Gambar halaman

Own race.

gress has authority to pass the necessary laws to carry for a mandamus to compel Judge Rives, a United into effect the judicial power of the United States. States judge in Virginia, who had ordered the removal 3. That this judicial power extends to “all cases in of the cases of two colored men to a Federal court, law and equity,” whether civil or criminal, “arising and had, by writ of habeas corpus cum causa, placed under the Constitution, the laws of the United States, them in the custody of the United States marshal, to and treaties made or which shall be made under their rescind the order and restore the prisoners to the authority.” 4. That such cases arise whenever a cor- proper State authority. The graud jury that indicted rect decision in regard to them depends upon the con- tho prisoners, as also the jury summoned to try them, struction of the Constitution or a law or treaty of the was composed entirely of the white race. After the United States. 5. That Congress, by a series of acts, trial had been entered upon, they petitioned the court commencing with the Judiciary Act of 1789, and pro- for a mixed jury, composed in part of persons of their viding for the removal of cases from State to Federal

This petition was rejected. They aftercourts, has expressed its legislative sense on this sub- ward applied to Judge Rives to have their cases reject. 6. That the Supreme Court of the United States moved to the Circuit Court of the United States for has, in several instances, affirmed the power of Con- trial; and he granted the application, assuming to act gress to authorize such removals. 7. That these re- under the authority of section 641 of the Revised movals constitute no invasion of State rights, as they Statutes of the United States. There was nothing in exist under our dual system of government; but on the Constitution or laws of Virginia excluding colored the contrary, that a denial of the right of the National men from serving as jurors. Government to remove, to take charge of and try any Such being tho material facts, the question before case “arising under the Constitution or laws of the the Supreme Court was whether, upon the showing of United States " would be “a denial of the conceded the petition for removal in these cases, Judge Rives sovereignty of that government over a subject ex- had, under section 641 of the Revised Statutes, authorpressly committed to it."

ity to order such removal. This question was anAs to the question "whether, if the case be remov- swered in the negative, and a mandamus was granted able from the State court, there is any mode and man- for the restoration of the prisouers to the State auner of proceeding prescribed by the act of Congress," thority. Mr. Justice Stroug said that there was no difficulty. The controlling reason for this answer, w} stated by “The Circuit Courts of the United States have all the Mr. Justice Strong, is the fact "that to such a case appliances which are needed for the trial of any crimi- that is, a judicial infraction of the constitutional innal case. They adopt and apply the laws of the State hibitions, after trial or fival hearing has commenced in civil cases, and there is no more difficulty in admin- section 641 has no applicability.” The section “was istering the State's criminal law. They are not foreign not intended to reach such cases. It left them to the courts."

revisory power of the higher courts of the State, and 8. The case of Strauder v. West Virginia, 303, camo ultimately to the review of this court." There bing before the court by a writ of error. Strauder, nothing in tho Constitution or laws of Virginia to exwho is a colored person, was indicted, convicted, and clude colored persons, because of their color, from sentenced for murder, in a State court of West Vir- serving on juries, tho proper remedy, in tho event of ginia, and the judgment was confirmed by the Su- such judicial infraction in tho process of trial, which preme Court of that State. He applied, before trial, could exist and be known only after tho trial was in to have his case removed to the proper Federal court, actual progress, is not a removal of the case to a Fedebecause the law of that State excluded colored per- ral court, for which section 641 gives no authority, but sons from serving as jurors, claiming the right to re- an appeal to the higher courts of the State, and if the moval under section 641 of the Revised Statutes of the infractiou be not thus corrected, then a review of the United States. His petition was denied by the State judgment by tho Supreme Court or the United States court, and the cause was forced to trial.

