Logan County National Bank v. Townsend

Citations

• 139 U.S. 67
• 11 S. Ct. 496
• 35 L. Ed. 107
• 1891 U.S. LEXIS 2362

Syllabus

<p>T. sold to a national bank, for sixty-eight cents on the dollar, $12,800.of the bonds of a municipal corporation issued in aid of a railroad under an .agreement that the bank would, upon deipand, replace them to him at the same or a less price. Subsequently, he demanded compliance with this agreement, but the bank refused. In an action brought against the bank in a state court to recover the difference between the amount it paid for the bonds, and their value at the time they were demanded, the defence in part was that the bank had no authority, under its charter and the national banking act, to make the alleged agreement and purchase, and, by reason of such- want of authority, could not be held liable to the plaintiff in any amount or upon any ground whatever. This defence was: overruled in the state courts of original and appellate jurisdiction. Held,</p> <p>(1) That this court had jurisdiction to review the judgment, so far as it involved the question whether the bank was exempted by the act of Congress or by its charter, from liability to account to the plaintiff for the value of the bonds which the jury found were purchased by it from the plaintiff, to be returned to him on demand at the same or a less price;</p> <p>(2) The national banking act is an enabling act for associations organized under it, and one cannot rightfully exercise any powers exert those expressly granted, or such incidental powers as aré necessary to carry on the business for which it was established;</p> <p>(3) - But that act does not give a national bank an absolute right to retain bonds coming into its possession, by purchase, under a contract which it was without legal authority to make. Although the bank is not bound to surrender possession of them, until reimbursed the full amount due to it, and may hold, them as security for the return of the consideration paid, yet when such amount is returned, or tendered back to it and the return of the bonds demanded, its authority to retain th