Beaston v. Farmers' Bank of Delaware/Dissent Story

by Joseph Story

United States Supreme Court

37 U.S. 102

Beaston  v.  Farmers' Bank of Delaware

Mr. Justice STORY, dissenting.

I dissent from so much of the opinion delivered by the Court in this case, as decides that a corporation is a person within the sense of the 5th section of the act of 1797, ch. 74. I have no doubt, whatsoever, that in a legal and technical sense, a corporation is a person; and that under that denomination, it may be included within the provisions of a statute, where the language and provisions and objects of the statute equally apply to corporations and to private persons. My dissent is founded upon this ground, that neither the language nor the provisions of the 5th section of the act of 1797, ch. 74, are applicable to the case of corporations: but that they apply exclusively to private persons; and cannot, without violence to the words and the objects of that act, be strained so as to reach corporations. I think that the persons intended by the act, are such persons only as may be brought within each of the predicaments stated in the act.

The language of the 5th section is, 'That where any revenue officer, or other person hereafter becoming indebted to the United States, by bond or otherwise, shall become insolvent, or where the estate of any deceased person, in the hands of executors or administrators, shall be insufficient to pay all the debts due from the deceased, the debt due to the United States shall be first satisfied: and the priority hereby established, shall be deemed to extend as well to cases in which a debtor, not having sufficient property to pay all his debts, shall make a voluntary assignment thereof, or in which the effects of an absconding, concealed or absent debtor, shall be attached by process of law, as to cases in which an act of legal bankruptcy shall be committed.'

Now, the statute, manifestly, in this provision, contemplates two classes of cases; insolvency inter vivos; and insolvency upon the death of a debtor. It is plain that the last class cannot have been intended to include corporations; for if it were to be supposed that they could be 'deceased debtors,' yet by no reasonable use of language, can it be said that they can have executors or administrators, or estate in the hands of executors or administrators. The other class of cases, is of insolvency inter vivos. Which are these? First, cases in which a debtor not having sufficient property to pay all his debts, shall make a voluntary assignment thereof; that is, of all his property. It certainly is practicable for a corporation to be in this predicament; if by its charter and constitution it is capable of making such a general assignment. But I must say, that independent of some special and positive law; or provision in its charter to such an effect, I do exceedingly doubt, if any corporation, at least without the express assent of all the corporators, can rightfully dispose of all its property by such a general assignment, so as to render itself incapable in future of performing any of its corporate functions. That would be to say, that a majority of a corporation had a right to extinguish the corporation, by its own will, and at its own pleasure. I doubt that right; at least, unless under very special circumstances. Secondly, cases of an absconding, concealed or absent debtor. Now, it is plain, that in no just sense can a corporation be brought within the terms of this predicament. Thirdly, cases of legal bankruptcy. Such cases do not exist in relation to corporations. The general bankrupt laws of England have never been held to extend to corporations; neither have the general insolvent laws of the several states in this Union, where they exist, ever been extended to corporations. Now, my argument is this, and I wish to put it into the most precise and concise form; that the fifth section of the act of 1797, ch. 74, was never intended to apply to any debtors or persons who were not, and might not be within every one of the classes of predicaments above stated. Corporations cannot be within three out of the four predicaments above stated; and therefore I hold, that the legislature never could have intended to embrace them within the provisions of the section.

I dissent from the opinion upon this point, upon another and independent ground; and that is, that the opinion is wholly extrajudicial, and unauthorized by law. That the question was not made or decided in the court below; and that unless it was so made and decided, it cannot be re-examined in this Court. This is a writ of error, not to a circuit court of the United States, but to the highest court of a state; and brought here for our revision, under the 25th section of the judiciary act of 1789, ch. 20. That section expressly declares, that upon such a writ of error 'no other error shall be assigned, or regarded as a ground of reversal in any such case as aforesaid, than such as appears on the face of the record, and immediately respects the beforementioned questions of the validity or construction of the said constitution, treaties, statutes, commissions or authorities in dispute.' The preceding part of the same section, authorizes the writ of error only when the decision of the state court has been against the validity or construction of the constitution, treaties, statutes, commissions or authorities stated in the section. So that it is manifest, and so has been the uniform course of this Court, that no question not made in the court below, on which its judgment ultimately turned, can be made, or is re-examinable here. I have already said, that it is apparent upon this record, that no such point arose, or decision was made in the court of appeals of Maryland; and, therefore, I cannot but consider the decision here pronounced upon it, as coram non judice; and in no just sense, obligatory upon us, or upon our successors.

I know that my brother, Mr. Justice BARBOUR, held the same opinion as I do, on this question. His departure from the Court before the opinion in this case was pronounced, does not entitle me to speak further in his behalf.

Mr. Justice BALDWIN concurred with Mr. Justice STORY in the opinion delivered by him; and with the majority of the Court, in affirming the judgment of the court of appeals.

Mr. Justice M'LEAN concurred with Mr. Justice STORY.

This cause came on to be hear, on the transcript of the record from the court of appeals for the Eastern Shore of Maryland, and was argued by counsel. On consideration whereof, it is now here adjudged, and ordered by this Court, that the judgment of the said court of appeals in this cause be, and the same is hereby affirmed, with costs.