by a writ of error. The questions to be determined in this case were Moreover, tho right secured by the Fourteenth whether “every citizen of the United States has a Amendment is "that, in the selection of jurors to pass right to a trial of au indictment against him by a jury upon tho life, liberty or property" of a colored man, selected and impanelled without discrimination against “there shall bo no exclusion of his race, and no dishis race or color, because of race or color," and whether, crimination against them becauso of their color." “if he has such a right, and is denied its enjoyment This does not necessarily imply that tho jury must in by the State in which he is indicted,” he may“ cause every such case bo composed of colored persous, or the case to be removed into the Circuit Court of the that a part of tho jury should be of this class. "A United States." Both of these questions were an- mixed jury in a particular casc," said Mr. Justice swered in the affirmative; the first, mainly in the light Strong, “is not essential to the equal protection of the of that clause of the Fourteenth Amendment which laws, and the right to it is not given by any law of Virforbids a State to "deny to any person within its gimia, or by any Federal Statute. It is not, therefore, jurisdiction the equal protection of the laws,” and guaranteed by the Fourteenth Amendment, or within which was held to be inconsistent with the jury law the purview of section 641" of the Revised Statutes of West Virginia; the second, in view of section 641 of the United States. “The petition for a removal of the Revised Statutes of the United States, provid-stated no facts that brought the case within the proing for the removal of cases when this right is deuied visions of this section (611), and, consequently, no by any State, and also in view of sectious 1977 and jurisdiction of the case was acquired by the Circuit 1978 of the same Statutes, enumerating somo of the Court of the United States." rights and immunities guaranteed by tho Constitution, 10. The case of Ex parte Virginia, 339, was that of a among which is “the full and equal benefit of all laws petition from J. D. Coles, a judge of a county court and proceedings for the security of person and prop- of Virginia, who had been indicted in a United States erty as is enjoyed by white citizens."

District Court, and was under arrest, asking for a writ The jury law of West Virginia, in its exclusion of of habeas corpus and a writ of certiorari to bring up colored persons from juries, because of their color, the record of the District Court, and of a similar pewas held to be unconstitutional, and this, of course, titiou from the State of Virginia, both of which petivitiated and rendered illegal the whole proceeding tions were regarded as presenting one case. The against Strauder.

offense set forth in the indictment against Judge Coles 9. The case of Virginia v. Rives, 313, was a petition was that, being charged by law with the duty of selecting grand and petit jurors, he had excluded or failed flicts of opinion which have existed in regard to them. to select any colored citizens as such jurors, and that The country now knows what the highest judicial trithe ground thereof was their race or color.

bunal of the land thinks in respect to these questions. The Supreme Court, after affirming its own jurisdic- Its exposition of law is alike final and conclusive. tion in the premises, proceeded to consider the merits of the case. Mr. Justice Strong, in stating the opin. DEGREE OF CARE REQUIRED FROM TRUSion of the court, remarked that the indictment and

TEES OF SAVINGS BANKS. bench-warrant rest upon the Act of Congress of March Ist, 1875, the fourth section of which declares: “That no citizen possessing all other qualifications which are

NEW YORK COURT OF APPEALS, SEPTEMBER 21, 1880. or may be prescribed by law shall be disqualified for service as grand or petit juror in any court of the

Hun, Receiver, v. CARY. United States, or of any State, on account of race,

The trustees of a savings bank are bound to exercise, in color, or previous condition of servitude; and any

the management of the affairs of the bank, ordinary officer or other person charged with any duty in the

care and prudence; the same degree of care and pruselection or summoning of jurors who shall exclude or dence that men prompted by self-interest generally exfail to summon any citizen for the cause aforesaid ercise in their own affairs, and it is a breach of duty in shall, on conviction thereof, be deemed guilty of a trustees not to bestow such care and prudence. misdemeanor, and shall be fined not more than five

The trustees cannot set up as a defense for neglect, that they thousand dollars.” 18 U. S. Stat. at Large, 335. The

did not possess ordinary skill and judgment, as they by validity of this statute rests upon the Fourteenth

accepting the position of trustees undertake that they

possess such a degree of skill and judgment. Amendment, which declares that no State shall “ deny

