special charters, a system of elaborate checks, restraints, and penalties was imposed; see R. S., 589, part i. ch. viii. tit. 2, "Of Monied Corporations. Art. 1 being entitled, Regulations to prevent the insolvency of monied corporations, and to secure the rights of their stockholders and creditors; and Art. 2, Regulations concerning the election of directors of monied corporations.

The granting of these charters in time became tainted with favoritism and abuse; and the State Convention of 1821 inserted in the Constitution then framed a provision requiring the assent of two thirds of the members elected to each branch of the legislature, to every bill creating, altering, &c., any body politic or corporate. Cons. of 1821, Art. 7, Sec. IX.

This, however, was not found sufficient to reach the root of the evil. In February, 1837, the Restraining Act was in part repealed; and on the 18th of April, 1838, the whole system was remodeled, and the business thrown open to general competition, by the passage of an act entitled "An Act to authorize the business of banking," permitting all persons on certain conditions to form associations for the purpose of carrying on the business. It has been a subject of great interest to know how far the provisions of the old system attach to the new; see Tracy vs. Talmadge, 18 Barb., 456, where a history of the changes are given, per Roosevelt, J. The first question that arose was, whether the associations formed under the act were corporations. In Thomas vs. Dakin, 22 Wend., 9, the Supreme Court held, that they possessed all the essential features of corporations, and that they were corporations; that it was competent, however, for the legislature to create corporations or authorize their creation by a general law; that the act of the 18th of April, 1838, was valid and constitutional, on the assumption that it received the assent of two thirds of the members elected to each branch of the legislature, that being the majority requisite to the valid creation of a corporation; and they also held that it would be presumed to be thus passed, unless the fact was denied by plea; and they refused to pass on the question upon demurrer. Nelson, C. J., dissented, on the ground that the legislature could not pass a bill of this kind as a majority bill. In Warner vs. Beers, 23 Wend., 103 (April, 1840), the Court of Errors held that the associations organized under the general banking law, and in conformity with its provisions, were not bodies politic and corporate within the spirit and meaning of the constitution, and that the act of the 18th of April, 1838, to authorize the business of banking, was constitutionally passed, although it might not have received the assent of two thirds of the members elected to each branch of the legislature. It was admitted that the associations formed under the free banking law had corporate powers; and whether they were corporations, mere partnerships, or joint-stock companies, and whether, if corporations, a law permitting corporations to be formed ad libitum came within the spirit of a constitutional restriction on corporations with grants of exclusive privileges, were the chief points discussed in the Court of Errors. From the nature of that tribu

nal, however, it is impossible to learn the precise views of the majority of the court on the subject. The strongest argument was probably the argumentum ad inconvenienti growing out of the capital already invested in the free banks. See the result of the decision stated in Gillet es. Moody, S Comst., 485.

In Purdy vs. The People, 4 Hill, 384, the case was whether a law altering the charter of the city of New York was constitutionally passed, it not having received a vote of two thirds of the members of both houses. The court decided that the law was void; and language was used which has been often relied on as going to show that all corporations being within the constitutional prohibition, it necessarily followed that the banking associations were not corporations; but the only point really decided was, that municipal corporations came within the constitutional restrictions upon the creation of corporations. See The People vs. Purdy commented on in The Supervisors of Niagara vs. The People, 7 Hill, 510.

In The Supervisors of Niagara rs. The People, 7 Hill, 504, it was, however, finally decided that the associations under the act of 1838 were "monied or stock corporations" within the meaning of statutes passed long anterior to the act of 1838, subjecting such corporations to taxation on their capital. Senator Porter, in delivering the prevailing opinion of the court, said it was obvious that Warner vs. Beers, and Purdy vs. The People, decided only that the banking associations were not corporations within the spirit and mean- " ing of the State constitution, and that municipal corporations were embraced in the State constitution; for the purposes of the principal case, he was of opinion that the banking associations were corporations within the tax laws. For that purpose, however, he went into an elaborate investigation of the principal points of difference between corporations and partnerships, and insisted that the free banks were evidently endowed with a corporate character. The decision of this involved question may be stated to be, that the free banking associations are corporations to all intents and purposes; but that the intent of the State Constitution being to impose restraints on special grants of privilege, and these associations being, on the contrary, a modified form of free banking, they did not come within the spirit of the constitution as if the constitutional clause had stood, "Corporations shall not be created unless, &c., provided the charters contain any exclusive grants of privilege." See Gillet vs. Moody, 3 Com, 485, for C. J. Bronson's statement of the result of the controversy.

