26 Barb. 595 | N.Y. Sup. Ct. | 1858
The plaintiffs are a moneyed corporation, created by special charter in 1833. (Sess. Laws of 1833, ch. 58, p. 53.) The 36th section of their act of incorporation is as follows : “ The said corporation shall also be subject to the provisions contained in the act entitled ‘ An act to create a fund for the benefit of the auditors of certain moneyed corporations, and for other purposes/ passed April 2, 1829, so far as the same shall be in force at the time of passing this act.” The 33d section of the act referred to provides, that “Every moneyed corporation subject to this
It is insisted, on behalf of the plaintiffs, that the 33d section of “ the safety fund act,” above quoted, is not applied to them, for the reason that in respect to the plaintiffs it was not “ in force at the time of passing ” their act of incorporation, because inconsistent with sections 3 and 24 of the latter act. Section 3 of the charter confers ordinary banking powers on the corporation, “by discounting bills, notes and other evidences of debt,” &c. and although, standing by itself, it would confer the right to take the rate of interest established by general laws, yet it can no more be said to be inconsistent with any special law regulating the rate of interest in particular cases, than with the general statute fixing it at seven per cent, and prohibiting the taking of a greater amount, to which it is concededly subject.
The 24th section of the charter confers on the directors power to make and prescribe such by-laws, rules and regulations as shall be needful, touching, (amongst other things,) “ 2. The time, manner and terms at and upon which discounts and deposits shall be made and received in and by the bank.” Whether this section confers any greater power than pertains, at common law, to all similar corporations to make needful by-laws, rules and regulations, it is not important to inquire. It is limited, in the authority it gives, to the making of by-laws, rules and regulations to operate upon and control the internal conduct of the business of the bank; to restrain and direct its own officers and servants in the manage
It is.further insisted on the part of the plaintiff, that the act in question having simply “ prohibited the taking of more than six per cent in such cases, without declaring void the instrument on which it i$ taken, the only consequence is that the plaintiffs are liable to be proceeded against on quo warranto, for a violation of "their charter, and in respect to the particular transaction, are only liable to refund the excess, in a proper action.’’ To sustain this proposition, the cases of Fleckner v. Bank of the United States, (8 Wheat. 338,) and Bank of the United States v. Waggener, (9 Peters, 378,) are relied upon. In the former of these cases, the note on which the action was brought was made by Fleckner, payable to one John Helder or order, and negotiated after several mesne indorsements to the Planters’ Bank of Hew Orleans, and subsequently discounted by the Bank of the United States for the Planters’ Bank. On such discounting the Bank of the United States deducted interest in advance, at the rate of six per cent; and the question presented to, and determined by, the court, was whether this transaction was usurious. The court held it was not, but that “ the authority to discount or make discounts did, from the very force of the terms, necessarily include an authority to take interest in advance.” After disposing of this point (the only one involved analogous in any' degree to
It is more difficult to perceive how the case of the Bank of the United States v. Waggener, above cited, has any application to the one at bar, In that case the note on which the
The long established maxim of the law, “ ex turpi causa non oritur actio,” is equally applicable where the act or contract is prohibited by statute, either expressly or by implication, as when it is contra bonos mores. “ It is quite clear,” says Lord Eldon in Ex parte Dysler, (2 Rose, 351,) “that a court of justice can give' no assistance to the enforcement of contracts, which the law of the land has interdicted;” and in Aubert v. Maze, (2 B. & P. 374,) it is expressly affirmed that there is no distinction, as to vitiating the contract, between malum in se and malum prohibitum. In Watts v. Brooks, (3 Ves. Jr. 612,) the court says: “There is nothing unusual in this
transaction, but it is against a prohibitory statute. I doubt a little the policy of the act, but I cannot allow it to be argued that you can break a law covertly. The court will not execute the contracts.”
The English cases in which this maxim has been applied and enforced are numerous and very decisive. (See Broom’s
But to enumerate here the various cases in which “this principle has been practically applied, would be to incur the imputation of vain parade.” Enough has been said to show that where the contract sought to be enforced, springs out of a violation of the statutes of the state, the court “will leave the parties to the illegal transaction where it finds them, withholding from both its aid in enforcing it.” (See Justice Sill in Tylee v. Yates, 3 Barb. 228.) “ It is upon that ground the court goes, not for the sake of the defendant,” says Lord Mansfield, “but because they will not lend their aid to such a plaintiff.”
The plaintiffs’ counsel argued that the amount of the excessive interest taken in this case, is so small that the court should rather attribute its taking to mistake than to a corrupt and intentional violation of the statute; but the case is not open to this suggestion. The rate of seven per cent was knowingly taken, and this operates as a violation of the statute whether the officers of the bank knew of its existence and intended to disregard it or not. Corporations, like natural persons, must be held to intend the consequences of their acts. “It is sufficient,” says Lord Stowell, “if there is a contravention of the law, if there is a fraus in legem ; whether that may have arisen from mistaken apprehension, from carelessness, or from any other cause, it is not material to inquire. In these
The case was open to the plaintiff to show the facts affirmatively, as they were hound to do if they would ekcüse themselves, on the ground of actual mistake in calculation. In the absence of such evidence the law must presume against them.
From these conclusions, it follows that this court cannot lend itself to aid the plaintiffs to secure the fruits of their infraction of the statute, and the judgment below must be affirmed.
Davis, Marvin and Greene, Justices.]