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imprisonment. These features are brought out to show the penal and savage nature of the act, and for the purpose of giving point to the repealing statute of April 6th, 1850. It is entitled, "An act to prohibit corporations from interposing the defence of usury." "No corporation," says the first section, "shall hereafter interpose the defence of usury in any action." Section two declares, the term corporation shall be construed to include all associations and joint-stock companies having any of the powers and privileges of corporations. The receiver, in these actions, represents the company, and, in respect to the claims of the bondholders, can only make such defence as the company could make This latter statute does not create a debt, as is said by the receiver's counsel, for that proposition assumes there is no debt, and that is the point in dispute. Prima facie, at least, there is a debt, for there is the written obligation of the bank acknowledging the existence of a debt, as there certainly is, also, a moral obligation to pay. Nor does the construction which makes the law retrospective, render it void. That depends upon its effect, whether it impairs obligations or takes away vested rights. Every right resting in perfect obligation is vested, and cannot be disturbed; but rights. arising under a statute, which are imperfect and inchoate, cannot claim any such immunity. For example, the right given to redeem under the statute of executions, was held to be taken away by a repealing act passed subsequent to the time when the right to redeem accrued. (The People v. Livingston, 6 Wend., 526; The People v. Townsey, 5 Denio, 70.) The general rule of the common law is, that a statute shall be so construed as not to have a retrospective operation. (1 Bl. Com., 45; Bac. Abr., Statute C; Sackett v. Andross, 5 Hill, 327; Palmer v. Conly, 4 Denio, 374.) In Butler v. Palmer (1 Hill, 324), where most of the authorities are referred to, Mr. Justice CowEN says: "A number of cases have been cited by the counsel for the defendant, and some very strong ones, to show that any enactment of the

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legislature, annulling contracts or creating new exceptions and defences, shall be so construed as not to affect rights of action existing at the time of the enactment. Cases were also cited to show that a statute in any way modifying the remedy of a party by action, shall never be so construed as tc affect actions before the statute. But these are all cases relating to positive enactments; none of them arose upon a repealing clause." "The amount of the whole comes to this, that a repealing statute is such an express enactment as necessarily divests all inchoate rights which have arisen under the statute, which it destroys. These rights are but incident to the statute, and fall with it unless saved by express words in the repealing clause." Butler v. Palmer involved the right of a judgment creditor to redeem, which was held to have been taken away by the operation of a subsequent statute. This case, and those there cited, are also authority for the rule that the effect of a repealing clause, upon a previous statute which imposes a penalty, takes away all right to the penalty. If the repeal takes place after conviction, it arrests the judgment. Chief Justice SAVAGE, in delivering the opinion in The People v. Livingston, indicates the rule in the following words: "For instance, the present statute prohibits gaming, and allows an action to be brought to recover back money won at play. An action is brought and ready for trial; the day before the circuit the legislature repeals the act; the suit dies because the court has no jurisdiction, and the party has no right to recover the money. Such right did exist, subject to the contingency of obtaining a judgment, and such jurisdiction too, existed, but both have been taken away because the means of enforcing the right no longer exists." The borrower can have no vested interest in the penalty or forfeiture which follows the proof of usury in an action where that defence is interposed. Whatever right he had was contingent upon the fact of the usury being established upon the trial. This the repealing act declares shall not be done. It makes SMITH.-VOL. I.

