of the company, in any manner not distinctly authorized by the act of Parliament, is, in my opinion, an illegal application or dealing." Lord LANGDALE, in Salomons v. Laing, 12 Beavan, 339.

These extracts are to show the sense in which the word "illegal" is used when employed to describe the unauthorized acts and contracts of corporations. And, with respect to such acts and contracts, it has been very aptly said that the powers and franchises of corporations are grants from the government; that it would be just as reasonable and just as legal to allow one who has a patent for one hundred acres of land to take possession of two hundred acres as to allow a corporation to usurp and exercise a power not conveyed to it in its charter.

III. Another ground on which the Franklin company claims to recover is, that when a contract has been executed, in whole or in part, and the corporation has thereby received a benefit, a recovery may be had by the other contracting party to the extent of the benefit thus conferred, notwith standing the contract was ultra vires. It is a sufficient answer to this argument to say that the case fails to show that the savings bank has been thus benefited. The $50,000 paid by the Franklin company was paid directly to the Continental Mills. Not a cent of it ever came into the possession of the savings bank. The stock for which the $50,000 was paid was issued directly to the Franklin company. The title never for a moment vested in the savings bank. Although, by the terms of the agreement, the Franklin company was to hold the stock as collateral security merely, still the agreement, being ultra vires, cannot be enforced. Nothing possessing the slightest intrinsic value, not even a right of action, was ever secured to or vested in the savings bank. There is absolutely nothing on which a quantum meruit or a quantum valebat claim can be sustained.

DECISION OF THE COMMISSIONERS AFFIRMED.

CLAIM OF THE FRANKLIN COMPANY DISALLOWED.

APPLETON, C. J., BARROWS, VIRGIN, PETERS and LIBBEY, JJ., concurred.

ULTRA VIRES NOT APPLICABLE IN CASE OF NOTE SECURED BY DEED OF TRUST, EXECUTED FOR MONEY LOANED BY A NATIONAL BANK-INJUNCTION REFUSED.

FIFTH SELECTED CASE.

NATIONAL BANK V. MATTHEWS.*

A executed a promissory note to B, and to secure the payment thereof a deed of trust of lands, which was in effect a mortgage with a power of sale thereto annexed. A national bank, on the security of the note and deed, loaned money to B, who thereupon assigned them to the bank. The note not having been paid at its maturity the trustee was, pursuant to the power, proceeding to sell the lands, when A filed his bill to enjoin the sale, upon the ground that, by Sects. 5136 and 5137, of the Revised Statutes, the deed did not inure as a security for a loan made by the bank at the time of the assignment of the note and deed. Held, that the bank is entitled to enforce the collection of the note by a sale of the lands.

Error to the Supreme Court of the State of Missouri.

On the 10th of March, 1871, Hugh B. Logan and Elizabeth A. Matthews executed and delivered to Sterling Price & Co. their joint and several promissory notes for the sum of $15,000, payable to the order of that firm two years from date, with interest at the rate of ten per cent per annum. The payment of the note was secured by a deed of trust, executed by her, of certain real estate therein described, situate in the State of Missouri.

On the thirteenth of the same month the note and deed of trust were assigned to the Union National Bank of St. Louis. Price & Co. failed to pay the loan at maturity. The bank directed the trustee named in the deed of trust to sell. Said Elizabeth thereupon filed this bill in the proper State court to enjoin the sale. The bank in its answer avers that it “ accepted the said note and deed of trust as security for the sum of $15,000, then and there advanced and loaned to said Sterling Price & Co. on the security of said note

and deed of trust."

*

*Reported in 98 U. S., 621 (1878).

*

A perpetual injunction was decreed upon the ground that the loan by the bank to Price & Co. was made upon real estate security; that it was forbidden by law; and that the deed of trust was, therefore, void. The decree was made upon the pleadings. No testimony was introduced upon either side. The bank removed the cause to the Supreme Court of the State, where the decree was affirmed. The bank then sued out this writ of error.

Mr. Philip Philips for the plaintiff in error.

This case does not fall within the limitations imposed by Rev. Stat., Sec. 5137. No mortgage or conveyance of real estate was made to the bank. Price & Co. had only a lien which could be enforced in default of payment. This was all that they passed to the bank (Potter v. McDowell, 43 Mo., 93; Watson v. Hawkins, 60 Id., 550), and it was a mere incident to the note, securing its payment to the holder thereof in good faith, although he was ignorant at the time of taking it of the existence of the lien. Had the mortgage not been delivered nor anything said about it the bank, on failure of the maker to pay the note, would have been entitled to the lien (Green v. Hart, 1 Johns, N. Y., 590; Chappel v. Allen, 38 Mo., 213), and its right to assert it could not have been successfully resisted on the ground that to permit it to do so would authorize a violation of its charter.

