Opinion of the Court.

has often recognized and affirmed, upon three distinct grounds: the obligation of any one contracting with a corporation, to take notice of the legal limits of its powers; the interest of the stockholders, not to be subject to risks which they have never undertaken; and, above all, the interest of the public, that the corporation shall not transcend the powers conferred upon it by law. Pearce v. Madison & Indianapolis Railroad, 21 How. 441; Pittsburgh &c. Railway v. Keokuk & Hamilton Bridge Co., 131 U. S. 371, 384; Central Transportation Co. v. Pullman's Car Co., 139 U. S. 24, 48.

When the corporation is created by a charter granted by the legislature, any person dealing with it is bound to take notice of the terms of the charter, and of the general laws restricting or defining the powers of the corporation. Pearce v. Madison & Indianapolis Railroad, above cited; Zabriskie v. Cleveland &c. Railroad, 23 How. 381, 398; Thomas v. Railroad Co., 101 U. S. 71; Pennsylvania Railroad v. St. Louis &c. Railroad, 118 U. S. 290, 630. In like manner, when the corporation is formed under general laws, by the recording or filing in a public office of the required articles of association and certificate, any person dealing with the association is bound to take notice of the documents recorded or filed, upon which, as authorized and controlled by the general laws, depend the existence of the corporation, the extent of its corporate powers, and its capacity to act as a corporation. Oregon Railway v. Oregonian Railway, 130 U. S. 1, 25; Central Transportation Co. v. Pullman's Car Co., above cited.

It is settled by a long series of decisions of this court, that a lease of a railroad by one railroad corporation to another, which is beyond the corporate powers of either, is unlawful and void, and cannot be made good by ratification or estoppel, so as to sustain an action upon the lease; that this is so, not only when the lease is ultra vires of the lessor corporation, and therefore open to the objection of disabling it from performing those duties to the public, its performance of which was the consideration upon which it received its charter from the State; but even if the lease is ultra vires of the lessee corporation only, and therefore not open to that particular

Opinion of the Court.

objection. Thomas v. Railroad Co., Pennsylvania Railroad v. St. Louis &c. Railroad, Oregon Railway v. Oregonian Railway, and Central Transportation Co. v. Pullman's Car Co., above cited; St. Louis &c. Railroad v. Terre Haute & Indianapolis Railroad, 145 U. S. 393, 404.

The case at bar is no less clear than those just referred to. Congress, indeed, in establishing the system of national banks, instead of undertaking to grant special charters of incorporation upon its own judgment of the expediency of doing so in each case, has allowed corporations to be organized by voluntary acts of the associates, under the general conditions defined in the statute. But the capacity of these voluntary associations to make contracts and to transact business has not been left to depend upon their own will, however formally expressed, without any public authority having ever passed upon their responsibility and fitness. On the contrary, Congress has entrusted to the Comptroller of the Currency the power and the duty of making a careful examination into the condition of the association, including the amount of its capital stock actually paid in, and its compliance with the requirements of the statute in other respects, and, if the result of his examination is satisfactory, of granting to the association an official certificate that it is authorized to commence the business of banking; and has forbidden the corporation to transact any business whatever, except so far as required to perfect its organization, until it has received the certificate of the Comptroller.

The result of the Comptroller's examination, and his certificate of that result, and of the authority thereupon granted the corporation to commence the business of banking, of course appear on the records of his office, as do the articles of association and the organization certificate previously transmitted to him. Every one dealing with the corporation is bound to take notice of the facts thus appearing on a public record, upon which, by the very terms of the National Bank Act, depend the right of the association to exist as a corporation, and its capacity to transact business.

The Comptroller's examination and certificate are required,

Opinion of the Court.

not only for the security of those dealing with the bank, but also for the protection of the stockholders, for, without them, stockholders who had paid in the amount of their subscriptions might find themselves held liable for debts contracted by the corporation, without its having obtained the payments due from other stockholders, and otherwise complied with the requirements of the act.

One important object of Congress, in requiring the fitness of each corporation for carrying on business, with safety to its stockholders and to all persons dealing with it, to be ascertained and certified by a public officer before the corporation should have power to transact any business whatever, except to complete its organization as a corporation, doubtless was to create and maintain public confidence in the new system of national banks established by Congress to take the place of the local banks to which the people had been accustomed.

