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objection to its power of contracting, in another. The case of The New Orleans and Carrollton It is, indeed, a mere artificial being, invisible and Railroad Company was submitted by Mr. Ogin contemplation of law, and has been recognized as den, on the argument in the other causes. such by the decisions of this court. It is sufficient. In the case of The Bank of Augusta V. that its existence as an artificial persona pe the Joseph B. Earle, the facts were the following: state of its creation, is acknowledged and recognized by the law of the nation where the dealing The Bank of Augusta, incorporated by the takes place;

and that it is permitted by the laws Legislature of the State of Georgia, instituted of that place to exercise there the powers with.

the Circuit Court for the Southern District which it is endowed. Courts of justice have always expounded and ex.

of Alabama, in March, 1837, an action against ecuted contracts made in a foreign country ac- Joseph B. Earle, a citizen of the State of Alacording to the laws of the place in which they were made, provided that law was not repugnant to the

bama, on a bill of exchange, dated at Mobile, laws of policy of their own country. The comity November 3, 1836, drawn at sixty days' sight, thus extended to other nations is no impeachment by Fuller, Gardner & Co., on č. B. Burland of sovereignty. It is the voluntary act of the na

& Co., of New York, in favor of Joseph B. tion by which it is offered, and is inadmissible wheo contrary to its policy, or prejudicial to its Earle, and by him indorsed, for six thousand interests. But it contributes so largely to promote dollars. The bill was accepted by the drawees, Justice between individuals, and to produce a friendly intercourse between the sovereignties to

but was afterwards protested for nonpayments which they belong, that courts of justice have con- and was returned with protest to the plaintiffs tinually acted upon it, as a part of the voluntary The following facts were agreed law of nations.

upon by The court can perceive no sufficient reason for

the counsel for the plaintiffs and the defendexcluding from the protection of the law the con- ant, and were subm tted to the Circuit Court: tracts of foreign corporations, when they are not "The defendant defends this action upon contrary to the known policy of the State, or injurious to its interests. It is nothing more than

the following facts that are admitted by the the admission of the existence of an artificial per plaintiffs: That plaintiffs are a corporation, in

created by the law of another State, and corporated by an act of the Legislature of the clothed with the power of making certain contracts. It is but the usual culity of recognizing State of Georgia, and have power usually conthe law of another State.

ferred upon banking institutions, such as to The States of the Union are sovereign States, and the history of the past and the events which purchase bills of exchange, etc. That the bill are dally occurring, furnish the strongest evidence sued on was made and indorsed for the purthat they have adopted towards each other the pose of being discounted by Thomas McGran, laws of comity in their fullest extent. In the legislation of Congress, where the States

the agent of said bank, who had funds of the and the people of the several states

are all repre plaintiffs in his hands, for the purpose of pursented, we shall find proof of the general under: chasing bills, which funds were derived from standing in the United States that by the law of

bills and notes, discounted in Georgia by said comity among the States, the corporations chartered by one were permitted to make contracts in plaintiffs, and payable in Mobile, and the said the others.

McGran, agent as aforesaid, did so discount It is well settled that by the law of comity among and purchase the said bill sued on, in the city is permitted to make contracts in another, and to of Mobile, State aforesaid, for the benefit of sue in its courts, and that the same law of com- said bank, and with their funds, and to remit ity prevails among the several sovereigntles of this

said funds to the said plaintiffs. Union. The public, and well known and long continued usages of trade, the general acquiescence of "If the court shall say that the facts consti. the States : the particular legislation of some of tute a defense to this action, judgment will be them, as well as the legislation of Congress, all given for the defendant, otherwise for plain

Franchises are special privileges conferred by tiffs, for the amount of the bill, damages, intergovernment upon Individuals, and which do not be est and costs; either party to have the right of common right. It is essential to the character of appeal or writ of error to the Supreme Court, i franchise that it should be a grant from the upon the statement of facts and the judgment sovereign authority; and in this country, no fran. thereon." chise can be held which is not derived from a law of the State.

