Case ID: ohio-law-abs_4/html/0116-03.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

No. 145
    SECOND NAT’L BANK v. DENHAM et
    No. 19543.
    Supreme Court
    On motion to certify.
    Dock. Jan. 8, 1926;
    4 Abs. 40.
    813. NATIONAL BANKS — Is the ultra vires act of a national bank in granting a loan and accepting as security a first mortgage on real estate in violation of section 5137 of the Revised Statutes of the United States, void or voidable, and if voidable, is such an act subject to collateral attack?
    Attorneys — W. A. Kennon, St. Clairsville, for Bank; Gordon D. Kinder, Martins Ferry, for Denham.
   The second National Bank of St. Clairsville, loaned Joseph Denham $5000 to purchase certain real estate in return for which Denham executed a note and secured the same by a mortgage on the property. Contemporaneously an agreement, which was incorporated in the mortgage, was entered into by virtue of which the Bank has the right to purchase the property for $6000 by giving six months notice of its intention. Such notice was given and upon Denham’s refusal to comply with the agreement the Bank brought suit in the Belmont Common Pleas for specific performance. Denham defended on the ground that the act of the Bank in entering such a contract was ultra vires and therefore void. Judgment was rendered for Denham,. which was affirmed in the Court of Appeals.

The Bank in the Supreme Court contends that the fact that a purchase of real estate was in violation of the national banking act and therefore ultra vires, does not render the transaction void but only voidable and that its validity can only be attacked by the United States and not collaterally.