Curran v. Arkansas

by the Supreme Court of the United States

United States Supreme Court

56 U.S. 304

James N. Curran  v.  The State of Arkansas, et al.

Error to the Supreme Court of Arkansas

Syllabus

In 1836, the Legislature of Arkansas incorporated a bank with the usual banking powers of discount, deposit, and circulation, the State being the sole stockholder.

The bank went into operation, and issued bills in the usual form, but in November, 1839, suspended specie payments.

Afterwards, the legislature passed several acts of the following description:

1843, January, continuing the corporate existence of the bank, and subjecting its affairs to the management of a financial receiver and an attorney, who were directed to cancel certain bonds of the State, held by the bank, for money borrowed by the State, and reduce the State's capital in the bank by an equal amount.

1843, February, directing the officers to transfer to the Stare a certain amount of specie, for the purpose of paying the members of the legislature.

1845, January, requiring the officers to receive the bonds of the State which had been issued as part of the capital of the bank in payment for debts due to the bank.

1845 January, another act, taking away certain specie and par funds for the purpose of paying members of the legislature, and placing other funds to the credit of the State, subject to be drawn out by appropriation.

1846, vesting in the State all titles to real estate or other property taken by the bank in payment for debts due to it.

1849, requiring the officers to receive, in payment of debts due to the bank, not only the bonds of the State, which had been issued to constitute the capital of the bank, but those also which had been issued to constitute the capital of other banking carporations which were then insolvent.

Upon general principles of law a creditor of an insolvent corporation can pursue its assets into the hands of all other persons except to bona fide creditors or purchasers, and there is nothing in the character of the parties in the present case or in the laws transferring the property, to make it an exception to ths general rule. For the Supreme court of Arkansas has decided thqt the State car be sued in this case.

The bills of the bank being payable on demand, there was a contract with the holder to pay them; and these laws, which withdrew the assets of the bank into a different channel, impaired the obligation of this contract.

Nor does the repeal or modification of the charter of the bank by the legislature prevent this conclusion from being drawn. But in this case the charter of the bank has never been repealed.

Besides the contract between the bill-holder and the haul:, there was a contract between the bill-holder and the State, which had placed funds in the bank for the purpose of paving its debts, and which had no right to wihdraw those funds after the right of a creditor to them had accrued.

The State had no right to pass these laws, under the circumstances, either as a creditor of the bank or as a trustee taking possession of the real estate for the benefit of all the creditors.

The several laws examined.

The Supreme Court of the State held these laws to be valid, and consequently the jurisdiction of this court attaches under the 25th section of the judiciary act.

THIS case was brought up from the Supreme Court of Arkansas, by a writ of error issued under tha 25th section of the judiciary act.

[p305] It was argued by Mr. Lawrence and Mr. Pike, for the plaintiff in error, and by Mr. Sebastian, filing a brief prepared by Mr. Hempstead, for the defendants in error.

The arguments of counsel upon both sides were in such an unbroken train of reasoning, that the reporter cannot compress them into a mere report; and as, together, they made upwards of sixty pages of print, he cannot publish them entire. The reader who desires to examine into the case thoroughly, can consult the opinion of the Supreme Court of Arkansas, delivered in November, 1851. In that opinion the court maintains its doctrines with great earnestness.

Mr. Justicn CURTIS delivered the opinion of the court.

[Mr. Justice CATRON, Mr. Justice DANIEL, and Mr. Justice NELSON, dissented.]