
    The President, Directors, and Company of the Planters Bank of the State of Mississippi vs. John Sharp, et al.
    Where a bank, in its discounts, reserves a greater interest than is allowed by its charter, the contract falls within the general law of usury ; it is not void; the bank may recover the principal sum lent, but without any interest.
    Where a note is not discounted by the required number of the directory of a bank, but the bank afterwards sues upon the note, such act will be held a ratification of the discount, and bind the parties thereto.
    A subsequent confirmation on the part of a corporation of the act of its agent, is equivalent to a previous command.
    In error from the Lawrence circuit court.
    The record in this case shows that an action of assumpsit was instituted in the ordinary form by the bank against the defendants, on their promissory note for $467, dated March 14, 1840, at twelve months, in the circuit court of Lawrence county, and defendants pleaded the general issue. Upon the trial, the plaintiffs read the note in evidence, and there rested the case.
    Defendants then introduced the late cashier of the Branch of the Planters Bank, at Monticello, who proved that the note was given in renewal of another note, and received by him and renewed, upon defendants paying one fourth of the old note,and the discount at seven per cent, on this new note. He does not recollect that the board acted on this particular note as to its renewal, but that individual members of the board authorized him to renew in this way— that the sum of $37 50 was taken for the discount or interest, and that the calculation was made according to Rowlette’s Tables, which were used for calculating.
    The next witness, A. S. Arrington, teller of the bank, testified that he knew the note sued on was laid before the board of directors for renewal and passed, and produced a transcript from the minutes of the board, to show that a directory was installed and organized on the 12th February, 1839, by appointing Arthur Fox president.
    
      John H. Oates, one of the directors, according to the minutes of the board, testified that the last time he was elected director was in 1838, and that in his opinion he did not think he w.as authorized to act after his term of one year expired, and did not recollect of the note sued on being passed by the board; that he never authorized the cashier to renew; believes he was out of office at the time as director; believes the cashier had authority from the board to renew, subject to be passed on by the board. Arthur Fox testified that his time had expired, but that he was president of the board, and that there was a meeting of the board after the date of the note sued on ; he believed his time was out at the date of the note sued on, he refused-to act officially; what he did was individually.
    The testimony having been closed,
    The court below, at the instance of defendant’s counsel, instructed the jury as follows :
    1. If they believed usurious interest was taken upon the discount of the note sued on, or on the former note renewed by this one, it rendered void the contract, and they must find for defendants.
    2. If the jury believe the cashier discounted the note, the transaction is illegal, and they must find for defendants.
    3. That unless the jury believe a board of directors discounted the note, they must find for defendants.
    A verdict was found for defendants. A motion was made for a new trial by plaintiff’s counsel, for the reasons — 1, Verdict contrary to law and evidence; 2, Court erred in charging the jury as asked for by defendants; 3, Court erred in permitting illegal evidence to go to the jury, to- show that note was not discounted by the board.
    The motion was overruled, exceptions taken by plaintiffs, and they now prosecute their writ of error to this court.
    The following are the errors assigned :
    1. That the court below erred in permitting the testimony of defendants to go to the jury.
    2. That the court below erred in giving in charge to the jury the instructions asked by defendant’s counsel.
    
      3. That the court below erred in overruling the plaintiff’s motion for a new trial, and in rendering judgment for defendants.
    
