next meeting of the Directors; to see that all deeds appertaining are duly recorded; and to do and perform all other duties that may, from time to time, be required of him by the President or Board of Directors relative to the affairs of the institution.

Article 6th. It shall be the duty of every other officer, clerk, and servant of the Bank, to do and perform all other duties, that may, from time to time, be required of them respectively, by the President and Cashier; and in no case to divulge the transactions of the Bank.

Article 8th. That no officer of the Bank, the President excepted, shall leave the Bank after it closes, until the Cashier's account shall be found to agree, or if it does not agree, until a strict examination be made to discover the error.

Section 3d, Article 3d. That no discount shall be made without the consent of a majority of the Directors present; nor shall any reason be required by the Directors to each other, nor assigned to the public, for refusing discounts.

Which said by-laws, so made, enacted, and declared, as aforesaid, were, at the time of the sealing and delivery of the writing obligatory, in the declaration mentioned, in full force and effect. And the said plaintiffs say, that the said Philip H. Minor, in the said writing obligatory mentioned, was duly appointed Cashier of the said Mechanics Bank of Alexandria; and, in virtue of his said appointment, did accept the office of said Cashier; and, on the day of the date of the said writing obligatory in the declaration mentioned, did thereupon enter upon the duties of the said Cashier; and the said plaintiffs further say, that the said Philip H. Minor did not well and truly execute the duties of the said Mechanics Bank, as Cashier of the said Bank, according to the true intent and meaning of the condition of the said writing obligatory, but violated his duty as Cashier aforesaid, and broke the condition of the said writing obligatory, in the following instances: that is to say,

1. That, during the period that the said Philip H. Minor acted as Cashier of the said Mechanics Bank, under the writing obligatory, as aforesaid, he, the said Philip, as Cashier aforesaid, received into his custody, and keeping the moneys of the said Bank, amounting to very large sums: that is to say, amounting altogether to five hundred thousand dollars and upward; which said moneys, so received as aforesaid, the said Philip, although often required, hath failed to account for, or to pay over to the said Bank, or to make a correct report of the same, from time to time, to the Board of Directors of the said Bank.

2d. And further, that he, the said Philip, during the period aforesaid, and in his capacity of Cashier aforesaid, wrongfully, and contrary to the duty of his office of Cashier aforesaid, did waste, and suffer to be wasted, of the moneys of the said Bank, in his care and custody, as Cashier aforesaid, the sum of thirty thousand dollars and puwards, whereby the same became entirely lost to the said Bank.

3d. And the said plaintiffs further say, that the said Philip, during the period aforesaid, and in his capacity of Cashier aforesaid, wrongfully, and contrary to the duty of his office of Cashier aforesaid, and without the authority of the said Bank, did apply and appropriate, of the proper money of the said Bank in his care and custody, as Cashier aforesaid, to his own proper use, the sum of five thousand seven hundred and twenty-eight dollars, and to the use of Thomas J. Minor and himself,

the said Philip H. Minor, the further sum of

$3,179.00

1,898.63

----------

5,077.63

so that the said sums were entirely lost to the said Bank.

4th. And the plaintiffs further say, that the said P. H. Minor, during the period aforesaid, and in his capacity of Cashier aforesaid, wrongfully and contrary to the duty of his office of Cashier aforesaid, and without the authority of the said Bank, did pay away, and did suffer and permit to be paid away, of the proper moneys and funds of the said Bank in his care and keeping, as Cashier aforesaid, to Jabez B. Rooker, divers sums of money, amounting altogether to the sum of 4,967 dollars 30 cents; and to one Francis Adams, divers others sums, amounting altogether to the sum of 1,884 dollars 18 cents; and to William F. Thornton divers other sums of money, amounting altogether to the sum of of 7,407 dollars 25 cents; and to Benjamin G. Thornton divers other sums of money, amounting altogether to the sum of 4,810 dollars 74 cents; and to Lewis Hipkins the sum of 2,375 dollars; and to Robert Young divers other sums of money, amounting altogether to the sum of 9,294 dollars 44 cents; so that the said several sums of money were entirely lost to the said Bank.