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no difference whether the forfeiture is given to the borrower, to be recovered in an action, as under the gaming statutes, or whether it is given him by way of defence to an action brought to enforce the contract. The form of the remedy is of no moment. In either case it is the penalty which the law imposes upon the lender, which the borrower seeks to appropriate to his own use; and the act under which he hopes to effect this must be subject to the same rules of construction as other penal statutes. The effect of the act of the 6th April, 1850, is to repeal the statute of usury so far as it applies to corporations. The condition of this class of beings becomes the same as if the usury laws never existed. The title of the repealing act is significant. It is " to prohibit corporations from interposing the defence of usury in any action." The first section then declares, in a few short emphatic words, that the defence of usury shall not thereafter be interposed. It is the defence which is prohibited, The barrier wall, the place of strength which the usury laws set up between the lender and the borrower, is thrown down and leveled with the ground, whenever the borrower is a corporation. Henceforth the law offers no rewards for bad faith and broken promises to this class of contractors. The act is not limited to contracts thereafter to be made, or actions thereafter to be brought; but it declares, without qualification, limitation or exception, that the defence shall not be interposed. Nor is the word interposed to be restricted to the time of serving the plea or answer. This would be a narrow interpretation. A defence is certainly interposed when set up in the answer, and in like manner it is also interposed when resorted to upon the trial, but the ir terposition is not complete until it is heard and disposed of at the trial. The object of the act is to take away from corporate bodies the defence of usurya defence which most men have come to regard as immoral, mischievous and unjust. It should have a liberal interpretation.

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In the several cases reported in the books, where the powers, rights and obligations of the banking associations have been the subjects of judicial decision, it is nowhere determined that they are within the prohibition contained in the thirty-fifth section of the safety fund act. (Laws of 1829, p. 173.) In Leavitt v. Palmer, the instruments did not profess to be anything else than promissory notes, payable on time, with interest, and they were held void under the fourth section of the act of the 14th of May, 1840, having been issued after it took effect. In Talmage v. Pell (3 Seld., 328), the paper was in the form of certificates of deposit, negotiable, payable on time, given to the State of Ohio upon a purchase of stock to be resold. They were held to be promissory notes, illegal and void, because the bank had no authority to traffic in stocks. Judge GARDINER, who delivered the only opinion, declined to consider whether they were void under the thirty-fifth section of the safety fund act. The certificates of deposit in the New-York Life Insurance and Trust Co. v. Beebe, were held to be illegal, because they were issued to be loaned in contravention of section four of the restraining act. (1 R. S., 600.) Judge SELDEN, in delivering the judgment upon the claim of The State of Indiana v. The North American Trust and Banking Co. (4 Kern., 178), assumes that associations under the banking law, even prior to 1840, had no power to issue negotiable paper on time; placing this assumption, however, not upon the safety fund act of 1829, but upon the general principles of law, which limit corporations to the exercise of the powers expressly given to them, or such as are necessarily incident thereto. Judge MITCHELL, in the same case, asserts, upon grounds which I think it impossible to controvert, that the safety fund act is not a general statute within the meaning of the resolutions of the court, adopted in Talmage v. Pell, and that the moneyed corporations, subject to the provisions of the act, are those only which contributed to the fund, and which existed, or should exist,

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under the banking system which prevailed before the law of 1838 took effect. The bonds in the present actions were made and sent abroad, to be negotiated before the act of the 14th of May, 1840; and although some of them may have been finally negotiated by the company's agent in London after that time, still, as the transfer took place in a foreign country, and they were taken in good faith and for value, in no aspect could the transaction be deemed within the prohibition of the fourth section. The prohibited securities are notes and bills payable on time, with interest. I shall presently attempt to show that these instruments were neither the one nor the other. They were not issued to be loaned, nor were they designed to circulate as money. They were payable abroad in sterling money, a currency unknown to the laws of this country. They had neither the form nor the substance of circulating notes, and were not convertible except into the stock of the association. In no sense, therefore, can they be regarded as issued in violation of the sixth section of the restraining act. I refer to these statutes for the purpose of showing that up to May, 1840, there was no legislative expression against the issuing, by the banking associations formed under the law of 1838, of obligations for the payment of money on time or with interest, and not intended to be loaned or to circulate as money, although such obligations should assume the form of promissory notes. Whether such an act was ultra vires is another question.

This brings me to consider what I have regarded as the principal question to be determined, and that is, the powe and authority of these corporations to borrow money. If they have no such authority, then the transaction of obtain ing the money and issuing the bonds is ultra vires, and cannot be upheld. But, on the other hand, if the obtaining money upon loan is an act fairly within the scope of the legitimate power of the association, then the contracts are legal and valid, and such as the law will execute and enforce.