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tion prescribed in the organic banking laws of the country or
State before he can be entitled to any of the rights which
inhere in corporations only by virtue of those laws.

The um ose of restraining acts is, of course, to secure the
public welfare and safety from the inroads of incompetent men

nd swindlers. But, serious as is the evil to be guarded against, no other means of defence appear to exist against it than precisely those penalties which are provided in the law itself for any breach of the law. No other punislıment can be inflicted than that laid down in the statute, and means of prerention can be sought only froin the same source. Equity will not intervene to check infringements, and even systematic conduct of the banking business, in direct contravention of enacted law, will not be enjoined on the ground that it is a mischief or

a a nuisance to the community.?

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Acts of Incorporation.
Banking corporations or associations, like others, may come
into existence, either under a charter or special act of incorpo-
ration, or under a general organic law. In the former case, the
courts seem generally to have regarded the acts of incorpo-
ration, and likewise of course all acts supplementary thereto,
as public laws, not requiring to be established by special proof,
but to be judicially noticed within the State where the bank is
situated. The authorities cited do not, however, assume to
establish a general and abstract rule of universal application.
They simply indicate the tendency of courts in which questions
concerning specific acts liave arisen. Instances of a contrary
nature must be expected occasionally to occur.4


1 Hal ett v. Harrower, 33 Barb. 537.

? Attorney-General v. Utica Ins..Co., 2 Johns. Ch. 371; Same v. Bank of
Niagara, 1 flopk. 354.

Stribbling v. Bank, 5 Rand. 132; Bank of Utica v. Magher, 18 Johns. 341;
Vance c. Bank, 1 Blackf. 80; Towson v. Havre de Grace Bank, 6 Har. & J. 47;
Williams v. Union Bank, 2 Humph. 339; Hays v. Northwestern Bank, 9 Gratt.

Agnew v. Bank of Gettysburg, 2 Har. & Gill, 478.


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Location. . As a general rule, a bank can carry on business only in the place where it is empowered to do so by its charter. Branch banks cannot be established elsewhere, except under actual legislative authority. It seems, that agencies for specific purposes, as for the redemption of bills or the dealing in bills of exchange, may be established in other places. In these cases, it is for the convenience of the public that such should be the case. But it cannot be supposed that an agency for the exercise of the more important and valuable functions, such as issuing circulating paper or discounting notes, or an agency designed to carry on the general business of banking, would be regarded as legal. For, in such case, the nominal establishment of agencies might easily result in the practical establishment of a network of branch banks throughout the State.

General and Inherent Powers of Banking Associations. It is necessary to confer in distinct terms in the charter or act of incorporation only those powers which the company could not otherwise exercise, or those concerning which there might be some doubt. Various powers have been at different times declared by the courts to be inherent, and to be properly enjoyed by banking associations simply by virtue of their creation and existence as such, and for the designated end of conducting the banking business. But powers of this nature, being based only upon a legal implication, must be used only in a manner and for purposes strictly consistent with such restrictions, and in furtherance of such duties, as are specifically prescribed by law. Thus a bank, though not directly thereto empowered by its charter or by the organic act, may borrow money. It is a necessary and inherent privilege. But it is limited by the same necessity or intrinsic propriety which

i City Bank of Columbus v. Beach, 1 Blatchf. C. C. 425: Bank of Augusta v. Earle, 13 Pet. 519; People v. Oakland County Bank, 1 Dougl. 282; Tombigbee R. R. Co. v. Kneeland, 4 How. U. S. 16.

gives it birth. The borrowing must be incidental to the legitimate banking business of the association. Otherwise, the act would be ultra vires; as, if the loan was obtained for use in speculation.

A banking corporation can engage in no business transaction which is not, properly speaking, of a banking nature, and within the scope of the purposes for which it was permitted to be organized. The powers with which it is invested must be exercised in strict subordination to this purpose, for the prosecution of which alone they were conferred. A transgression, though under color of an act covered by the designated power, will be illegal. It cannot speculate or traffic either in financial securities or in merchandise. It need not be positively prohibited from doing so in the charter or organic law. For it owes its powers as it owes its existence to the terms of that charter or law. It is not restricted like an individual from the exercise of a wide range of other powers which, in the absence of restriction, it would enjoy; but its power to do any act at all is due wholly to the legislation of which it is a creature, and must be either the direct or necessarily incidental gift of that legislation. When, therefore, it is specifically permitted to conduct a banking business, it has no power to do any other species of business; not because it has been stripped in any manner of that power, but because that power has never attached to it. A bank may however do, on isolated and especial occasions, or for certain purposes, what it cannot do generally and for all purposes. It cannot buy and sell merchandise, but it can take merchandise from a debtor, if this is the only way to save the amount of the debt; and of course having taken property of any nature for this proper purpose it may sell it in any manner that will bring the best price. It may purchase public stocks in order to deposit them, under a

