Wayne County MI Archives Court.....Attorney, General V. Bank Of Michigan 1837
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Source: Cases In Chancery
Written: 1837

CASES IN CHANCERY.
FIRST CIRCUIT

Attorney-General v. The Bank of Michigan.

Corporations, jurisdiction over. The jurisdiction of this court over corporate 
bodies, for the purpose of restraining their operations, or of winding up 
their concerns, is based upon and controlled by the statutes of the State. It 
has no such jurisdiction at common law, or under its general equity powers, 
and it will not interfere except when the case is fairly brought within the 
scope and object of the statute conferring this special jurisdiction. (a.)

The provisions of the act of June 21, 1837, and the act of April 12, 1841, in 
regard to banks and incorporations commented upon and explained.

Statutes, construction of. Where one part of an act is equivocal, other 
portions of the act may be resorted to as a guide in construction. The 
occasion and the reason of the enactment, which is the same thing as the old 
law and the mischief; the letter of the act, whether words be used in their 
proper or in a technical sense; the context, the spirit of the act, whether 
statutes be in their nature remedial or penal, the subject matter and the 
provisions of the act, and the intent of the legislature in passing it, are to 
be considered; which intent is not to be collected from any particular 
expression, but from a general view of the whole of the act. (b.)

Forfeiture of corporate rights. If a corporation has forfeited its rights by 
misfeasance, or non-feasance, such forfeiture must be shown by the pleadings; 
it is not to be presumed; the legal presumption is otherwise.

The fact that a bank not protected by statute authorizing a suspension of 
specie payments, has stopped payment, is not of itself conclusive evidence of 
its inability to pay its debts, but is prima facie evidence of inability or 
insolvency. (c.)

Injunction against suspended bank. The rule adopted in this State has been not 
to grant an injunction in the first instance upon the allegation alone that a 
bank has stopped payment, but to grant a rule to show cause and require notice 
to be given to the defendants. If not explained or excused in cases where the 
banks are not protected from a forfeiture of their charters by reason of a 
failure, the court would be authorized to grant an injunction and appoint a 
receiver. But when banks are authorized to suspend specie payments, such 
refusal is not even prima facie evidence of insolvency.

The true construction of the sixth section of the suspension act of April 12, 
1841, is that the statements should be made out and transmitted to the 
secretary of State on the days specified, or as soon thereafter as the same 
can be made out and stated.

Statutory condition, when to be performed. Where no time is prescribed in 
which an act is to be done, it must be done in a reasonable time. (d.)

Motion by complainant for a receiver, and on the part of the defendant for a 
modification of the injunction.

The bill states that December 19, 1817, the Bank of Michigan was incorporated, 
with capital of $100,000 ; was organized and went into operation.

That in accordance with the provisions in its charter, the capital was 
afterwards augmented to the sum of $500,000.

That February 25, 1831, the charter was continued for twenty-five years from 
and after the first Monday in June, 1839.

That ever since they commenced doing business, and down to the present time, 
they have had a banking house in Detroit, and have done an extensive banking 
business. That down to 1837, they were unembarrassed, and were able to meet 
and pay all their liabilities upon demand. But ever since that period, and 
down to the present time, they have labored under embarrassments, and have 
been unable during the greatest portion of the last mentioned period, and are 
now unable to meet and pay their liabilities; and that their officers have for 
some time past refused and still continue to refuse to pay the debts of the 
corporation; and that they have almost ceased the transaction of any business 
as a bank.

That the present liabilities of the bank are large; that its bills issued and 
in circulation amount to upwards of $200,000; that it is indebted largely to 
depositors, and otherwise; all of which are payable on demand.

That the State of Michigan is a creditor as bill holder to over $20,000. That 
June 11th, 1841, complainant demanded payment or security, which was refused 
by the president and cashier of the bank.

Complainant charges, insolvency, and avers that the interests of the State 
require that it shall be enjoined, and a receiver appointed.

That in consequence of the refusal to redeem its bills, numerous suits have 
been commenced against it, and its cash funds are becoming diminished, and 
some creditors receive the full face of their debts, while others may 
ultimately receive but partial payment. That a due regard to the interest of 
the creditors generally requires an injunction to prevent the inequitable 
distribution of its cash means.

