Brown v. Tarkington, 70 U.S. 377 (1866)
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Scribd Government DocsBrown v. Tarkington, 70 U.S. 377 (1866)
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Scribd Government Docs70 U.S.
377
18 L.Ed. 255
3 Wall. 377
BROWN
v.
TARKINGTON.
December Term, 1865
THIS was a writ of error to the Circuit Court of the United States for the
District of Indiana.
The case was this: The suit was brought by Brown, the plaintiff in error,
to recover against Tarkington and others, defendants, the amount of four
promissory notes, and another small sum, in the aggregate exceeding
twelve thousand dollars. The defendants were stockholders in the Bank of
Tekama, in the Territory of Nebraska, organized under a charter granted
by the legislature, February 13, 1857. The notes were signed by its
president, S. L. Campbell.
By an act of Congress passed July 1, 1836, it was provided, 'that no act of
Territorial legislature of any of the Territories of the United States,
incorporating any bank, or any institution with banking powers and
privileges, hereafter passed, shall have any force or effect whatever, until
approved and confirmed by Congress.' The charter of this bank, as already
observed, was passed in 1857. Three of the notes were given on the 9th
June, 1858, and the fourth on the 28th April of the same year. The
consideration of the three notes of the 9th of June, was for a balance due
the plaintiff from the Bank of Tekama on a settlement of accounts; and of
the other, for moneys advanced to Campbell, the president, to enable him
to redeem the paper of the bank in circulation.
Much evidence was given, in the course of the trial, tending to prove that
the plaintiff was connected with the officers and directors of the bank in
conducting its operations, in aiding and assisting, personally, and by his
credit and means, to extend the circulation of its bills; and also tending to
prove that the plaintiff was familiar with the charter of the bank, and the
articles of association, and knew of the illegality of the association, and
participated, in common with the officers and directors, in very
unscrupulous, if not fraudulent contrivances, to keep up the credit of the
bank and its bills, to the injury and loss of the business public, after they
had knowledge of its utter insolvency and inability to redeem the paper
already in circulation.
Indeed, it was apparent from the evidence that the institution possessed
very little, if any, capital, during the whole term of its existence. The
nominal capital was $300,000, divided into shares of one hundred dollars
each, payable in instalments of ten dollars each. The third, fourth, fifth,
sixth, seventh, eighth, ninth, and tenth instalments were made due and
payable at such times as the board of directors might designate. The bank
began business in September, 1857, and ceased in the May following, with
an outstanding circulation of its bills of some ninety thousand dollars.
In the course of the trial the plaintiff read without objection the deposition
of Campbell; and, of course, being thus read, no exception was taken to it.
The record however disclosed the fact that at a former term there had
been a motion to suppress and exclude this deposition, as not having been
taken in conformity with the 30th section of the Judiciary Act of 1789,
under which the counsel moving to suppress, assumed it to have been
taken; and disclosed also the fact that the motion had been overruled.
At the trial, the court below, after referring to the act of Congress
forbidding the Territorial legislature to pass any law chartering a bank
without its consent, and to the violation of this organic law in the present
charter, and to the facts which had been proved, instructed the jury that the
charter and the organization of the bank under it, as well as the banking
business conducted and carried on through the means of this organization,
were all illegal and void; and that if the plaintiff's participated in these
transactions, aiding and assisting the officers and directors in giving credit
to the bank, and to its bills in circulation, thereby co-operating in the
imposition and fraud upon the business community, with a knowledge of
the illegality of the charter and of the organization of the bank, and that
the consideration of the notes in question grew out of these illegal
transactions, he was not entitled to recover.
Verdict and judgment went accordingly for the defendants.
On error here, Mr. G. M. Lee, for the plaintiffs, contended that various
instructions requested below and which he presented, but which, as having
been aside from the ground on which the case was put before the jury,
need not perhaps, here, by the reporter, be particularizedwere not given
by the court below, as asked. He argued further that the charge as given
was, in itself, wrong: for conceding argumenti grati a, what was otherwise
not to be conceded,to wit, that the bills of the Tekama Bank as
originally issued were not obligatory on the persons by whose authority
they were put forthstill that here the plaintiff, in so far as he lent his
money to the defendants to enable them to pay debts, and the payment of
which was not illegal whatever the incurring of them might have been
was not censurable, but, contrariwise, praiseworthy; that here too was a
promise, not the immediate nor necessary offspring of the old acts, nor
tainted by their infirmity, if they had any; and that thus standing on its
own and on new ground, such promise was good.* He contended that the
court below had disregarded the purpose to which part of the money was
applied, and disregarded the new and independent promise; and by
charging, substantially, that if the plaintiff had furnished funds to enable
the bank to do business he could not recover, had cast into the background
or out of view entirely, one of the most salient and distinguishing features
of the case; herein, he argued, committing error in the charge.
Mr. Eames, contra.
Mr. Justice NELSON delivered the opinion of the court.
We perceive no valid objection to the charge given by the learned judge below.
It referred to the facts with great particularity and accuracy. The principle of
law which it laid down is familiar, and the evidence in the case called for its
application. The illegality of the charter of the bank, and of the organization
under it, as well as the business of banking conducted through its means, were
matters not in controversy upon the evidence. The only material question open
was, whether or not the plaintiff was particeps criminis? If he was, he was
disabled, under the maxim, to recover. The law leaves the party thus situated
where it finds him. If either has sustained loss by the bad faith of his associates,
it is but a just punishment for the illegal adventure.
To the argument of the counsel for the plaintiffthat admitting the banking
transactions to be illegal, yet that the settlement of the balance and giving notes
for the same purged the new promise, as he calls it, from the original taintthe
answer is, that the new promise is founded upon the illegal consideration; a
debt or demand growing out of the illegal transactions: and is as infirm, in the
eye of the law, as the implied promise that existed previous to the giving of the
notes.
There were several prayers for instructions on the part of the plaintiff, which
were refused in the form presented. Most of them were irrelevant and
immaterial, and neither even alluded to the ground upon which the case was
placed before the jury. The court embraced in its charge all that was material or
pertinent in the instructions prayed for.
4
It is also insisted for the plaintiff that the deposition of S. L. Campbell, the
president of the bank, was improperly admitted on account of an irregularity in
taking it under the act of Congress. It appears that a motion had been made, at a
previous term of the court, to set aside this deposition on the ground stated;
which was denied. On the trial, when the deposition was offered, no objection
was made to it. The question, therefore, is not in the bill of exceptions; on the
contrary, if any valid objection existed, it was waived by not taking advantage
of it at the trial.
JUDGMENT AFFIRMED.
[See Orchard v. Hughes, 1 Wallace, 73; Brooks v. Martin, 2 Id. 70.REP.]
Petrie v. Hannay, 3 Term. 418; 6 Id. 410; Bird v. Appleton, 8 Id. 562; Faikney
v. Reynous, 4 Burrow, 2069; Farmer v. Russell, 1 Bosanquet & Puller, 296; Ex
parte Bulmer, 13 Vesey, 313; Hodgson v. Temple, 5 Taunton, 181; Toler v.
Armstrong, 4 Washington, 297; Armstrong v. Toler, 11 Wheaton, 258; Catts v.
Phalen, 2 Howard, 376.