A savings bank was incorporated in 1867, and up to 1875, to any person within its jurisdiction the equal protec

when a receiver was appointed, did business in leased tion of the laws," and that “Congress shall have power premises. The deposits in the bank at no time exceeded to enforce by appropriate legislation the provisions of about $70,000, aud during each year but one the exthis article." The purpose of the amendment was to penses of the bank, including interest to depositors, put the colored race, as to civil rights, on a “perfect

exceeded its income. At a time when the bank was equality with all other persons within the jurisdiction

substantially insolvent, the trustees purchased a lot of the States," and this includes “an impartial jury

costing $29,000, on which a building for the use of the

bank, costing $27,000, was erected. In 1875 a receiver trial by jurors indifferently selected or chosen without

was appointed, and this building and lot, subject to a discrimination against such jurors because of their

mortgage, and other assets, producing only about $1,000, color." Congress has power, by appropriate legisla- constituted the whole property of the bank and the lot tion, to make this purpose effective."

and building were afterward swept away by the mort"Such legislation,” said Mr. Justice Strong, “must gage. In an action by the receiver against the trustees act upon persons, not upon the abstract thing denom- for the loss, held, that a jury were justified in finding inated a State, but upon the persons wbo are the agents

that the trustees failed in exercising the prudence which of the State in the denial of the rights which are in

the law requires and were liable for the loss sustained.

Held, also, that the receiver of the bank might maintain tended to be secured. Such is the Act of March 1st,

the action, and that the same was triable at the Circuit 1875, and we think it was fully authorized by the Con- before a jury. stitution." The fact that the person upon whom the Held, also, that all the trustees need not be joined. law acts holds an office under a State, and claims to Held, also, that a trustee was not relieved from liability by act for the State, does not relieve him “from obliga- a discharge in bankruptcy. tion to obey the Constitution of the United States, or dience.” ,

tral ing jurors, was not a judicial act, but “merely a

others, to recover damages for the loss alleged to be ministerial act," and even if the act were judicial, he

caused to the bank by the misconduct of defendants, would be entitled to no immunity on this ground,

who were its trustees. The opinion states the case. since, as alleged in the indictment, “he acted outside

From a judgment in favor of plaintiff as to certain of of his authority, and in direct violation of the spirit

the defendants, such defendants appealed. From an of the State statute," which statute gave him no au

order of the General Term, granting a new trial as to thority for the exclusion, in selecting jurors, of "all

Smith, one of the defendants, plaintiff appealed. colored men merely because they were colored.”

F. C. Barlow, for plaintiff. Mr. Justice Strong said in conclusion: “Upon the

E. Ellery Anderson, for defendants. whole, as we are of opinion that the act of Congress, upon which the indictment against the petitioner was

A. Wakeman, for defendant Smith. founded, is constitutional, and that he is correctly held EARL, J. This action was brought by the receiver to answer it, and as, therefore, no object would be of the Central Park Savings Bank of the city of New secured by issuing a writ of habeas corpus, the peti- York against the defendants, who were trustees of the tions are denied.”

bank, to recover damages which, it is alleged, they These ten cases, especially the last six, present a caused the bank by their misconduct as such trustees. body of very important decisions in the construction The first question to be considered is the measure of and application of the Constitution of the United States. fidelity, care and diligence, which such trustees owe to Seldom has the Supreme Court had occasion in a single such a bank and its depositors. The relation existing term to pass upon so many questions of this elementary between the corporation and its trustees is mainly that character. Its uniform practice is to express opinions of principal and agent; and the relation between the on constitutional points only as they arise in pending trustees and the depositors is similar to that of trustee cases, and even then, so far only as may be necessary and cestui que trust. The trustees are bound to obin determining these cases. The validity of the Fede- serve the limits placed upon their powers in the charter, ral election laws, the right of the National Govern- and if they transcend such limits and cause damage, ment to protect its own officers and agents against they incur liability. If they act fraudulently or do a State action, the interpretation of the Fourteenth willful wrong, it is not doubted that they may be held Amendment in its guaranty of civil rights, and the for all the damage they cause to the bank or its depospower of Cougress legislatively to enforce this guaranty itors. But if they act in good faith within the limits form a cluster of questions, not only significant in of powers conferred, using proper prudence and dilithemselves, but also significant by reason of the con- gence, they are not responsible for mere mistakes or