That in and by the act entitled "an act to provide for proceedings in chancery 
against corporations, etc.," approved June 21, 1837, the chancellor has power 
to restrain by injunction any bank from exercising any of its banking powers, 
and from receiving or paying out anything whenever the attorney-general upon 
bill filed shall furnish satisfactory proof that such bank has become 
insolvent, or unable, or has refused, to pay its debts. 

And in and by the seventh section, the chancellor may compel such bank to 
discover any stock, property, moneys, things, choses in action or effects 
alleged to belong to it, or in any manner liable for the final payment of its 
debts, the transfer and disposition thereof, and all the circumstances of such 
transfer and disposition; and that every such officer, agent or stockholder 
may be compelled, at the discretion of the chancellor, to answer any bill 
filed to obtain such discovery.

The bill prays that defendants be required to answer all the allegations in 
the bill, and particularly that they answer and discover as particularly 
required in and by the seventh section as above quoted.

The bill prays the granting of writ of injunction, etc., restraining them from 
exercising any of their corporate rights, privileges or franchises, and from 
collecting or receiving any part of their debts due or to become due; and from 
paying out or in any way transferring any of the money, property or effects of 
the bank. 

Also for the appointment, of a receiver or receivers, in pursuance of the 
fifth section of the act last aforesaid, in order that the assets of the bank 
may be applied in an equal and proportionate manner to the payment of its 
debts. 
A temporary injunction was granted.

The answer admits the organization of the bank, the augmentation of stock, the 
extension of the charter; that it was unembarrassed up to 1837, that since 
that time it had been embarrassed and unable to meet and pay its liabilities, 
and has refused so to do. That the present liabilities of the bank are large, 
but insists that its liabilities are now less by $1,200,000 than in 1837, and 
$70,000 less than they were four months ago; and that for many years past 
their aggregate liabilities have not been so small as now.

Admits indebtedness to the State of Michigan to amount over $20,000. And that 
the bank officers did refuse to pay the same as stated by complainant, and did 
decline to execute securities for the future payment of the same in specie; 
but that although they may have declared their inability to do so, as charged 
in the bill, it was not because the bank was not possessed of that, and a much 
larger amount in specie, but because they did not deem it their duty to pay 
the State of Michigan in specie, when they could not pay all bill holders in 
specie. But they aver that they did offer the attorney-general to turn out 
assets of the bank in payment; and that he might have selected from all the 
assets, amounting in all to nearly a million of dollars, and of a value very 
much more than sufficient to cover and pay all the debts of the bank.

Expressly denies insolvency, and avers that the contrary is the fact. That on 
15th February last, upon the examination by committee of the legislature, the 
said committee and officers of the bank made a scrutinizing examination into 
the situation of the bank, and of all its assets; by which investigation it 
was ascertained as certainly as such a fact could be, that the assets were 
sufficient to pay off and discharge all its liabilities; and not only so, but 
also to leave a surplus, after being converted into cash funds, of more than 
$400,000, to be divided among the stockholders. That since said 15th February 
last, no material change has taken place in the condition or value of said 
assets, or to depreciate them, unless it be that the two-thirds or appraisal 
law passed last winter may operate injuriously. That some of their securities 
have been changed—some of the paper then held by the bank has been paid; but 
that no change has taken place so great as to render the insolvency of the 
bank a probable fact, although the stockholders may be affected. That the bank 
has in its vaults in specie funds about $50,000.

Admits that numerous suits have been commenced and continue to be, to the 
injury of the bank, by accumulation of costs and expenses.

Answer avers that although now embarrassed, the bank is able and willing to 
pay and redeem all its bills by turning out its assets. That many of its 
creditors are desirous of being thus paid, and the interests of the public 
cannot be injured by it. That the bank has made great efforts to pay off their 
large liabilities which it had created in 1836-7; and has succeeded in 
liquidating almost entirely those which were the largest and most pressing, 
and is now comparatively free from the pressure of large debts.

States that the appointment of a receiver would be ruinous to the interests of 
the stockholders, and could not be beneficial to the public, the State of 
Michigan, or the creditors of the bank. That a sudden and forced winding up of 
its affairs by a receiver would be productive of mischief and injury to the 
bank, stockholders and creditors. 

Attorney-General, in person.

Insolvency is defined to be inability or refusal to redeem. Both are charged, 
and both admitted.

Suspension of payment is evidence of insolvency, which cannot be rebutted by 
the naked assertion of its ultimate ability to pay. Such assertion is nothing 
more than an expression of an opinion as to the future value of the assets.

