The Chesapeake Bank v. The First National Bank of Baltimore. laws enacted by Congress to carry into effect the powers vested in the National government." And in Howell v. State, 3 Gill, 14, our own Court of Appeals said: "State sovereignty extends to every thing which exists by its own authority, or is introduced by its permission, but not to those means employed by Congress to carry into execution powers conferred by the Constitution of the United States." The prayers of the plaintiff below rested on the ground of contract, and were addressed to the point, that it ought to be left to the jury, on all the facts and circumstances of the case, to find an implied agreement by the defendant to pay the money sued for. It could not be competent to the jury to find an implied contract by the defendant to pay to the State a bonus for the priv ileges and franchises of defendant's charter. No charter from the State was in existence. The defendant derived the franchises and privileges which it enjoyed from the act of Congress. It would have been contrary to law for the jury to so find. So, it could not be competent for the jury to infer a promise by defendant to pay to the State a tax which the State had no right to demand. The attempt by the State to impose such a tax would be void, and there could be incumbent on the defendant no duty to pay it, on which a promise to pay could be raised by implication. In no view do we think that the jury could have been justified in finding a contract by the defendant on which the action could. have been maintained, and we, therefore, concur with the court below in the propriety of rejecting the appellant's prayers. Judgment affirmed. THE CHESAPEAKE BANK, appellant, v. THE FIRST NATIONAL BANK OF BALTIMORE. (40 Maryland, 269.) National banks · Mesne process against, from State court. The act of Congress providing that no attachment, injunction or execution shall be issued against a National bank, before final judgment, in any action in a State court, is constitutional. A The Chesapeake Bank v. The First National Bank of Baltimore. TTACHMENT on warrant against the First National Bank of Baltimore, as garnishee of the First National Bank of Washington. The opinion states the case. George H. Williams, for appellant. A. Sterling, Jr., for appellee. MILLER, J. The appellant on the 18th of September, 1873, caused an attachment on warrant to be issued out of the Superior Court of Baltimore city to affect the property and credits of the First National Bank of the city of Washington, District of Columbia, as a non-resident debtor, which was laid in the hands of the First National Bank of Baltimore, as garnishee. In October following, the garnishee filed a motion to quash for reasons alleged, and from the judgment of the court quashing the writ, this appeal is taken. It is conceded the decision of the Superior Court was based upon the first reason stated in the motion, as follows: That said First National Bank of Washington was, before said attachment and at the time of the issue thereof, and still is, an association for the purpose of carrying on the business of banking, duly organized under the act of Congress of June 3, 1864, and that, by the 2d section of the act of Congress, approved March 3, 1873, it is enacted that the 57th section of the first-mentioned act be amended by adding thereto the following: "That no attachment, injunction or execution shall be issued against such association or its property before final judgment in any such suit, action or proceeding in any State, county or municipal court,” and that, by the force of said section, of said acts, the said attachment is illegal and void. We shall not stop to inquire what is the true construction of the original 57th section of the act of 1864, because it is clear the case before us is embraced by the terms of the amendment thereto made by the act of 1873. The constitutionality of the National Banking Acts is admitted, their purpose being, as expressed in the title to the original act of 1864, "To provide a National currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof;" but it is insisted these particular provisions, or features of them, are unconstitutional and void. The argument is that it is not within the power of Congress to Weckler v. The First National Bank of Hagerstown. clothe these banking associations as to their contracts and dealings with the world, with any special immunities and privileges exempting them, in their trade and intercourse with others, from the laws and remedies applicable in like cases to other citizens. But the power to create these banks as instrumentalities of the government, being, as it confessedly is, within the rightful powers of Congress, we cannot say that provisions like these, defining in what tribunals they shall be sued and to what suits or actions they shall be subjected, are not appropriate and necessary to carry out this admitted power. It must plainly appear that such provisions are inappropriate and unnecessary for this purpose, in order to justify a court in declaring that Congress has transcended its authority in enacting them. In our opinion Congress has the power to make any provisions which tend to promote the efficiency of these banks in performing the functions by which they were designed to serve the government, and to protect them, not only against interfering State legislation, but also against suits or proceedings in State courts by which that efficiency would be impaired. We are unable to perceive that the provisions here assailed are not of that character, and therefore cannot pronounce them void. Judgment affirmed. WECKLER V. THE FIRST NATIONAL BANK OF HAGERSTOWN. (42 Maryland, 581.) National bank Ultra vires-When not liable for representations of officer. Selling railroad bonds upon commission is not within the scope of the corporate powers of a National bank; and therefore no action lies against such corporation for false representations made by its teller to induce the plaintiff to buy bonds.