Matthews v. Skinker

• Decision Date: 31 January 1876
• Citation: 62 Mo. 329
• Parties: ELIZABETH A. MATTHEWS, Defendant in Error, v. THOMAS K. SKINKER, et al., Plaintiffs in Error.
• Court: Missouri Supreme Court

62 Mo. 329

ELIZABETH A. MATTHEWS, Defendant in Error,

v.THOMAS K. SKINKER, et al., Plaintiffs in Error.

Supreme Court of Missouri.

January Term, 1876.

Error to St. Louis Circuit Court.

Britton A. Hill, for Plaintiffs in Error, cited Green's Brice's Ultra Vires 39, 40 and notes.

Noble & Orrick, for Defendant in Error cited 2 N. J., 623; 2 Cow., 419; Beaty vs. Knowles, 4 Pet., 152; 15 Ohio St. R., 85; 7 Ga., 221; McMaster vs. Reid, 1 Grant's Case Penn., 36; 15 Johns., 358; 2 Conn., 678; 5 Conn., 560; 2 Comst., 430; Wiley vs. First Nat. Bk. of Brattleboro, 47 Vt., 552; Am. Law Reg., June 1875, p. 342; Wickler vs. First Nat. Bk. of Hagerstown, Am. Law Reg. Oct. 1875, 616; 7 Mo., 585; 18 Wall., 588; Fowler vs. Scully, 72 Penn., 468.

WAGNER, Judge, delivered the opinion of the court.

The error complained of in this case is the action of the court in rendering a perpetual injunction restraining the trustees from selling the plaintiff's property. From the record it appears that the plaintiff executed her note payable to Sterling Price & Co. for $15,000, due two years after date, and to secure payment of the note she made a deed of trust, bearing even date with the same, on certain real estate belonging to her. The note and deed of trust were delivered to Sterling Price & Co., who afterwards transferred them to the Union National Bank of St. Louis, a banking institution organized under the act of congress, to secure a loan for $15,000, advanced to Price & Co. by the bank. Price & Co. having failed to pay the money advanced on the note, and secured by the deed of trust, the trustee, at the request of the bank, advertised the property for sale, and the plaintiff filed her petition to enjoin the trustee and the bank from proceeding with the sale. Whether the deed of trust in the hands of the bank amounted to a valid security, which could be enforced in payment of the money advanced, depends upon the construction of the act of congress providing for the formation of national banking associations [Rev. St. U. S., p. 998]. By § 5136 of the Rev. St., authority is given to the banking associations “to exercise by its board of directors, or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking, by discounting and negotiating promissory notes, drafts, bills of exchange and other evidences of debt by receiving deposits; by buying and selling exchange, coin and bullion, by loaning money on personal security,” &c. By § 5137 it is provided that: “A national banking association may purchase hold and convey real estate for the following purposes, and for no other. First, such as shall be necessary for its immediate accommodation in the transaction of its business. Second, such as shall be mortgaged to it in good faith by way of security for debts previously contracted. Third, such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings. Fourth, such as it shall purchase at sales under judgments, decrees or mortgages held by the association, or shall purchase to secure debts due to it.”

The act, as will be thus seen, gives the association power to loan money on personal security, and to purchase, hold and convey real estate in certain specified cases.

The general principles defining the extent and mode of exercise of corporate powers are well settled and have often been passed upon by this court. Corporations have only such powers as are specially given by their charters, or are necessary to carry into effect some specified power. (St. Louis vs. Russell, 9 Mo., 507; Blair vs. Perpetual Ins. Co., 10 Mo., 559; Ruggles vs. Collier, 43 Mo., 353.) They must act strictly within the scope of the powers conferred on them by the act calling them into being; and where a grant of power from the legislature is relied on, the mode prescribed in that grant for doing any particular thing must be pursued according to the law creating them. (Han. & St. Joe R. R. Co. vs. Marion Co., 36 Mo., 294.) The distinction between natural persons and corporations is, that while the former may make any contract not prohibited by law or against public policy, the latter can exercise no powers not expressly conferred on them by their charters. (Bank of Louisville vs Young, 37 Mo. 398.) In Great Eastern Railway vs. Turner [L. R. 8. Ch. Ap., 152] Lord Chancellor Selborne gave a brief and comprehensive statement of the law applicable to questions of corporate powers. He said, “The company is a mere abstraction of law. All that it does, all that the law imputes to it as its act, must be that which can be legally done within the powers vested in it by law. Consequently an act which is ultra vires, and unauthorized, is not an act of the company, in such a sense, as that the consent of the company to that act can be pleaded.” As this case depends upon the interpretation of a national statute we may refer to some of the cases in U. S. Supreme Court to see what view that tribunal has taken of the law construing the powers of corporations.

In the Bank of the U. S. vs. Danbridge (12 Wheat., 64), the rule is stated to be, that, “whatever may be the implied powers of aggregate corporations by the common law, and the modes by which these powers are to be carried into operation, corporations created by statute must depend, both for their powers and the mode of exercising them, upon the construction of the statute itself.”

In Head vs. Providence Ins. Co., (2 Cranch. 127), Ch. J. Marshall defines the powers and limitations of statutory corporations with great clearness, as follows: “Without ascribing to this body, which in its corporate capacity is the mere creature of the act to which it owes its existence, all the qualities and disabilities annexed by the common law to ancient institutions of this sort, it may be correctly said to be precisely what the incorporating act has made it: to derive all its powers from that act and to be capable of exerting its faculties only in the manner the act authorizes.” Judge Strong, now of the Supreme Court of the U. S....