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ment of a creditor residing here." But the court did not decide
that such an assignment would not defeat the attachment of a



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348 MAINE,

Chalee ▼. Fourth National Bank of New York.

reditor who did not reside here. On the contrary, the doctrine is
.stated as an exception to the general rule. It is an exception in
favor of domestic creditors only. The language of the court
clearly implies this. '^ Comity between States is not thns to be ex-
tendcdy to the prejudice of our own citizens/' Such is the lan-
guage of the court; and we think it clearly implies that while ^
foreign assignment will not be permitted to defeat the attachment
of a domestic creditor, it will have that effect upon foreign credit-
ors. The reason of the rule clearly implies this. It is the sup-
posed duty of every government to protect its own citizens, a duty
which it does not owe to foreigners.

In Todd V. Bucknam, 11 Me. 41, the court expressly stated that
the doctrine which had been previously established in favor of resi-
dent creditors could not be extended to non-residents. The as-
signment in that case (although actually executed within the limits
of this State), was made by a non-resident debtor to a non-resident
trustee, and the suit in which property found in this State was
attached was commenced in the name of a resident of this State,
and the rule in favor of domestic creditors was invoked in support
of the attachment; but the jury having found that the real
owners of the demand sued were non-residents, the court held that
the rule did not apply. Although the court might perhaps have
given some other answer to the argument of the plaintiff^s counsel,
the only one which it in fact gave was that the real creditors
claiming under the attachment were non-residents, and therefore
the rule in favor of domestic creditors did not apply. This point,
though actually raised, argued, and decided by the court, does not
appear in the head notes of the reporter.

It is claimed, however, that in a more recent case {Sauih Boston
Iron Co. V. Boston Locomotive WorhSy 51 Me. 585), the doctrine in
favor of domestic creditors was extended to non-resident creditors.
A careful examination of that case will show that this claim is not
well founded. The court there held that an attachment by a non-
resident creditor would not be defeated by an assignment subse-
quently made in another State ; but the court did not hold that an
attachment by a non-resident creditor would not be defeated by
such an assignment previously made. On the contrary, it is ex-
pressly stated in the opinion of Chief Justice Tbkney, on page
589, that such would be the effect He says: '*But by the rule of
comity referred to, the assignment would be upheld here, and an



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DEUEMBEB TERM, 1880. 349

Chafeo t. Fourth National Bank of New York.

attachment, made after the assignment and notice thereof to the
creditor, would be invalid."

See, also, Fekh v. Bugbee, 48 Me. 9, where the rule, and its limi-
tation to domestic creditors, are accarately stated.

We think it is clear that the recognized rule in this State is to
nphold foreign assignments, except as against our own citizens.
There is certainly force in the objection tliat such a discrimination
is in conflict with that provision of the Federal Constitution which
declares that the citizens of each State shall be entitled to all
privileges and immunities of citizens of the several States. But
there are many cases in which such a discrimination has been sus-
tained, and we are aware of none in which this objection has
prevailed. Chancellor Kent, although himself opposed to such a
discnmination, concedes that it is the prevailing doctrine in this
country, and he does not express a doubt of its constitutionality.
Nor does Judge Story, in his elaborate examination of this and
kindred questions, in his Conflict of Laws. That provision of the
Federal Constitution has heretofore been regarded as applying only
to such privileges and immunities as are in their nature fundamen-
tal and universal, and not to special privileges enjoyed by the citi-
zens of a State by virtue of its local laws ; and it does not apply to
corporations at all. Paul v. Virginiay 8 WalL 168.

Besides, if the objection were well founded, we think the better
remedy would be to abolish the rule in favor of our own citizens,
not to extend it to the citizens of other States. But we do not
think the discrimination is unconstitutional.

But there is another and an independent ground on which it is
claimed that the assignment should be upheld. Creditors, whose
debts amount to more than eight millions of dollars, have assented
to the assignment and received payments thereby secured to them.
Among these creditors are those who have attempted to attach the
property assigned. Can these assenting creditors now repudiate
the assignment ? We think not. It is a general rule that those
who assent to an assignment cannot repudiate it And knowingly
receiving payments or dividends thereby secured to them is con*
elusive evidence of assent. These creditors have done both. They
not only assented to the assignment, but they have since received
payment in part of the large interest thereby secured to them.
The Fourth ITational Bank alone has received over fifty thousand



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350 MAINE,

Chafea t. Foarih National Bank of New York.

dollars We think they are thereby estopped to treat the assign-
ment as invalid.