Whether such opinion is well or ill founded depends upon the final result, and 
cannot be known until the usual process has been gone through of converting 
them into money.

The statements in the bill furnish evidence of insolvency.

The mortgage to the Dwights is evidence of insolvency.

If, then, there is good reason to believe the bank insolvent, by whom shall 
its affairs be wound up?

It is not proper to leave the bank in the hands of those officers under whose 
administration it has failed.

The appointment of receivers is necessary for this purpose.

The directors and officers of the bank are appointed by and represent the 
stockholders. Their sympathies and prejudices are with them, and are adverse 
to the bill holders.

The appointment of strangers will secure a fearless investigation of its 
affairs, which the public have a right to expect. It may become their duty to 
institute proceedings against the directors and officers.

The facts cannot be known until the receivers investigate.

In the language of Chancellor Walworth, "Those creditors who have been 
stripped of their property by the failure of the bank, have a right to claim 
from the court the appointment of receivers upon whose impartial 
investigations they can rely, and who could have no interests in opposition to 
theirs." (1 Paige, 517; 3 Wend., 588.)

Chancellor Walworth says: "If the interests of stockholders were first 
consulted, it would be proper to give to those indebted to the bank, and in 
poor circumstances, sufficient time to buy up the bills from honest creditors 
at a great discount, and thus restore the broken institution to a state of 
solvency. But in such case the real creditors would lose the greatest part of 
their debts, although the stockholders in the end might save something of the 
stock. It is therefore necessary and proper, in every case of this kind, for 
the protection of the creditors, who have the first claim to the property, to 
turn its effects into cash with the least possible delay, so that a 
distribution may be made before their necessities or fears compel them to 
sacrifice their demands."

The bank now seeks to obtain from the chancellor what the legislature refused 
to grant them, to wit, immunity against its bill holders.

Joy and Porter, for defendants.

As to the jurisdiction of the court, it is limited by the statutes.
1 Edwards Rep., 87, and cases there cited, are conclusive.

The extent of the authority conferred is settled by this court in the case of 
Barnum v. Bank of Pontiac, ante, 116.

As to the proof of insolvency upon which charge alone the injunction rests, 
see 1 Paige, 515; 3 Wend., 590; 1 Edwards, 92; 2 Edwards, 286.

A receiver, then, cannot be appointed. Will the court modify the injunction? 
It must dissolve it on motion, why not then modify? The answer is ample and 
complete as to the only charge upon which the bill rests; the whole equity of 
the bill is denied.

The only real question is whether the court will hear this motion at this 
time. We say it will, because the whole equity of the bill is denied, and 
exceptions can avail the complainant nothing if they are taken; they will only 
cause injury to the defendant without object. The rule relative to exceptions 
does not apply in such a case. (4   Paige, 111; ante, 162.)

Besides, the court reserved by its own order the power to modify at any time. 
(Swanst., 228; Merivale, 29; Eden, 122.)

As to the suspension law, the court must presume that the bank is under it, 
until the attorney-general shows that it is not.

So far as the Bank of Michigan is concerned, the terms of the law are express, 
and include the bank by name. The court will say and presume that the bank has 
accepted a law enacted for its benefit, unless the contrary appear. The answer 
was only to the bill filed. The bills neither of them charge that the bank has 
not accepted or availed itself of the suspension law, and it must of course be 
taken to have done so unless the contrary be stated or in some way appear.

It does not fall upon us to show that we are under the protection of a law 
passed for our express benefit, unless the opposite party charges that we are 
not under it. We are there until they show that we are not.

A corporation will be presumed to have accepted of the terms of an act passed 
for its benefit, until the contrary appear. This is reason, and the principle 
has been repeatedly decided in the Supreme Court of the United States. Indeed 
this must be so, because otherwise the bank could not show the fact before 
July. The question of filing a statement does not come up because it does not 
appear to the court that it was not properly filed. And had any such charge 
been made, we should have shown that it was properly and duly filed under the 
law.

