134 Ark. 368 | Ark. | 1918
(after stating the facts). In any event the judgment must be reversed because the court erred in refusing to give instruction number one asked by the plaintiff and in giving instruction number two at the request of the defendants.
On the other hand it was contended by the defendants that a partnership for the purchase and sale of the cattle was made between Stokes and the bank and that Mays simply acted as agent for the bank in making the contract. The instruction asked for submitted the plaintiff’s theory of the case as to the partnership, and should have been given. Beebe v. Olentine, 97 Ark. 390.
The court also erred in giving instruction number two at the request of the defendants. It reads as follows : “You are instructed that if you should find from the preponderance of the evidence that the money was secured by the defendant Ed Mays from the First National Bank to be used by the defendant, J. C. Stokes to buy cattle and the bank made the loan to said Stokes for that purpose, and that a contract was made to give either the defendent Mays or the bank one-half the profits on said cattle in .addition to the payment of legal interest, this alone would not make the parties partners and you will return a verdict for the defendant Ed Mays. ’ ’
This instruction was erroneous because the concluding part of it makes it peremptory in its nature. It is true that an agreement to share profits alone is not the test of .a partnership, still if the contract was made between Stokes and Mays for himself instead of the bank, these parties would be liable to the bank for the money borrowed, whether there was a partnership or not. Hence it is obvious that the concluding part of the instruction was misleading and prejudicial to the rights of the bank.
Section 5136 of the Revised Statutes of the United States defines the corporate power of national banks. Sub-section 7 provides that it shall ‘ ‘ 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; and by obtaining, issuing, and circulating notes according to the provisions of this title.”
It is manifest that the power to enter into a partnership for the purpose of buying and selling cattle at a profit is not expressly conferred upon national banks, nor is it an act which may be exercised as incidental to the powers expressly conferred. Consequently such a partnership would be an ultra vires act.
In the cases above cited it is said that the reason that such contracts are unlawful and void rests upon three distinct grounds; the obligation of any one contracting with the corporation to take notice of the legal limits of its powers, the interest of the share holders not to be subject to risks which they have never undertaken, and, above all, the interest of the public that the corporation shall not transcend the power conferred upon it by law.
The record does not show that the national bank in any wise profited by the transaction. Neither can it be said that it retained any benefits from it. There was no profit to the bank from the transaction. It resulted in a material loss to the bank.
It follows- that the judgment must be reversed. Inasmuch as there is no dispute about the amount of the indebtedness, there is no necessity to remand the case. The case was tried on the 27th day of August, 1917, and at that time there was a balance due the plaintiff of $1,331.87 with interest at the rate of 10 per cent, per1 annum frorr the 30th day of December, 1916.
Judgment will be entered here for that amount. It is so ordered.