We say such is the general role. An exception to it is where an
assignment is declared void by the law of the place where it is made*
If declared absolutely void by the law of the place where made, no
assent or ratification of the creditors can make it valid. Bat if not
absolutely void, — if it is only void at the election of such creditors
as choose to avoid it,— and they assent to it, or afterward ratify it
by accepting payments or dividends thereby secured to them, then
as to such assenting or ratifying creditors, the assignment will be
sustained. The assignment now under consideration is of the latter
class. It was valid by the law of the place where made. It is not
absolutely void in this State. Non-resident creditors are here bound
by it. Bcsident creditors may here avoid it if they choose so to da
But if, instead of electing to avoid it, they actually assent to it,
and accept payments thereby secured to them, then the general
rule applies, and we think their right to treat the assignment as
void is extinguished.

In Clay v. Smith, 3 Pet 411, the court held that a creditor, who
is a citizen of one State, by voluntarily making himself a party to
proceedings under the insolvent laws of another State, thereby
becomes bound by the proceedings to the same extent as the
citizens of the State where the proceedings are had ; and if the
debtor obtains a discharge, that the creditor's debt will be thereby
discharged.

In Bodley v. Goodrich, 7 How. 276, the assignment contained
conditions which rendered it void upon its face as against a non-
assenting creditor, but the court said that if the creditor had as-
sented to the assignment there could have been no objection to it

In Adlum v. Yard, 1 BaWle, 163, the court said that the creditor
might originally have repudiated the assignment, but having taken
a dividend under it, he should no longer question its validity.

In Eapalee v. Stewart, 27 N. Y. 310, the court held that it would
be a fraud upon all the other creditors to allow one who had assented
to the assignment to repudiate it, and thereby gain a preference
and secure his entire debt

Personal privileges may undoubtedly be waived, although secured
by the positive provisions of a statute ; and when a creditor, to
whom the law secures the right to avoid an assignment made by hw
insolvent debtor, assents to the assignment, or knowingly avails



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DECEMBER TERM, 1880. 361

Chafee v. Foarth National Bank of New York.

himself of the benefits thereby secured to him, we think he thereby
waives his right to treat the assignment as void. This rule, as
.already stated, does not apply to assignments which the law declares
absolutely void. It applies only to such as are avoidable at the
election of creditors. The assignment now under consideration we
regard as of the latter class. We hold that all creditors who became
parties to it, or knowingly accepted any of its benefits, thereby
waived the right to afterward treat it as invalid.

We do not deny that the lex loci rei sHcb is to govern in this case.
But we hold that the lex loci rei stim is as here declared. Not that
such is the law of this State applicable to domestic assignments, but
that such is the law of this State governing foreign assignments
when they are brought into litigation herewith respect to property
here situated. Our statute, as its provisions clearly show, applies
only to domestic assignments. No statute can have any extra-
territorial force. Our statute cannot govern assignments made in
other jurisdictions. The latter, when brought into litigation here,
must be governed by the rules of comity aliH3ady referred to.

It is urged in argument by the defendants* counsel that, for the
purpose of applying tho Maine Assignment Act to the Sprague
Manufacturing Company, the latter may be regarded as having a
residence at Augusta, in this State, where it owned property and
where it was doing business. Wc think this proposition cannot
be sustained. A corporation can exist only within the sovereignty
which created it, although, by comity, it may be allowed to do
business in other jurisdictions, through its agents. It can have but
one legal residence, and that mustbe within the State or sovereignty
creating it Bank of Augusta v. Earle, 13 Pet^ 519 ; Runyon v.
Coster, 14 id. 122 ; Tombighee R. R. Co. t. Kneeland, 4 How. 16;
Ex parte Sckollefiberger, 6 Otto, 369.

[Minor points omitted.]

Bill sustaifted. Decree as prayed for.

Arfims, 0. J., YiROiK, PETBBSand Syhonds, JJ^ concnrred



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362 MAINE,

Ames y. Jordan.