diecaway the power of Congress to punish his disobe- ACTION by Marcus T, Hun, as receiver of the



errors of judgment. That the trustees of such corpo- rigid a rule and rendering them liable for slight negrations are bound to use some diligence in the dis- lect; while to require less would be relaxing too much charge of their duties cannot be disputed. All the the obligation which binds them to vigilance and attenauthorities hold so. What degree of care and dili- tion in regard to the interests of those confided to their gence are they bound to exercise ? Not the highest care, and expose them to liability for gross neglect degree; not such as a very vigilant or extremely care- only, which is very little short of fraud itself.” ful person would exercise. If such were required, it In Spering's Appeal, 71 Penn. St. 11, Judge Sharswould be difficult to find trustees who would incur the wood said: “They (directors) can only be regarded as responsibility of such trust positions. It would not be mandataries — persons who have gratuitously underproper to answer the question by saying the lowest de- | taken to perform certain duties, and who are therefore gree. Few persous would be willing to deposit money bound to apply ordinary skill and diligence, but no in savings banks or to take stock iu corporations, with more." the understanding that the trustees or directors were In Hodges v. New England Screw Co., 1 R. I. 312, bound only to exercise slight care, such as inattentive | Jencks, J., said: “The sole question is whether the persons would give to their own business, in the man- directors have or bave not bestowed proper diligence. agement of the large and important interests commit- They are liable only for ordinary care - such care as ted to their hands. When one deposits money in a prudent men take in their own affairs." And in the savings bank, or takes stock in a corporation, thus same case, Ames J., said: “They should not, theredivesting himself of the immediate control of his fore, be liable for innocent mistakes, unintentional property, he expects, and has the right to expect, that negligence, honest errors of judgment, but only for the trustees or directors who are chosen to take his willful fraud or neglect, and want of ordinary knowlplace in the management and control of his property edge and care.” The same case came again under conwill exercise ordinary care and prudence in the trusts sideration in 3 R. I. 9 and Green, C. J., said: "We committed to them - the same degree of care and pru- think a board of directors, acting in good faith and dence that men prompted by self-interest generally with reasonable care and diligence, who nevertheless exercise in their own affairs. When one voluntarily fall into a mistake, either as to law or fact, are not takes the position of trustee or director of a corpora- liable for the consequences of such mistake." tion, good faith, exact justice and public policy unite In the case of Liquidators of the Western Bank v. in requiring of him such degree of care and prudence, Douglas, 11 Session Cas. (3d series) 112, Scotch, it is and it is a gross breach of duty, crassa negligentia, not said: “Whatever the duties (of directors) are, they to bestow them.

