Court Opinion

ID: 7984599
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:24:12.123675+00
Date Added: 2024-06-11T16:35:09.497737
License: Public Domain

Simrall, C. J.,
delivered the opinion of the court.
The complainants, appointed under a recent act of congress, commissioners to take charge of the assets of the Freedman’s Savings Institution, collect its debt and wind up its business, brought this suit in chancery to foreclose the mortgages, and to pay the notes of the defendants.
These notes and mortgages are the property of the Freedman’s Saving Institution, and came to the possession of the complainants, commissioners, for collection. This institution was created a body corporate, by act of congress, in the city of Washington in the District of Columbia. The 5th section of its charter defines its general business to be, to receive on deposit such sums of money as may be from time offered by or on behalf of persons, heretofore held in slavery, or their descendants, and investing the same in stocks, bonds, treasury notes and other securities of the United States. U. S. Stat. at Large, vol. 13, p. 511.
Subsequently, by further acts of congress, the corporate privileges were extended so as to allow the loan of money, the taking of mortgages, and the establishment of branches, or agencies in the southern states.
A branch or agency was established at Yicksburg, in this state, *822where the notes and mortgages in question bear date, and purport to have been executed.
Their validity is denied on the ground, as presented by counsel, that congress has not the power to create such a corporation, with branches in the several states. It is conceded that congress might enact the original charter, but it could not authorize, as was after-wards done, the corporation to enter the states with branches or agencies, and transact business there, of the character disclosed in the bill.
The argument is that congress does not possess the power to pass acts creating corporations generally, for any and all the purposes for which the states may grant charters, and reference is made to the cases of M’Culloch v. Maryland, 4 Wheat., 424, and Osborn v. Bank of United States, 9 id., 859, 860. The answer to that is, that this savings institution was made a body corporate, with its location and domicile at Washington city, in the District of Columbia, and by virtue of the grant of “exclusive legislation in all cases whatsoever over the district ” to congress, it could, at disc; etion, grant a charter to a savings institution.
Whether the state of Mississippi might not have prohibited the location of an agency in this state is a question not necessarily arising on this record, and we decline to consider it. Counsel for the appellants urge the argument with force, that congress could not, by it own'authority, establish branches in the states against their objection and prohibition. If that were conceded, it would not follow that these notes and mortgages were void. If the Freedman’s Savings Institution had no authority by its charter to loan money and take security therefor, or to discount paper, then the obligations here sought to be enforced are of no validity. A corporation in this country, being the creature of positive law, has such power as is conferred upon it, and cannot make a particular contract unless the power is given expressly or by necessary implication. Commercial Bank of Manchester v. Nolan, 7 How., 508; Bacon v. Mississippi Insurance Co., 31 Miss., 116. It follows that unless the Freedman’s Savings Institution and Trust Co. *823was enabled to invest its funds in, or to discount notes and mortgages, then these contracts are ultra vires and void. It is not controverted that it had such power generally, but it is said it could not exercise it in this state. Is it true that a bank or a savings institution with the privileges of this one, may not, through an agency, make a loan of money outside of the District of Columbia and secure it?
It is well known that banks and insurance companies, and other associations acting under charters, have, through their agents, entered other states than those of their domicile, and made investments in bonds, notes and mortgages, have issued policies of insurance, bought and sold exchange. A banking corporation, with power to loan, discount, and buy and sell exchange, would be seriously crippled in its' operations if it could not constitute an agent at the great centers of commerce to present a bill of exchange for acceptance, make collections and investments in other bills of exchange for remittances, or to create a fund in some other state or country, to draw against according to the needs of its business. We know this to be every day’s practice, and yet such transactions involve the foreign corporation in a multitude of new contracts beyond the jurisdiction of its domicile. Much the largest part of the insurance is done in this state by foreign corporations, not because of any enabling statute, for the statute regulating that subject is comparatively of modern date.
The right reposes on the law of comity, that beneficent rule of the private law of nations to which all civilized communities assent, viz: “ That in the silence of any positive rule affirming, or denying, or restraining the operations of foreign laws, courts presume the tacit adoption of them by their own government, unless repugnant to its policy or interest.” Therefore, each state within the limit of the rule will recognize those corporations, enacted into being by the legislatures of other jurisdictions, and allow access to its tribunals for a remedy on all legal contracts.
In Bank of Augusta v. Earle, 13 Pet., 589, the court say, in terms, that by the comity of nations, foreign corporations may *824make contracts in other states, unless excluded from so doing, as against the policy or interest of the state. The union of these states in a common government, as members of the same political family, suggests, and indeed requires a larger degree of comity and friendship than prevail among foreign amicable states. Business ramifications are intimate ; the commercial system is free ahd almost unrestricted. It is the common practice of the corporations of one state to make loans to the individuals or corporations of another ; and there is no reason, that can be advanced, if the exigencies of business require it, why a foreign corporation may not have an agent or agency in another state. Long continued practice, without objection, evinces, most unmistakably, its utility and rightfulness. If it be claimed that a foreign corporation cannot make a contract in this state, which is lawful in itself, and within the scope of its corporate powers, we must be referred to some positive rule declaring a prohibition, or regulating the right. Something of that sort is found in the laws of this and other states, defining the terms on which foreign insurance companies may do business in this state. Until the enactment of these laws, it was the practice for such of said corporations as chose to do so, to appoint their agents here, and issue policies of insurance, and their right to do so has never been seriously questioned, certainly not since the decision in the case of the Bank of Augusta v. Earle, supra, in 1839.
The decree embraced a note for $1,000, not due until several months after the bill was filed. This is complained of, as not permissible under the chancery practice.
The complainant ought, in his bill, to have claimed that so much of his debt as was not then due, but which might become due before final decree, should be included in it; or, if that is not done, he ought to have filed a supplemental bill, praying that this note, matured since he exhibited his bill, might be provided for in the decree. It is irregular to adjudge to the complainant the note which matured 1st of January, 1876, without some foundation being laid in the pleadings.
*825For this error, the decree must be reversed, and cause remanded, with leave to complainants to foreclose their mortgages for so much of the debt as was due at the time suit was brought, or to amend so as to include the last matured note.
For this error decree reversed, and the cause remanded.