Bibb v. Hall & Farley , 101 Ala. 79 ( 1893 )

HARALSON, J.

I. If there is a special finding of facts in the lower court, as was the case here, at the request of one of the parties, the Supreme Court must, on appeal, examine and determine whether the facts aré sufficient to support the j udgment. — Code, § 2743. It must find directly and affirmatively every issue in fact essential to the right of recovery, or judgment on it can not be pronounced, and it can not be aided by intendment or by-reference to extrinsic facts. — Betancourt v. Eberlin, 71 Ala. 461; Quillman v. Gurley, 85 Ala. 594, 5 So. Rep. 345.

II. Then, what are the issues of fact in this case, essential to recovery?

The note sued on was dated July 21, 1887, and reads : “I promise- to pay to the Alabama Midland Railway Company, as now chartered under the general railroad laws of the State of Alabama, or any amendments that' may hereafter be made either by general law or :by*'act of the legislature, its order or assigns, five hundred’ dollars, at the banking house of the First National Bank of Montgomery, Alabama, to be paid in cash, on demand, at the maturity of the note ; this amount being the total of my subscription to the capital stock of the Alabama Midland Railway Company. It is agreed, that said amount, to-wit, $500, matures and becomes due and payable, whenever the board of directors of said company shall decide that the Alabama Midland railroad has been finished to a point within a mile from the centre of the city of Montgomery, from one or the other of its terminal points, and that said road is of standard guage, laid with steel rail. Publication of said decision of said board of directors to be made in one of the daily papers of the city of Montgomery, Alabama, shall be final and com elusive notice to me of the same. It is hereby agreed and made part of this contract, that if the said Alabama Midland Railway Company should fail to complete the work, necessary to make this obligation binding, by the first day of October, 1890, then this instrument is, null and void.”

The finding shows, that "On the 7th day of May, 1887, the defendant subscribed $500 to the capital stock of the Alabama Midland Railway Company. The conditions attached to the subscription were, that the amount was to be paid when the railroad ‘is built, furnished and equipped to this city, (Montgomery), from either one or the other of its terminal points, and a line is perfected to Jacksonville and Savannah, Ga. Upon the payment of the sum above stated, the Alabama Midland Railway Company shall issue to each subscriber two-thirds of the amount subscribed for of its own capital stock and one-third of the amount in the capital stock of the Alabama Terminal & Improvement Company, which last company is formed to build said railroad.’ ”

The finding states the fact, that the board of directors of each of said corporations had decided and advertised the facts in all respects as required by the conditions of said subscription and said note, — that said railroad' had been built and equipped in the manner and within the time prescribed in said subscription and note.

III. The defendant’s pleas were, in substance, that the plaintiffs are not the parties interested in the instrument sued on ; that the note is not the property of the plaintiffs, but that it is the property of the Alabama Terminal & Improvement Company, a corporation under the laws of Alabama; want and failure of consideration of the instrument sued on ; that both companies were fraudulently organized, by means of false certificates of organization, and that this was concealed from defendant and he was deceived and. intentionally defrauded into making the contract to subscribe for the stock. The errors assigned are, that the facts found by the special judge sustain these pleas, and do not sustain the judgment rendered.

We have referred above, to the finding of the special judge as to the compliance by the corporations with the conditions of the subscription and note, touching the manner and time of the completion of the railroad. No point is made in the argument of counsel on the sufficiency of the findings to sustain the judgment, on this branch of the case.