The Circuit Court gave judgment for the deThe comity of suit brings with It the comity of fendant. contract, and where the one is expressly adopted The Bank of the United States, incorporated by the courts, the other must also be presumed, according to the

usages of nations, unless the by the Legislature of the State of Pennsylvacontrary can be shown.

nia, as the holders of a bill of exchange proThe state of Alabama has not merely acquiesced tested for non payment, for five thousand three by silence, but her judicial tribunals have declared the adoption of the law of international comity in

hundred and fifty dollars, drawn by Charles the case of a suit.

Gascoine, at Mobile, on the 14th January, 1837, The State of Alabama never intended, by Its con

at four months, on J. and C. Gascoine, of New stitution, to interfere with the right of selling, or purchasing bills of exchange.

York, in favor of W. D. Primrose, and by When the policy of a state is manifest, the him indorsed, instituted in October, 1837, an courts of the United States would be bound to no

action against the indorser of the bill, in the tice it as a part of its code of laws, and to de clare all contracts in the state repugnant to it Circuit Court for the Southern Dis.' (*522 to be Illegal and void.

trict of Alabama. The agreed facts of the case,

which were submitted to the Circuit Court, 521')

United States for the Southern “The plaintiffs are a body corporate, existDistrict of Alabama.

ing under and by virtue of a law of the State These cases were brought from the Circuit of Pennsylvania, authorized by its charter to Court of the Southern District of Alabama, by sue and be sued by the name of the President, the plaintiffs in each case, by writs of error. Directors and Company of the Bank of the The cases of The Bank of Augusta v. Joseph | United States, and to deal in bills of exchange, B. Earle, and of The Bank of the United States and is composed of citizens of Pennsylvania, v. William D. Primrose, were argued by counsel. and of States of the United States, other than

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the State of Alabama. The defendant is a, Mobile, which were remitted by them to Mobile citizen of the State of Alabama. George Poe, and were there paid. The funds thus obtained Jr., was the agent of the plaintiffs, resident were invested in the bill of exchange which is in Mobile, and in the possession of funds be the subject of this suit, for the purpose of a longing to the plaintiffs, intrusted to him for remittance. The question for the determination the sole purpose of purchasing bills of ex. of this court is whether the plaintiffs had change. The said George Poe, Jr., as such authority to make the purchase. The Circuit agent, on the 14th day of January, A. D. Court of Alabama decided this to be contrary 1837, purchased at Mobile the bill declared up to the laws of Alabama. on, and paid for the same in notes of the If the decision of the Circuit Court shall be branch of the Bank of the State of Alabama, sustained by this court, a deeper wound will be at Mobile. The defendant is the payee of the inflicted on the commercial business of the bill, and indorsed it to plaintiffs, the present United States than it has ever sustained. The holders. The bill was presented at maturity principal means by which the commercial deal. to the acceptors, and duly protested for non- ing between the States of the United States and payment, and due and legal notice given to Alabama is conducted will be at an end, and the defendant.

there will be no longer the facilities of inter"The question for the opinion of the court on course for the purposes of traffic, by which alone the foregoing statement of facts is, whether the it is prosperous and beneficial. Nor will the ef. purchase of the said bill of exchange by the fect of such a decision be confined to the State plaintiffs, as aforesaid, was a valid contract of Alabama. The principles of law which forbid under the laws of Alabama. If the court be of the dealing in exchange by a corporation estabopinion that the said contract was valid, and lished under the laws of another State, and by that the said plaintiffs, as holders of the said the terms of its charter expressly authorized to bill, acquired the legal title thereto by the said purchase bills of exchange, will prevail to the purchase, then judgment to be rendered for full extent of inhibiting the same purchases in the plaintiffs for the sum of $5,350, with in other States, and thus exclude the principal terest at eight per cent. since 30th May, 1837, operations of commerce between the States of and ten per cent. damages on it. But if the the Union. In the State of Alabama, such a court be of opinion that the said purchase was condition of things will operate most injurious. prohibited by the laws of Alabama, and the ly. The purchases of bills of exchange in that contract was therefore invalid and void, judg- State, are extensively made by the agents of ment to be rendered for the defendant." corporations of other States; and thus, by the

The Circuit Court gave judgment for the de- competition which is produced, the rates of exfendant.

