c10:No. 176

Mr. Justice Brewer,
dissenting.
I am unablé to concur in the opinion and judgment in this, case, and will briefly state the grounds of my dissent.
There is nothing in the organization of a national bank that ’ puts it outside of the ordinary rules governing corporations, whether we consider the rights, obligations or the remedies in actions by or against it. Section-5136, Rev. Stat., prescribes the terms of its charter. It is authorized to do a banking business, and, like any other corporation, its powers are limited by the terms of the charter. A national bank may not engage in manufacturing, for its charter-gives it no authority therefor. Neither can a manufacturing corporation engage in banking, and for a like reason. Neither one can engage in the business of buying and selling stocks, because authority therefor is not granted in the charter of either, but nevertheless each has authority to take stock in another corporation as security for or. in payment of a debt. It was so long since decided by this court, First National Bank v. National Exchange Bank, 92 U. S. 122, 126, 127, 128, in which the question presented, as stated in the opinion of the court, announced by Mr. Chief Justice Waite, was: _
“Whether a national:bank, organized under the national banking act, may, in a fair and bona fide compromise of a contested claim against' it growing out of a legitimate banking transaction, pay'a .larger sum than would have been exacted in satisfaction of.the demand, so as to obtain by the arrangement a transfer of certain stocks in railroad and other corporations; it being honestly believed at the time, that, by turning the stocks into money under more favorable circumstances than then existed, a loss, which would otherwise accrue from the transaction, might be averted or diminished.”
And answering that question in the affirmative, it was said:
“Its own obligations must be met, and debts due to it collected or secured. The power to adopt reasonable and appropriate measures for these purposes is an incident to the power to incur the liability or become the creditor.. Obligations may be assumed that result unfortunately. Loans or discounts may be made that cannot be met at maturity. Compromises to avoid or reduce losses are oftentimes the necessary results of this condition of things. These compromises’ come within the general scope of the powers committed to the board of directors and the officers and'agents of the bank, and are submitted to their judgment and discretion, ■ except to the .extent that they are restrained by the charter, or by-laws. Banks may do, in this behalf, whatever natural persons could do under like circumstances.
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“Dealing in stocks is not expressly prohibited; but such á prohibition is implied from the failure to grant the power. In the honest exercise of the power to compromise a doubtful debt owing to a bank, it can hardly be doubted that stocks may be accepted in payment and satisfaction, with a view' to their subsequent sale or conversion into money so as to make good or reduce an anticipated loss. Such a transaction would not amount to a dealing in stocks. It was, in effect, so decided in Fleckner v. Bank of United States, 8 Wheat. 351, where it was held that a prohibition against trading and dealing was nothing more than a prohibition against .'engaging in the ordinary business of buying and selling- fof profit, and did not include purchases resulting from ordinary banking transactions.”
In California Bank v. Kennedy, 167 U. S. 362, the right to take stock of another corporation as collateral security was affirmed.
In the case before us the bank had á claim against the Northwestern Manufacturing and Car Company. This was in 1884. The car company was in financial trouble and had been' placed in charge of' a receiver appointed by a state court. The bank, in connection with other creditors of the car company, organized a hew corporation — the; Minnesota Thresher Manufacturing Company — to buy the entife plant of the car company. It was so purchased and the bank surrendered its' claim, taking in payment thereof preferred stock in the thresher company. The latter company carried on business until it failed, and then proceedings were had by which the defendant in error was appointed receiver and an assessment'made by order of the court, which assessment is the basis of this action. •Now, in accordance with the.decision of this court in 92 U. S., supra, the bank had a right to surrender its claim and take stock in payment thereof. It did so, and, so far as the record shows, everything was done in good faith and in the belief that' the best interests of the bank would be promoted thereby. Having thus become a stockholder in the thresher company it was entitled to all the benefits and subject to all the liabilities which attached to ownership of the stock. The fact that the arrangement antedated the organization of the thresher company is immaterial, for until the arrangement was carried into effect the claim of the bank against the car company was undisturbed. To hold that a national bank may take, in satisfaction of a claim, stock in a corporation, already existing, and v cannot agree to take in such satisfaction stock in a corporation to be creátéd, and which is afterwards created, and whose stock is issued to it in payment of the claim, is to create a distinction without a difference and-to sacrifice substance to form. The transaction is precisely the same as though the thresher company had been fully organized and thereafter the bank surrendered its claim against the car company for stock in the thresher company, and that, as held in 92 U. S., is perfectly legitimate. It held that stock for nearly a score of years, its right to so hold being, so far as the record shows, unchallenged by the Government or any stockholders, and enjoying during that time all the benefits and profits resulting from such holding. Finally the thresher company became embarrassed. Its creditors proceeded against it, and then for the first time is it discovered that the holding by the bank, of stock in the thresher company was unauthorized and illegal, and how it repudiates its liabiltiy as stockholder and leaves the burden of the thresher company’s debts to bo borne by the other stockholders. Certainly there is little in this to appeal to the sense of justice.