The act, by authorizing loans to be made "on personal security," cannot be held as limiting the transaction to the personal undertaking of the parties to the note; and it would not be violated if the bank should require as collateral a deposit of bonds or of stocks, either of States, municipalities or incorporated companies. Shoemaker v. National Bank, 2 Abb. (U. S.), 416; Schouler, Personal Property, pp. 87, 94; Pittsburgh Car Works v. Bank, Thompson's Nat. Bank Cases, 315. In many of these instances the bonds or stocks are secured by real estate. This, however, does not change the character of the collateral, or make it other than personal security. See, also, First National Bank of Fort Dodge v. Haire, 36 Iowa, 443; Merchants' National Bank v. Mears, Thompson's National Bank Cases, 353.

The decision of the learned court below questions neither the right of the bank to recover the contents of the note by suing the parties thereto, nor the validity of the lien created by the mortgage. Here there is a bona fide subsisting debt, evidenced by the note, whereof the bank is the lawful holder, and a lien which Price & Co., before their attempted transfer of it, could have made available. It does not now inure to their benefit, because they have assigned the note, and it cannot be enforced by the bank, as it was made void in its hands. Is the lien, then, vacated? It certainly is for all practical purposes, if the extraordinary position taken below should be sustained here.

Can the defendant in error, by a strained construction, be permitted to make the objection and cancel a contract which the statute does not declare to be void? There is some contrariety of opinion upon this question, and the court is referred to some of the numerous cases which answer it in the negative. Smith v. Sheely, 12 Wall., 360; Gold Mining Company v. National Bank, 96 U. S., 610; Silver Lake Bank v. North, 4 Johns (N. Y.) Ch., 370.

The decision in the last case is, that if the bank had passed "the exact line of its power, it would rather belong to the government to exact a forfeiture of the charter, than the court. in this collateral way to decide a question of mis-user by setting aside a just and bona fide contract." The same doctrine is repeated in Steam Navigation Company v. Wood, 17 Barb. (N. Y.), 380, and supported by the judgments of the courts of Massachusetts, Pennsylvania, and other States. Ang. & A., Corp., section 153.

Mr. J. A. Hunter, Mr. John W. Noble, and Mr. John C. Orrick, for the defendant in error.

The deed of trust is in effect a mortgage, with a power of sale thereto annexed. Although a third person may be named as trustee, and vested with that power, the grantor has an equity of redemption which may be judicially foreclosed and sold. The cestui que trust has a beneficial interest in the lands. Kennett v. Plummer, 28 Mo., 142; Chappell v. Allen, 38 Id., 213; Potter v. Stevens, 40 Id., 229. In the ab

sence of any statutory prohibition, the assignments would have vested that interest in the bank, but as the latter is permitted (Revised Statute, section 5137), to "purchase" or "hold" real estate in certain specified cases, of which this is not one, and in "no other," the assignments passed no interest in the lands, and conferred no right to subject them to sale to pay the note.

The words "purchase" and "hold," where they occur in that section, are not confined to cases where the absolute title to the fee has been conveyed. The provision allowing the bank to take a mortgage, by way of security for debts previously contracted, would be superfluous, if the general prohibitory words did not forbid it to purchase such an interest in real property as a mortgage transfers.

Looking at the mischief, which the statute had in view, it is immaterial whether the mortgage is made direcly to the bank, or is assigned to it. The interest acquired is, in each case, the

same.

The preceding section allows the bank to loan money on personal security. This virtually prohibits loaning it on any other. Expressio unius est exclusio alterius.

The decided cases, without a dissent, affirm that all grants of corporate power are to be construed favorably to the public at large, and most strongly against the corporation; that it has only the powers expressly given or necessarily implied; that the specification of certain powers prohibits by implication the exercise of other substantive powers, and that the intention of the law-maker is to be gathered from the whole statute. Governed by these fundamental rules, it must be held that the transaction on the part of the bank was ultra vires, not allowed by, but in palpable violation of, the statute to which it owes its existence, and consequently void. The injunction was, therefore, properly awarded. Fowler v. Scully, 72 Pa. St., 456; Kansas Valley National Bank v. Rowell, 2 Dill., 371; Ripley v. Harris, 3 Biss, 190; Commonwealth Bank v. Clark, 4 Mo., 59; Griffith v. Commonwealth Bank, Id., 255; Bank of Lawrence v. Young, 37 Id., 398; Downing v. Ringer, 7 Id., 585; White v. Franklin Bank, 22 Pick. (Mass.), 181; Brown v. Farkington, 3 Wall., 381; Beasley v. Big