change are kept in a due proportion to those of The action of the New Orleans and Carroll. other States. The large productions of cotton ton Railroad Company, incorporated by an act in that State are thus enabled to realize to the of the Legislature of Louisiana, was upon a planter a proper and an equal price to that bill of exchange drawn by Fuller, Gardner & obtained by the planters in the neighboring Co., of Mobile, in favor of Joseph B. Earle, / States. Should the banks of Alabama and the upon Fuller & Yost, of New Orleans, for five capitalists of that State have the exclusive thousand two hundred and ten dollars, protested right to deal in exchange, the effect of such a for nonpayment. The action was against the monopoly will be felt extensively. indorser of the bill, which had been purchased Such operations in exchange as those out of at Mobile by an agent of the plaintiffs, who which this controversy has arisen, have been had funds in his hands belonging to the plain- transacted in every State of the Union. Until tiffs, for the purpose of purchasing bills of now, their legality has never been doubted; and exchange, as a means of remittance to New Or- in no court of the United States, or in any leans.

State court, has their validity been before ques. The Circuit Court gave judgment for the de. tioned or denied. The Union has existed for fendant,

more than half a century; the transactions beThe case of The Bank of Augusta was argued tween the States composing it, of the same by Mr. D. B. Ogden for the plaintiffs, and by character with that which is now before the Mr. C. J. Ingersoll for the defendant. Mr. court, have, for a large portion of that period, Ogden also submitted the case of The New been extensive and constant, and they have been Orleans and Carrollton Railroad Company to universally found to be beneficial. No State, the court, on the argument in the case of The whatever "the power of its Legislature (*524 Bank of Augusta, etc. The case of The Bank may be to act upon the matter a power which of the United States v. Primrose was argued by it is not intended to admit or deny in this are 523*] Mr. Sergeant and Mr. Webster for the gument has attempted to interpose a prohiplaintiff in error, and by Mr. C. J. Ingersoll bition and forbid such dealing. and Mr. Vande Gruff for Joseph B. Earle. A The proposition in the Circuit Court, and on printed argument for W. D. Primrose was also which its decision is founded, is that a corpora. submitted by Mr. Crawford.

tion of one State can do no commercial busi. Mr. Ogden, for the Bank of Augusta, con- ness, can make no contract, and can do nothing tended that the bank had a right to become the in any other State of the Union but in thet in purchaser of the bill of exchange on which the which, by the law of the State, it has been guit was brought, and they had a legal right to created. recover its amount against the defendant, as the This proposition is the more injurious, es in indorser of the bill.

the United States associated capital is essentialThe plaintiffs were the owners of a bill or ly necessary to the operations of commerce, and bills of exchange, which they had purchased the creation and improvement of the facilities at Augusta, in Georgia, drawn on persons in of intercourse, which can only be accomprished

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by large means. Associated capital here sup- I comity is doubly due, and is an obligation of plies the place of the large individual accumu. the highest influence. lations which are found in Europe.

The States between each other are sovereign The question is not on the powers of a cor- and independent. They distinct and poration, but as to whom and to what objects separate sovereignties, except so far as they those powers can be exerted. A corporation is have parted with some of the attributes of the creature of the law, and it is clothed with sovereignty by the Constitution. They con: all the powers of a person. The position on tinue to be nations, with all their rights, and the other side is that when it leaves the State under all their national obligations, and with which gave it existence by granting its charter, all the rights of nations in every particular; it loses its personal existence, and has no exist. except in the surrender by each to the common ence whatever. This is a harsh doctrine, and purposes and objects of the Union, under the seems at war with the principles of those who Constitution. The rights of each State, when assert and maintain State rights. It is certain not so yielded up, remain absolute. ly true that a corporation in one State is not a Congress have never provided for the proof corporation in another State, as to the full ex: of the laws of the States when they are brought ercise of corporate powers. In Georgia, if it forward in the courts of the United States, or was brought into being by a law of that State, in the courts of the States; and they are proved it may carry on any business authorized by its as foreign laws are proved. There must be charter; but in Alabama it can do nothing but special legislation of every State as to the mode what the laws of Alabama authorize it to do, as of proof of the laws of other States. New a corporation, or which these laws do not for. York has legislated on this subject, and a probid. It may institute suits in Alabama. If a vision has been made which is applicable to it. debt is contracted in Augusta, in Georgia, and Every principle of law which allows foreign the debtor removes to Mobile, can no suit be States to sue in the courts of other countries instituted to recover the debt in Mobile? It can applies to corporations. The laws respecting be sued at Alabama, as it may sue.