must be discharged with fidelity and conscience, and It is impossible to give the measure of culpable neg- with ordinary and reasonable care. It is not necessary ligence for all cases, as the degree of care required de- that I should attempt to define where excusable repends upon the subjects to which it is to be applied. missness ends and gross negligence begins. That must First Nat. Bank v. "Ocean Nat. Bank, 60 N. Y. 278. depend to a large extent on the circumstances. It is What would be slight neglect in the care of a quantity enough to say that gross negligence in the performance of iron might be gross neglect in the care of a jewel. of such a duty, the want of reasonable and ordinary What would be slight neglect in the care exercised in fidelity and care, will impose liability for loss thereby the affairs of a turnpike corporation, or even of a occasioned." manufacturing corporation, might be gross neglect in In Charitable Corporation v. Sutton, 2 Atk. 405, Lord the care exercised in the management of a savings Chancellor Hardwicke said that a person who acccepted bank intrusted with savings of a multitude of poor the office of director of a corporation "is obliged to people, depending for its life upon credit, and liable to execute it with fidelity and reasonable diligence," be wrecked by the breath of suspicion. There is a although he acts without compensation. classification of negligence to be found in the books — In Litchfield v. White, 3 Sandf. 515, Sandford, J., not always of practical value, and yet sometimes service- said: “Iu general, a trustee is bound to manage and able - into slight negligence, gross negligence, and that employ the trust property for the benefit of the ceslui degree of negligence intermediate the two, attributed que trust with the care and diligence of a provident to the absence of ordinary care; and the claim on be- owner. Consequently he is liable for every loss sushalf of these trustees is that they can only be held tained by reason of his negligence, want of caution or responsible in this action in consequence of gross neg- mistake, as well as positive misconduct." ligence, according to this classification.

In Spering's Appeal, supra, Judge Sharswood said negligence be taken according to its ordinary meaning, that directors “are not liable for mistakes of judgAs something nearly approaching fraud or bad faith, I ment, even though they may be so gross as to appear cannot yield to this claim; and if there are any authori- to us absurd and ridiculous, provided they were hon. ties upholding the claim, I emphatically dissent from est, and provided they are fairly within the scope of them.

the powers and discretion confided to the managing It seems to me that it would be a monstrous proposi- body.” tion to hold that trustees intrusted with the manage- As I understand this language, I cannot assent to it as ment of the property, interests and business of other properly defining to any extent the nature of a directpeople, who divest themselves of the management and or's responsibility. Like a mandatary, to whom he control of them, are bound to give only slight care to has been likened, he is bound not only to exercise the duties of their trust, and are liable only in case of proper care and diligence, but ordinary skill and judggross inattention and negligence; and I have found no ment. As he is bound to exercise ordinary skill and authority fully upholding such a proposition. It is judgment, he cannot set up that he did not possess true that authorities are found which hold that trus- them. When damage is caused by his want of judgtees are liable only for crassa negligentia, which literally ment, he cannot excuse himself by alleging his gross means gross negligence; but that axiom has been de- ignorance. One who voluntarily takes the position of fined to mean the absence of ordinary care and dili- director, and invites confidence in that relation, ungence adequate to the particular case.

dertakes like a mandatary, with those whom he repreIn Scott v. Depeyster, 1 Ed. Ch. 513, 543, a case much sents or for whom he acts, that he possesses at least cited, the learned vice-chancellor said: “I think the ordinary knowledge and skill, and that he will bring question in all such cases should and must necessarily them to bear in the discharge of his duties. Story on be, whether they (directors) have omitted that care Bailments, $ 182. Such is the rule applicable to public which men of common prudence take of their own officers, to professional men and to mechanics, and concerns. To require more would be adopting too such is the rule which must be applicable to every per

If gross

son who undertakes to act for another in a situation or than $25,000. This contract was reported by the comemployment requiring skill and knowledge; and it mittee to the trustees at a meeting held April 7. matters not that the service is to be rendered gratu- On the first day of May, 1873, the real estate was conitously.

veyed and the cash payment was made, and four sepaThese defendants voluntarily took the position of rate mortgages were executed to secure the balance, trustees of the bank. They invited depositors to con- one upon each lot. The mortgage upon the lot upon fide to them their savings, and to intrust the safe- which the bank building was afterward erected was keeping and management of them to their skill and for $30,500. At the same time the bank became obliprudence. They undertook not only that they would gated to build upon that lot a building covering its discharge their duties with proper care, but that they whole front, 25 feet, and 60 feet deep, and not less than would exercise the ordinary skill and judgment re- five stories high, and have the same inclosed by the quisite for the discharge of their delicate trust.

