presented the account (so charged) to the defendants, claiming the amount of the same, and claiming also for the work done under the agreement of 1804, the sum of $3,625, and proved that while the work was going on the defendants paid Patterson sundry large sums of money on account thereof.

The court was thereupon prayed by the defendants to instruct the jury, that if they believed that the agreement of 1804 was assented to by Patterson and the committee as binding between them, and that the work therein contracted for was done by Patterson, and that the sum of $3,625 therein mentioned was claimed by him on account of the same, then the plaintiff could recover for no such work, but could only recover for the work done extra of the said agreement, which instruction the court refused to give.

It was contended by the defendant's counsel that in that refusal the court below erred.

STORY, J., delivered the opinion of the court as follows: *

*

3. Another objection is that as the agreement of 1807 is sealed, and is connected, by reference, with the prior agreement, they are to be construed as one sealed instrument, and assumpsit will not lie upon an instrument under seal.

* * *

The foundation of this objection utterly fails, for the agreement is not under the seal of the corporation, but the seals of the committee; and if it were otherwise, it is too plain for argument that the original agreement was not extinguished, but referred to as a subsisting agreement. It is quite impossible to contend that the mere recital of a prior, in a later agreement, after it has been executed, extinguishes the former.

Two other objections are made under this exception; but as they are answered in the preceding observations, it is unnecessary to notice them farther.

Under the third exception, the only objections relied on are in principle the same as the objections urged under the former exceptions and they admit the same answers.

The case has thus been considered all along as though the contracts were made between the plaintiff's administrator and the corporation, and indeed some points in the argument have proceeded upon this ground. It is very clear, however, that neither the first nor second agreements were made by the corporation, but by the committee in their own names. In consideration of the work being done, the committee, and not the corporation, personally and expressly agree to pay the stipulated price. A question has therefore occurred, how far the corporation were capable of contracting, except under their corporate seal; and if it were capable, as no

special agreement is found in the case, how far the facts proved show an express or an implied contract on the part of the corporation.

Anciently it seems to have been held that corporations could not do anything without deed. 13 H., 8, 12; 4 H., 7, 6; 7 H., 7, 9.

Afterward the rule seems to have been relaxed, and they were, for conveniency's sake, permitted to act in ordinary matters without deed; as to retain a servant, cook, or butler. Plow. 91b; 2 Sand., 305; and gradually this relaxation widened to embrace other objects. Bro. Corp. 51; 3 Salk. 191; 3 Lev. 107; Moore, 512. At length it seems to have been established that though they could not contract directly, except under their corporate seal, yet they might by mere vote or other corporate act, not under their corporate seal, appoint an agent whose acts and contracts, within the scope of his authority, would be binding on the corporation. Rex v. Bigg, 3 P. Wms. 419; and courts of equity, in this respect seeming to follow the law, have decreed a specific performance of an agreement made by a major part of a corporation, and entered in the corporation books, although not under the corporate seal. I Fonb. 305, Phil. ed. note (o.). The sole grounds upon which such an agreement can be enforced must be the capacity of the corporation to make an unsealed contract.

As it is concéded in the present case that the committee were fully authorized to make agreements, there could then be no doubt that a contract made by them in the name of the corporation, and not in their own names, would have been binding on the corporation. As, however, the committee did not so contract, if the principles of law in this subject stopped here, there would be no remedy for the plaintiff except against the committee.

The technical doctrine that a corporation could not contract except under its seal, or, in other words, could not make a promise, if it ever had been fully settled, must have been productive of great mischiefs. Indeed, as soon as the doctrine was established that its regularly appointed agent could contract in their name without seal, it was impossible to support it; for otherwise the party who trusted such contract would be without remedy against the corporation. Accordingly it would seem to be a sound rule of law that wherever a corporation is acting within the scope of the legitimate purposes of its institution, all parol contracts made by its authorized agents are express promises of the corporation; and all duties imposed on them by law, and all benefits conferred at their request, are implied promises, for the enforcement of which an action may well lie. And it seems to the court that adjudged cases will sup

port the position. Bank of England v. Moffat, 3 Bro. Ch. Rep. 262; Rex v. Bank of England, Doug. 524, and note ibidem; Gray v. Portland Bank, 3 Mass. Rep. 364; Worcester Turnpike Corporation v. Willard, 5 Mass. Rep. 80; Gilmore v. Pope, 5 Mass. Rep. 491; Andover & Medford Turnpike Corporation v. Gould, 6 Mass. Rep. 40.

