Bond vs. The Central Bank of Georgia.

security or indorser, having run more than twelve months, and exceeding the sum of $2,500.

[10.] Under the amended charter of 1829, persons indebted to the State in a sum exceeding $2,500 may renew their notes for the whole amount of the debt. And, under the act of 1838, the Directors of the Central Bank are authorized to discount or purchase bills of exchange or other paper to pay the interest on the public debt, without reference to the limitation contained in the 25th section of the original charter. A debt contracted under either of these acts will be presumed to have been done in good faith, in the absence of any fact or circumstance implicating it.

Action of Assumpsit. From Lee Superior Court. Tried before Judge Warren, November Term, 1846.

For the facts of the case, and the grounds of error, see the deeision of the Supreme Court.

HINES and HOLT, for the plaintiff in error.

Mr. Hines for the plaintiff in error submitted the following points, and relied on the authorities cited.

The writ of the plaintiff below was insufficient. Cited Judges Cole and Tracey's decisions; also 1 Chit. Pl. 302; 10 Wend. R. 487, et passim; also Acts of 1838, Pamph. p. 46.

The receipt of William F. Bond, the payee, and the testimony of James Bond going to prove the contract between the original parties to the note sued on, at the time it was given, were admissible in evidence, and the Court below erred in ruling them out. 1 Greenleaf Ev. 125.

The testimony of Henry Morgan and James Bond, proving the publication of Joseph Bond's notice in the South Western Georgian, cautioning all persons against receiving or trading for the note sued on was admissible, and the Court below committed error in ruling it out; and also in its decision upon the question of notice to the defendant in error, a paper containing said caution having been sent by mail to Dr. Fort, then President of the Central Bank, before the transfer of the note by Beall to the Bank. At all events this was proper testimony for the jury. 3 Burr. R.

1522.

The charge of the Court below to the jury was erroneous. 12 Wheat. R. 180.

To protect the holder against the equities subsisting between the maker and payee of a promissory note transferred before maturity, he must have received the note bona fide in the due course o

Bond vs. The Central Bank of Georgia.

and for a valuable consideration, otherwise the equities, if any between the original parties, will subsist and may be set up against the holder. 5 John. Ch. R. 54; 20 John. R. 637; Bayl. on Bills, 536; Story on Prom. Notes, ; 4 Binn. R. 367; 10 Wend. R. 85.

A Corporation is the creation of the law, having such powers as are specifically granted by the act creating it, or as are necessary to carry into effect the powers granted, and not having any other. 2 Kent Comm. 298; Bank U. S. vs. Deveaux and others, 6 Cranch R. 61; Trustees of Dartmouth vs. Woodward, 4 Wheat. R. 518,

All incidental powers and capacities of corporations may be restrained and limited by the act of incorporation, and when not so limited they can only be exercised to effect the purpose for which they were conferred by the government. Angell & Ames on Corp. 64 to 69; ib. 192, 195; 13 Peters R. 587.

A Corporation authorized to invest its money on bond and mortgage, cannot recover money lent, except upon bond or mortgage; any other security as well as the contract itself being void. Angell & Ames on Corp. 96; 15 John. R. 358; 7 Wend. R. 31.

Mr. H. then cited and commented on the powers and limitations of the Central Bank charter, as well as the legislative construction of those powers and limitations. Prince Dig. 75; Acts of 1838 Pamph. p. 46, &c.

DUDLEY & MCCAY, for the defendant in error.

Mr. Dudley in the opening argument for defendant in error insisted.

The first objection taken to the recovery in the Court below, was that the charter of the Bank prohibited a loan of more than $2,500 to a single individual-that the sum sued for here greatly exceeded that amount; and that there was no averment in the declaration showing the special authority of the Bank to hold and sue so large a debt against any one individual.

The hard shell doctrines of the dark ages were cited to support this objection and were overruled.

For the plaintiff below it was urged-that the power to loan money to the citizens of the respective counties in this State, was but a very small part of the corporate powers of the Central Bank.

That said Bank had power to discount bills of exchange and notes on two or more good securities or indorsers. Sec. 11 P. D. p. 73. The right to sue; sec. 15, p. 74.

Bond vs. The Central Bank of Georgia.

To exercise all power and authority necessary for the well gov erning and ordering the affairs of the corporation and promoting the interest and credit thereof. Sec. 16, p. 74.

To loan money as equally as practicable to the citizens of the respective counties, and when this power is erercised the sum not to exceed $2,500 to the same person. Sec. 25, p. 75.

To allow debtors to the State to run notes in the Bank for any amount whatever. Sec. 1, am. ch. p. 75.

To act as the fiscal agent of the State in all its monetary operations committed to its charge as fully and completely as the State itself could do. Sec. 12, p. 77.

The Legislature itself decided that it is not illegal for one individual to draw a larger sum than $2,500 on a bill of exchange. P. D. 138.

That the objection rested upon a false assumption, viz: that this was a loan to Bond contrary to the 25th sec. of ch.

As the chartered agent for collecting State dues the Bank was not restricted to any specified sum in suits brought for that purpose.

The simple right to sue carries along with it those incidents which would entitle the Bank to recover here; e. g. to compromise debts.

To accept something else in satisfaction. Bank of Augusta vs. Earle, 13. Pet. 521; A. & A. 208.