The Chancellor.—Before proceeding to the examination of the facts disclosed by 
the pleadings in this cause, it will be necessary to examine the statutory 
provisions which have a bearing upon the question presented. The jurisdiction 
of this court in this class of cases is based upon and controlled by the 
statutes. It has no such jurisdiction at common law. {The Attorney-General v. 
The Utica Ins. Co., 2 Johns. Ch., 371; Same v. Bank of Niagara, Hopk., 354; 
Verplanck v. Mercantile Ins. Co., 1 Edw., 87.) In the last mentioned case the 
chancellor says: "After such repeated decisions expressly disclaiming all 
jurisdiction over corporate bodies for the purpose of restraining their 
operations, or of winding up their concerns under the general equity powers of 
the court, the complainants must not expect any interference, except it be 
under special authority of existing statutes, and when the case is fairly 
brought within their scope and object." The proceedings in this case are based 
upon the provisions of the act of June 21st, 1837. This imposes upon the court 
the duty of inquiring how far the powers and duties of this court are 
controlled by subsequent legislation. By the first section of the act of April 
12th, 1841, it is enacted that every provision of law in force requiring or 
authorizing proceedings against the Bank of Michigan and the Farmers' and 
Mechanics' Bank of Michigan and their branches, with a view to forfeit their 
charters or wind up their concerns, or which requires them to suspend their 
operations and proceedings in consequence of a refusal to pay their notes or 
evidences of debt in specie, is hereby suspended. Section three requires the 
Bank of Michigan to lessen its liabilities at the rate of $20,000 quarter-
yearly. Section four prohibits any bank from dividing or paying to its 
stockholders or to any person for them any dividends, profit, or interest, 
until after it shall have resumed paying its debts and liabilities in specie, 
and shall have continued to do so in good faith for three months, Section five 
inhibits the banks and their officers from selling specie or bullion at a 
premium, and from purchasing its notes at a discount; and provides that "every 
violation of this section shall be a forfeiture of its charter." Section six 
is, That every such bank or branch shall transmit a statement under oath of 
the president, cashier, and a majority of the directors, of its true 
condition, once in every three months, viz : On the first day of January, 
April, July and October, to the secretary of State, who shall cause the same 
to be published in the State paper; and the expense of such publication shall 
be paid by the banks respectively." Section seven is as follows: "It shall be 
the duty of the secretary of State, on the receipt of each quarterly statement 
provided for in the sixth section of this act, to transmit as soon as 
practicable, to the governor, lieutenant-governor, auditor-general and 
treasurer of this State, each a certified copy of such statement; and if on 
examination of the same, it shall appear to any one of said officers, 
including the secretary of State, that any bank availing itself of the 
provisions of this act is, or has been so conducting its business, as in their 
opinion to endanger the interests or security of the public; or those holding 
its notes or other evidences of debt, or in any way improperly to abuse the 
privileges by this act granted; or if from any other cause any such officer 
shall have good reason to believe that any such bank has so improperly 
conducted, then it shall be the duty of such officer, with the advice and 
consent of one or more of his associates above named, forthwith to cause an 
examination to be made of the conduct and affairs of such bank; and in case it 
shall thereupon appear to the satisfaction of three or more of said officers, 
that such bank is, or has been conducting its business improperly as 
aforesaid, it is hereby made their duty forthwith to report such fact to the 
attorney-general, who is hereby required to proceed against such bank as 
directed in the tenth section of this act." Section eight provides that the 
Bank of Marshall, the Bank of Adrian, the Merchants' Bank of Jackson County, 
the Bank of Constantine, and the Erie and Kalamazoo Rail Road Bank, may avail 
themselves of the provisions of this act, by conforming to its requirements, 
upon obtaining the certificate of the auditor-general, State treasurer, and 
secretary of State, that their business has been honestly managed, and that 
they are in a sound condition. Section nine provides, that the auditor-
general, State treasurer and secretary of State, before they proceed to 
examine such banks as may apply to them for that purpose, shall make oath 
before any person authorized to administer the same, that they will not grant 
a certificate to any bank unless they shall be perfectly satisfied that the 
resources of such bank are, and will be adequate to the ultimate payment of 
its circulation and all other liabilities permitted by this act. Section ten 
authorizes the attorney-general to proceed against any bank availing itself of 
the provisions of this act, and which shall directly or indirectly violate the 
same by injunction, quo warranto or otherwise, in the same manner as if this 
section (probably a misprint for act) had not passed. The act of April 12, 
1841, in its material provisions is a literal copy from the suspension law of 
New York of May 16, 1837. The first section is identical except that the names 
of the Bank of Michigan and the Farmers' and Mechanics' Bank are introduced. 
Of the construction of the New York statute there is no doubt. In respect to a 
portion of the banks in that State, the law requires that a bank which shall 
suspend specie payments shall, on pain of forfeiture of its charter, "wholly 
discontinue and close their banking operations." What was intended by the 
provision of the ninth section of the suspension law of New York, placing the 
banks under the supervision of the bank commissioners, and authorizing them to 
institute proceedings against any bank in dangerous or insolvent 
circumstances? It could not have intended an inability to pay their 
liabilities at the time, as the very object of the law was to relieve the 
banks from the penalties they incurred by reason of such inability. It must 
have contemplated ultimate insolvency. By our statute the officers who are 
constituted special commissioners for this purpose may, if they are satisfied 
any bank is so conducting its affairs as to endanger the security of the 
public or those holding its notes, institute an examination, and upon the 