Ames v. Jordak.

01 He. 540.)

MoMter and $ervant — eontraei — negligence.

One agreeing to famish another with a team and eaitable driver
cover from the hirer for the loes of the team occasioned bj the drlvei^s
lessness and incompetency.



A



CTION of negligence. The opinion states the



H. D. Hadlock, for plaintiff*

Oeorge S. Peters and Wm. H. Folgety for defendant.

Appletox, C. J. The defendant hired a pair of horses and a
driver of the plaintiff, to be employed by him in lambering opera-
tions during the winter of 1878 and 1879. While so employed
tlie horses were drowned and the plaintiff brings this action to re-
cover compensation for their loss, on the ground that it occurred
through the negligence of the defendant, or that of those in his
employ.

The plaintiff engaged to furnish a suitable driver for his team.
The team and the suitable driver were to be furnished for $40 a
month. The defense was that the loss occurred through the
carelessness and want of ordinary prudence on the part of Perry^
the driver furnished by the plaintiff, and that in such case the
defendant would not be liable for their loss.

It was for the plaintiff to furnish a suitable driver. He was
guilty of negligence in not furnishing such a one, and must suffer
for the consequences of his negligence. If, then, the negligence
and carelessness of Perry occasioned the loss of the plaiutifTs
horses, the defendant is not liable and the jury should have been
so instructed.

It is true the horses and driver were under the control and man-
agement of the defendant, and he was responsible for whatever
was done in pursuance of his orders. He was to see that the land-
ing place provided for logs was a safe one, and if not so, he was re-
sponsible therefor. The driver in obeying his orders is his servant.



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^ AUGUST TERM, 1880. 363

White V. Carr.

for whose acts he is liable so far as within the scope of his employ-
ment» bat the results of his incompetency the plaintiff mast beav,
for he shoald have famished a suitable servant.

Exceptiom sustained.

Waltojst, Dajkforth, Vibqibt and Libbet, JJ., concarred.



White v. Carb.

en He. 665.)

MaUdaus prosecution — - advice of intereeted couneel,

b an action for malidoos proeecntion the defendant cannot justif j hie actScm
by the adyloe of an attorney who was personally interested in the sabject-
matter.

ACTION for malicious prosecution. The opinion states the
case.

Vose (£ Libbey, for plaintiff.

Potter £ Otis, for defendant.

LiBBET, J. This is an action against the defendant for mali*
ciously bringing a civil action against the plaintiff for slander. To
show probable cause for that action the defendant claimed that he
consulted an attorney of this court, took his opinion in good faith,
and acted upon it.

The case shows that the alleged slanderous words for which the
action was brought related to and embraced the attorney consulted
as well as the defendant, and in substance charged both with a con-
spiracy to defraud. The fact was well known to the defendant
when he consulted the attorney; and the attorney brought and
entered in court an action for the slander in his own name, at the
same term at which he brought and entered the defendant's action.

Upon this point the judge in substance instructed the jury that
if the defendant sought the advice of the attorney in good faith,
and the attorney in good faith gave him an opinion that he had a
good cause of action, and the defendant acted upon tuat opinion m
good faith in bringing the suit, it was a good justification therefor.
Vol. XXXVI— 45



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364 MAINE.



White V. Carr.



We think this was error. A party who consults an attorney at
law in regard to his legal right to bring an action against another^
when the attorney is interested in the subject-matter of the suit,
and known by him to be so interested when consulted, cannot
show the opinion of the attorney as palpable cause for bringing tlie
suit, although the opinion is honestly given.

