Company v. National Bank

• Decision Date: 01 October 1877
• Docket Number: GOLD-MINING
• Citation: 24 L.Ed. 648,96 U.S. 640
• Parties: COMPANY v. NATIONAL BANK
• Court: U.S. Supreme Court

96 U.S. 640

24 L.Ed. 648

GOLD-MINING COMPANY v. NATIONAL BANK.

October Term, 1877

ERROR to the Supreme Court of the Territory of Colorado.

The facts are stated in the opinion of the court.

Mr. Wheeler H. Peckham for the plaintiff in error.

Mr. J. M. Woolworth, contra.

Mr. JUSTICE HUNT delivered the opinion of the court.

This was an action by the Rocky Mountain National Bank against the Union Gold-Mining Company of Colorado, to recover a balance of overdraft, due upon the account kept at the bank, in the name of the company. The balance of over-draft, exceeding $20,000, was created by drafts or checks drawn by one Sabin, who, claiming to be the authorized agent of the company, acted in its name, and made deposits from time to time to its credit. The jury rendered a verdict in favor of the bank for the amount of the over-draft with interest ($30,358.32), and from the judgment entered upon that verdict the present writ of error is brought.

The defendant presented formal requests to charge to the number of forty, one of which was subdivided into three parts. It asked for a new trial upon ten grounds severally set forth; and the assignment of errors below discloses one hundred and thirty-three allegations of error.

There was but a single question in the case; to wit, Were the acts of Sabin the acts of the gold-mining company, either by original authority or by ratification? As it was finally put to the jury, Was there a ratification of his acts by the company? We shall consider the objections most seriously urged and having the greater plausibility.

The first objection to the recovery arises from the amount of the debt. The plaintiff is a national bank organized under the act of Congress of June 3, 1864, with a capital stock of $50,000. 13 Stat. 99. By the twenty-ninty section of that act, it is provided as follows: 'The total liabilities to any association of any person, or of any company, corporation, or firm, for money borrowed, including in the liabilities of a company or firm the liabilities of the several members thereof, shall at no time exceed one-tenth part of the amount of the capital stock of such association actually paid in.' Rev. Stat., sect. 5200.

After obtaining and holding to its own use the money, can the mining company be allowed to interpose the plea that the bank had no right to loan the money? In Harris v. Runnels (12 How. 79), where the defendant sued upon a note set up the illegality of its consideration, it was held that the whole statute then in question must be examined to discover whether it intended to prevent courts of justice from enforcing contracts in relation to the act prohibited; and that when a statute prohibits an act, or annexes a penalty for its commission it does not follow that the unlawfulness of the act was meant to avoid a contract made in contravention of it. A statute provided that slaves should not be brought into the State without a previous certificate signed by two freeholders. Slaves were brought in without such certificate and sold, and the purchaser was held liable for the purchase-money. Mr. Justice Wayne said that the rule was allowed not for the benefit of either party to the illegal contract, but altogether upon grounds of public policy.

In O'Hare v. The Second National Bank of Titusville (77 Pa. St 96), the question was made upon the statute we are considering, and it was objected that the bank could not recover the amount of the loans in excess of the proportion specified. The court held that the section of the statute referred to was intended as a rule for the government of the bank, and that the loan was not void. See also Pangborn v. Westlake et al., 36 Iowa, 546; Vining et al. v. Bricker, 14 Ohio St. 331.

We do not think that public policy requires or that Congress intended that an excess of loans beyond the proportion specified should enable the borrower to avoid the payment of the money actually received by him. This would be to injure the interests of creditors, stockholders, and all who have an interest in the safety and prosperity of the bank.

We are of the opinion that this objection is not well taken.

It is contended that there was error in admitting Perrin to sit as a juror in the cause. It appears that he had previously conversed with another party in relation to the facts of the case, and had received from him an impression in relation to them. He expressed an entire willingness, as well as an ability, to accept the facts as they should be developed by the evidence, and to render a verdict in accordance with them. He was evidently an intelligent man, and well qualified to act as a juror in such a case. When his name was called, he was sworn to answer truly to such questions as should be put to him touching his competency to sit as a juror in the case. Questions were put to him by the respective counsel, and were answered by him, the result of which was as above stated. At the close of his examination, the record states as follows; viz., 'By the court. Well, I think he is competent. Here the defendant ...