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Opinion of the court on the first and second errors assigned.
for the receiver, before bringing suit in an ordinary case of a debt or claim due the bank, to have the order of the comptroller for that purpose. In the case already referred to, the receiver had instituted a suit in equity against some of the stockholders of the bank for the purpose of charging them with the personal liability prescribed by the twelfth section of the act; and we held that he had no right to do this without the comptroller's direction. But it will be perceived that that was a very special case, out of the ordinary course, and one which involved an important consideration of the policy to be pursued. Stockholders are not ordinary debtors of the bank, but are rather in the light of creditors, their stock being regarded as a liability. They are entitled to all the surplus that remains, if any should remain, after the payment of the debts. They are only conditionally liable for those debts after all the ordinary resources of the bank have been exhausted, and they ought not to be prosecuted without due regard to the circumstances of the case. The determination on the part of those charged with winding up the affairs of the bank, to resort to this ultimate remedy, requires the exercise of due consideration; and a receiver ought not to take it upon himself to decide so important a question without reference to the comptroller under whose direction he acts. Although it is his duty to collect the assets of the institution he does not distribute them, and cannot ordinarily know, without reference to the comptroller, whether a prosecution of the stockholders will be necessary or not. Hence our decision in the case of Kennedy v. Gibson cannot fairly be quoted for the government of a case like the present, which is a suit to recover an ordinary debt.
The language of the statute authorizing the appointment of a receiver to act under the direction of the comptroller, means no more than that the receiver shall be subject to the direction of the comptroller. It does not mean that he shall do no act without special instructions. His very appointment makes it his duty to collect the assets and debts of the association. With regard to ordinary assets and debts no
Statement of the third error assigned.
special direction is needed; no unusual exercise of judg.. ment is required. They are to be collected of course; that is what the receiver is appointed to do. We think there was no error in the decision of the court below on these points, aud that the action was properly brought by the receiver.
We next come to the special ground of litigation in this case.
The cause was tried before a jury, and evidence was adduced pro and con upon the principal subject of controversy, namely, whether the note given by Sherman to the defendants, on the 27th of February, was given on his individual accouut for a loan made to him personally, or whether it was given on the account of the Merchants’ Bank (of which he was cashier) for a loan made to it. We are called upou to decide upon the legality of certain rulings as to evidence which took place during the trial, and upon the correctness of the charge to the jury.
After the plaintiff had proved the presentation of the check on the 1st of May, and the payment of it to the messenger of the Merchants’ Bank, in certain moneys and securities, including the note in question; and had proved by Sherman, the cashier of the Merchants’ Bank, that the defendants refused to take the note back and pay the cash instead; he proceeded to prove by Sherman the circumstances under which the note had been given to the defendants, the substance of which was, that on the 27th of February be applied to Hutchinson, cashier of the defendants, for a loan to himself of $20,000, to enable him to purchase some stock in the Merchants’ Bank, and that this note was given for that loan, with the certificate of the stock attached as collateral; and that he received therefor two drafts for $10,000 each on Baltimore and Philadelphia banks, payable to C. A. Sherman, cashier; that he indorsed them as cashier, and that the proceeds, when paid, went to the credit of the Merchants’ Bank. The drafts being produced in evidence, the plaintiff's counsel then asked the witness what took place, when the drafts were about to be drawn, between him and Hutchinson in
Opinion of the court on the third error assigned.
regard to the form of the drafts. This evidence was objected to, was allowed, and an exception taken, which is the subject of the third assignment of error.
