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Bond vs. The Central Bank of Georgia. The defendant, in support of his objection, relies on the 25th section of the original charter, which limits loans to two thousand five hundred dollars ; on the 11th section, requiring two or more good securities or endorsers on notes and bills of exchange discounted by the Bank; and on section 1st of the amendatory act of 1836, which provides that all notes thereafter discounted at said Bank, shall be renewed annually. Prince Dig. 118.

Joseph Bond's note had only one month to run when taken by the Bank; and while it is granted, that it exceceded the sum of two thousand five hundred dollars, and was without securities or indorsers, still being received in discharge of sundry notes due the Bank by Beall, either as principal or indorser, the number and terms of which do not appear from the record before us, the plaintiff might well claim the benefit of the 1st section of the Act of 1829, the provisions of which, as heretofore quoted, equitably, if not literally, apply to the transaction. He might fold his arms and insist, that non constat, it does not appear that

any

of these antecedent debts transcended in amount or varied in their terms, from the regulations in the statute creating this corporation. That while it is admitted that the directions and restrictions in the charter must be obeyed, still it remains for those who charge culpabilty to show it. That all persons, private and official, natural and artificial, are presumed to do their duty until the contrary is proved. Omnia præsumuntur rite et solenniter esse acta, donec probetur in contrarium. That the transcript sent up, which is the only evidence before the Court, contains nothing, as to the original notes of Beall, which would overturn the presumption, that all things were rightly done, as to them.

Bond's note, therefore, being taken in liquidation of Beall's, he is estopped from setting up the provisions of the charter for his escape. Suppose that Beall's notes were likely to be lost, and that Bond's note was the only security that could be obtained for their payment, it would be suicidal to hold that the Bank was inhibited from availing itself of this indemnity on account of the limitations in its charter. The power to save its debts is essential to its existence. The regulations in the charter as to discounts, are merely directory. Beall himself, if sued, could not take advantage of any deviation from them; much less can Bond, whose note is taken in discharge of the original debtor. United States vs. Kirkpatrick, 9 Wheat. R. 720; United States vs. Van Zandt, 11 Wheat. R. 184;

Bond vs. The Central Bank of Georgia.

The Bank of the Northern Liberties vs. Cresson, 12 Sergt. and Rawle R. 306.

The President and Directors of the Bank of the Commonwealth of Kentucky brought a suit for money loaned at the branch at Greensburg. The defendants plead, that the writing sued on was illegal and void, being a renewal note, and a substitution and satisfaction of a former note, the sole consideration of which was, bank paper loaned to the defendant by the plaintiff, by the authority and in pursuance of an act of the Legislature of Kentucky, contrary to the meaning and prohibition of the 1st article and 10th section of the Constitution of the United States, forbidding the emission of bills of credit by any State in the Union. The plaintiffs filed a demurrer to the plea, and Judge Tompkins sustained the demurrer, on the ground that, although the loan may have been illegal, still it was no defence to a suit brought by the Bank on the note for the money. The defendants prayed an appeal. The cause was heard, and the judgment of the court below affirmed. 2 Littell R. 300.

-The Bank of Somerset obtained judgments against one Hughes, on notes executed by him to the Bank. The defendant applied for an injunction against these judgments on four grounds, the first and second of which were, that the Bank had forfeited its charter by commencing its operations as a corporation, before the amount of money required by the act of incorporation was actually received by the commissioners appointed for that purpose, and by since failing to redeem its notes. Judge Owsley delivered the opinion of the Court.“ With regard to the first and second ground of equity set up in the bill,” said he, “we apprehend they afford no sufficient cause for the interposition of a court of equity. Whether the Bank went regularly into operation, or has since failed to redeem its paper, according to the provisions of its act of incorporation, are inquiries which we suppose cannot be drawn in question 'in the mode adopted by the complainant. The justice of the demand against the complainant could in no possible way be affected by such inquiries." 5 Littell R. 45.

In a suit on a promissory note, at the instance of Edward Little vs. John O'Brien, 9 Mass. R. 403, it was agreed, on a case stated by the parties, that the plaintiff was the agent merely of the Union Fire and Marine Insurance Company, of Newburyport, and that he had no interest or property in the note declared on. For the defendant it was argued that there could be no recovery, because the corporation above named had no authority by law to take such

Bond os. The Central Bank of Georgia.

a note, as it was exceeding their legal powers, and against the positive regulations of the charter under which they claimed to act. The consideration of the note was, then, illegal and corrupt,

and the courts would not enforce a contract originating in a direct breach of the law.

By the Court.The principal objection urged against the plaintiff's recovery in this case arose out of the provisions of the act incorporating the Union Marine and Fire Insurance Company, by which it was required that their capital stock should, within six months after payment, be invested in the funded debt of the United States, or of this Commonwealth, or in the stock of some incorporated banking company. From the facts in the case submitted, it appears that, instead of such investment, the company received of the several stockholders their respective promissory notes, with collateral security for the payment thereof; that they from time to time renewed such notes, either partially or in the whole; and that the note, of which payment is sought in this action, was given for, a balance of instalments, due from the defendant as one of the stockholders. And it is insisted that the conduct of the company was such a contravention of their duty as will avoid the note in question.