IV. Let us refer, in the first place, to the ownership of the note sued on by the plaintiffs. As touching the same, the special finding ascertained, that the general purpose of the Alabama Terminal & Improvement Company, — as shown by its declaration for incorporation,— was to build and equip railroads and railways, under contract for and with other parties ; that the Alabama Midland Railway Company received from numerous persons, including the defendant, their notes for subscription to its capital stock, and that these notes, afterwards, hecame the property ■ of the Alabama Terminal & Improvement Company ; that the Farley National Bank, a corporation organized under the national banking laws, and located at Montgomery, Alabama, opened an account with the Alabama Terminal & Improvement Company, at the request of the company, by J. W. Woolfolk ; that in the course of the dealings between the bank and the company, the latter became indebted to the bank, on account of money advanced to it, in the sum of about $150,000 ; that this indebtedness arose by the discount by the bank of the notes and drafts executed in the name of the company by its president, Woolfolk; that the proceeds of such notes and drafts were placed by the bank on its books to the credit of the company, and was checked against by said Woolfolk, as president; that some of the money checked out was applied by Woolfolk to the payment of obligations of the Alabama Terminal & Improyement Company, and some was applied by him to the expense of constructing the Montgomery, Tuscaloosa & Memphis Railway ; that the Alabama Terminal & Improvement Company paid back to the bank, about $18,000, leaving a balance due of about $130,000, which has never been paid; that J. W. Woolfolk, as president, on the — day of July, 1892, executed to the Farley National Bank an instrument in writing, transferring to said bank, as collateral security for a large sum then due, (and which sum has not been paid), a large number of the notes of subscription to its capital stock, and to the capital stock of the said Alabama Midland Railway Company, then owned by the Ala. Ter. & Imp. Co., including the note of defendant; that the said transfer was made subject to the rights of the Metropolitan Trust Company of New York, which then held said notes for the purposes of security under a contract with the Ala. Ter. & Imp. Co.; that in August, 1891, the Farley Nat. Bank failed, and was placed in the hands of a receiver by the Comptroller of the Currency; that while suspended, to-wit, in February, 1892, said Trust Company turned said notes over to L. B. Farley for said receiver . — its claim to said securities being released; that subsequently, the capital of the bank was made good, the receiver withdrawn, and the bank was authorized, under the national banking acts to resume business ; that on the 23d of February, 1892, the board of directors of the Farley National Bank, (which had then resumed business), passed resolutions authorizing the transfer of said notes and securities to J. L. Plall and L. B. Farley, ■as trustees, and the same were so transferred, the same day, by PI. D. Plerron, the agent of the bank, thereto authorized, amounting to about $333,000; that all the indebtedness of the A. T. & I. Co,, for the security-of which the said transfer of said securities as collateral was made, (subject to certain credits), was transferred with the collaterals to the plaintiffs; but the sum of $30,000 of the original indebtedness (credited thereon as hereafter shown) was retained, and is still held by the Farley National Bank, while all the securities were transferred to the plaintiffs, to collect and apply to the payment of the whole indebtedness, including that portion-retained by the Farley Nat. Bank, as shown by the transfer by said bank to the plaintiffs. The written transfer, attached as a part of the finding, recites, that suit has been, brought by the bank against the Ala. Ter. & Imp. Co., upon said notes and other evidences of debt, which suitis nowpending ; and since said suit has been brought, *■ the said company has paid the bank, $10,000 in cash, and has executed its three bills for the sum of $10,000 each, bearing date — February, 1892, and payable sixty days, ninety days and four months after date, respectively, which sum, amounting to $40,000, together with $3,700.14, to which the company was entitled to as a credit, being applied as credits to the ascertained balance due by said company to the bank, viz., $151,008.99, left a balance of $107,308.85, due by said company to the bank, which balance, together with all of said notes and securities, the board of directors of the bank transferred, assigned and set over to the plaintiffs, as trustees, for the purposes specified in the resolutions of transfer, and authorized and empowered Henry D. Herron, for and in the name of the bank, to execute a written instrument, necessary and proper for the purpose of transferring the said indebtedness and the said collaterals to secure the same, to the plaintiffs, which he did. The amount of the indebtedness did not include the $30,000, for which the company gave its notes to the bank, as above stated. No objection is made in the assignments of .error, or in the argument of the counsel, to the correctness and sufficiency of these resolutions, and the transfer by Herron under them, to accomplish the purposes designed, if Woolfolk, as president, had the right to transfer said col-laterals to the bank. The substance of this transfer has been given above, in the findings of the special judge. It is signed by J. W. Woolfolk, Pres’t., and purports to be made in behalf of the said A. T. & I. Co.