concurrence of three of them proceedings may be instituted under the 
provisions of the act. There can be no doubt that the construction of the 
first section of the New York statute is, that every provision of law 
requiring or authorizing proceedings against banks with a view to forfeit 
their charters or wind up their concerns, and that every provision of law 
which requires them to suspend operations and proceedings in consequence of a 
refusal to pay their notes and evidences of debt in specie is suspended. I do 
not well see what other construction can be given to this section either in 
the New York act or our own. The words "or which" must refer to the provisions 
of law which were intended to be suspended. Where one part of the act is 
equivocal, other portions of the act may be resorted to as a guide. "The 
occasion and the reason of the enactment (which is the same thing with the old 
law and the mischief), the letter of the act (whether words be used in their 
proper or technical sense), the context, the spirit of the act (whether 
statutes be in their nature remedial or penal), the subject matter and the 
provisions of the act, have all to be considered. Again, the intent of the 
legislature is not to be collected from any particular expression, but from a 
general view of the whole of the act." (Per Best, Ch. J., 3 Bing., 196; 
Dwarris on Statutes, 47, 48.) The ninth section of the law of New York places 
the suspended banks under the special supervision of the bank commissioners. 
The sixth section of our law requires the suspended banks to transmit a 
statement of their condition once in three months to the secretary of State. 
Section seven contemplates that the officers therein mentioned, and to whom a 
copy of each statement is to be transmitted, and each of them, shall exercise 
a supervision over those suspended banks, and if in the opinion of either of 
them, any bank is, or has been so conducting its business as to endanger the 
interests or security of the public or those holding its notes or other 
evidences of debt, any such officer, with the advice and consent of one or 
more of his associates, may institute an examination of its affairs. It has 
been shown that in the construction of statutes which may admit of doubt, we 
must resort to the object and intent of the legislature, the mischief to be 
obviated, and the remedy contemplated. It appears from the pleadings in this 
cause that the legislature had instituted a careful investigation of the 
affairs of this bank. The condition of its assets was not then materially 
variant from the present. Its liabilities have since that time been diminished 
some $120,000, and it appears that for many years no part of its assets have 
been used otherwise than for the payment of its liabilities. The legislature 
must have been aware of the inability of the bank to pay off its liabilities 
immediately, though they seem to have entertained no doubt of its ultimate 
solvency. Can it by any possibility be inferred that the legislature 
contemplated or intended by this legislation that this bank should be wound up 
on the ground of insolvency under the state of facts here presented? The 
insolvency is again and again denied in every form by the president and 
directors, who must be deemed better able to form an opinion than strangers 
unacquainted with its concerns, and this, too, after a full, careful, and 
detailed investigation of all their assets and liabilities. Not only is 
insolvency denied, but it is alleged that there will remain a large surplus 
after the payment of all their debts and liabilities. Did the legislature 
intend to treat the several banks which should become subject to the 
suspension act unequally? This cannot be supposed. The ninth section provides, 
that the banks which are named in the eighth section shall satisfy the auditor-
general, State treasurer and secretary of State, "that the resources of such 
bank as shall apply to them for that purpose, are, and will be adequate to the 
ultimate payment of its circulation and all other liabilities permitted by 
this act." This is in harmony with the supervision vested in those officers by 
the seventh section. Under that section, if they or any three of them should 
become satisfied that from the conduct of the bank or the condition of its 
affairs, legal proceedings were necessary to effect an equality of 
distribution or a proper application of its means, it would then be competent 
for them to direct proceedings to be instituted under the provisions of that 
act. For the purposes of this motion it should be remarked that this bank must 
be considered as under the provisions of the suspension act. It was placed 
expressly under it in terms, from and after the passage of the act. If it has 
forfeited its rights under it by misfeasance or non-feasance, such forfeiture 
must be shown. No allusion is made in the pleadings to any act of omission or 
commission by which such forfeiture has been incurred. It is not to be 
presumed. The legal presumption is otherwise. It has been held that grants 
beneficial to corporations may be presumed to have been accepted, and an 
express acceptance is not necessary. (Charles River Bridge v. Warren Bridge, 7 
Pick., 344; Dartmouth College v. Woodward, 4 Wheat, 688; U. S. Bank v. 
Dandridge, 12 Wheat, 71.) But admitting that the operation of the first 
section of the suspension act should be limited to the failure to pay its 
notes or evidences of debt in specie, which from a careful examination I think 
it cannot, would the result be varied? The legislature could not have intended 
to apply one rule to the banks specially named in the first section of the 
act, and which were undoubtedly the principal objects intended to be benefited 
by it, and another to the other banks named in the act. We have seen that 
those banks were required only to satisfy the officers before named of their 
ability ultimately to pay their liabilities. We have seen this ability in the 
case under consideration asserted and reasserted in the broadest and most 
comprehensive form by those best acquainted with ite condition. The answer, 
for the purpose of the present motion, must be taken as true. Under either 
construction of the act, then, the motion must be denied. Some misapprehension 
seems to have been entertained upon the effect of the refusal of any bank not 
protected by statute to pay its debts or liabilities in specie. The rule 
adopted here is the same as in New York. In the case of the Attorney-General 
v. The Bank of Columbia, 1 Paige, 511, the chancellor says, that the fact that 