The bank was not, as suggested, investing in any merely speculative business. It was not accepting stock in a corporation organized for the business of buying and selling. It was no more engaged in a speculative transaction than if it had taken a piece of real estate in satisfaction of a debt, hoping that the time Avould come when the real estate would be worth as much or more than the debt. The object of the organization of the thresher company, as stated 'in its charter, was to purchase the plant of the Northwestern Manufacturing and Car Company — that is, to buy a single property which was then in the hands of the court and likely to be sacrificed in judicial proceedings. Clearly the creditors thought that by acquiring title and possession of the entire plant they could realize more than by a receiver’s sale', to outside parties; and at the same time, contemplating the possibilities of the future, they provided in the charter for the carrying on of a general manufacturing business. The scheme is clearly set- forth in the following passage from the opinion of the Supreme Court of Minnesota, quoted in the opinion of this court:
“There are two general purposes for which the corporation was organized as declared by the articles — oiie the purchase of the capital stock, evidence of indebtedness, and' assets of an. existing corporation; and the other the manufacture and sale of all articles, implements, and machinery made of wood and iron, or either of them, and the manufacture of’the materials therein used. The first purpose does not' appear to be a necessary incident to the second one. On the contrary, the corporation was authorized to buy anti sell the stock, choses in action and assets of the. Northwestern Manufacturing and Car Company mentioned in the articles, without ever engaging in the business of manufacturing. The first .purpose appears to be independent of the second one, for the power to buy necessarily-.mcludes the incide'ntaFpower to use, collect, deal with, or sell the stock and assets of the then existing corporation. Nor does it. fairly appear, expressly or by necessary implication,. from the language' of these articles, that such stock and assets were to be purchased only as a necessary incident to the declared purpose of manufacturing all articles which are made of wood and iron, or either of them.” .
Clearly the thresher company was no speculative corporation, but an ordinary and legitimate business venture. Suppose the bank had been the only creditor, is it possible that it could not have taken the whole car company’s plant in satisfaction of its claim, and then held it in the hopes of being-, able to realize fully on the property? And if it could do so, acting alone and for its single interest, what is there in the organization of a .national bank which prevents it doing the like thing in conjunction with other creditors?
Of course, as held by the Supreme Court of Minnesota, unless the thresher company was organized solely for the purpose of carrying on a manufacturing business, its stockholders would, under section 3 of article X of the constitution of Minnesota, be subject to the double liability. For if a power to engage in manufacturing exempts stockholders from double liability, no matter what other business the corporation is chartered to carry on, every corporation organizing under the Minnesota statutes would include that among its charter powers. We ordinarily accept the construction by a state supreme court of its constitution and laws as conclusive. In this case the construction placed by the Supreme Court of Minnesota upon this clause in the constitution is so obviously right as to preclude the necessity of defense.
For thése reasons, thus briefly stated, I am constrained to dissent from the opinion and judgment of the court, and am authorized to say that-Mr. Justice Brown concurs in this dissent.

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