Court Opinion

ID: 6727990
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:06:40.372237+00
Date Added: 2024-06-11T16:01:37.062812
License: Public Domain

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.