The judge finds, in respect to the authority of Wool-folk to make this transfer, from an examination of the' minute books of the A. T. & I. Co., and from the evidence, that the president was not authorized by the stockholders to make said pledge, nor was it ever ratified by the stockholders ; that his act was never expressly authorized by the directors, nor was it ever expressly confirmed by them, at a meeting of the directors. But, as he stated, he reached the conclusion of fact from the . evidence, that if the president did not have the express power, under the charter and by-laws of the company, yet the. directors, with knowledge of the facts, so acquiesced in Ms act, in pledging the securities, that the corporation is now bound by his acts.

He bases this finding on the following facts : (a.)

The Alabama Terminal & Improvement Company was compelled to borrow money almost from the date of its organization, and, in every instance disclosed by the evidence, was compelled to give security either personal or by depositing collaterals, and it took all they could do to persuade the people to lend it to them ; that papers were constantly coming to the bank and there was no money to meet them, and they had to call meetings of the people interested, and persuade them to make papers to raise money and meet such maturing obligations to keep the company from going to protest; that, sometimes, such papers were signed, both, by the A. T. & I. Co. and the Alabama Midland Railway Company, but generally, by the former, and the debts were very large, (b.) Ata meeting of the directors on August 8,1891, the president was authorized to borrow money by a mortgage on certain lands of the company, the resolution reciting that it was desirable to use the lands as collateral for the purpose of raising money. At that meeting, the president mentioned to the board the fact of the company's indebtedness to the bank ; that under that resolution, the president executed mortgages to the bank on lands in Montgomery and elsewhere. Dr. Tennell, one of the directors of the A. T. & I. Co., testified to the fact of the failure of the bank, and that it resulted from the large indebtedness of the company to it, which 'fact was published in the papers and was generally known and talked about in Montgomery and Troy, but he did not know the facts before, (c.) No other director except Dr. Tennell was examined as a witness, (d.) A considerable portion of the money borrowed went to pay debts of the A. T. & I. Co. (e.) The books of the company were kept at Montgomery, Ala. A check book was.kept, and showed on what account checks were drawn on the bank, and all transactions were posted on the books of the company, kept at the Montgomery office. On the 25th of January 1892, six of the nine directors of the A. T. & I. Co., signed a paper in which they ratified and confirmed the transfer by the president of these collaterals to the bank, which paper was signed, separately, by the directors, and not at a meeting of them. The minutes of the several meetings of the directors were introduced in evidence, showing that, in all the instances there disclosed, in which collaterals had been deposited, the president was expressly authorized to deposit them.

The defendants insist, that, on the foregoing finding, it appears that the plaintiffs are not the owners of the note sued on, that it is not their property, but belongs to the Ala. Ter. & Imp. Co.

