Henry Baldwin

“ It is an universal principle, that he who claims under a special authority must show its existence and lawful exercise: to throw the burthen of proof on the party whose rights will be destroyed by its abuse, would be the utter reversal of every rule which governs the execution of powers. ”

“ It cannot be pretended, that the appropriation of the whole fund to the United States exonerates the bank from their obligation to pay the sixty thousand dollars due to individuals: their demands are not extinguished thereby, but remain in full force, after all the corporate effects are disposed of. And this becomes the situation of the parties: the private creditors have just and legal demands against the bank, arising from a deposit of their money; the United States have a demand of the same kind: the bank are bound to pay both, if their property and effects are sufficient ”

“ The directors are liable individually; but the bank cannot be bound by their doing that, which they had no lawful power to do, or which was a violation of some duty enjoined by the charter, or resulting from the nature and objects of the incorporation; for the directors are not then their agents. A corporation is strictly limited to the exercise of those powers which are specifically conferred on it. 4 Peters, 168. 2 Dows. P. C. 521, &c. The directors own none of the property or funds of the bank. They are trustees for the stockholders and creditors. ”

“ When the debts of a bank, due to the holders of their paper, or their customers, are paid; stockholders being creditors, are entitled to payments of their demands. The thirteenth section directs the directors to manage the funds, 'for the use and benefit of the stockholders;' and the twelfth pledges them for all demands upon the bank. After the out of doors debts are paid, the claims of stockholders are as sacred as those of depositors were before payment; and any acts of the directors, not strictly authorized by these sections of the charter, are inoperative and void ”

“ The thirteenth section expressly releases the members of the company, exempts their persons and property from all liability for the contracts and engagements of the bank, or losses, deficiencies and failure of the capital stock: thus making the capital stock the only fund for payment. Two creditors then, having debts contracted in the same way, have by law a pledge of the whole estate and effects for their security. The trustees of the fund apply the whole to one creditor: the other receives nothing. All the losses are thrown on him; he has a right to a judgment against the bank, as his debtor ”

“ The power to manage, control, and dispose of the corporate property, is a special authority given by the charter. None can be exercised which is not explicitly granted: and it can only be exercised on the precise subjects over which it is given, and within the limits definitively assigned. ”

“ Their control over the effects is entirely fiduciary, and responsible; deriving their power over them by the act of incorporation, they must execute it according to its provisions and directions; which are in their nature creative, and not merely restrictive, inherent powers. ”

“ If they misapply trust revenues, and by misbehaviour are unable to pay moneys due by them, chancery will take the estate out of their hands. 7 Brown's P. Cas. 235, Coventry Case. So if they mis-spend or misapply trust money, 2 Durn. and East, 200, 204; or as trustees, having the management of a productive fund abuse their trust, 14 Ves. ”