the bank has stopped payment is not of itself conclusive evidence of its 
inability to pay its debts, but is prima fade evidence of inability or 
insolvency. In the case of Stuart v. Mechanics' Bank, 19 Johns., 497, it is 
said "a bank may be quite solvent notwithstanding it fails to redeem its 
bills. This we know to have happened in several instances where the ability 
and solvency of the banks have been afterwards fully established." The rule 
adopted here has been not to grant an injunction in the first instance upon 
this allegation alone, but to grant a rule to show cause and require notice to 
be given to the defendants. If not explained or excused in cases where the 
banks are not protected from a forfeiture of their charters by reason of a 
failure to pay specie, the court would be authorized to grant an injunction 
and appoint a receiver. But where banks are authorized to suspend specie 
payments, it is not prima facie evidence of insolvency. It may be proper to 
say that the result to which I feel myself compelled, by the provisions of law 
bearing upon this case, to arrive, in my opinion will be better for the 
interest of the bill-holders and creditors of the bank than would be the 
usually disastrous measure of appointing receivers. It must be apparent that 
in the present condition of the country such a measure must result in great 
losses, and that heavy expenses must be incurred, and if by such means the 
resources of the bank should be found insufficient to pay its liabilities, the 
loss must fall upon its creditors. The entire resources of the bank have been 
thus far applied to the payment and security of its debts, and the officers of 
the bank in their answers state their intention to continue so to do. The 
aggregate amount of the indebtedness of the directors is small. No part of the 
resources of the bank has been diverted to pay dividends, and I can perceive 
nothing in the case as presented before me to lead to the belief that the 
affairs of this institution have not been honestly and in good faith 
administered. But these remarks, which would apply properly in a case for the 
exercise of discretion in the appointment of a receiver, are perhaps 
unnecessary in the present case, as from the view I have taken of the law 
bearing upon it, and from which I cannot escape, there is no room for the 
exercise of this discretion in the case. The law being positive, the rights of 
the defendants are fixed, and the duty imposed upon the court imperative. A 
question has been incidentally raised as to the construction of section six of 
the suspension act, but as it is not necessary to the decision of the case, I 
have had some doubt as to the propriety or necessity of expressing an opinion 
upon it. The facts do not appear as to when this bank filed its statement of 
the condition of its affairs. The question is, are the banks compelled to 
transmit a statement of their condition on the first days of January, April, 
July and October, or are they to transmit a statement of the condition they 
were in on those days as soon as the same can thereafter be made out and 
stated? It would of course be impossible to ascertain their condition on a 
particular day and make and transmit a statement on the same day. If the 
statement is to be transmitted on those days, it must be of their condition on 
some previous day, and each bank must be left to select its own day. This 
would certainly open the door for transfers from one to the other, and might 
lead to inconveniences which the legislature intended to guard against by 
requiring a simultaneous statement of the condition of all the banks on the 
same day." Some of the banks contemplated by the terms of the act are situate 
some one hundred and fifty miles distant from the office of the secretary of 
State. Are those banks required to file on that day a statement of their 
condition, or on some indefinite previous day of their own selection, or must 
they "transmit" by mailing their statement on that day, or was it the 
intention of the legislature that they should transmit a statement of their 
condition on the particular days indicated by the act? The statute requires 
that the statement of the condition of the banks shall be made under oath of 
the president, cashier, and a majority of the directors. Should this be 
impossible, from the absence or sickness of the president or cashier, or a 
portion of the directors, must the statement be actually transmitted on this 
particular day under pain of a forfeiture? The language and object of the act, 
the security intended to be afforded to the public, the inconvenience, if not 
impossibility of otherwise conforming to its terms, all concur in leading to 
the construction that the statements shall show the condition of all the banks 
under the suspension law at one and the same period of time; and that their 
statements shall be filed as soon as they can properly be prepared and 
examined by the different officers required to make oath to the truth of the 
statements of their condition on those days. Where no time is prescribed in 
which an act is to be done, it must be done in a reasonable time, and this 
must be determined by the tribunal before which the question may be made. (9 
Pick., Coke Litt., 208.) But if the construction should be otherwise, I do not 
perceive how a failure to conform to this section on the particular days 
mentioned can be held ipso facto to work a forfeiture. The rights and 
immunities conferred upon this bank by the first section of the suspension act 
are positive and unconditional. The fifth section provides, that a failure to 
conform to the provisions of that section shall work a forfeiture. The sixth 
section is directory, and imposes no penalty or forfeiture. The consequence of 
a failure to conform to the requirements contained in that section, therefore, 
would subject the delinquent bank to be proceeded against under the provisions 
of the tenth section of the act, and the failure to conform to the provisions 
of the act must be averred and shown. The bill, as before stated, contains no 
such averment, and as the question is not necessarily involved in the decision 
of this motion, I should not have deemed it necessary to express an opinion 
upon it, but from the consideration that as the views I have taken of the law 
must be conclusive upon the principal object of the bill, the complainant, if 
any doubt is entertained of the correctness of the conclusion arrived at, may 
be disposed to take an appeal to the supreme court; and in that case it will 
be desirable that this question, as well as the others, should be presented 
and settled in the appellate court.

