Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/283

 PART III.] ACTS BEYOND THE CORPORATE POWERS. [§ 302. In another instance where a statute provided that savings banks should make no loans on the security of names alone, it was held that the statute should not be construed so as to defeat its own purpose, and that a loan made by a savings bank in contravention of it could be recovered, and the security given (a note) enforced. 1 Again, a provision in the charter of a bank prohibiting any director or other officer, under penalty of fine or imprisonment, from borrowing money from the bank, does not exempt a director from liability for money loaned to him in violation of the prohibition ; 2 and a corporation can retain negotiable securities given at the time to secure the repayment of such a loan, but belonging to an innocent cestui que trust for whom the borrower was trustee; the corporation having no notice of the trust. 3 § 302. The last-mentioned qualification, that an act will not be held void when to hold it so would frustrate the intention of the statutory prohibition, is of common ^onslay application where the prohibition is not express, but ippiica- arises by clear implication from the language of the charter or enabling statute of the corporation. Here the lead- ing authority is National Bank v. Matthews, 4 which decided that real estate security taken by a national bank for a loan made at the time is not void, although by implication national banks are clearly forbidden to loan money on such security. As Justice Swayne said, giving the opinion of the court : u The object of the restrictions was obviously threefold. It was to keep the capital of the banks flowing in the daily channels of commerce, to deter them from embarking in hazardous real estate speculations, and to prevent the accumulation of large masses of such property in their hands, to be held, as it were, in mortmain. The intent, not the letter, of the statute consti- M'g Co. v. Rocky Mt. Nat. Bank, 2 Col. 248; Allen v. First Nat. Bank, 23 Ohio St. 97. 1 Farmington Savings Bank v. Fall, 71 Me. 49. A corporation authorized to loan on bond and mortgage may re- cover a debt secured by a promissory note and mortgage. National Bank v. Insurance Co., 41 O. St. 1. 2 Lester v. Howard Bank, 33 Md. 558; Bowditch v. New England Life Ins. Co., 141 Mass. 292; see Richmond Bank v. Robinson, 42 Me. 589. 3 Bowditch v. New England Life Ins. Co., 141 Mass. 292. 4 98U. S. 621. 263