Y. The basis of this contention is, that the transfer by Woolf oik, the president, and by the treasurer of the collaterals, including the note sued on, is their individual act, without the authority, virtute officii, or by any shown delegation of power to dispose of the property of the corporation. The finding is, as has been shown, that these officers were not authorized by any action of the stockholders to make said transfer, and it was never expressly authorized by the directors. If this were all, the contention would have to prevail. — Speckle v. Spence, 8 Ala. 264; Gibson v. Goldthwaite, 7 Ala. 281. But, these officers, and especially the president, were the active financial agents of the company. It was organized to carry on a business which required the raising, borrowing and expenditure of very large sums of money; the skill and energies of the company, with the assistance of all its friends, were greatly and sorely taxed to raise money with which to build the road, get along, pay the debts, and not to go to protest. It was impracticable, as is the case with every enterprise of the kind, to speak and act, always, through its governing body; and the old rule, requiring such formality, — as we said on another occasion, — in obedience to the demands of the commercial necessity, lias been greatly relaxed. Corporations engaged in such enterprises, and incorporated trading companies, would be greatly embarrassed, if required to conform to such corporate action. “Hence, in the ordinary dealings of trading corporations, and within the scope and purview of their chartered powers, the same intendments and implications arise, as would spring out of similar acts or conduct of natural persons. ” Tenn. R. T. Co. v. Kavanaugh, 93 Ala. 329, 9 So. Rep. 395; Ga. Pac. R. Co. v. Propst, 83 Ala. 518, 3 So. Rep. 764. Morawetz lays down the principle, that a corporation has implied authority to conduct its business . on liberal principals, and may generally do what an intelligent man would do, under similar circumstances. — 1 Mor. on Corporations, § 365; 1 Am. & Eng. Encyc. of Law, 369. While, therefore, the officers of a corporation are not free from all obedience to form, so as to be independent of the governing body, and can not perform acts which are ultra vires, and while there are many 'things which, if they do, will not be recognized as binding on their principals, yet, while they act in the line of the business of their companies, without express authority, but manifestly for their interests, it will require but little to show the approval or ratification of the companies. — 2 Mor. on Corp., § 675. It is elementary, that an act done by one, re£)resenting himself as the agent of another, which he had no express authority from his principal to do, may be ratified by the party for whom he assumed to act. Ratification maybe done expressly, or by mere acquiescence, or a failure to repudiate the act, knowing it to have been done, and as effectually by the one, as by the other mode. — 2 Kent, 616; Story on Agency, §§ 239, 255, 256 ; 2 Morawetz on Corp., § 627 ; 1 Beach on Corp., §195; Lyndeborough Glass Co. v. Mass. Glass Co., 111 Mass. 315; Olcott v. Tioga R. R. Co, 27 N. Y. 546; 17 Am. & Eng. Encyc. of Law, pp. 127, 162, 163.

Whether this corporation ratified this act of the president, in transferring these collaterals, is one of fact. Proof of circumstances from which the court can reasonably infer, that the act in question was generally known by the stockholders, and more especially so by the directors, is prima Jade evidence of ratification. The board of directors had authorized the placing of collaterals by the president to borrow money in other instances; the company was hard pressed and was resorting to every known • expedient to raise money to carry on its work, and we are not permitted to doubt that every director knew this fact; it had authorized the mortgaging of its lands, even, to place as collaterals for loans; they knew, for the president had informed them, of this large indebtedness of the company to the bank; the books were kept open in Montgomery, and all transactions were entered upon them ; the company had an account with the bank, and was borrowing largely from it; it had its check book, on which a memorandum of checks drawn, and to whom was kept; and it is not reasonable to suppose its transactions were not known and well understood by the directors, especially, if we presume, as we must, that they did tlieir duty, and by as many of the stockholders as desired to know, or inquire. Besides this, six out of the nine directors ratified the act by a private paper, which, though not a ratification by the directory, is evidence of a knowledge and approval of the act, and of a determination not to disaffirm it. Who can question a legal ratification as binding, as if expressly done, after this finding of all these facts?

This is unlike the cases referred to by defendant, where acts have been done by officers, especially forbidden to be done, except in a certain manner, and according to certain formalties, in which cases, greater strictness of ratification is required, than in placing of collateral paper to borrow money in the current business of a company, like the one whose acts we are considering. — 1 Beach on Corp., § 195.

The plaintiffs are parties to whom payment may be legally made, and who can legally discharge the debts, and though the money when collected may not be for their use, or theirs alone, but for other persons, or for theirs and others to whose use they are required to apply or pay it, the action is properly brought in their names. — Yerby v. Sexton, 48 Ala. 311; Hirschfelden v. Mitchell, 54 Ala. 419.

VI. But it is said, the A. T. & I. Co. was never more than a de facto corporation; that the preliminaries to a legal incorporation were never complied with ; that there was a positive combination and agreement, that the 20 per cent, of the subscription required to be paid in cash, should not be paid, and in fact never was paid.