It is a sufficient answer to the objection that it does not lie in the mouth of the defendant, for this cause to avoid his contract, which, as between him and the company, was made on a sufficient consideration. Whether for this misbehaviour of the corporation the Government might not seize their franchises, upon due process, is a question not now before us."

The Chester Glass Company brought an action of assumpsit against Stephen Dewey, to recover the original amount or price of a share in the stock of the said company, and also the assessments laid on the said share; and it is alleged in the declaration that the defendant agreed to take the said share, and promised to pay the said original amount, and all the assessments. The plaintiffs also claimed another sum for goods sold and delivered by them to the defendant. The defendant interposed numerous pleas, and among the rest that the company had never been regularly organized, nor even authorised to act as an incorporated company. That they had no right, under their charter, to keep a store and sell goods; and that, therefore, they could not recover against him on his purchases. Parker, Chief Justice, in delivering the opinion of the Court, says: “ As to the fourth objection, which was to the recov-.

Bond os. The Central Bank of Georgia.

ery on the count for goods sold and delivered, on the ground that the plaintiffs were prohibited from trading, it cannot prevail. The Legislature may enforce the prohibition, by causing the charter to be revoked when they shall determine that it has been abused. The defendant, however, cannot refuse payment on this ground.” 16 Mass. R. 94.

The Bank of Virginia, and the Farmers' Bank of Virginia, finding it expedient to erect buildings in the city of Richmond for the transaction of their business, purchased a piece of ground for that purpose, and erected the building. After this was done there remained a vacant space on each side of the Bank buildings, on which they determined to erect fire-proof brick houses, for the greater security of the banks, and to sell them out to individuals. Before the houses were completed, the banks agreed with Michael B. Portiaux, to sell him one of the tenements for the sum of $15,500, payable at the end of five years, with interest. The Banks also agreed to advance to the said Poitiaux the necessary sum to prepare the house as an auction store, and to build a small house, to be added to the cost of the tenement, and to be paid for in the same manner. Bond and security, and a trust deed on the property were to be given. Poitiaux did accordingly take possession of the said tenement, and received from the banks $5,000 under the agreement, which was laid out by him in the manner contemplated. But he never executed the bond, with security, for $20,500, (the whole sum due,) nor a deed of trust, according to the agreement.

The Banks brought a suit against Poitiaux, to compel a specific performance of this agreement.

Poitiaux plead, among other things, that the Banks had no power to deal in real estate under the circumstances of that in question. Their charters provide that the land which it shall be lawful for them to hold shall be only such as shall be requisite for their immediate accommodation, &c. or acquired in satisfaction of debts, &c. and that they shall not, directly or indirectly, deal or trade in any other thing, except bills of exchange, gold or silver bullion, &c.

The Chancellor decreed that the banks had exceeded their pow. ers in purchasing and selling the property in question, it not being necessary for their immediate accommodation in relation to the convenient transaction of their business. From this decree the plaintiffs appealed, and the Court of Appeals reversed the decree, and held, that notwithstanding the Act of Assembly authorises a Bank to hold as much real property as may be requisite for its im

Bond vs. The Central Bank of Georgia.

mediate accommodation, in relation to the convenient transaction of its business, and no more, the Bank may purchase more ground than is necessary for the erection of a Banking-house, build fireproof houses on the vacant land, for the greater security of the Banking-house, and sell them to third persons. And that, even if the Bank violated its charter in so doing, the only proceeding against it would be by quo warranto, and the purchasers of the houses cannot resist a specific performance of their contracts by alleging that the Banks had exceeded their powers in erecting and selling the house.

Judge Green says: “ It seems to me that the charters are only directory in this respect. They impose no penalty in terms. They do not declare the purchase by, or conveyance to the banks, to be void, nor vest the title in the Commonwealth, or any other than the Banks, in consequence of such purchase and conveyance. The legal title passed to the Banks by the conveyance to them, and their conveyance would effectually transfer that title to any other. If, in making the purchase of the land in question, the Banks violated their charters, the corporation might for that cause be dissolved by a proceeding at the suit of the Commonwealth; and even in that case it seems to be the better opinion that the property, if not previously conveyed to some other, would revert, upon the dissolution of the corporation, to the grantor. The maxim, factum valet quod fieri non debet, seems to apply. It would be extremely inconvenient if every contractor with one of these Banks could, for the purpose of avoiding his contract, institute the inquiry whether the Bank had violated its charter. They have a right to insist that the question should be tried by a jury, in a proceeding having that single object in view.” 3 Rand. R. 136.

In Fleckner against the Bank of the United States, the Supreme Court held that the statute incorporating the Bank of the United States does not avoid securities on which usurious interest may have been taken, and that the usury cannot be set up as a defence to a note on which it is taken. It is merely a violation of the charter, for which a remedy may be applied by the Government.

Judge Story, who delivered the opinion of the Court, says: “Even if the Bank had violated its charter by this particular transaction, it is not easy to perceive how that objection could be available in favour of Fleckner. The act has not pronounced that such a violation makes the transaction or contract ipso facto void, but has punished it by a specific penalty of treble the value. It would, therefore, remain to be shown how, if the Bank had a general right

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