mortgages are necessarily local in their char. Congress in 1825 passed an Act authorizing acter and provisions; and yet it has been held steamboat companies to own ships and vessels, that a corporation of one State may become a and to take out a register on the oath of the mortgagee of lands in another State. This was president of the company. Suppose a steamboat decided by Chancellor Kent in the case of The owned and registered in New York shall put Silver Lake Bank, 4 Johns. Ch. Rep. 370. In into Mobile, and shall there be unlawfully this case the Chancellor held that corporations taken possession of; could no action be brought created by the Legislature of Pennsylvania had by the company for such a trespass ? Could not a right to enforce a mortgage on real propthe company make an agreement to have the erty in New York, by a proceeding in the Court boat repaired in Mobile ? Is it possible that of Chancery of New York. such a construction can be given to the law ? It is said that a right to sue and a right to

Nothing is better settled than that a corpora contract are different; that a corporation may tion may institute suits in the courts of other sue because it is a person recognized by the laws States and countries than those under whose of Alabama, and may take a stand as a person laws they may have been established. 1 Rolle's in the courts of Alabama. Thus, a corporation Abr. 631; 2 Bulstrode, 32; Hobart, 113; 9 of Georgia is considered a person in Alabama. Vesey, 347; The Nabob of Carnatic v. The East It can give a warrant of attorney; for no suit India Company, 1 Vesey, Jun., 371; 2 Lord can be sustained without such a warrant. Why Raymond, 152; 1 Strange, 612; 10 Mass. Rep. is such a right allowed ? It is because a corpo91; 6 Cowan, 550; The King of Spain v. Oliver, ration is recognized as having a personal existPeters's Cir. Court Rep. 276; The Society for ence. How can they sue to enforce a conthe Propagation of the Gospel in Foreign Parts tract, and not have a right to make a contract ? v. Wheeler, Gallison's Rep. 2; Randolph's Rep. In principle there can be no difference. 465.

*Does not a right to sue give a right [*526 It is admitted by those who maintain the to make a compromise of the matter in contro525*) decision of the Circuit Court of versy in the suit? This is a right to make Alabama to be correct, that by the laws of a contract, for a compromise is a contract. He nations, corporations of other countries may who institutes a suit may discontinue it. This institute suits out of the States or countries in is a contract. The declaration in a suit in a which they were created: but it is said this court of Alabama must aver that the contract principle and established practice does not was made in Alabama; but this is not travers. apply to suits which are claimed to be institu- able. ted by a corporation of one State of the United

A chose in action is assignable only to a lim. States, in the courts of another State; that the ited extent; but it has been held that the as. States are not nations towards each other, and signees appointed under the bankrupt laws of that the rules and principles of international England may sue in the courts of the United law do not apply to them; that all the States istence to the laws of England. This is on the

States. This is giving an extraterritorial excompose one nation, and each is absorbed in principles of the comity of nations, and such the nation of the United States.

principles are essential to sustain the inter. This is a strange doctrine as to the States of course between nations. But if no express conthe Union. The same governments, having tract can be made in another State by a corposimilar laws, are said to owe to each other less ration, it cannot be a party to an impli comity than is admitted to be due to foreign tract. The law will not suffer a contract to be nations. The contrary to this position would implied, where no express contract can be made. seem just and proper. Between the States Look at what this would lead to. The Bank

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of Augasta may buy a bill on Mobile, and the ment in England impose restrictions on this bill may be sent by the Bank to Mobile for col common law right. 15 Johns. Rep. 379. lection. It may be paid in Mobile to the agent The plaintiffs in this case are citizens of the of the bank; but if a corp..ation cannot make State of Georgia. They are so called in the writ

contract, no implied promise of the agent to by which the suit was commenced; and by the remit the money collected to the Bank of Au- Constitution of the United States they have a gusta can be raised, and he may keep the whole right to transact any business which any peramount. Suppose a note given by him to the sons, citizens of the State of Alabama, may car. bank for the money, it would be void. The ry on, and which is not prohibited by the laws doctrine is monstrous.