      Quitman and McMurran, for plaintiffs in error.
    We think that the record in this case presents as unique and singular a defence in the court below to a promissory note, as can be found in the history of judicial proceeding. It is almost a pity to disturb the verdict and judgment in favor of defendants, resting on the peculiar testimony disclosed, and appearing in the bill of exceptions. But as we have come to this court to have the law of this case determined, and to have that justice done to the plaintiffs which they could not obtain below, we will proceed briefly to touch upon the errors manifest in the proceedings.
    After the plaintiffs read in evidence the promissory note sued, made payable to the plaintiffs themselves, the defendant proves that the note was taken by the cashier in renewal of a former note due the bank, upon one fourth of the old note, and the discount on this note being paid, but does not know whether the board of directors acted on it. But Arrington, the teller, testifies that he knows it was acted on by the board, and that there was a board at the time duly organized at the Branch at Monticello. Prestridge, Oates and Fox testify that they believe they were not directors at the date of the note, though the minutes show they were, and Fox himself states he was president, & c.
    Now this testimony was clearly inadmissible, and of no weight in contradicting the minutes of the board of directors, introduced by defendants themselves, and the directors could not thus falsify their own proceedings. The board of directors for the Branch at Monticello were appointed by the mother bank, and according to the charter there was no limit as to the term they might serve. And being in office and acting, they saying they believe their time was out, can have no weight.
    Planters Bank Charter and Amendments. See Rev. Statutes, from 1824 to 1838, 237-244, sec. 12; 248, sec. 27; 297-300, sec 9.
    And if they were appointed for a year, and that period had elapsed, they would be in office, unless they actually resigned, until their successors were appointed. Foote v. Prouse, Strange’s R. 625; 10 Mod. R. 140.
    Even if the charter of the bank were forfeited, the fact could hot come before the court collaterally, as in a case of this kind, till office found. 1 Bl. Com. 485 ; 5 John. Ch. R. 366 -379.
    Again. The court instructed' the jury that unless they believed a board of directors discounted the note they must find for defendants. The proof is that the board did discount the note ; but suppose they did not, still the plaintiffs were entitled to recover. There was no want of consideration, no failure of consideration — but a bona fide consideration, the renewal of a part of an old debt due the bank; it was made payable to the bank, received by the cashier in renewal, and accepted by the bank, and sued on by the bank. No discount was made, no discount was necessary, the proper officer acted, and the board has approved the act; and the defendants cannot, either legally or morally, gainsay their liability, as long as we have any laws enforcing valid contracts, and requiring the payment of debts.
    The second instruction given to the jury is equally erroneous, and there was no proof touching it, it was irrelevant, and ought to have been refused. The cashier does not say that he discounted the note' — he received it for the bank for the balance of the debt due by the defendants to the bank, after receiving the one-fourth and the discount in money for the bank; and it would be just as plausible to assert that the money was illegally received, as to say that the note was. 14 John. R. 238 - 245 ; 2 Ld. Raym. 1535.
    As to calculating interest by Rowlette’s Tables, there is not a word in the record, what rule is adopted by those tables, whether it gives more or less interest than would accrue in an ordinary calculation, and we cannot travel properly out of the record to ascertain. Not a word of proof about usury from one end to the other of the record. And therefore the first instruction was abstract and incorrect. It was onerous too, as usury or an excess of interest would not avoid the contract, but only the excess over the legal interest or discount. Planters Bank v. Snodgrass, 4 How. R. 573; Commercial Bank of Manchester v. Nolan, decided January term, 1843, of High Court.
    These brief views will cover the other error assigned, the refusal of the court to grant a new trial. The plaintiffs having made out a full case by the introduction of defendant’s note to them, and no proof on the part of defendants to avoid the note, on any legal or just ground, or to show that plaintiffs were not the legal holders of it, and the jury having, notwithstanding, found a verdict for the defendants, the court ought, upon every principle, to have awarded a new trial.
    