The cases on which the plaintiff principally relied are distinguishable in essential elements from the case at bar. Whitney v. Wyman, 101 U. S. 392; Harrod v. Hamer, 32 Wisconsin, 162; and Hammond v. Straus, 53 Maryland, 1, depended on provisions of local statutes, differing from those of the National Bank Act; and in Whitney v. Wyman, the corporation, after being authorized to commence business, had ratified the previous contract. Chubb v. Upton, 95 U, S. 665, was to the familiar point that one who has contracted with a de facto corporation cannot set up irregularity in its organization in defence of a suit upon the contract. Smith v. Sheeley, 12 Wall. 358, merely held that when land had been conveyed for full value to a de facto corporation, the grantor and those claiming under him could not afterwards deny its capacity to take the title. National Bank v. Matthews, 98 U. S. 621, and National Bank v. Whitney, 103 U. S. 99, depended upon section 5137 of the Revised Statutes, specifying the purposes for which a national bank might purchase, hold and convey real estate, which, as construed by the court, did not make void mortgages taken for other purposes by a banking association authorized to transact business. See also Fritts v. Palmer, 132 U. S. 282, 293, and cases cited; Thompson v. St. Nicholas Bank, 146 U. S. 240, 251.

Syllabus.

The present case is not one of irregularity of organization, or of abuse of a legal power, but of an attempt to exercise a power expressly prohibited by statute.

The lease sued on having been executed by the defendant, contrary to the express prohibition of the statute, which peremptorily forbade the corporation to transact any business, unless to perfect its organization, and thus denied it the capacity of entering into any contract whatever, except in perfecting its organization, the lease is void, cannot be made good by estoppel, and will not support an action to recover anything beyond the value of what the defendant has actually received and enjoyed. Central Transportation Co. v. Pullman's Car Co., 139 U. S. 24, 54-61; Logan County Bank v. Townsend, 139 U. S. 67.

The plaintiff, who by the judgment below has recovered rent at the rate stipulated in the lease for all the time of the defendant's occupation, as well as all that the defendant had agreed to pay towards the repairs, has certainly no ground of complaint; and the defendant, not having sued out a writ of error, is in no position to object to the amount recovered. Judgment affirmed.

SWAIM v. UNITED STATES.

APPEAL FROM THE COURT OF CLAIMS.

No. 33. Argued January 7, 1897. Decided March 1, 1897.

It is within the power of the President, as commander-in-chief, to convene a general court-martial, even when the commander of the accused officer to be tried is not the accuser.

A charge was made by letter against an officer in the army; the letter was referred to a court of inquiry to investigate; on the receipt of its report charges and specifications against him were prepared by order of the Secretary of War; and the President thereupon appointed a court-martial to pass upon the charges. Held, that such routine orders did not make the President his accuser or prosecutor.

In detailing officers to compose a court-martial the presumption is that the President acts in pursuance of law; and its sentence cannot be collater

Opinion of the Court.

ally attacked by going into an inquiry, whether the trial by officers inferior in rank to the accused was or was not avoidable.

When a court-martial has jurisdiction of the person accused and of the offence charged, and acts within the scope of its lawful powers, its proceedings and sentence cannot be set aside by the civil courts.

The action of the President in twice returning the proceedings of the court-martial, urging a more severe sentence, was authorized by law; and a sentence made after such action, and in consequence of it, was valid.

When an officer in the army is suspended from duty, he is not entitled to emoluments or allowances.

ON February 23, 1891, David G. Swaim filed in the Court of Claims a petition against the United States, alleging that he was on the 30th day of June, 1884, and still was, judge advocate-general of the army of the United States, with the rank, pay and allowance of a brigadier-general therein. He complained that, by reason of the unlawful creation and action of a certain court-martial, he had been, on February 24, 1885, suspended from rank and duty for twelve years, and that one half of his pay had been forfeited for that period. For reasons set forth in the petition, the claimant asked that the proceedings, findings and sentence of the said courtmartial should be declared to be void, and that judgment should be rendered, awarding him the amount of his pay and allowances retained in pursuance of the said sentence.

The Court of Claims made, upon the evidence, certain findings of fact, and, on the 27th day of February, 1893, entered a final judgment dismissing the claimant's petition. 28 C. Cl. 173. From that judgment an appeal was taken to this court.

Mr. Benjamin Butterworth (on whose brief was Mr. Julian C. Dowell) and Mr. J. II. Gillpatrick for appellant.

Mr. Attorney General for appellees.

MR. JUSTICE SHIRAS, after making the foregoing statement, delivered the opinion of the court.

The theory of the claimant's petition was that the sentence