In the case before the court these principles assume a peculiar importance. The act incorporating the Bank of Columbia (act of Maryland, 1793, c. 30) contains no express provision authorizing the corporation to make contracts. And it follows that upon principles of the common law, it might contract under its corporate seal. No power is directly given to issue notes not under seal. The corporation is made capable to have, purchase, receive, enjoy and retain lands, tenements, hereditaments, goods, chattels and effects of what kind, nature or quality soever, and the same to sell, grant, demise, alien or dispose of and the board of directors are authorized to determine the manner of doing business, and the rules and forms to be pursued; to appoint and pay the various officers, and dispose of the money or credit of the bank, in the common course of banking for the interest and benefit of the proprietors. Unless therefore a corporation, not expressly authorized, may make a promise, it might be a serious question how far the bank notes of this bank were legally binding upon the corporation, and how far a depositor in the bank could possess a legal remedy for his property confided to the good faith of the corporation. In respect to insurance companies also it would be a difficult question to decide whether the law would enable a party to recover back a premium the consideration of which had totally failed. Public policy, therefore, as well as law, in the judgment of the court fully justifies the doctrine which we have endeavored to establish. Indeed, the opposite doctrine, if it were yielded to, is so purely technical that it could answer no salutary purpose, and would almost universally contravene the public convenience. Where authorities do not irresistibly require an acquiescence in such technical niceties, the court feel no disposition to extend their influence.

Let us now consider what is the evidence in this case, from which the jury might legally infer an express or an implied promise. of the corporation. The contracts were for the exclusive use and benefit of the corporation, and made by their agents for purposes authorized by their charter. The corporation proceed, on the faith of those contracts, to pay money from time to time to the plaintiff's intestate. Although, then, an action might have laid against the

committee personally, upon their express contract, yet as the whole benefit resulted to the corporation, it seems to the court that from this evidence the jury might legally infer that the corporation had adopted the contracts of the committee, and had voted to pay the whole sum which should become due under the contracts, and that the plaintiff's intestate had accepted their engagement. As to the extra work, respecting which there was no specific agreement, the evidence was yet more strong to bind the corporation.

In every way of considering the case it appears to the court that there was no error in the court below, and that the judgment ought to be affirmed.

II. The Power to Take, Hold and Transfer Real and Personal Property.

"Corporations, when considered with reference to their powers to take and hold real estate, may be classified as follows:

"First, those whose charter or law of creation forbids that they should acquire and hold real estate, in which case a corporation cannot take or hold real estate; and a deed or devise passes no title.

"Secondly, those whose charter or law of creation is silent on the subject. In such case, as a general rule, there is no power to acquire and hold such property. But if the objects for which the corporation was formed cannot be accomplished without acquiring and holding the title to real estate, the power to do so is implied.

"Thirdly, those corporations whose charter, etc., authorizes them in some cases, or for some purposes, to take and hold the title to real estate. In these cases, as the corporation may for some purposes acquire and hold title, it cannot be questioned by any party except the state, whether the real estate has been acquired for the authorized purposes or not.

"Fourthly, those whose charter, etc., confer a general power to acquire and hold real estate. Such corporations may take and hold real estate as freely and as fully as natural persons." Hayward v. Davidson, 41 Ind. 212.

NATIONAL BANK V. MATTHEWS.

98 United States Reports 621 (1878).

ERROR to the Supreme Court of the State of Missouri.

On the 1st of March, 1871, Hugh B. Logan and Elizabeth A. Matthews executed and delivered to Sterling Price & Co. their joint and several promissory note for the sum of $15,000, payable at the rate of 10 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 13th of the same month, the note and deed of trust were assigned to the

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Union 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." 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 case to the Supreme Court of the state, where the decree was affirmed. The bank then sued out this writ of error.

MR. JUSTICE SWAYNE, after stating the facts, delivered the opinion of the court.

This case involves a question arising under the National Banking law, which has not heretofore been passed upon by this court. We have considered it with the care due to its importance.

Our attention has been called to but a single point which requires consideration, and that is, whether the deed of trust can be enforced for the benefit of the bank.

The statutory provisions which bear upon the subject are as follows:

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"Sec. 5136." Every National Banking association is authorized 'to exercise by its board of directors or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin and bullion; by loaning money on personal security; and by obtaining, issuing, and circulating notes according to the provisions of this title.

"Sec. 5137. A National banking association may purchase, hold, and convey real estate for the following purposes and for no others: First, such as may be necessary for its immediate accommodation in the transaction of its business. Second, such as shall be mortgaged to it in good faith by way of security for debts previously contracted. Third, such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings. Fourth, such as it shall purchase at sales under judgments, decrees or mortgages held by the association, or shall purchase to secure debts to it. But no such association shall hold the possession of any real