Ward v. Johnson

Citations

• 95 Ill. 215
• 1880 Ill. LEXIS 173

Syllabus

<p>1. Merchants, Farmers and Mechanics’ Bank—of Us powers. The Merchants, Farmers and Mechanics’ Savings Bank of Chicago, under its charter, has express power to receive deposits, and possesses the power, by necessary implication, to receive money as a loan, nor can the right to assign or mortgage negotiable instruments which it is authorized to take, be questioned.</p> <p>2. Corporations—power to contract debts, etc. A private corporation has implied power to contract debts, like an individual, whenever necessary or convenient in furtherance of its legitimate business, and whenever it may contract a debt it may borrow money to pay it, and execute a negotiable bill, note or bond, and secure it by mortgage to the creditor in payment.</p> <p>3. Same—estoppel to plead ultra vires. Where a bank creates an investment department as one agency of its business, under which parties loaning money to the bank, or making deposits, are secured by a deed of trust for the payment of their loans or deposits, with interest, under which the bank receives large sums of money, on the faith of the security, which goes into its general business, the bank, after having the full benefit of the contract, will not be allowed'to interpose the defence of ultra vires to defeat the execution of the trust.</p> <p>4. Same—who bound by Us by-laws. The general rule is that the by-laws of a corporation are binding upon no one but its members and officers. Hence, a by-law directing the investment of savings deposits in certain securities is binding on the members and officers of the corporation, but not upon others dealing with the corporation.</p> <p>5. Banks—power to provide an investment department secured by an assignment to a trustee. Where a bank, by its charter, is authorized to contract and agree with persons desiring to make deposits or loan money, as to the terms, and give for the sum its note, bond or certificate as evidence of indebtedness, and secure the same by pledge, chattel mortgage,