Levi Woodbury

“ Not that a banking corporation has under its charter a constructive power to follow another independent branch of business, such as manufacturing or foreign trade, but merely the business of banking, and to do such acts as are necessary and proper or usual to carry that business into effect, and such as are in harmony with the letter and spirit of its charter. ”

“ The limitation of the power to issue would be effectually destroyed if the bank could sell and indorse notes, because there is no limit to such a proceeding. It is true, that the liability is contingent; but still it has ruined many corporations.
Is the power to transfer notes essential to the proper business of banking? On the contrary, it is entirely subversive of it. It is indorsing other people's paper,-mere brokerage. When the paper is assigned, interest upon it ceases to the bank. No well-conducted bank is ever reduced to such an emergency as to be obliged to sell paper. ”

“ Thus, where a new law has taken the property of a corporation for highways under the right of eminent domain, which reaches all property, private or corporate, on a public necessity, and on making full compensation for it, and under an implied stipulation to be allowed to do it in all public grants and charters, no injury is committed not atoned for, nothing is done not allowed by pre existing laws or rights, and consequently no part of the obligation of the contract is impaired. ”

“ No State can pass a law impairing the obligation of a bank charter. This is a corollary from the other two propositions.
What, then, was the contract in these cases? The power to the Planters' Bank is given in words as comprehensive as possible. The only limitation is as to the amount of property to be held. The railroad charter refers to and adopts the bank charter. In both, there was a power to receive these notes, to hold them, and to alien or sell them. Before the restraining statute was passed, it would not have been easy to doubt these powers. ”

“ Again, State insolvent laws, if made, like this law, to apply to past contracts and stop suits on them, have been held not to be constitutional except so far as they discharge the person from imprisonment, or in some other way affect only the remedy. When so restricted, they do not impair the obligation of the contract itself, because the obligation is left in full force and actionable, and future property, as well as present, subjected to its payment, and the body exonerated only as a matter connected merely with the form of the remedy. ”

“ The charter required the bank to take paper which was 'payable and negotiable at the bank.' How negotiable? The law merchant describes this quality as passing from hand to hand by indorsement and delivery. The object must have been to give the bank the best kind of paper, such as it could use in an emergency by selling. It has been said that the word 'enjoy,' in the charter, does not imply the power of selling property; but how can a hungry man enjoy a dollar in his pocket without spending it?
It is an error to say that notes were not negotiable at common law. ”

“ It is not, by the Constitution, to be impaired at all. This is not a question of degree or manner or cause, but of encroaching in any respect on its obligation, dispensing with any part of its force. The Commercial Bank of Rodney v. The State of Mississippi, 4 Smedes & Marshall, 507. So, if the obligation of a contract is to be regarded as the duty imposed by it, here the duty imposed by the State to adhere to its own deliberate grant, and the duty imposed on the signer of the note to make payment to an assignee, as well as to the bank itself, are both interfered with and altered. ”

“ The States say, pass the law, and if it is wrong the Supreme Court will overthrow it. If in these cases we ask, Did you not make these notes? the answer must be, Yes. Did you not promise to pay? Yes. Have you any defence but the one now set up, viz. the policy of the State? No. But if a whole community are set free from paying their debts, it is a policy which no one ought to wish to establish. This is a far-fetched defence. The defendants have reconciled their own consciences to it, but they are under the influence of self-interest. ”

“ It is true, there was no final judgment in bar, but the right of maintaining an action was cut off for ever. If both judgments of the State court are correct, then neither the original payee nor the transferee can sue. No one can sue. If the legislature had merely forbidden the transfer, and suffered the original right of property to remain in the bank, then the bank could have sued for the use of the transferee. But the court have said that the fact of transfer abates the suit brought in the name of the bank. ”

“ But in discounting notes and managing its property in legitimate banking business, it must be able to assign or sell those notes when necessary and proper, as, for instance, to procure more specie in an emergency, or return an unusual amount of deposits withdrawn, or pay large debts for a banking-house, and for any 'goods and effects' connected with banking which it may properly own. It is its duty to pay in some way every debt. ”

“ But in the mean time, after the execution of the note, though before its transfer, the legislature of Mississippi, on the 21st day of February, 1840, passed a law, the seventh section of which is in these words:-'It shall not be lawful for any bank in this State to transfer by indorsement or otherwise any note, bill receivable, or other evidence of debt; and if it shall appear in evidence, upon the trial of any action upon any such note, bill receivable, or other evidence of debt, that the same was transferred, the same shall abate upon the plea of the defendant.' (See Acts of 1840, p. 15.) ”

“ The railroad company had no power to transfer vested in it by the charter. If it had the right at all, it must be found in the charter as an express grant, or it must have been held by the municipal law, which is always subject to be repealed.
As to the first branch. If granted in the charter, it must be found in the words 'usual powers of banking.' Does this clause include a power to sell? Even if the Planters' Bank had it specially, it would not pass to the railroad company under this general clause. In other States, the power to sell is not considered one of the usual banking powers. ”

“ In the present instance, however, as before explained, the extent and operation of the prohibitory law being regarded as forbidding any transfer whatever, and, if it takes place, as barring every kind of remedy on the note, the decisive question may be repeated, How can this happen without injury to the plaintiff's contracts? When every form of redress on a contract is taken away, it will be difficult to see how the obligation of it is not impaired. ”

“ The seventeenth section gives power 'to receive money on deposit and pay away the same free of expense, discount bills of exchange and notes, with two or more good and sufficient names thereon, or secured by a deposit of bank or other public stock, and to make loans to citizens of the States in the nature of discount on real property, secured by mortgage,' &c. ”

“ The words, 'grant, demise, alien, or dispose of,' are as comprehensive as any words that could be used. 'Goods, chattels, and effects' must include promissory notes. 'Goods and chattels' would do so, but 'effects' is still stronger. The legal meaning of 'effects' is explained in Cowper, 299. Also 13 Vesey, 39, 47, note.
Corporations, unless restrained by their charter, have control over their property, and may alienate it. ”

“ We say that this decision is contrary to the Constitution of the United States. The principles upon which we stand are elementary. The State law was passed in 1840, after the grant of the charter and after the execution of the notes.
(Mr. Wharton then entered into a history of the decisions of this and other courts upon the following propositions.) 1st. That a charter is a contract between a State and the corporation. 6 Cranch, 87, decided in 1810. A grant is an executed contract, and a repeal of the law cannot set it aside. ”

“ Some other laws are referred to, which are upheld and which affect the whole community, and seem to violate some of the important incidents of contracts between individuals, or between them and corporations. ”