Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/281

 PART III.] ACTS BEYOND THE CORPORATE POWERS. [§ 300. poration without banking powers discounts a note in direct vio- lation of a statute, it cannot recover on the note. 1 § 299. Next, as to the first qualification of the general rule: the forbidden contract will not be void if the statute which the contract violates specifies the consequences fication. of its violation, and those consequences are other than that the contract is void and incapable of forming the basis of an action. As was said in Pratt v. Short: 2 " A pro- hibitory statute may itself point out the consequences of its violation, and if, on a consideration of the whole statute, it ap- pears that the legislature intended to define such consequences, and to exclude any other penalty or forfeiture than such as is declared in the statute itself, no other will be enforced, and if an action can be maintained on the transaction of which the prohibited transaction was a part without sanctioning the ille- gality, such action will be entertained." 3 In this case the statute declared that " no incorporated company without being authorized by law, shall employ any part of its effects, or be in any way interested in any fund that shall be employed for the purpose of receiving deposits, making discounts or issuing notes, or other evidences of debt, to be loaned or put in circu- lation as money.' 1 And it further declared that all notes or other securities for the payment of money " made or given to secure the payment of any money loaned or discounted by any incorporated company contrary to the provisions of the [statute], shall be void." The court held the notes or securities so taken to be void, but that the money loaned on them could be recov- ered. 4 § 300. The second qualification to the general rule is that the contract will not be absolutely void when the pro- g, hibition exists plainly for the protection of a certain quaiifica- class of persons, who alone may take advantage of it. 3 See Robinson ». Bland, 2 Burr. 1077; Lister v. Howard Bank, 33 Md. 558. 4 See, also, Utica Ins. Co. v. Kip, 8 Cow. 20; Same v. Cadwell, 3 Wend. 290; Underhill ». Santa Barbara Land Co.. 93 Cal. 300, 311. Compare Life, etc.. Ins. Co. v. Mecb. Fire Ins. Co., 7 Wend. 31; New Hope Delaware 261 10 Cush. 22; compare Faneuil Hall Bank v. Bank of Brighton, 16 Cray, 534. 1 New York State Loan and Trust Co. v. Helmer, 77 N. Y. 64; In re Jaycox, 12 Blatcbf. 209; Utica Ins. Co. v. Scott, 19 Johns. 1. See Pratt v. Short, 79 N. Y. 437. 2 79 N. Y. 437, 445.