The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1848-11-29

liable to Pamers, Mackillop Dent Co. in they
had hOnored but part Of the bills drawn under 1t 1t
m m possibly be fn1s IL m MSy on the receipt
countermanded the notice Of acceptance, they would
have capped all legal liability. But If in the embar
induced to keep the promise which they had made,
and in order to all legal question: thought It
against the entire credit, can IL be said that claim
thus created arose turpt cansa Particularly, when
upward of month had elapsed after the Illegal trans
action had been contaminated. 1t seems to me that
neither law, equity, morality would require such
conclusion.
The question has frequently arisen in England as to
vanced by party to another to enable him pay
an illegal debt, could be enforced. In the case of
Fsikney Ra;nous, "a Burr. 2069,) two persons had
been jointly engaged in stock jobbing transactions
and one of them had advanced money behalf of the
other for compromising differences. 1t was held by
Lord Mansfield, that suit could be maintained upon
bond given for the payment Of the money advanced
on the grounA that there was new consideration In
the case of Petrie v. Hannay, q r. 410) which
similar transaction, it was held that the party who
had advanced the money could recover it back it hav
ing been advanced for the benefit Of the other party
and with his privty and consent and he having sub
sequently to the advance made express promise of
payment. In the case Of Booth v Hodgson 20 T. r.
403) which also out of stock jobbiug trapsac
ton, 1t was held that partner who had advanced
money for the benefit of another could not
back on an applied assumpsit and the court then
stated that action could not be sustained because
on the whole promise could be implied except
Of the
partner had advanced money for the benefit Of auo-
ther in payment Of losses illegal insurances
held that no action would lie aud che dncss of
the distinction taken the of Petrie Hannay
between an express and implied promise, doubt
ed 1t will be remembered that in all these cases the
party who advanced the money had beeh particeps
criminis in the original illegal transaction.
There Is another class of cases in which actions have
been sustained for money advance to person, to
enable him to pay debt which had bee illegally con-
trscted but where the lender was not party to the
e Burr 1879 money lent to pay gaming debt was
held recoverable. A similar decision made in AL.
eiDbrook '. Hail. e wills. ao9) See also Carson v
In the case of Armstrong vs. Toler, III Wheat 25s,
the English cases were reviewed by Oh. J. MarShalD
and the rule which he deduced from them is, that
where q contract grows Immediately out Of, and is
connected with Illegal or immoral act, it cannot
be enforced But If the promise is entirely discon-
consideration it is net affected by the iegaty of the
act although it was known to the party to whom the
the money knew that 1t to be paid in discharge of
debt not not recoverable at law still he could main
vs. Bryce Barn AID 1s does not oaS so on wth
this rule. In that money was lent to enable a
party to pay illegal debt and the held that it
could not be recovered back by the lender. The
ground Of that decision that in the case then be-
fore the court the statute made the of payment
Of the va, for the
the statute does not make the payment itself Illegal
promise founded on q loan to pay an illegal debt
connected with It, and the maxim tu,pi causa non
oritur aciio does not apply.
But if should be admitted that money lent to pay
an Illegal debt cannot be recovered still think that
the claim of Palmers Mackillop, Dent s. Co. can be
sustained for question of fact, it that
the loan made to the banking company not o My
not made for the purpose of enabling it to purchase It's
stock but that 1t not made for the purpose of
enabling 1t to pay for stock already purchased AS
has been before stated 1t appears by the testimony of
Strong that the stock was purchased the 2Sth of
February 1s4o that it paid for out Of the pro-
ceeds ofother bills than those drawn on Palmers Mac.
killop, Dent Co.. before the bills drawn then had
been prese nted for acceptance.
1t must follow. then, that the bills &C cepted
not to enable the company to pay an illegal debt but
to use the language of Murray, to it from cr
sis in its affairs which would have compslsd It to wid
up Tho officers of the company had placed 1t In
such situation that the acceptance Of the bills was
necessary to prevent its prostration and ruin 1t
Of avoiding result which would have bsen so disss
trous that Palmers, Msckilop Dent Co., much
against their wish were forced to become the cred
The next question to be considered is, how far the
North American Trust and Banking Company had
the power to borrow money The general banking law
gives such power in express terms 1t specifies the
general powers of banking associations and then
fers such Incidental shall be necessary to
ry ON their business under the powers specifically
granted. Without reference to the banking law It
ageneral fundamental principle, that when . right Is
given all powers given which necessary to the
exercise and enjoyment of the right. Now it cannot
be questioned that banking association may become
indebted the exercise Of Its und ,ubted legitimate
business It has the right receive deposits aud it
must become indebted for them It has the right to
purchase gold and silver bullion foreign coins aud bills
of exchange, and it may become indebted upon such
purchase 1t requires State stocks basis OF its cir
cuation and It may lawfully contract debt in the
be other ways in which banking association can be-
legally indebted. II 1t has the right to become
indebted may become liable for the payment of its
debts, at time when, owing to disappointment un.
expected osees or some unforeseen casualty IL has
available assets to meet Its engagements This emer-
gency may occur in the soundest and best regulated
association. The question then must arise whether
solvent institution Is to fail to meet its liabilities and
mted to substitute credit for some nient period
Of time in the place of debt then due and payable
or In other words, whether it substitute
then, necessary incident to the power to become
indebted. 1t is power without whiokn bsnklng an
II is contended, however that the loan ia this cas
authorized by the company. On reference
to the articles Of association it will be that all
the powers, rights and privileges of the association
were delegated to and vested in board of directors
and such officers and agents they should appoint
tices Of association, that the board Of directors
should have authority to make such bylaws rules add
acquisitions for tho Of the business of the
Sap 6l) Under and in pursuance of these provi-
sions, the directors adopted set Of bylaws, ana
partmsnts. bylaws, 1, p. Soy They then dele
gated the power to conduct the business Of ons do
and the power to conduct the business Of the other
department to q committee of foreign and domestic
exchange. (By.Lsvs, l. 2, g., A. p. 55) All the bust
nees Of the company was to be transacted by these
two committees. In this distribution the general
powers of the directors the finances were con
ferred upon the committee Of Investments and nance
and the power to borrow money assuming it to have
existed must have been necessary incidental part of
the power Of that committee
By reference to the printed case (p 2SS) It appears
that the 2Sth of February, 1910, a resolution
passed by the committee of investments and nance,
ipstructing and authorizing the drawing of bills
the granting of credits upon Palmers Mackilop Dent
Co. In pursuance of this resolution, letter was
sent by Beers, the president of the company. to
Palmers, Mackillop Dent Co, informing them that
the Banking Company had authorized a credit ia
favor Of Davis t. the amount of f46875 IL was
against this credit that the bills accepted by Pamers
Mackillop, Dent & Co. drawn The letter of
credit was signed by Beers, as president of the
pany.
The general banking law provides that contracts
made by any banking association, shall be signed by
the president or vice president, and cashier claws
1885, $50, l2) tbs contendsd on the part OF the