Metropolitan Stock Exchange v. Lyndonville National Bank

Haselton, J. This was an action of general and special assumpsit. .Special counts, two in number, set out promises and undertakings on the part of the defendant regarding a transaction in respect to shares of the United States Rubber Company, and a breach of such promises and undertakings resulting in damage to the plaintiff. The defendant filed pleas, the second of which was in brief to the effect that the supposed promises and undertakings set out in the declaration related solely to; an alleged sup>posed purchase by the defendant from the plaintiff of such shares, and that at the time in- question the defendant was a national bank without power or authority to make such alleged purchase. To this plea the plaintiff filed a replication which, though somewhat like a special traverse, is in its general structure and purpose a replication de injuria. It contains the characteristic allegation that, “The said defendant of its own wrong, without the cause by the said defendant in its said second plea above alleged in that behalf disregarded its said promises and agreement.” To this replication the defendant demurred. [307] The demurrer was sustained and the replication adjudged insufficient. The replication de injuria, though peculiarly applicable in actions of tort, is, under a rule of practice now grown familiar, allowable in actions of assumpsit to meet a plea which merely sets up matter of excuse for the non-performance .of a promise or undertaking. But the plea of ultra vires here interposed denies the making of the alleged agreement on the ground that the plaintiff could not malee it. In the nature of things, it is no reply to such a plea to' allege that the defendant of its own wrong and without the cause alleged in the plea disregarded its promise and agreement. This replication closes with a denial that the alleged promises and agreement of the defendant were beyond its power to malee. It is argued in behalf of the plaintiff that this is a traverse of fact, the ground of the argument being that as the states of the union are foreign to1 each other, so the Federal government and each state are foreign each to the other and that a statute .of one is a fact to be pleaded and proved in the courts of the other if there relied on. But in each state the acts of the Legislature of that state and the acts of Congress operate alike upon every one and alike claim recognition and due application by the courts. The public statutes of the general government are no more facts toi be alleged and proved in the courts of a state than are the public statutes of that state. Under our complex system there are in every state two bodies of statutory law equally entitled to direct recognition. When questions relating to bankruptcy, naturalization, the national banking system-, coinage and currency, patents, interstate commerce, the postal system., copyrights, internal revenue, and other proper m'atters of congressional legislation [308] are before the state courts, the public acts of Congress on those subjects are not facts to be proved, but the courts and all concerned must take notice of them precisely as they must take notice of the public acts of their own state Legislature. If in this case an attempt is made to- treat the replication as something else than that for which it was obviously intended, difficulties are presented which cannot fairly be met. The result is that the replication is adjudged bad. The question now arises whether or not the plea is good; for it is a truism that a bad replication may be a sufficient answer to a bad plea. The plea is good in form, and, whatever conflict of decisions there may have been formerly or may be now, we have no hesitation in saying that it is good in substance, and we so hold. Concord National Bank v. Hawkins, 174 U. S. 364; California Bank v. Kennedy, 167 U. S. 362; McCormick v. Market Bank, 165 U. S. 538; Central Transportation Co. v. Pullman Car Company, 139 U. S. 24. Counsel for the defendant having in their brief referred to and quoted from Wiley v. National Bank of Brattleboro, 47 Vt. 546, this court takes, occasion to point out that that case and Whitney v. National Bank of Brattleboro, 50 Vt. 389, are expressly disapproved by the Supreme Court of the United States in National Bank v. Graham, 100 U. S. 699. With regard to. contracts which are ultra vires in the strict sense, the sound doctrine is that they are wholly void and not merely voidable; that the corporation is under a perpetual disability to make them1; that, therefore, there can be no ratification by the corporation, and that a corporation cannot be estopped from- making the defense of ultra vires wheni it is sued for non-performance on its part. The denial of corporate existence, and the claim that a corporation has not proceeded in the way or through the officers designated by [309] law, are defenses that stand on a different and much narrower ground 'than the defense of ultra vires in its full and proper sense. In some cases a corporation which has received the benefit of an ultra vires contract may be recovered from on a quantum nieruit without reference to the attempted contract. In some cases a corporation may be liable in an action of tort for acts connected with or growing out of an attempted ultra vires contract. In some cases directors or officers of a corporation may malee themselves liable in an attempt to fix upon the corporation a liability with which it cannot under the law be charged. It may be said, too, in passing that directors of corporations do well to heed the right of the government which has created them to act properly and efficiently with reference to usurpations of power on the part of its creations. ' Whether, if the facts in this case are as alleged in the plaintiff’s declaration, the plaintiff, under a different state of pleadings, has 'a remedy in this action, or whether he hás a remedy in some other action against this defendant or against some other defendant or defendants, are questions not considered. Judgment affirmed, and causé remanded.