Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/280

 § 298.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. the bank to take more than a certain rate of interest, a note taken by it in violation of this prohibition is void ; even though the statute does not expressly declare void contracts in which a rate of interest greater than allowed is stipulated for. 1 So if a statute prohibits banks from issuing or circulating any bill or note that is not payable on demand without interest, notes issued in contravention of it are illegal and void, even in the hands of a bona fide purchaser for value. 2 And when a cor- Here this is not the point under con- sideration; but whether, and in what respect, the illegality of the act may be taken advantage of even by those persons who, had the act not been forbidden, might not have been iu a position to complain of it. 6 Barton v. Port Jackson, etc., Plauk Road Co., 17 Barb. 397; Sibell v. Renisen, 33 N. Y. 95; Franklin Bank o. Commercial Bank, 36 Ohio St. 350; McCormick v. Nat. Bank, 102 111. 100. The Roman law states the principle thus: "Nullum enim pac- tum, nullam conventionem, nullum contractual inter eos videri volumus subsecutnm, qui contrahunt lege contrahere prohibente." Codex, I. 14, lex 5. A person cannot recover from a corporation for services in negotiating on its behalf a contract which it was forbidden by statute to make. Gibbs v. Bait. Gas Co., 130 U. S. 396. 1 Bank of U. S. v. Owens, 2 Pet. 527; Bank of Salina v. Alvord, 31 N. Y. 473; Bank of Chillicothe v. Swayne, 8 Ohio, 257; Kilbreth v. Bates, 38 Ohio St. 187; Miami Ex- porting Co. o. Clark, 13 Ohio, 1; Orr v. Lacey, 2 Dougl. (Mich.) 230. Sue Hitchcock's Heirs v. United States Bank, 7 Ala. 386, 434. If, however, the usury laws of the state do not render usurious contracts void, courts, in construing provisions in the constitution of a corporation which prohibit taking more than a 260 given rate of interest, may follow the analogy of the construction put on the usury laws. Philadelphia Loan Co. v. Towner, 13 Conn. 249; Com- mercial Bank v. Nolan, 8 Miss. 508; Planters' Bank v. Sharp, 12 Miss. 75; Grand Gulf Bank v. Archer, 16 Miss. 151; Larwell v. Hanover Savings Fund Society, 40 Ohio St. 244. In the absence of special legislative ex- ception, corporations are embraced in usury statutes just as persons, and may plead usury. Commission- ers of Craven v. Atlantic & N. C. R. R. Co., 77 N. C. 289. The penalties of the usury laws apply to the acta of corporations done without the state; e. r/., when suit is brought within the home state on a note taken by the corporation outside of the home state, and this although the laws of the state where the contract was made authorized the rate of in- terest stipulated for. Ewing v. To- ledo S'v'gs Bk., 43 Ohio St. 31. See Farmers and Traders' Bank v. Har- rison, 57 Mo. 503; Perkins v. Watson, 2 Baxt. (Tenn.) 173. Compare Buk- ingham v. McLean, 13 How. 151; Bank of United States v. Waggener, 9 Pet. 378. 2 Leavitt v. Palmer, 3 N. Y. 19, Root v. Godard, 3 McLean, 102; Hay- den v. Davis, ib. 276; Weed v. Snow, ib. 265 ; Root v. Wallace, 4 McLean, 8; Davis v. Bank of River Raisin, ib. 387. See Western Bank v. Mills, 7 Cush. 539; Mills v. Western Bank,