Court Opinion

ID: 5474387
Source: CourtListenerOpinion
Date Created: 2022-01-09 20:45:49.327511+00
Date Added: 2024-06-11T08:33:25.830160
License: Public Domain

Per Curiam.

The replication is bad, for the causes set forth in the demurrer; it does not traverse or deny the facts in the plea, nor does it introduce any new fact in avoidance of the facts stated in the plea. (1 Chitty Pl. 587, &c.) This brings the case back to the plea. In the case of The People v. The Utica Ins. Co. (15 Johns. Rep. 358.) it was decided, that the act of incorporation did not authorize the company to institute a bank,, issue bills, discount notes, and receive deposits; and that the company having exercised those powers, had usurped the franchise of banking ; and a judgment of ouster was accordingly rendered against them. The restraining act, (2 N. R. L. 234. s. 2.) declares, that all notes and securities for the payment of money, or the delivery of property, made or given to any such association, institution, or company, not authorized as aforesaid, shall be null and void. The same statute declared it to be unlawful for any person unauthorized by law, to subscribe to or become a member of any association, or proprietor of any bank or fund, for the purpose of issuing notes, receiving deposits, making discounts, or transacting any other business which incorporated banks may or do transact, by virtue of their respective acts of incorporation ; and it inflicts a penalty of $1,000 for a violation of the act. If the plaintiffs became proprietors, of a fund illegally, and in violation of the restraining act, it follows ihevitably, that all notes given to them, for the purpose of being discounted, and actually discounted, in contravention of the act, are null and void. That they did become proprietors of a fund illegally and in violation of the restraining act, has been solemnly decided in the case referred to; and in that decision the plaintiffs have acquiesced. In analogy to the statute against gaming, the notes and securities are absolutely void, into whatever hands they may pass; but there is a material distinction between the *7security and the contract of lending. The lending money is not declared to be void, and therefore wherever money has been lent, it may be recovered, although the security itself is void. (2 Burr. 1080. 2 Str. 1249. Com. Rep. 4. 2 Str. 1155. Doug. 736.) Here, the action is on the security; and as that is declared to be void, the plaintiffs cannot sustain their action.
Judgment for the defendant.