The findings of the judge on this branch of the defense were, that the A. T. & I. Co. was organized by the election of a board of directors, on the 20th day of January, 1887; that a certificate of the judge of probate of Montgomery county, Alabama (in which county its principal place of business was located) was issued on the 4th day of February, 1887, reciting the facts required to be recited by section 1807 of the Code of 1876 ; that in the organization of said corporation, the provisions of Art. I. Ch. 1. T. 1. Part 2 of the Code of 1876, were followed in every respect, .except that. 20 per cent. of the capital subscribed was never paid in ; ’ that checks were given for the cash required to be paid on subscription of stock, and were putin custody of an officer of the company with instructions not to present them, and there was an agreement that they were not to be, and they have never been, collected.

It was further found, that the Alabama Midland Railway Company was incorporated in March, 1887, under the general incorporation laws found in the Code of 1876 as amended ; but it did not pay the 20 per cent, required to be paid by law on organization ; that it received after-wards, the notes of persons for subscriptions to its stock, which notes became the property of the A. T. & I. Co. The only irregularity in the incorporation of either of these companies, that has been suggested in argument, is the non-payment in cash of this 20 per cent of the subscription, required by law as one of the conditions to organization.

It must be admitted, that a substantial compliance with all the terms of a general incorporation law is a prerequisite to the formation of a corporation under it —1. Morawetz on Corp., § 27 et seq.; 1 Spelling, §§ 37-8 ; Cen. Agr. & Mech. Asso. v. Ala. G. L. Ins. Co., 70 Ala. 120. But, as was well said in the case last cited, “When an association of persons is found in the exercise and user of corporate franchises, under color of legal organization, their existence as a corporation can not be enquired into collaterally. In a direct proceeding by the government they may be ousted. * * * * The eoi’poration exists defacto, — is subject to all the liabilities, duties and responsibilities of a corporation de jure. It would produce only disorder and confusion, embarrass and endanger the rights and interests of all dealing with the association, if the legality of its existence could be drawn in question, in every suit to which it was a party, or in which rights were involved, springing out of its corporate existence. No judgment could be rendered which would settle the question finally. But, when the government intervenes by an appropriate proceeding, the judgment is final and conclusive, putting an end to all controversy.” — The State ex rel Sanche v. Webb, 97 Ala. 111; Lehman v. Warren, 61 Ala. 455; Frost v. Frostburg Coal Co., 24 Howard, (U. S ) 279, 284; County of Macon v. Shores, 97 U. S. 277; Casey v. Galli, 94 U. S. 673; Appleton M. F. Ins. Co. v. Jesser, 5 Allen (Mass.) 446; 4 Am. & Eng. Encyc. of Law, p. 198 ; Taylor on Corp., § 145 ; 1 Spelling on Corp., § 48 ; 2 Morawetz on Corp., § 1022 ; 1 Morawetz on Corp., § 331.

Another principle equally well settled and recognized, as may be stated in the language of this court in the Cen. Agr. & Mec. Asso. Case, supra, is, “Whoever eon-tracts with a corporation, having a de Jacto existence, the reputation of a legal corporation, in the actual exercise of corporate powers and franchises, is estopped from denying the legality of the existence of the corporation, or inquiring into .irregularities attending its formation, to defeat the contract, or to avoid the liability he has voluntarily and deliberately incurred. The principle is especially applicable to stockholders, seeking to avoid a liability to creditors of the corporation. Their own acts vitalized the corporation, gave- it credit, invited and induced dealings with it, and it is true conservatism and sound policy, promotive of right and equity, to seal their lips against contradiction and denial of that which they must be taken to have affirmed, to the injury of strangers who must have trusted the affirmation.” — Snider’s Son’s & Co. v. Troy, 91 Ala. 224,- 8 So. Rep. 658, and authorities supra.

The payment of this 20 per, cent, as one of the statutory prerequisites to the organization of these companies, can not be availed of as a defense to this action. — Selma & Tenn. R. R. Co. v. Rountree, 7 Ala. 670; Smith v. Tallassee Br. Plank Road Co., 30 Ala. 650; Sparks v. Woodstock I. & S. Co., 87 Ala. 294, 6 So. Rep. 195; 2 Morawetz on Corp., § 742.