* A CTION to recover damages for fraudulent representations made by defendants' teller upon sale of bonds to plaintiff. H. H. Keedy, for appellant. This is an action for deceit. Whether *See Wiley v. First National Bank of Brattleboro, post, and note. Weckler v. The First National Bank of Hagerstown. an action of this kind can be maintained against a private corporation is no longer an open question. Tome v. Parkersburg Branch R. R. Co., 39 Md. 70; Merchants' Bank v. State Bank, 10 Wall. 644; Barwick v. Eng. Joint Stock Bank, L. R., 2 Exch. 259; Swift v. Wintherbotham, L. R., 8 Q. B. 244; Phil., Wil. & Balt. R. R. Co. V. Quigley, 21 How. 202. The instruction of the court is clearly erroneous, independent of the fact that it goes upon the assumption that the transaction complained of was a purchase and sale of these bonds, which the facts in the case do not warrant, it lays down the broad proposition that the purchase and sale of bonds are not within the chartered powers of a National bank. It has long been established by the American courts, that the bonds of railroads, as well as State and municipal bonds, made payable to bearer or holder, are negotiable instruments-commercial paper. White v. Vermont and Mass. Railway Co., 21 How. 575; Mercer County v. Hacket, 1 Wall. 95; Gelpcke v. Dubuke, id. 206; Aurora City v. West, 7 id. 105; City of Lexington v. Butler, 14 id. 295; White v. Railroad, 21 How. 576; Thomson v. Lee County, 3 Wall. 331. The ruling of the court is then reduced to this, that the purchase and sale of negotiable instruments, or negotiable evidences of debt, are not within the chartered powers of a National bank. The National Banking Act, section 8, says: "Shall exercise under this act 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." To discount, signifies the act of buying a negotiable instrument for a less sum than that which, upon its face, is payable, and to negotiate means "to sell, to pass, to transfer for a valuable consideration; as to negotiate a bill of exchange." (See Bouvier's Law Dictionary, Discount, and Webster's Dictionary, Negotiate.) Giving these meanings to these words, the ruling of the court below was in direct conflict with the very words of the statute. What can be meant by "other evidences of debt," if it does not refer to the class of securities under consideration ? If it is lawful for National banks, under any circumstances, to sell bonds, the defense of ultra vires will not be available. It will not be controverted that a National bank can invest its own funds in bonds of the class in question; that if it becomes tired of Weckler v. The First National Bank of Hagerstown. the investment or finds it unprofitable, it can sell these bonds and buy others, in other words, can change its investments. Nor will it be denied that if, at one season of the year, its funds are more than sufficient to supply the demands of its customers, it could purchase bonds; and at another season of the year, when the wants of its customers increase, could sell them. It has been decided by this court in First National Bank of Charlotte v. National Bank of Balimore, 39 Md. 600,* that a National bank could legitimately even become possessed of stocks and sell them; and if it could own stocks under certain circumstances, it could surely, under similar circumstances, own bonds and sell them; and again, it is usual for banks to loan money with bonds as collateral security, and upon default in payment, to sell such bonds. The law applicable to this branch of the case is well settled. 66 If the contract can be valid under any circumstances, an innocent party has a right to presume its validity, and the corporation is estopped from denying it. The appellant in this case was an innocent party; at the time of the transaction she was not made acquainted with the circumstances under which the appellee was selling these bonds; the words used by the officers were, we can give you better bonds." Miner's Ditch Co. v. Zellerbach, 37 Cal. 543; Merchants' Bank v. State Bank, 10 Wall. 644 (ante, p. 47); Rashdell v. Ford, L. R., 2 Eq. Cas. 750; Houghton v. First National Bank of Elkhorn, 26 Wis. 662; S. C., 7 Am. Rep. 107; North River Bank v. Aymar, 3 Hill, 262. The buying and selling of bonds by a National bank is not ultra vires. It is a fact known to all persons, that National banks, from their organization, have been engaged in the sale of government and other bonds. They have advertised them; their windows have been filled with fac similes of them—and every means has been employed to give the public notice that such was a part of their business. It is not necessary that the act of incorporation should give a bank particular power to do an act, to enable it to do it, for if so, its movements, for all practical purposes, would not last for a day. It is sufficient if it is the ordinary course of banking business. Bank of Kentucky v. Schuylkill Bank, Parsons' Sel. Cases, 227. In the face of an usage so broad and general, it would be a harsh rule to declare a transaction illegal or ultra vires, which had been entered into in good faith. Happily we are not without authority * Affirmed by the Supreme Court of the United States, see ante, p. 124. |