      Adams and Freeman, for defendants in error.
    This is an ordinary action of assumpsit by the Planters Bank v. John Sharpet et als. on a promissory note of defendants as makers. The note bears date March 14, 1840, and is for the sum of $467. This note was discounted by the cashier of the office of discount and deposit of the Planters Bank at Monticello. At this time that office had no directory, the mother bank having refused to elect a directory for said office according to the provision of her charter. The charter of the bank provides “that any number of the directors of said bank shall have power to discount paper, provided the same shall not be less than five.” See amendment of 1831, sec. 7. By an amendment of the charter in 1833, it is provided “ that the directors may require, at each renewal, additional security, should the same be deemed necessary or expedient.”
    The power to discount and renew notes is vested solely in the president and directors. See original charter, sec. 17.
    By the 27th section of the original charter it is provided, that the bank may establish branches ‘‘ for the purpose of discount and deposit, upon real security, under the rules, regulations and restrictions, herein before established, and to appoint the officers and directors of said branches, and to prescribe their duties and fix their salaries.”
    The 12th article of the rules and regulations for conducting the business of the Planters Bank of the State of Mississippi, and for the government of the offices of discount and deposit, adopted 20th March, 1832,” provides, that “ on each application for discount, every director who may be present, shall be held to give his opinion for or against the same, and no discount shall be made, if two directors present vote against it.”
    The 4th article of the rules prescribes the duties of the cashier, but he is not required by any rule to discount or renew paper. On the contrary, the 11th rule provides, that “ all bills and notes offered for discount, shall be laid before the board of directors by the cashier.”
    From all this, it is evident that the cashier of the Planters Bank and its branches are prohibited by the charter of the bank, and by the rules of the bank, from discounting or renewing paper, bills, notes, &c. The bill of exceptions, in this case, states, that the note sued on here “was offered in renewal of another note of defendants, and the same was received and renewed by the cashier, on the payment of one fourth of the amount and discount, at seven per cent, without the knowledge or consent of the directory.” Nor was there any subsequent vote or resolution of the directory sanctioning the act. In fact, there had been no directory in that branch, as appears from the evidence since April 12, 1839, that being the time when the term of office of the last directory expired.
    It may be said that this note was not a discount, but a renewal of an old note. The facts, however, show that one fourth of the old note was paid, and that seven per cent, discount was deducted from that note. A note cannot be renewed without discounting another note. The 29th article of the rules of the bank says, that “ All notes discounted to meet the payment of any note or bill due to the bank shall not be drawn for nor applied to any other purpose whatever.” The note, in this case, was discounted under this rule by the' cashier.
    It is contended by the defendants in error, that this note is a nullity as between the bank and the makers of the same, and that no action can be maintained on it by the bank. It stands in the precise attitude of a note sent into the bank, to be laid before the directory for discount, but which the directory have never acted on. The cashier has advanced the money at his own risk; it is a transaction between Casson, in his private capacity, and Sharp, the defendant. The bank has never ratified the contract. The remedy of the bank is upon the original note; if that be destroyed or cancelled, the act is void, and the original note may be sued on as a lost or destroyed contract. The bank may also sue the cashier on his bond, and recover the loss, if any, in that way. Casson might bring his action against these defendants for money had and received, and recover the amount. The law is well settled, that where the charter of a corporate body prescribes the mode of contracting, that mode must be observed, or the instrument creates no contract with the body. 2 Cranch, 127; 6 Ibid. 192.
    The cashier and president of the bank cannot release the indorser of a promissory note. It is not their duty to make such contracts, nór have they the power to bind the bank, except in the discharge of their ordinary duties. All discounts are made under the authority of the directors, and it is for them to fix any conditions which may be proper in loaning money. Bank of the United States v. Dunn, 6 Peters, 51; Angelí & Ames, 149, 151; 8 Mass. 299; 10 Mass. 401; 9 Wheat. 829 ; 2 Johns. 109.
    The securities on the original note, of which this is a renewal, are therefore not released by this note, discounted without authority by the cashier. Hence it is clear that the bank can only maintain her action on that note.
    The note bears date fourteen days previous to the day on which it was actually discounted by the cashier, as appears by his own testimony, and which is not explained, and is therefore usurious.
    The members of a corporation aggregate cannot, separately and individually, give their consent in such a manner as to oblige or bind themselves as a collective body. Angelí & Ames, 122,123; Ibid. 130.
   Mr. Justice Clayton

delivered the opinion of the court.

This was an action of assumpsit brought by the Planters Bank, upon a note executed by the defendants in error, payable at the Branch of said bank, at Monticello. The note was given in renewal of one which had been previously discounted. Two grounds are assumed in the defence. One, that the transaction is tainted with usury, and that the note is therefore void; the other, that the note was not discounted by a competent board of directors, and is for that reason likewise void. Both these grounds were sustained by the court below in its charge; a verdict was given for the defendants, discharging them from payment of the note, a new trial moved for and overruled, and the case brought to this court.

The first point was very elaborately argued by counsel, and received very deliberate consideration from the court, in the case of the Commercial Bank of Manchester v. Nolan, 7 How. 508. It was there holden, by a majority of the court, “ that when a bank in its discounts reserves a greater interest than is allowed by its charter, the contract falls within the general usury law, it is not void; the bank may recover-the principal sum lent, but without any interest.” I can add nothing to the reasoning contained in the opinion concurred in by two members of the court on that occasion. I have seen no reason to change that opinion, and repeat my adherence to the principles it declares.

As regards the other point, the record shows that the note was given in renewal of one previously discounted, upon pay^ ment of one fourth of its amount; that it was accepted by the cashier of the Branch Bank; but there is contradictory testimony as to whether it was approved by the directory- of the branch or not. The jury seem to have found that it was not, and there is no such preponderance of testimony on the other side, as would induce us, upon that ground, to set aside the verdict.