It is argued by the counsel for plaintiffs in error that this evidence was calculated to explain or vary the legal effect of the drafts themselves. We do not think so. Those drafts are not sued on in this action. They are introduced merely as part of the res gesta of the loan, and the conversation of the parties on the subject of the drafts was also a part of that res gesta. They equally constituted parts of the transaction. The witness might have preferred to receive the drafts in that form; he might have preferred to receive drafts payable to any third person. Evidence as to the reason why they were made in one form rather than another does not in the least vary or contradict the drafts themselves. As the form of the drafts might confuse the jury, the plaintiffs had a clear right to explain how they came to be made as they were. The fact in question was the loan. The circumstances of the negotiation constituted the res gesta of the loan. The drafts were one of those circumstances; the conversation of the parties was another. Evidence of the reason why a loan was made in particular funds or securities, instead of cash, is perfectly competent where it will tend to elucidate the nature of the transaction, when that is the question at issue. The question here was, whether the loan was made to Sherman or to the bank. The note given for the repayment of the loan was given by Sherman individually. The drafts in which he received the loan were made payable to him as cashier. Neither the one nor the other of these documents can prevent the parties from showing, as a matter of fact, to whom the loan was really made. The defendants were endeavoring throughout the cause, contrary to the form of the note, to show that it was really the obligation of the bank, and that the loan was made to the bank. This they had a clear right to do, as the plaintiff had an equally clear right to show the contrary. The principle which governs such cases was explained and enforced by Statement of the fifth error assigned.
this court in the case of Baldwin v. The Bank of Newbury.* There was no error in the admission of this evidence.
The next exception, which is the subject of the fourth assignment of error, related to evidence of a similar character. Sherman, on his cross-examination, stated that he had learned about the stock being for sale from Mr. Huyck, the president of the Merchants’ Bank, without knowing · whose stock it was until he had made arrangements for his loan, and went to Huyck for the certificate of stock, when he found that it belonged to one English, a director of the bank. IIe was then asked, on re-examination by the plaintiff, what Huyck said at the time of delivering him the certificate, as to the sale, delivery, and price of the stock. To this the defendants' counsel objected, but the question was allowed.
We think that in this also there was no error. The object of the cross-examination evidently was to show that the bauk, through its president, was concerned in the purchase of the stock, and that, therefore, the loan must have been made on its account. As the witness's purchase of the stock was made through Huyck, the conversation between them when the purchase was made was part of the res gesta of the purchase-part of the transaction itself. For that reason it was clearly competent. Like the loan, the purchase of the stock was a fact accomplished by conversations and acts. In proving this fact these conversations and acts were competent evidence. Conversations, in such cases, are not adduced so much to prove ulterior facts stated therein as to prove the conversations themselves as facts constituting part of the transaction. Hence they are not hearsay, but original evidence.
It further appeared from Sherman's testimony that when he had received the two drafts from Hutchinsou he delivered them to Huyck, the president of the Merchants’ Bank, who delivered them to English upon his entering the bauk a few minutes afterwards, and that English handed them to the
* 1 Wallace, 240, 241,
Statement of the sixth error assigned.
receiving teller. The plaintiffs' counsel then asked the witness for what purpose the drafts were delivered to English. The allowance of this question (which was objected to) is the fifth error assigned. Its propriety is evinced by the answer to it, which was that the drafts were delivered to Eng. lish in payment of the stock. The position of the parties is material. It had appeared by Sherman's testimony that he was the purchaser of the stock; that the drafts belonged to him, having been borrowed by him to pay for the stock; that he had purchased it through Huyck, but that the stock belonged to English, who was the vendor; that he, the witness, handed the drafts to Huyck on his return from the defendants' bauk, and that Huyck, a few minutes after, handed them to English. Surely one of the principals in this transaction, under these circumstances, was competent to testify as to the purpose for which the drafts were delivered to English. If the declarations of a man when doing an act may be proved in his own behalf to show the purpose aud intent with which it was done, as numerous authorities show,* it must be competent for a party to the transaction, cognizant of all the circumstances, and a witness of the act, to state its purpose, being subject, of course, to cross-examination. The manner and form in which an act is done, being one of several acts concurring to one purpose or transaction, indicate even to a mere observer, by shades of circumstance often difficult to analyze, what was the character of the act, or the intent and purpose with which it was done.
It further appearing, on Sherman's cross-examination, that the drafts were not indorsed by him until after Evglish had delivered them to the receiving teller, the defendants objected to Sherman's being asked the reason why they were not indorsed when given to English. The allowance of this question was made the ground of another exception, and is the subject of the sixth assignment. We can see no objection to the question. If the fact that the drafts were not
* Starkie on Evidence, 61, 87; 1 Greenleaf on Evidence, 2 108.