Penn v. Bornman

Citations

• 102 Ill. 523
• 1882 Ill. LEXIS 63

Syllabus

<p>1. Contract—legality. The general rule is, that all contracts made in violation of an express statutory provision are inoperative and void, and no recovery can be had upon them though the defendant is a party to the violation of the law, in the absence of fraud or bad faith on his part upon which to found an estoppel.</p> <p>2. Same—loan by bank to a director in violation of its charter, is illegal. Under a provision in a bank charter that “no director of said corporation shall be indebted to said corporation, either directly or indirectly, or individually, at any time, to an amount greater than seventy-five per centum of the capital stock held by such director, in good faith as his own,” it is held, that a director can not enter into a valid contract with the bank, as guarantor or indorser, without regard to his ownership of stock and in violation of such provision, and no recovery can be had by the bank under such a contract against him or his -estate. The prohibition in such case applies to the bank as well as to the directors.</p> <p>3. The distinction in some of the old cases between malum prohibitum and malum in se has long since been exploded, and the rule is now well established that no agreement to do an act forbidden by statute, or to omit to do an act enjoined by statute, is binding.</p> <p>4. A provision in a bank charter prohibiting the directors from besoming indebted to the bank, is not purely personal to the directors, but it is equally a mandate to the bank, which it is as much bound to observe as the directors themselves. It goes directly to the power or capacity of both the bank and directors to enter into any engagement or agreement by which the latter may become indebted to the former. »</p> <p>5. Conflict of laws—rulings of Supreme Court of United States— when not binding on this court. The decisions of the Supreme Court of the United States, while entitled to great respect, are not of binding authority on this court in the construction of o