We think the grounds upon which the opinion of an attorney
can be shown as probable cause for bringing a suit are, that he is
an officer of the court, held out to tl)o public as one learned in the
law, and that the client has aright to presume that he will give
him a fair, unbiased and well grounded opinion as to his legal
rights. But when the attorney is directly interested in the sub-
ject-matter of the suit| and his interest is known to the client, the
client has no right to presume that he will give him an unbiased
opinion ; and if he takes it and acts upon it, and it turns out to be
erroneous, it will afford him no justification. The client knows
that he has not consulted a disinterested and unbiased attorney.
NeitheKa judge nor juror thus interested would be competent to
sit in the trial of the case, and if either should act it would be good
ground for a new trial, although ho acted honestly. Why should
the opinion of an attorney thus interested be entitled to greater
respect than the decision of the judge? It might as well be held
that when an attorney is defendant in an action for malicious prose-
cution he may justify on the ground of probable cause by satisfying
the jury that as a lawyer he in good faith believed he had a good
cause of iaction,, although in fact he had none. We know of no
authority to sustain such a proposition. The rule as established
by the authorities has gone quite far enough in holding the opinion
of an attorney to be sufficient probable cause, and should not be
extended.

[Omitting another point.]

Exceptions sustained.

Appletok, 0. J^ Barbows, Davfobih, ViBGur and Pbisbs^
JJ.y ooDoarred,



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0(.



Oj^SES



COURT OF APPEALS'



i MARYLAND.



T.ACTAtt T. Natiokal Ukiok Bank of BAizmcolui

(SB Hd. 78.)

JfatUmal bank — iMtfry, effect cf. on eontrad ^remedy far - patMr to pwrehofB

notes,

A guaranty of negotiable paper discoanted bj a National bank is not rendered

Toid by the fact tliat the banlc demanded and reoeived asorioas intereal

upon the notes.
No one can recover asarioas interest paid to a National bank bat the party

who paid it, and it cannot be set off or repoaped by another party to the

paper.*
National banks have no power to purchase negotiable paper except from wn-

plus capital (See note, p. 860.)

A CTION on a guaranty. The opinion states the oasa

R. Stockett Mathews and 8. Teachh WalKs, for appellaal
John N. Steele and J. Nevett Steele, for appellee.

* It caxmot be set off or reoouped at«n, but the party Is restricted to
Bamet v. Bank, 96 U. & 8fi6i 0. o., Browne*! Nat. Bank Gas. 18.— Bap.



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356 MARYLAND,



Lasear t. National Union Bank of Baltimore.



Gbason, J. This suit was institated on a written guaranty of
the appellant to the appellee, which was executed on the 3d day of
February, 1870, and is in the following words: " For value receired,
I hereby guaranty to the National Union Bank of Maryland at Bal-
timore, all liabilities to said bank of Lazear Brothers, now existing
or which may hereafter arise, to the extent of 125,000, I hereby
holding myself liable to said bank to that extent for all paper that
may be held by the bank of Lazear Brothers, either as drawers or
indorsers, in the same manner as if indorsed by me, I hereby waiv-
ing notice of protest of such paper/'

[Omitting a minor inquiry.]

It was contended, that the guaranty is void, because usurious in-
terest was demanded and received by the bank upon the notes now
held by it, and the non-payment of which is the foundation of this
suit. The United States Banking Law authorizes banks, organized
under its provisions, to receive the same rate of interest that is al-
lowed by the laws of the States in which such institutions are lo-
cated, and no more, and provides, that if more is demanded and
received, the whole interest shall be forfeited, or that twice the
amount of interest so paid may be recovered by the person paying
it, or his legal representatives, provided suit for that purpose be
brought within two years from the date of the usurious transaction-
See ch. 3, §§ 5197, 5198, U. S. R. S. There is no provision how-
ever declaring an usurious contract void. While as a general rule,
contracts which are in violation of the common or statute law are
void, yet this rule does not apply to cases like the present In
most of the States there are laws regulating the rate of interest^
and yet we have been referred to no case, and have found none, in
which a contract has been declared void, by reason of the fact, that
a greater interest than that allowed by law has been received under
it, unless the law itself has provided that the taking of illegal in-
terest shall render the contract void. This court, in the case of
Lester v. Howard Bank, enforced the contract, notwithstand-
ing the bank had made the loan to Purvis, its president, in violation
of the terms of its charter, and in that case this court said: *^ Cases
are to be found, arising under contracts made in violation of a
statute, in the application to which of the general rule, courts have
been governed by the plain and obvious purposes of the law ; and in
such it has been repeatedly held, that an action would lie against a



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APEIL TERM, 1879. 357



Lazear t. National Union Bank of Baltimore.



party reoeiving money under such a contract upon a promise im-
plied by law to refund it"