Independently of these broad provisions of the charter, the Bank would have the inherent right to purchase this note and deal with it as her own. A. &. A. 64, 65; 2 Kent 278 o. p.

To illustrate the more liberal and enlightened doctrines of modern times, the Bank relied on A. & A. 188; sec. 10 entire and pp. 192, 193.

A corporation in receiving a contract for debt shall be presumed to have acted within its powers. 2 Phil. Ev. 298, 299; 2 Cow. 644; 12 Wheat. 69 and cases cited.

Maxim.-" Omnia presumuntur rite et solenniter esse acta donec probetur in contrarium."

Argumenti gratia we might concede that the officers of the Bank violated the 25th section of charter, and it would avail Bond nothing

1st. Because it is merely directory.

2d. Because it does not declare the contract void. 2 Ala. R. N. S. 462 to 465; 6 Serg. & Rawle, 166; 12 Ib. 306; 12 Wheat.

Bond vs. The Central Bank of Georgia.

64; 6 Cond. R. S. C. U. S. 454; 2 Conn. R. 252; 3 Rand. 141; 9 Mass. 423; 16 Ib. 102.

Second. For Bond it was contended in the Court below that inasmuch as the Bank had taken this note in payment of a precedent debt it took it subject to all the equities existing between the original parties.

To support this proposition Rosa vs. Brotherson, 10 Wend. 85, and other New York cases were relied on. Bond proved by A. M. Nisbet and J. S. Thomas, that the note in suit was taken in payment of precedent debts due the Bank.

They proved also, that the note was taken by the Bank before maturity, that it was taken in the usual course of trade, that the note was taken by the Bank officers without any knowledge of any infirmity whatever as between the maker and payce.

That the precedent debts were bills of exchange indorsed by two persons having large property in possession and that said bills were surrendered and given up at the time the exchange of debts took place.

Counsel for the Bank relied on the following principles of Commercial Law which the Court decided to be applicable and to control the case. Story on Prom. Notes, secs. 186, 190, 191, 192, 194, 195, 196, 197, and cases cited; 16 Pet. R. 1, et. seq.; Story on Bills, sec. 188, 189, 191, 192, 193, 194.

In all cases of notes indorsed where one is fairly received in renewal of another, it discharges the first, and the second is taken in the usual course of trade and for a good consideration passing at the time. Nichols vs. Bate, 10 Yerg. 410; cited Chit. on B. 173 n.

Third. James Bond, brother of defendant, was called by him to prove that he heard W. F. Bond the payee, say, that this note and others were to be paid off by defendant's taking up W. F. Bond's notes on which defendant was indorser, without being able to say whether this note was in W. F. Bond's possession at the time or

not.

This testimony was objected to and ruled out, and we say properly, on the ground that W. F. Bond was himself a competent witness, and his sayings not admissible, and on other grounds suggested by the following authorities. Chitty on Bills, 663. o. p. and cases there cited; Hedger vs. Horton, 3 C. & P. 179; 14 E. C. L. 261; Barough vs. White, 4 B. & C. 325; 10 E. C. L. 345; Spargo vs. Brown, 9 B. & C. 935; 17 E. C. L. 525; Beauchamp vs. Perry, 1 B. & A. 89; 20 E. C. L. 351.

Bond vs. The Central Bank of Georgia.

Mr. McCAY, in the concluding argument for defendant in error, contended

As to the question of the legality of the transaction, the presumption is with the Bank. 2 Cowen R. 664.

The construction of the charter, contended for on the other side, is onerous and unreasonable.

Bond cannot dispute our right, he did not contract with us. Beall's insolvency was no notice, as the note was not lost or stolen.

The notice to Doctor Fort was none to us. The precedent debt doctrine, is neither law nor reason. 1 Starkie, 1, 20; 3 Burr. R. 1463; and this case is out of the rule. 21 Wend. R. 499; 24 ib. 115.

The date of a paper is prima facie the time of its execution. Cowen's Notes to Phil. Ev. 1453.

Parol evidence is inadmissible to vary the note. Cowen's Notes to Phil. Ev. 1460; 14 Mass. R. 154; 4 ib. 414; 1 Chitty, 661. The super-se-assumpsit is good. 4 Mass. R. 451.

By the Court-LUMPKIN, J. delivering the opinion.

In the month of February, 1844, Samuel Beall, being indebted to the Central Bank of Georgia on sundry notes, transferred by delivery to that institution in discharge of his liabilities a note for eight thousand six hundred and eighty dollars, given by Joseph Bond to William F. Bond, and payable to the said William F. Bond or bearer, on the first day of March, 1844, and bearing date 23d of February, 1842.

To the May Term, 1844, of the Superior Court of Lee county, an action of assumpsit was brought by the Bank, on said note, against Joseph Bond, the maker. The declaration is in the following words. "The petition of the Central Bank of Georgia showeth, that Joseph Bond, of said county, hath damaged plaintiff sixteen thousand dollars. For that, on the twenty-third day of February, eighteen hundred and forty-two, defendant made his promissory note of that date, and delivered the same to one William F. Bond, which is now to the Court shown, by which, by the first day of March, eighteen hundred and forty-four, defendant promised to pay the said William F. Bond, or bearer, eight thousand six hundred and eighty dollars, for value received. And, after the making and delivery of the said note, and before pay