The question, however, still remains, assuming these institutions to be corporations, how far they are subject to the details of the old system devised to regulate chartered banks. In The matter of the Bank of Dansville 6 Hill, 370, it was endeavored to apply to the free banks the provisions of the Revised Statutes (I. 598) which gave the Supreme Court power, by summary proceeding, to review the elections of the specially-chartered institutions. It was insisted that the free bank in question was a corporation; but the summary jurisdiction was denied on the ground, among others, that "the only monied corporations in existence at the time those powers

were conferred, were such as had an organization prescribed by law." A board of directors or trustees was provided by the old charters, elected at stated periods, and for a stated time, and in a specified manner; whereas the general banking law provided in terms for no other officers than a treasurer and cashier; and it was said that it could not be supposed that the legislature intended the court should have a summary jurisdiction over the contracts upon which the banking associations were organized under the free banking law.

In Gillet vs. Campbell, 1 Den., 320, it was held that an assignment by the president and cashier of part of the effects of a free bank exceeding $1,000 in value, did not come within the 8th section of the statute to prevent the insolvency of moneyed corporations, and that the assignment was valid although not authorized by a previous resolution of the board of directors. But the decision has been questioned by the same learned judge who delivered it. See Gillet vs. Moody, 3 Coms., 486.

Gillet vs. Moody, 3 Comst., 479, was a bill filed by a receiver of a banking association against a stockholder and director to set aside a transfer of certain state bonds made in exchange of his stock, and which came within tit. ii. art. 1, § 1) declaring it unlawful for the directors of any monied the terms of the provisions of the Revised Statutes (part i. ch. xviii. corporation to divide, withdraw, or in any manner pay to the stockholders or any of them any part of the capital stock, &c., or to reduce the capital stock, without the consent of the legislature, and; it was held by the Court of Appeals that the banking associations were not corporations in any qualified sense, as within the intent and meaning of some particular statute, but corporations to all intents and purposes; and that the transaction was illegal and void, although a doubt was intimated whether the provisions of the 10th section applied to the directors personally. It may be noticed that in this case it was also held that stopping payment by a bank is prima facie evidence of insolvency; and also that the title of the Revised Statutes in regard to moneyed corporations was a beneficial statute, not to be defeated by a narrow construction.

Talmadge vs. Pell, 3 Seld., 328, was a bill filed to set aside an operation in stock, on the ground that traffic in stock did not come within banking power. The transaction was held illegal on that ground, and it was further held that the free banking associations were moneyed corporations, and as such liable to all general laws relating to that class of corporations, except in so far as those laws or some of their particular provisions have been modified or superseded by, or are inconsistent with, the free banking act of 1838.

In Tracy vs. Talmadge, 18 Barbour, 456, Mr. Justice Roosevelt, who was in the legislature in 1838, and who is very familiar with the whole matter, said, speaking of this subject, "The only question is, Did the legislature in forming these associations, or rather in authorizing their self-formation, intend that certain penal provisions of law previously enacted to govern the action of chartered banks, undisputed corporations,

should apply to these new forms of limited partnership; and is that intention, if entertained by the law-making power, expressed in a manner so clear as to require no implication or interpretation to discover it?—the rule being inflexible, and as just as it is inflexible, that penal enactments when not perfectly clear admit of no extension by judicial interference."

I have no room for a discussion of the question; but considering the differences between the organization of the old safety-fund banks, as they were called, and the free banks, it must be admitted that the precise extent to which the provisions of the revised statutes are to be applied to the new institutions, and especially to their officers, is still unsettled.

Since writing the. above note, and while this sheet is passing through the press, I have received a work specially devoted to "The Banking System of New York," for which I am indebted to the kindness of the learned author, John Cleaveland, Esq. The volume contains a vast quantity of information, both of a legal and historical character, which is nowhere else to be found collected, and must undoubtedly prove of great value to all persons, whether in or out of this State, who occupy themselves in any way with matters relating to this most important branch of finance. Mr. Cleaveland's long familiarity with this particular subject, his devotion to his profession, and his reputation as an accurate jurist, are sufficient guarantees in regard to the execution of the work.

CHAPTER IX.

OF THE INTERPRETATION AND APPLICATION OF TREATIES, OF PATENTS OR GRANTS OF LAND, AND OF MUNICIPAL ORDINANCES.

Treaties-Part of the Supreme Law of the Union-How far they affect State Legislation-How far they may have a retrospective effect-Patents or Grants of Land-Resumptions of, in early times-Rules of construction applicable to Municipal Ordinances-Centralization and Local Sovereignty -Instance of the former in Rome and France. Development and application of the latter in America. Towns and Cities. Delegation of Legislative Sovereignty. Mode of the exercise of the delegated authority. Cases-General authority of the Courts-Contracts in violation of Ordinances void-Passage of Ordinances.

IN treating of the interpretation and application of written law, we have thus far considered the exercise of legislative power in regard to the enactment of statutes, in cases in which that power is unrestrained by any paramount or fundamental law. Before passing to the subject of constitutional limitations upon legislative action, we have to examine some topics which are so intimately connected with our general subject, that they cannot with propriety be omitted. Treaties, Patents. or Grants of Land, and Municipal Ordinances, form a part of our written law, and are all in some respects governed by considerations and rules of the same kind as those which apply to statutes.