5th. And the said plaintiffs further say, that the said Philip H. Minor, during the period aforesaid, and in his capacity of Cashier aforesaid, and without the authority of the said Bank, did endorse upon a certain check, drawn by Lewis Hipkins upon the said Mechanics Bank, in favour of 'note in city or bearer' for 3000 dollars, that the same was 'good;' when in fact and in truth, the said Lewis Hipkins had no money or funds in the said Mechanics Bank, at the time of the said endorsement, to pay the said check, nor has he, at any time since, had in the said Bank any money or funds to pay the said check, so endorsed as aforesaid, and the said Bank have actually paid and taken upon themselves the payment of the same.

7th. And the said plaintiffs further say, that Benjamin G. Thornton, on the 18th day of December, 1818, drew a certain bill or draft upon a certain Bank in the state of Ohio, called the Bank of New Lancaster; which bill or draft was in substance as follows:

'ALEXANDRIA, December 18, 1818. Cashier Bank of New-Lancaster, Ohio. Pay to the order of W. F. Thornton, ten days after sight, four thousand seven hundred and fifty dollars, and charge the same as per advice, to yours, &c.

B. G. THORNTON.'

And the said plaintiffs say, that the said Philip H. Minor, while he acted as Cashier aforesaid, under the writing obligatory aforesaid, wrongfully, and contrary to the duty of his office of Cashier aforesaid, and without the authority of the said Bank, did advance and pay, upon the credit of the said draft or bill, to William F. Thornton and Lewis Hipkins, the amount of the said draft: that is to say, the sum of 4750 dollars; by means of which said advancement, so made as aforesaid, the said sum has been entirely lost to the said Bank.

8th. And the said plaintiffs further say, that said Philip H. Minor, while he acted as Cashier aforesaid, under the writing obligatory aforesaid, wrongfully, and contrary to his duty as Cashier, and with a view to deceive and mislead the Board of Directors of the said Bank, did make sundry false and erroneous entries in the books of the said Bank, in his care and custody as Cashier aforesaid; and among others, the following, to wit: a charge against the Bank of Alexandria, of the date of the 31st of August, 1818, for the sum of 1791 dollars; and another against the Bank of Potomac, of the date of the 31st of August, 1818, for the sum of 2581 dollars 25 cents; and another against the Bank of Washington, of the date of the 2d of March, 1818, for 1000 dollars; when in fact and in truth, at the periods aforesaid, there was nothing due from the said last mentioned Banks to the said Mechanics Bank; by means of which said false entries and charges, the said Mechanics Bank have lost the said several sums of money. All which said several matters and thing the said plaintiffs are ready to verify. Wherefore, &c.

To these pleas, the plaintiffs in error put in the following replication:

'And the said defendants, George Minor, Daniel Minor, William Minor, and Smith Minor say, that the said Mechanics Bank of Alexandria ought not to have, or maintain, their aforesaid action against the said defendants, by reason of any thing by the said Mechanics Bank of Alexandria, in their said replication to the said third plea of the defendants, above in replying alleged; because they say that the said Philip H. Minor, in the said plea and replication named, did not violate his duty as Cashier aforesaid, and break the said condition of the said writing obligatory, in the instances by the said Mechanics Bank of Alexandria, in their said replication above pleaded and alleged, nor in any of them, with or by means of any fraud, or deceit, or wilful default whatsoever. And this they pray may be inquired of by the country–and the said Mechanics Bank of Alexandria in like manner.'

At the same term, the demurrer to the first and second pleas, and the issues on the remaining seven, between the plaintiffs and the four sureties, were respectively argued and tried; the first and second pleas were adjudged insufficient, on general demurrer; the issues were found for the plaintiffs, and damages, in gross, upon all the issues and breaches, assessed against the four sureties, at 8607 dollars 30 cents; and, upon the motion of the plaintiffs, a rule was then laid on the principal obligor and co-defendant, Philip H. Minor, to plead to issue on the morrow. In compliance with which rule, he did, within the time prescribed, plead five several matters in bar; the same, mutatis mutandis as the third, fourth, fifth, seventh and ninth, of the aforesaid pleas, put in by the co-defendants, his sureties. A day was given at the next ensuing term, to the plaintiffs, to reply: at which term, the plaintiffs took a judgment on the ...


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