first day of November then next. Upon that lot the Enough has now been said to show what measure of bank proceeded, in the spring of 1875, to erect a builddiligence, skill and prudence the law exacts from ing covering the whole front and 76 feet deep and five managers and directors of corporatious, and we are stories high, at an expenso of about $27,000, and the now prepared to examine the facts of this case for the building was nearly completed when the receiver of the purpose of seeing if these trustees fell short of this bank was appointed in November of that year. The measure in the matters alleged in the complaint. three lots not needed for the building were disposed

This bauk was incorporated by the act chapter 467 of of, as we may assume, without any loss, leaving the the Laws of 1867, and it commenced business in the corner lot used for the building to cost the bank $29,250; spring of that year in a hired building on the east side and wo may assume that that was then the fair value of third avenue in the city of New York. It remained of the lot. This case may then bo treated as if these there for several years, and then removed to the west trustees had purchased the corner lot at $29,250, and side of the avenue between Forty-fifth and Forty-sixth bound themselves to erect thereon a building costing streets, wbere it occupied hired rooms until near the $27,000. When the receiver was appointed, that lot time of its failure in the fall of 1875. During the and building, and other assets which produced less whole time the deposits averaged only about $70,000. than $1,000, constituted the whole property of the In 1867 the income of the bauk was $942.12, and the bank; and subsequently the lot and building were expenses, including amounts paid for safe, fixtures, swept away by a mortgage foreclosure, and this action charter, current expenses and interest to depositors, was brought to recover the damages caused to the were $5,571.34. In 1868 the incomo was $5,471.43, and bank by the alleged improper investment of its funds, the expenses, including interest to the depositors, as above stated, in the lot upon which the building was $5,719.43. In 1869, the income was $3,918.27, and the erected. At the time of the purchase of the lot, the expenses and interest paid $5,346.05. In 1870, the in- bank was substantially insolvent. If it had gone into come was $5,784.09, and expenses and interest $7,040.22. liquidation, its assets would have fallen several thouIn 1871 the income was $13,551.14, which included a sand dollars short of discharging its liabilities, and bonus of $4,000 or $6,000 obtained upon the purchase this state of things was known to the trustees. It had of a mortgage of $40,000, which mortgage was again been in existence about six years, doing a losing busisold in 1874 at a discount of $2,000, aud the expenses, ness. The amount of its deposits, which its managers including interest paid, wero $9,124.05. in 1872 the had not been able to increase, shows that the enterincome was $5,100.51, and the expenses, including in- prise was an abortion from the beginning; either beterest paid, were $7,212.49. Down to the first day of cause it lacked public confidence, or was not needed January, 1873, therefore, the total expenses, including in the place where it was located. It had changed its interest paid, were $5,046 more than the income. To location once without any benefit. It had on hand but this sum should be added $2,000, deducted on the sale about $13,000 in cash, of which $10,000 were taken to of the largo mortgage in 1874, which was purchased at make the first payments. The balance of its assets the large discount in 1871, as above mentioned, and yet was mostly in mortgages not readily convertible. One entered in tho assets at its face. From this apparent was a mortgage for $40,000, which had been purchased deficiency should be deducted the value of the safe and at a large discount, and we may infer that it was not furniture of the bank, from which the receiver subse- very salable, as the trustees resolved to sell it as early quently realized $500. At the samo date the amount as May, 1873, and in August, 1873, authorized it to be due to over one thousand depositors was about $70,000, sold at a discount of not more than $2,500, and yet it and the assets of the bank consisted of about $13,000 was not sold until 1874. In this condition of things, in cash and the balance mostly of mortgages upon real the trustees made the purchase complained of, under estate.