Having now said all that can be material to a decision of the question 
presented, it would have been certainly gratifying, if consistent with my 
views of duty, here to pause. But with the hope that it may not be without its 
utility hereafter, I think it my duty to refer to the unusual and 
extraordinary course which has been pursued during the pendency of this 
controversy, having a tendency to create excitement and pre-occupy public 
opinion. Minatory articles have from time to time appeared in the public 
papers. The consequences of failing to yield to this artificial excitement 
have been shadowed forth. Various interests and considerations, very far from 
being properly connected with any question of legal right involved in the 
cause, have been enlisted.  A detailed recital of the circumstances referred 
to is not deemed necessary, and would afford no pleasure. It would have been 
easy to have acquired cheap temporary applause by yielding to the current. But 
the court has a higher duty to perform. It is bound to declare the law as it 
is, and to vouchsafe to every one his rights under the law without regard to 
consequences. Whenever the rights of litigant parties shall be surrendered to 
any such extraneous influences there is an end of all security and of all 
confidence.

This is the first time I have had occasion to recur to improprieties of this 
character. It is painful to do so now; I trust it may never again be necessary.

The result is that the motion for the appointment of receivers must be denied. 
A motion was submitted at the same time for a modification of the injunction, 
but as the attorney-general expresses his election that if the motion for the 
appointment of receivers is denied, the injunction should be dissolved, and as 
from the views expressed, such must be the final result, the order will be 
entered accordingly, except so far as relates to the assigned assets. That 
presents a distinct question which has not been considered, and the injunction 
will be so far retained until the further order of the court.

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(a.) See also Attorney-General v. Oakland County Bank, Wal. Ch., 90. 

(b.) See Sibley v. Smith, 2 Mich., 486, which is to the same effect. 

(c.) See Barnum v. Bank of Pontiac, ante, 116.

(d.) See Byram v. Gordon, 11 Mich., 531, and Stange v. Wilson, 17 Mich., 342; 
where the same rule of computing time was applied under contracts. 

Additional Comments:
CASES DETERMINED IN THE COURT OF CHANCERY FOR THE STATE OF MICHIGAN
BY ELON FARNSWORTH, Chancellor 

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