| Ala. | Nov 15, 1894
— The Florence Railroad & Improvement Company, a private corporation, executed a negotiable note, payable at the Florence National Bank to the order of the Florence Wagon Company, which in due course of trade, before maturity, for a valuable con-' sideration became the property of The Chase National Bank, and not being paid at maturity, the present action was instituted to enforce its payment. Many exceptions were reserved during the trial, and there are numerous assignments of error. The record presents but two meritorious questions of law, and which are decisive of the case. In fact these two propositions of law are the -only ones insisted on in argument by counsel for appellant. After the evidence.had closed the court instructed the jury to find the issue for the plaintiff. The two propositions of law raised by the defendant’s pleas,in defense of the action, are, first, that the note was made purely as an accommodotion paper to ena-. ble the Florence Wagon Company to raise money fo its 'own use and benefit, and was, therefore, ultra vires and void; second, that the payee of the note discounted the same to the Florence National Bank at a usurious rate of interest, contrary to section 4140 of the Criminal Code, which declares that “any banker who
First: as to the defense of ultra vires, upon the ground that the instrument was purely an accommodation paper. Iiow far this defense might be available against the note in the hands of one who has acquired it with notice of its character we deem it unnecessary to decide! There is no evidence tending to show that the plaintiff which acquired the note from the Florence National Bank in due course of trade, was chargeable with notice that it was made ás accomodation paper, or that there were any defenses to it, or irregularities in its execution, or hindrance to its circulation as negotiable paper. Presumptively the Florence Railroad & Improvement Co. was authorized to execute negotiable paper for its own uses and purposes. — Tiedeman on Com. Paper,■§ 115. There is nothing on the face of the paper to indicate that it was purely an accomodation paper, and the evidence fails to show that plaintiff had any notice or knowledge of the consideration for which it was made. We have then the case of a private business corporation, authorized to execute negotiable paper for its own uses, sending out into the commercial world, apparently within the scope of its corporate powers, a paper in all respects complete, inviting the credit and confidence of those engaged in commercial dealings, with the assurance of the law, to every innocent purchaser for value before maturity, that he may receive it, free from any infirmity and defect or defense. Nay more. If the plaintiff, before purchasing, had made inquiry of the maker and payee, and had been assured that it was not accomodation paper, but that che maker was the sole beneficiary of the consideration, and had purchased the paper upon such assurances, notwithstanding, when sued, unless we apply the doctrine of estoppel to private corporations, the plea of ultra vires must defeat the action. The equitable doctrine of estoppel “will not down at the bidding” of persons, or corporations, when its presence is necessary to prevent fraud or injustice. Corporations as well as persons, authorized to issue commercial paper, when it sends such paper into the markets of the world, are bound by
The other defense, viz., that the paper was discounted in violation of section 4140 of the Criminal Code; supra, •we regard as settled by the decisions of the Supreme Court of the United States. In questions of this kind, involving the construction and effect of the statutes of the United States which regulate the management, and impose duties and liabilities upon National Banks, we think sound conservatism and justice to all parties require that our decisions conform to those of the Federal courts. These decisions declare that the penalty prescribed by the National Banking statute for usurious discounting paper by National Banks is exclusive, and those imposed by State statutes can not be applied and enforced. — Barnett v. Nat. Bank, 98 U.S. 555" court="SCOTUS" date_filed="1879-03-18" href="https://app.midpage.ai/document/barnet-v-national-bank-89902?utm_source=webapp" opinion_id="89902">98 U. S. 555 ; Stephens v. Monongohela Nat. Bank, 111 U.S. 197" court="SCOTUS" date_filed="1884-03-31" href="https://app.midpage.ai/document/stephens-v-monongahela-bank-91100?utm_source=webapp" opinion_id="91100">111 U. S. 197; Farmers Nat. Bank v. Dearing, 91 U.S. 29" court="SCOTUS" date_filed="1875-10-25" href="https://app.midpage.ai/document/farmers--mechanics-national-bank-v-dearing-89142?utm_source=webapp" opinion_id="89142">91 U. S. 29; Central Nat. Bank v. Pratt, 115 Mass. 539" court="Mass." date_filed="1874-09-10" href="https://app.midpage.ai/document/central-national-bank-v-pratt-6417754?utm_source=webapp" opinion_id="6417754">115 Mass. 539 ; 15 Am. Rep. 138 ; First Nat. Bank of Columbus v. Garlinghouse, 22 Ohio St. 492; s. c. 10 Am. Rep. 751; Davis v. Randall, 115 Mass. 547" court="Mass." date_filed="1874-09-11" href="https://app.midpage.ai/document/davis-v-randall-6417755?utm_source=webapp" opinion_id="6417755">115 Mass. 547 ; s. c. 15 Am. Rep. 146; Higley v. Nat. Bank of Beverly. 26 Ohio St. 75 ; s. c. 20 Am. Rep. 759 ; 2 Morse on Banking, p. 133 (part 2d), § 130.
^In the case before us, we might reach the same conclusion from the particular facts in evidence, but we deem it unnecessary to discuss them.
We find no error in the record.
Affirmed.