Federal Trust Co. v. State Bank

Rugg, C.J. This is an action to recover damages for failure to deliver Russian roubles according to written contract. The agreement of the defendant under date of January 31, 1918, confirmed “sale to you [[the plaintiff] today of one hundred thousand (100,000) cash Roubles Russian bank notes to be delivered to you within six or eight weeks from date” at stated price and denominations. The only defence is that the defendant was not authorized by law to make such a contract. The defendant was organized under R. L. c. 115. That chapter is not included in the General Laws by reason of St. 1918, c. 12, which forbade future incorporations under said c. 115 but continued its provisions as to banks already incorporated thereunder. It was provided in § 30 of said c. 115, “A bank shall carry on . . . the usual business of banking . . . may receive deposits, and may loan and negotiate its moneys and effects by discounting [574] on banking principles upon such security as the stockholders consider expedient.” In § 38 of the same chapter was this prohibition: “No bank shall use any of its moneys, goods, chattels or effects in trade or commerce.” The single question presented is whether it could have been ruled as matter of law that the contract here in suit was in violation of either § 30 or § 38. There was ample evidence from those familiar with banking tending to show that banks in this Commonwealth and particularly in Boston usually and generally bought and sold and dealt in Russian roubles and other foreign currency, that Russian roubles were bank notes issued by the Imperial Bank of Russia and were the currency of Russia at the time in question. The selling of foreign currency cannot be said as matter of law to be beyond the lawful power of a bank. Whether it was a part of “the usual business of banking” within the meaning of those words in § 30 was a question of fact. It rightly was left to the jury. The verdict has established that such selling is within the scope of ordinary banking business in Boston and hence that it was not in violation of § 38. Portland Bank v. Storer, 7 Mass. 433. Even if dealing in Russian roubles were “trade or commerce” within the prohibition of those words in § 38, there is nothing in this record to show that the defendant had not acquired ownership of the roubles which were the subject of this contract in such way as to warrant it in making lawful contract to sell them. Fortier v. New Orleans National Bank, 112 U. S. 439, 451. Schuyler National Bank v. Gadsden, 191 U. S. 451. Exceptions overruled.