an obligation to place on the lot an expensive bankingWhile the bank was in this condition, with a lease of house. Whether, under the circumstances, the purthe rooms then occupied by it expiring May 1, 1874, the chase was such as the trustees, in the exercise of project of purchasing a lot and erecting a banking- ordinary prudence, skill and care could make, or house thereon began to be talked of among the trustees. whether the act of purchase was reckless, rash, extravaThe only reason put on record in the minutes of the gant, showing a want of ordinary prudence, skill and meetings held by tho trustees for procuring a new care, were questions for the jury. It is not disputed banking-house was to better the financial condition of that under the charter of this bank, as amended in the bank. In February, 1873, at a meeting of the 1868 (chapter 294), it had the power to purchase a lot trustees, a committee was appointed “on a site for a for a banking-house, "requisite for the transaction of new building;” and in March the committee entered its business.” That was a power, like every other posinto contract for tho purchase of a plot of land, con- sessed by the bank, to be exercised with prudence and sisting of four lots, on the corner of Forty-eighth care. Situated as this moribund institution was, was street and Third avenue, for the sum of $74,500, of it a prudent and reasonable thing to do, to invest nearly which $1,000 was to be paid down, $9,000 on the first half of all the trust funds in this expensive lot, with day of May then next, and $64,000, to be secured by a an obligation to take most of the balance to erect mortgage, payable on or before May 1, 1875, with inter- thereon an extravagant building? The trustees were est from May 1, 1873, at seven per cent; and there was urged on by no real necessity. They had hired rooms an agreement that payment of the principal sum se- where they could have remained; or if these rooms cured by the mortgage might be extended to May 1, were not adequate for their small business, we may 1877, provided a building should, without unavoidable assume that others could have been hired. They put delay, be erected upon the corner lot, worth not less forward the claim upon the trial that the rooms they then occupied were not safe. That may havo been a be adjusted, and there was no occasion to appeal to an good reason for making them more secure, or for get- equity forum. ting other rooms, but not for the extravagance in Treating this therefore as an action at law, it folwhich they indulged. It is inferable, however, that lows also that the objection taken, that the other the principal motive which influenced the trustees to trustees should have been joined as defendants, cannot make the change of location was to improve the finan- prevail. In actions ex delictu the plaintiff inay suo cial condition of the bank by increasing its deposits. one, some or all of the wrong-doers. Liquidators of Their project was to buy this corner lot and erect Western Bank v. Douglas, 22 Sess. Cas. (3d series) 475, thereon an imposing edifice, to inspire confidence, al- Scotch; Barbour on Parties, 203. tract attention and thus draw deposits.

The defendants Hoffman and Gearty filed petitions It was intended as a sort of advertisemeut of the for their discharge in bankruptcy after the commencebank; a very expensivo one; indeed, savings banks ment of this action, and were discharged before judg. are not organized as business enterprises. They have ment, and they alleged such discharge as a defense to no stockholders, and are not to engage in speculation or the action. The trial judge and General Term held money-making in a business sense. They are simply that the discharge furnished no defense, and we are of to tako the deposits, usually small, which are offered, the same opinion. This claim was purely for unliquiaggregate them and keep and invest them safely, pay- dated damages occasioned by a tort. Such a claim is ing such interest to the depositors as is thus made, not provable in bankruptcy, and therefore was not after deducting expenses, and paying the principal upon discharged. U. S. R. S. (2d ed.), ss 5115, 5119, 5067 to demand. It is not legitimate for the trustees of such 5071; Zimmon v. Ritterman, 2 Abb. (N. S.) 261; Kela bank to seek deposits at tho expense of present de- logg v. Schuyler, 2 Den. 73; Crouch v. Gridley, 6 Hill, positors. It is their business to take deposits when 250; In re Wiggers, 2 Biss. 71; In re Clough, 2 Ben. 508; offered. It is not proper for these trustees, or at least In re Lidle, 2 Bank. Reg. 77. the jury may havo found that it was not, to take the I conclude, therefore, that the judgment appealed money then on deposit and invest it in a banking- from should be affirmed. house merely for the purpose of drawing other depos- The appeal by the plaintiff from the order of the its. In making this investment, the interests of the General Term, granting a new trial as to defendant depositors, whose money was taken, can scarcely be Smith, must, for reasons stated on the argument, be said to havo been consulted.

