State vs. How. McReynolds vs. Goddard. are not liable for the payment of the bills, or other indebtedness of the bank, either as stockholders and directors of the association, or as part ners. THESE cases were decided by the chancellor on March 10, 1846. They involved one and the same question, viz.: the liability of the president and directors of banks organized under the act entitled "An act to organize and regulate banking associations," Sess. L. 1837, p. 76, and the acts amendatory thereto, for the payment of the bills and other indebtedness of the association. The first was a bill filed by the state against the president and directors of the Bank of Saline, to charge them individually with the payment of the bills of the bank, to which defendants demurred. The other case differed from the first only in that the bill was filed by an individual, and against the president and directors of another association. Seaman, for complainant. Romeyn, for defendants. Chancellor. The supreme court, in the case of Green v. Graves, 1 Doug. 351, having decided the general banking law, under which the Bank of Saline was organized, unconstitutional, as it regards the corporate existence of associations organized under it, it follows the defendants cannot, under the law, be charged in their individual capacity with the debts of the bank, by reason of their being members of the corporation; for where there is no corporation there are no corporators. But it is insisted they are liable as partners. This would undoubtedly be true, if the association had been formed for the purpose of prosecuting a business not prohibited by law. If the act in question had had for its object the incorporation of associations for manufacturing purposes, instead of banking, the only effect of the unconstitutionality of the law would have been to make them liable for the debts of the association as general partners, instead of corporators under the act. *One of the objects to be gained, and, perhaps, in [513*] some cases almost the only one, by an act of incorporation to do what the corporators might do without it, exempt State vs. How. McReynolds vs. Goddard. ing from individual liability for the debts of the association; and when the law under which such exemption is claimed is unconstitutional, the exemption itself ceases to exist, and the creditors of the association are remitted to their common law remedy for the collection of their debts. In such a case, the law under which the association had been formed would have nothing to do in fixing the liability of the associates. Their liability would be determined by the law of partnership, and not by the act under which they had claimed a corporate existence. Is this principle applicable to associations formed under the general banking law? On the part of the defense, it is insisted that, by the general banking law, the legislature intended to confer the right of banking on corporations, organized in pursuance of the law, and not upon individuals, as such, associated together for that purpose; and that the law in this particular having been declared unconstitutional, all issues of bank paper by the association were illegal, under the act to restrain unincorporated banking associations (Laws of 1833, p. 530); which act was in force when the Bank of Saline was organized, and the principles of which were afterwards incorporated in the Revised Statutes, p. 221. On the other hand, it is said the general banking law is unconstitutional only as to the corporation; that in all other respects it is operative; and that by it the defendants were authorized to establish a bank, as an association, without corporate powers; that a statute may be good in part and bad in part; and that the act in question is good so far as it confers banking powers on the defendants as an association, but unconstitutional and bad as to the corporation. The general banking law does not repeal the restraining act. It does not authorize, or profess to authorize, individual banking. Neither does it authorize defendant, or any other persons, by name, to do a banking business; and then, to facilitate their operations, undertake to confer corporate powers upon them. If it did, it might be likened unto a grant of two things, one of which the grantor had not the power to State vs. How. McReynolds vs. Goddard. dispose of; or to an insolvent law, discharging a debtor from the payment of his debts, which has been held to be unconstitutional as to preëxisting debts, and constitutional as to debts contracted subsequently to *the passage of the [514*] law. In such cases the court give effect to the contract or law, so far as it can be done legally, but in the mode pointed out by the contract or law itself; that is, in the same manner it would have given effect to the whole contract or law, had no legal objection existed to enforcing it in toto. Neither can the general banking law be construed into a repeal of the restraining act, or into a license for banking, in favor of individuals who have complied with its provisions. There is nothing in the act inconsistent with the restraining law; and I think it will appear obvious to any one who will take pains to read the act, that it was not intended to authorize individual, joint stock, or partnership banking. The object the legislature had in view was to create corporations for banking purposes. Had they not failed in this, no one would ever have thought of construing the act into a license for unincorporated banking. But it is said, "The principal end and object of the legislature was not to create corporations; corporate powers were but a means to effect an ulterior end or object, which was supposed to be of greater practical effect and importance to the people, to wit: a supply of a paper circulating medium, or a paper currency, as a substitute for coin." Conceding such to have been the case, does the conclusion sought to be deduced from it follow? By no means, unless we admit a power in the judiciary to do what the legislature might have done, but did not do. It will hardly be contended that, where the legislature aim to effect a particular object, and prescribe the means by which it is to be brought about, and the means prescribed fall short of the end, that the judiciary may put itself in the place of the legislature, and devise other means better adapted to the end. Such a power would de volve upon the court, legislative as well as judicial functions. State vs. How. McReynolds vs. Goddard. The means, when prescribed, as well as the object to be achieved, must be regarded. From this course of reasoning it follows, the Bank of Saline was an association of individuals for banking, in violation of the restraining act. And its effect upon the legal liability of the defendants, for the bills put in circulation by the association is next to be considered. The restraining act imposes a penalty on individuals concerned in unlawful banking, and declares all notes and securities for the payment of money, or the delivery of property, given to any such association, institution or company, [515*] null and void, without making any mention of *the bills put in circulation, or contracts made by the com pany. But this is immaterial, for the principle is well set tled, that "a contract founded upon an unlawful act, whether it be malum prohibitum or malum in se, cannot be enforced by action." Pennington v. Townsend, 7 Wend. 276; Bank of U. S. v. Osborn, 2 Pet. 527. Demurrer allowed, and bill dismissed without costs. 636 INDEX. ABATEMENT. 1. Plaintiff commenced two suits against defendant on the same day, for the 2. Where a plea in abatement averred another suit was commenced at the ACKNOWLEDGMENT OF DEEDS. 1. A certificate of acknowledgment to a deed described it as the foregoing 308 2. A certificate of the acknowledgment of the execution of a deed by a feme ACTION. 1. D. took a mare belonging to B., which he afterwards sold to T., against 2. Where the moderator of a school district refused to sign a warrant to a 268 |