But there is another view of the question, which cannot be overlooked. This suit is brought and prosecuted by the bank, by which must be understood the‘parent institution. By the 27th section of the charter it has control of the branches. If the note had not been discounted by a competent number of the directors, it'was nevertheless in the power of the bank to ratify the act. When so ratified, it became obligatory upon all the parties concerned. The rule that a subsequent confirmation or consent is equivalent to a previous command, is as applicable to corporations as to individuals. Angell & Ames on Corp. 174. 5 Hill N. Y. Rep. 137. In this latter case it was holden, that “ where property was purchased for a corporation by two of its officers, who gave several notes in the corporate name for the purchase money, and afterwards the property- was claimed by the corporation and converted to its own use; this amounted to a ratification of what the officers had done, and that even if the notes were originally given without authority, the corporation was liable upon them.” Here the defendants have got all they contracted for; the bank might have had reason to complain of its agents, but surely the defendants, after they have procured the agreement to be executed, and after it has been ratified by the bank, cannot object a want of power in the agents. Where the contract has been executed, the general rule does not apply. 2 Kent, 291. The Mayor of Stafford v. Till, 4 Bing. 75. East Lond. Water Works Co. v. Bailey, 4 Bing. 283. This distinction, however, has been questioned in a subsequent case. Church v. Imperial G. L. Co., 6 Adol. & Ellis, 846; 33 Eng. C. L. Rep. 237. But in questions in regard to the mode of the exercise of corporate powers, where rights have accrued under their acts, we think, in frequent instances, the distinction is a sound one.

The charges given in the court below, were, in our view, erroneous, the judgment is therefore reversed, and a new trial awarded.

Judge Thacher gave no opinion, having been of counsel in the case.

Mr. Chief Justice Sharkey

delivered the following opinion.

I concur in reversing the judgment, because I consider the main question in this case as fully settled by the decision in the case of the Commercial Bank of Manchester v. Nolan, 7 Howard, 508. And when I say that I concur in it as a settled question, I do not wish to be understood as intimating a disapprobation of the decision referred to. Nor is my concurrence based upon any recent investigation of the question involved. I have ceased to look upon it as a question open for investigation since the decision in the case of the Bank of Manchester v. Nolan; and I avail myself of this occasion to say a few words in explanation of the reasons which seem imperatively to require my acquiescence.

The case of Snodgrass v. The Planters Bank, was the first to bring the question of usury before this court. It was my misfortune then to differ in opinion from a majority-of the court, and I gave the best reasons which seemed to be available in support of my conclusion. Although the majority of the court did not decide fully that the effect of usury was to avoid the contract, because the contract was held not to be usurious, yet I did intimate an opinion that such a contract was void. My principal effort, however, was to show that the contract was tainted with usury; but the majority of the court thought otherwise, and of course were not led to consider of the effect of that which they thought did not exist. I feel satisfied, however, that had they found it necessary to decide that question, the decision would have been that the contract was valid except as to the interest, and I think such was the general impression produced by the opinion. The case of the Bank of Manchester v. Nolan, presented the same question, in a somewhat modified shape, a second time to this court. The point was very fully and ably argued on both sides. I am free to confess that the inclination of my mind was still that the contract was void ; but finding that I could concur in the judgment on the ground that the contract was not usurious, I was content to rest my judgment o n this ground, and did not investigate the question as to the effect of usury. But, at the earnest solicitation of counsel, the majority of the court did very fully and carefully examine that question, and came to the conclusion that usury did not avoid the contract. I watched with great interest the laborious investigation which was bestowed upon the subject, and heard with pleasure, in a lucid expose of judicial learning and reasoning, the result of that investigation. That decision bears its own commendation, and might well induce me to distrust any opinion of nay own on the subject, although it had been formed from more deliberation than I have bestowed on this question. After the question has been thus settled, I feel that it is my duty so to regard it, whenever it may arise, and I do so with as much freedom and pleasure as if I had fully united in the.opinion of the court in all the points. I think that the opinion of a majority of the court on questions well considered, is as obligatory and conclusive as if it had been unanimous, and the importance of adhering to decisions is manifest for many reasons. It is the duty of this court to settle the construction of laws in their application to the rights of individuals, and the community should be able to look with a fixed confidence to the decisions we may give as the true and permanent expositions of the law. If we vacillate, we unsettle the law instead of settling it, and suitors will start out as adventurers, to speculate on the chances of a favorable result. The example of a wavering mind in one instance, is calculated to induce a belief or a hope that the same thing may occur again, which, besides opening the door to increased and endless litigation, is calculated to shake the confidence of the public in the tribunals of the country, and to bring the law into disrespect. To persist in adhering to a-dissenting opinion may also be productive of pernicious consequences. The organization of this court may be partially changed every two years, and totally changed every six years; these changes may soon bring about a concurrence with the minority of the court, and a consequent change of decisions. If we wish to establish precedents for others, we should not set the example of departing from them ourselves. Cases, it is true, may arise in which I shall feel willing to change former decisions; cases, for instance, which show a want of due consideration and investigation, when the change can produce no injury, or when I think the decision is erroneous and mischievous in its consequences ; but when a question has been so well considered as this was in the case of the Bank of Manchester v. Nolan, it should be considered as finally at rest. Ne movete quieta is a maxim of much merit, and 1 cannot better recommend it to others than by adopting it as a rule for my own government.  