1 Curtis v. Leavitt, 15 N. Y. 9; Barnes v. Ontario Bank, 19 id. 152; Leavitt 0. Yates, 4 Edw. Ch. 134; Safford v. Wyckoff, 4 Hill, 442; Talman v. Rochester City Bank, 18 Barb. 123.

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law requiring such stocks to be deposited as a security for circulation, or in order to invest its surplus funds in them; it may loan upon them as security, and sell them if need be to save the debt. But it cannot " trafficin them; it cannot buy them with the view to sell them shortly at an anticipated advanced price. Such would not fall within any department of the general province of banking, which alone the association can carry on, and which it must carry on only in the manner, with the powers and for the objects, directly set forth or necessarily implied in the law of the corporate existence. In a case in Vermont, indeed, it was once said that a clause in a bank charter prohibiting the bank from dealing in any goods, wares, merchandise, or commodities was in derogation of the common and ordinary powers of the corporation. The full breadth of this language would certainly set the doctrine of the case at variance with the views expressed above. But the reasoning in support of that doctrine is too clear, and the authorities are too strong, to be brought within the range of doubt by this solitary adjudication. More especially since the sweeping statement of the legal theory in that opinion was enunciated for the insignificant purpose of protecting the bank in a purchase of shares in its own capital stock, a proceeding which could have been defended at much less expense of questionable generalization.2

Power to hold Real Estate. Ordinarily, it is no part of the banking business to hold or deal in real estate. No general right to do so can be considered to be inherent in a bank. Certain obvious cases, however, in which it is eminently proper, almost even necessary, that a bank should be able to acquire, to hold, and to sell land

I Comstock v. Willoughby, Hill & Den. 271; Talmage v. Pell, 3 Seld. 328; Leavitt v. Yates, 4 Edw. Ch.134; Sacket's Harbor Bank v. Pres. of Lewis County Bank, 11 Barb. 213; Portland Bank v. Storer, 7 Mass. 433. See also Curtis v. Leavitt, 15 N. Y. 9, which, properly interpreted, supports the above doctrine.

2 Farmers' & Mechanics' Bank v. Champlain Transportation Co., 18 Vt. 131.

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and interests in land, will suggest themselves at once to every
mind. Thus it may often, especially in small towns, be im-
possible to obtain a building with the suitable appliances for
security, unless the corporation can buy land and erect a
structure for itself. The mortgage or conveyance of real
estate to it may often be the only means by which debts owing
to it can be secured or discharged. If a bank came into pos-
session of land in perfect good faith for either of these
purposes, and held it or sold it only in due and bona fide
prosecution of these objects, it seems unreasonable to imagine
that the most rigorous court of justice would declare it illegal.
But the necessity of discussing the question of the abstract
legality of such proceedings has been nearly always saved by
the insertion in charters and organic laws of clauses specifi-
cally enabling banks to acquire, hold, and sell real estate for
these purposes. The legislative expression of this power of
course excludes its exercise otherwise than in precise accord-
ance with the statutory provisions. The holding, acquiring, or
selling to any greater extent, in any other manner or for any
other end, than is therein set forth, would be unquestionably
illegal. The power to purchase land or to take it in mort-
gage or by absolute conveyance, without the additional ex-
pression of the power to sell it or to assign the mortgage, will
by necessary implication confer those powers also, and even, it
has been held, the power to mortgage it. Further, it must
be regarded as appurtenant to, or even a part of, the power to
take land in mortgage or pledge, that the bank should also be
permitted to deal in reference to the land or interest therein,
thus acquired, in any manner, either by buying in any out-
standing title or interest, or in any other way whatever, that
may prove desirable for rendering the security more perfect or
more available. The courts seem generally to have been in-

1 Thomaston Bank v. Stimpson, 21 Me. 195.
2 Metropolitan Bank v. Godfrey, 23 III. 579.
3 Jackson v. Brown, 5 Wend. 590; Curtis v. Swartwout, 1 N. Y. Leg. Obs.

4 Ingraham v. Speed, 3 Miss. 410.

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