VII. On the question of fraud and the consequent failure and want of consideration, as set up in the pleas of defendant, the judge, in addition to what has been already stated, finds, that the allegations are not sustained, on these additional grounds: That on the 7th May, 1887, the defendant subscribed for $500 of the capital stock of the Ala. Mid. Railway Co., the' conditions attached to which subscriptions were, as has been above recited; that on July 21, 1887, he executed the note sued on, which contains no reference to stock in the A. T. & I Co.; the subscription contained a stipulation for one-third of his stock in the Alabama Midland Railway Company, to be substituted by an equal amount in the A. T. &I. Co.; that the condition of the note relates only to the time and manner of the completion of the road, which were fully complied with ; that on the same day he gave the note, he accepted from the A. T. & I. Co. its obligation to exchange one-third of its stock for a like proportion of the $500 in stock of the Ala. Mid. Railway Co., when the note here sued on was paid; that when the note was given, both companies had received certificates of-incorporation, such as are provided by law, and had performed all acts entitling them to certificates, except the payment of 20per cent, required by law; and that defendant testified in the case, that no representation was made to him, that the 20-per cent, had been paid, and he did not enquire or investigate. If one has been induced by fraud to become a stockholder in a corporation, it is true he may set up this fraud as a defense to an action on his stock notes,)! (2 Mor. § 769 ; 1 Mor., § 94) ; but,the findings are satisfactory to show, that the fraud complained of is. not sustained.

VIII. There remains another defense, which is, that although so far as this case is concerned, if the corporations are held to be even de jure organizations, under the law of 1876, still,, that law was expressly repealed by section 10 of the Code of 1886, and that one or two alternatives resulted, necessarily, from this repeal, namely, that the companies were either dissolved by the repeal of their charters, or, they exist under and by virtue of, and subj ect to, the new law. And, if they were not dissolved, but continued to exist, under the new and not under the old law, then section 1664 of the Code of 1886 became a part of their corporate life, subject to which they had, necessarily, to exist. That section, among other things, provided that a corporation, when duly organized, has power to borrow money, and to mortgage or otherwise convey or pledge its property, real or personal, but it has no power to make such mortgage, conveyance or pledge, otherwise than by the consent of the holders of the larger part in value of the capital stock, expressed by vote, at a meeting of the stockholders, called for that purpose; and inasmuch as the pledge of these collaterals by Woolf oik, ' as president, to the bank, was not made in conformity to that section, it is ultra vires and void.

Generally speaking, the rights of a corporation are determined by the law in force when it came into being, though it can not be denied, that by the laws of this State, the charter of either of these companies was subject to amendment or repeal by future legislation. — Art. XIV, § 10 Const, of Ala.; Chesapeake & Ohio R. R. Co. v. Miller, 114 U. S. 189

Whether or nob an enactment of the legislature shall operate as a repeal or alteration of a charter, where the power is reserved to alter or repeal, is a question of legislative intent. Repeals by implication are not favored, and it has been held, and we think properly, that the repeal of a general incorporation act, and the re-enactment of a new one, does not affect existing corporations formed under the former act; and the object of such legislation would seem, more reasonably and fairly to be, to make provision for future corporations only. The later act will not be held to repeal the former one, unless there is án express intention to do so;< or a necessary implication to that effect, arising from the enactment. — 2 Spelling on Gorp., § 1066; 2 Morawetz on Corp., § 1110; Freehold Mut. Loan Asso. v. Brown, 29 N. J. Eq. 121; United Hebrew Benevolent Asso. v. Benshimol, 130 Mass. 325; Donworth v. Coolbaugh, 5 Clarke (Iowa) 300.

That it was not the intention of the legislature to repeal the general incorporation law of 1876, as to corporations formed under it, butto enact a new law, extend-ing the provisions of the old, perfecting it in many of its details and supplying some of its omissions, without any purpose to interfere with corporations formed under the former, is manifest from some of the new provisions of this new system, as we find them in the Code of 1886.