dismissed, with costs. It matters not that the trustees purchased this lot All concur. for no more than a fair value, and that the loss was occasioned by the subsequent general decline in the

ESCAPED CRIMINAL MAY NOT MAINTAIN value of real estate. They had no right to exposo

APPEAL FROM CONVICTION. their bank to the hazards of such a decline. If the purchase was an improper one when made, it matters not that the loss came from the unavoidable fall in the

CALIFORNIA SUPREME COURT, JULY 20, 1880. value of the real estate purchased. The jury may have found that it was grossly careless for the trustees

PEOPLE OF CALIFORNIA V. REDINGER. to lock up tho funds in their charge in such an invest- When one convicted of a crime has escaped from custody ment, where they could not be reached in any emerg- he has, while he remains at large, no right to appear by ency which was likely to arise in the affairs of the counsel and prosecute an appeal from the judgment of crippled bank. We conclude, therefore, that the evi

conviction. dence justified a finding by the jury that this was not PPEAL from the Superior Court of Colusa County. a case of mere error or mistake of judgment on the The opinion states the case. part of the trustees, but that it was a case of improvi

A. L. Hart attorney-general, for the people. dence, of reckless, unreasonable extravagance, in which the trustees failed in that measure of reasonable pru

John C. Dewel, for appellant. dence, care and skill which the law requires.

THORNTON, J. The defendant was indicted for the This case was moved for trial at a Circuit Court, and

murder of one James King; was tried in the District before the jury was impaneled the defendants claimed Court of Colusa county under this indictment, and on that the case was improperly in the Circuit, and that the 16th of December, 1870, convicted of murder in it should be tried at the Special Term, and the court the first degree. Tho defendant moved for a new ordered that the trial proceed; and at the close of the trial, which was denied. The court in due course proevidence the defendants moved that the complaint be nounced sentence of death by hanging. The defenddismissed, ou the ground that the action was not a ant prosecuted au appeal to this court, notice of the proper one to be tried before a jury and should be samo having been served on the 9th of February, 1820, tried before the equity branch of the court. The and the cause was here for argument at the session of motion was denied, and these rulings are now alleged May, 1880, held at the city of Sacramento. for error. The receiver in this case represents the bank When the cause was called for argument, the attorand may maintain any action the bank could have

ney-general moved the court for an order dismissing maintained. The trustees may be treated as agents of the appeal on the ground that since the appeal was the bank (In re German Mining Co., 27 Eug. Law & Eq. taken the defendant had escaped from jail, and was 158; Belknap v. Davis, 19 Me. 455; Bedford R. R. Co. no longer in custody to abide the sentence of the court. v. Bowser, 48 Penn. St. 29; Butts v. Woods, 38 Barb. This fact is certified to the court by the affidavit of the 181; Austin v. Daniels, 4 Den. 299; Ohio & M. R. R. sheriff of the county aforesaid, in whose custody the Co. v. McPherson, 35 Mo. 13), and for any misfeasance prisoner had been since the conviction and sentence or nonfeasance causing damage to the bank they were above mentioned, who deposes under oath that the responsible to it, upon the same principle that any defendant, by stratagem and force, on the 5th day of agent is for like cause responsible to his principal. It April last, escaped from the jail aforesaid, and was has never been doubted that a principal may sue his then at large. The affidavit bears date the 19th day of agent in an action at law for any damages caused by May, 1880. Of the escape there is no denial. culpable misfeasance or nonfeasance in the business of The question is one of interest and importance: is the agency. The only relief claimed in this complaint new in this State, no case decided by any of its courts was a money judgment, and we think it was properly having been produced to us. Several cases were called tried as an action at law. No equitable rights were to to our attention on the argument of this motiou, and

« SebelumnyaLanjutkan »