Bank v. Lanier

Messrs. McDonald and Roache, for the plaintiff in error: 1. It will be contended that the contract set up in the first and third pleas is in violation of the 35th section of the act of 1864, which prohibits any association from making any 'loan or discount on the security of the shares of its own stock.' Now the object of the prohibition was to compel stockholders to become borrowers on the same terms as other general customers; and inasmuch as the inhibition is limited to 'loans and discounts,' which must be held to mean those made in the ordinary course of dealing, it cannot with fairness be extended to such securities as might be taken for deposits in such commercial centres as the bank might find it necessary to make for the purposes of trade and exchange.