Savier e. Chipman. no jurisdiction; and that the circuit court decided the return did not show that the justice held his court in a bar-room or place where spirituous liquors were sold, and that the question arising upon the return was not one of jurisdiction, but one that should have been taken advantage of, if at all, by plea in abatement, if the facts were disputed, or upon motion to dismiss the action, if the facts were undisputed. The errors assigned are, that the circuit court erred in denying the motion to reverse for the reasons specified in the bill of exceptions, and also that the justice had no jurisdiction of the case. The only question involved in the case seems to be, whether the justice's court, before which the suit was tried, was holden in a bar-room where spirituous or intoxicating liquors were sold. Ses. L. 1842, p. 135. The justice's return shows, that on the day of the trial of the cause it was called in the bar-room of a tavern, and adjourned from that room to one adjoining in the some house, but that the justice had no knowl edge that spirituous or intoxicating liquors were sold there, nor was any proof of such fact offered upon the trial. Whatever information the justice acquired upon inquiry afterwards, not having been judicially before him in the case, cannot be regarded here, and should not have constituted any part of his return. Such information may have been true, or it may have been false. It comes upon the record without any sanction making it evidence. Excluding, therefore, all that relates to information derived from the keeper of the house or others, after the trial, the return only shows that the cause was called and adjourned in a barroom, but not that any kind of spirituous or intoxicating liquors were sold there. If, under the statute then in force relating to taverns, every license to a tavern keeper authorized the sale of spirituous liquors, it would then seem to be a fair legal presumption that such liquors were sold in every bar-noom of a tavern; but by the revised statutes of 1838, p. 206, sec. 23, provision was made for granting licenses to tavern keepers which should not authorize the sale of brandy, rum, or other spirituous liquors or wines. It cannot, therefore, be presumed, from the mere fact that the room in question was the bar-room of a tavern, that it was a barroom or place where spirituous or intoxicating liquors were sold. This cause having been tried before the justice within the general Brooks et al. v. Hill. limits of his territorial jurisdiction, and he having acquired jurisdiction of the cause and of the parties by a regular course of proceeding, any special circumstances which would take away that jurisdiction, ought to appear in the record; and no such circumstances appearing, the judgment of the circuit court mnst be affirmed, with costs to the defendant in error. Judgment affirmed, BROOKS ET AL. V. HILL. An act was passed by the legislature for the organization of banks, generally, declaring them to be corporations, and making the directors individually liable for the debts of the corporation in case of insolvency. So much of the act as purported to confer corporate rights on the banks organized under it, was afterwards decided to be unconstitutional. By a prior act, banking was made unlawful unless authorized by law, and penalties were imposed for its violation. In an action brought against the directors of an insolvent bank organized under the first named law, it was held that the act against banking was not repealed by the first named act, except in favor of iucorporated banks organized under it; and, as by the constitution corporations could not be created under it, the banks so organized were illegal, and therefore the action could not be sustained. ERROR to Wayne Circuit Court. An action of debt was brought by Warren Hill in the circuit court, against Edward Brooks and other directors of the Detroit City Bank. The declaration stated the organization of the bank in November, 1837, under and by virtue of an act entitled "an act to organize and regulate banking associations," approved March 5th, 1837; that Brooks and the other defendants were elected directors, and always were directors of the bank, which claimed to have complied with the provisions of the act and to be a body politic, and on its organization commenced doing business as a bank under the act, and continued the same until the 10th February, 1839, when it failed and became insolvent, and was still insolvent; and that when it Brooks et al. v. Hill. failed it was indebted to Hill in the sum of $2,000, for money deposited with it while it was doing business, &c. Hill obtained judgment by default, to reverse which defendants brought the case to this court by writ of error. Romeyn, for plaintiffs in error. Seaman, for defendant in error. By the court, WING, J. The Detroit City Bank was organized under the act of March 5th, 1837, and became subject to the provisions of the amendatory act of the 30th December, 1837. I shall not attempt to give a synopsis of either of these laws, as this has been done, and a full history of these laws has been given by the court in the case of Green, Receiver v. Graves, 1 Doug. Mich. Rep. p. 351. It may be well to notice a few of the sections of these laws, having an immediate bearing on the question under consideration. The 9th section of the act of the 5th of March, and the 4th section of the act of the 30th December, provide, that "all such persons as shall become stockholders of any such association shall, on compliance with the provisions of this act, constitute a body corporate and politic, in fact and in name, and by such name as they shall designate and assume to themselves, which name shall not be changed without the consent of the Legislature," &c. This section further declares, that " by this