In the case of Fleckner v. U. S. Bank, 8 Wheat. 356, Mr. Jus-
tice Stoky in delivering the opinion of the court says: "The tak-
ing of interest by the bank beyond the sum authorized by the
charter would doubtless be a violation of its charter, for which a
remedy might be applied by the government; but as the act of
Congress does not declare that it shall avoid the contract, it is not
perceived how the original defendant could avail himself of this
ground to defeat a recovery." See, also, Bandel v. Isaac, 13 Md.
224, to same effect

We think it very clear that the demand and receipt by the bank
of usurious interest upon the notes offered in evidence does not
avoid the contract between the appellant and the appellee. There
was therefore no error in the refusal to grant the third, fifth, fifth
and a half, eighth, ninth and tenth prayers of the appellant, nor in
refusing his motion to withdraw from the jury the notes which had
been offered in evidence subject to exception. But it was also con-
tended that the usurious interest, received by the bank upon the dis-
count of paper upon which Lazear Brothers were drawers or indors-
ers, should be recouped or set off against the amount of the notes
offered in evidence. It must be borne in mind that none of the paper
of Lazear Brothers discounted by the bank was discounted for the
benefit of the appellant, and that none of the usurious interest taken
by the bank was pa^d by him. It was paid by Lazear Brothers and
Schurtz & Co., and they, and not the appellant, have been the
sufferers by the exaction of illegal interest If the notes had been
discounted at the rate of interest prescribed by law, the appellant
would have been in no better situation than he is now, for if bound
at all, he would have been liable for the amount of the notes, with
legal interest thereon from the date of their maturity to the time
of the trial of the case. But it has been frequently held that no
one, except the party who has paid it, can recover the usurious
interest paid. Smiih v. Bxchange BanJc of Fitisburg^ 26 Ohio St.
152 ; Scott v. Leary, 34 Md. 395 ; Hough v. Horsey, 36 id. 184. It
will be found too that section 5198 of the Banking Act gives the
remedy in such cases to the party who has paid the usurious in-
terest, and to his legal representatives, provided they bring suit to
recover it back within two yeans from the date of the usurious
transaction. It was optional with the parties, who paid it to the ap-



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368 MARYLAND,



Lazear v. NatioBftl Union Bank of Baltimore.



pellee^ to institute proceedings for that purpose or not, and they
have not thought proper to do so within that time, and they are
therefore now without remedy.

The Superior Court of Baltimore city was therefore right in ex-
cluding from the consideration of the jury the statement of the
interest paid, as set out in the third exception, and in rejecting the
appellant's twelfth prayer.

The appellant's seventh prayer is based upon the theory that the
note of Lazear Brothers for five thousand dollars, dated June 22,
1872, which was obtained by the appellee from Winchester & Son,
note and bill brokers, was not discounted but purchased; that such
purchase was not authorized by the Banking Act, and consequently,
that the appellee obtained no title to the note, and was not entitled
to recover upon it. Sub-section 7 of the act enumerates the pow-
ers which are conferred upon institutions organized under the law,
and provides that such institutions *' shall have all such inci-
dental 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 circu-
lating notes according to the provisions of this title."

A corporation has no other powers than such as are specifically
granted, or such as are necessary for the purpose of caiTving into
effect the powers expressly granted. This rule of law is so well
settled that we need refer to no other case than that of Weckler v.
First National Baiik, 42 Md. 591; s. c, 20 Am. Kep. 95. The only
power to buy and sell, with which National banks are clothed, is
the authority given by chapter 1, section 5137, sub-sections 1, 2, 3
and 4, to purchase real estate for the special purposes and under
the circumstances therein stated. The act plainly shows that it was
the intention of Congress to so limit and restrict National banks,
as to prevent them from exacting and receiving a greater rate of
interest than is authorized by the laws of the States within which
sueli institutions may be respectively located, and to prohibit them
from becoming buyers and sellers of promissory notes. The evi-
dence shows that Winchester & Son, note and bill brokers, were
employed by Lazear Brothers to sell the note of June 22, 1872, t«i



Online LibraryIrving Browne Isaac Grant ThompsonThe American reports: containing all decisions of general ..., Volume 36 → online text (page 40 of 123)