Section 1528 provides, that any banking corporation or loan association, which has been or may be organized under any law of this State, may be organized and do business under the provisions of this chapter, upon complying with the conditions following — setting them out. Of course, the necessary implication is, that the charter, under the forfiaer law still exists, and it may continue under the old, with an option to reorganize under the new, upon complying with certain conditions. Section 1535 provides, that an insurance company, when organized under the new system, “and any stbch company heretofore organized,” shall have the power conferred by that section. So, sections 1535 and 1539 extend their provisions to insurance companies, — the first, to those “now organized, * * or -which, may be hereafter organized under this chapter/’ the latter, to “a corporation organized under this chapter, or any insurance corporation heretofore organized wnder the laws of this State.” And sections 1586, 1587, 1594, and 1595, — the two former being old sections and the two latter being new,— each makes provision for railroad companies organized under former laws. In these several sections we have a clear manifestation of the legislative recognition of the existence of former corporations, chartered under previous general law. We conclude, therefore, that without reference to section 10 of the Code, and whether the corporation law of 1876 was repealed or not by that section, the charters of corporations formed under that law were not repealed, but were left by the new law as they were previously organized.

In Massachusetts, a corporation was oi’ganized under general statutes enacted for the purpose. Later these general statutes were repealed by the legislature, which later repealing ^statute substantially re-enacted the provisions af the old law, so far as it related to the creation of such corporations. The question having arisen, whether the charter of the corporation, formed under the repealed statute was also repealed and destroyed by the repeal, the court said : “It is contended that as the statute of 1874 contained no reservation, it operated to destroy all corporations created under the provisions of the general statutes. * * But it is plain that the statute of 1874 was not passed for the purpose of affecting the rights of corporations already organized. The repeal of a general corporation law cannot be construed, in the absence of express provisions, as intended to repeal the charters of corporations formed under it, especially when the manifest purpose of the repealing act is to substitute a new law, extending the provisions of the old, and perfecting its details, but not changing its general policy. ”

We think the old system was repealed in the enactment of the new, and no corporations may now be organized under, the provisions of the Code of 1876; but that, as for all companies incorporated under the old law, they are continued of force under the provisions of that system.

IX. It is argued once more, that the findings show that the note sued on was pledged for all the alleged debt then existing ; that $30,000 of this debt is held and owned by the Farley National Bank, while the plaintiffs own the remainder, and all the collaterals have been transferred to the plaintiffs; that .the debt and the col-laterals placed to secure it, have thus parted company, and section 1784 of the Code which provides, that a transfer or assignment of collateral security pledged to secure the payment of a debt, not accompanied by á transfer of the debt, is a discharge of the pledge, restoring the right and title of the person from whom received.

This argument proceeds on a mistake as to the finding. As appears from the findings, the amount of the debt assigned to the plaintiffs was $107,308.85. It was originally — as shown by the resolution of assignment by the bank to plaintiffs, (made a part of the findings) — $151,008.99, on which were credits of $10,000 cash, paid by the company, $30,000, the three notes given by the company to the bank — the $30,000 to which defendant is referring as the basis of this objection — and $3, 700.14, together, making $43,700.14 of credits, on the original debt of $151,008.99, which being deducted, leaves $107,308.85, the balance of said original debt, which was transferred to, and is held by plaintiffs, for which all of said securities were transferred to them, to collect and pay, as well as the said sums of the three notes for $30,-000, which the bank holds.

But the original debt, for which the securities were pledged, and the securities have not parted company. That debt and the securities are, together, in the .hands of the plaintiffs, as shown by the findings. If a question might be raised, whether any of the proceeds of the collections of those collaterals can be applied towards the payment of these three notes now held by the bank, it will be one between the .A. T. & I. Co., the party for whose benefit the provision in the section of the Code referred to applies, and the plaintiffs., and does not arise in this case between defendant and them.

When he pays his note to the plaintiffs, he will have a full discharge, — the only point, on this- branch of the case, in which he is interested.

The judgment of the court below is affirmed. .