name they shall have continual succession; and shall, in their corporate capacity, be capable of suing and being sued, &c.; may have a common seal and be capable of purchasing, holding and conveying any estate, real or personal, for the use of the said association." The 21st section provides, that if such banking association shall become insolvent, the directors in the first place shall be liable in their individual capacity to the full amount which such insolvent associations may be indebted; and each stockholder shall thereafter be liable in like manner in proportion to his or her amount of stock, for the payment of the full amount of the debts of such insolvent association. This suit is brought upon the statutory liability of the defendants in the court below, as directors of the Detroit City Bank, arising under the 21st section. The cause of action is averred to have grown out of dealings with the Detroit City Bank as a bank, and in the exercise of its Brooks et al. v. Hill. functions as such. By the terms of the 21st section, the liability of the directors is made to depend upon an indebtedness of the bank, and upon the contingency that the bank has become insolvent; and after their responsibility is exhausted, recourse may be had to the stockholders. The question is therefore presented, whether there can be a recovery on a contract made with an association organized under the general banking laws. The plaintiffs in error insist that there cannot be a recovery 1. Because such contract was made by the bank as a corporation, when there was no corporation. 2. Because such contract was made by it as a bank, contrary to the inhibitions of the restraining act of this state. In the case of Green v. Graves, it was decided by this court, that "so much of the act to organize and regulate banking associations as purports to confer corporate rights upon the associations organized under its povisions, is in violation of the 2d section of the 12th article of the constitution of this state, which declares, that 'the legislature shall pass no act of incorporation unless with the assent of at least two-thirds of each house,' and is therefore void." The defendant in error suggests that this court should review their decision in the case cited, because it was counter to previous decisions, and the decisions of the judges at circuit. The suggestion is very well, and this court would not hesitate to do so in this or any other case, if convinced of their error. But that case was decided upon mature deliberation, and subsequent examinations of these statutes, and a careful examination of the New York decisions, have convinced us that that case was rightly decided, and that the general banking laws were and are void, so far as they purport to confer corporate powers upon banking associations organized under them. It is manifest from the course of the decisions of the New York courts, and the opinions of the profession in that state, that if the question was now presented to their courts for the first time, disconnected with considerations of public policy, their general banking law would be held to contravene the provisions of their constitution. The history of the decisions of the New York courts upon their general banking law, is, to say the least, quite singular. The supreme court first held, that banking associations organized under their law were not corporations. Brooks et al. v. Hill. The court of errors held, that they were not corporations within the meaning of the constitution; they attempted to establish a distinction between certain money corporations and municipal corporations; but the doctrine having been afterwards established that there was no such distinction, the chief support of their former decision was withdrawn. Shortly afterwards, another case upon the same law was taken to the same court, and they were compelled to yield their former opinion, and admit that these associations were within the prohibition of the constitution; and, though they sustained the law, it was not upon legal principles. See 1 Denio 1. If, then, the courts of New York have finally adopted such views in reference to their constitution, which is not as strict as ours, and in reference to a law which does not upon its face profess to create corporations, most certainly we cannot but affirm the doctrine of the case cited when applied to a law in which these associations are by an express enactment declared to be corporations. No other case was ever brought before this court where the same question was raised. The Detroit City Bank was organized as a corporation under our general banking laws. There can be no pretence that it was organized as a partnership, or a joint stock company. The idea that any of these banking associations were partnerships, was never urged from any quarter in this state until after the case of Green v. Graves was decided by this court, or at least until about that period. None of these banking associations ever contracted, or professed to contract, with imdividuals or the public as partnerships. The stockholders organized it as a bank, and in the powers which it exercised, and in the manner of their exercise, it exhibited the functions and modes of action of a corporation; and, in the language of the counsel for the plaintiffs in error, it was baptized as such. But as the grant of corporate franchises was not authorized by the constitution, this court declared it to be void. What, then, remained of these associations? They could not exist as corporations, but they maintained in their proceedings all the forms prescribed by the law. What were they? They were joint stock companies usurping the franchises of corporations. They had an actual existence; but was it a legal existence? It is conceded by the counsel for the plaintiffs, that, as individuals or VOL. I. 16 |