of the State. The laws of New York authorThe Constitution of the United States was ize special partnerships. Have not these partformed to establish a national government, and nerships a right to deal in Georgia and Alabathis court is a most important part of the gov- ma to the same extent and in the same manner ernment thus formed. The great object of the as in New York? This shows that an associConstitution was to erect à government for ation under the name of one person, can do any commercial purposes, for mutual intercourse, and all acts which citizens of New York or of and mutual dealing. The prosperity of every any other State can do. State could alone be promoted and secured by Large collections have been made by the establishing these on principles of reciprocity, Bank of England in the United States, on bills and on the security and protection of the citi. of exchange drawn in the United States, and zens of each State, in all the States united by returned protested for nonpayment. There the government. This court will hesitate a has not been a suggestion that the Bank of Eng. long time before it will make a decision which land, a foreign corporation, could not pur. will either break down or cripple the whole of sue such claims in the courts of the States and the commercial intercourse between the States, of the United States, in the same manner as inand shake the foundations of all our internal dividuals. All those bills have been collected, commerce.

but a very small amount; and this after many One of the most important objects and inter- of them had been put in suit. Large and ests for the preservation of the Union is the es numerous sales of the stocks of States of the tablishment of railroads. Cannot the railroad United States, and of corporations established corporations of New York, Pennsylvania, or by States, have been made in other States and Maryland, make a contract out of the State for in England. These would be void on the same materials for the construction of a railroad? principle as that claimed on the part of the deCannot these companies procure machinery to fendant in this case. Alabama has herself is. use on their railroads, in another State. They sued stock as the basis of her banking capital, cannot get on without this right. These rail. and this stock has been sold out of the State of roads often run into other States, with the per- Alabama. Yet she will not be bound to pay the mission of those States; and it never has been amount of this stock, or even to pay the interdoubted that every contract for construction est on it, if as a corporation she cannot contract made by the corporations to which the rail. I out of her territories. roads belong, although out of the State in which Mr. Ogden went into an examination of the they were originally created, is valid.

cases which had been referred to by the Circuit Manufacturing corporations established in Court of Alabama, and which were con- (*528 one State by the law of the State cannot sue in sidered by that court as sustaining the princianother State for debts due for articles made by ple that the plaintiffs in error could not mainsuch corporation, if the decision of the Circuit tain this suit. He examined particularly the 527*) Court of Alabama is sustained by this case of Head and Amory v. The Providence Incourt. Policies of insurance made in another surance Company, 2 Cranch, 127; The Dart. Stato than that in which the property insured mouth College case, 4 Wheat. 519; Goslen v. was, at the time of the insurance, will be void. The Corporation of Georgetown, 6 Wheat. 593;

The Legislature of New York have by a The Bank of the United States v. Donnally, 8 special law prohibited insurances against fire Peters, 361. being made in New York by foreign corpora

There is another class of cases and authoritions. This shows that the Legislature thought ties cited in the opinion of the Circuit Court of that without such a law, foreign corporations Alabama, which go to show that a corporation had the right to make such insurances, and to has no power which is not given to it by the sue upon contracts made in New York, or con law which created it, and from which all its tracts growing out of policies in insurance. Re functions are derived. It is not necessary to exvised Laws of New York, 62; Act of March amine these authorities, because the principle 18th, 1814.

laid down by the Circuit Court is fully admit It is admitted that a corporation may not car. ted; and because in this case, it is not a ques. ry on the business for which it was created, out tion as to the powers of the corporation, but as of the State whose laws gave it existence. But to the place where those powers may be exethis does not interfere with the right claimed cuted. by the plaintiffs in this case. The Bank of Au There is another view upon this branch of gusta cannot carry on the business of banking the argument which appears worthy of the in Alabama, for by the laws of Alabama, this is serious consideration of this court. This is an forbidden. But if not forbidden by the law of action commenced in the Circuit Court of the that State, it could transact the business of United States. How does the court acquire banking there. At common law every man has jurisdiction of the cause ? Certainly not under a right to become banker, and to carry on the State law of Georgia, constituting the the business of banking. The acts of Parlia- plaintiffs e corporation. A State Legislature

has no power to give to or take away jurisdic- so, what becomes of the provision in the Consti. tion from the courts of the United States. tution of the United States, which declares that

Again, as it regards the United States, and a citizen of one State shall be entitled to all the courts of the United States, a corporation the rights of a citizen of the other States ? created by one of the States is as much a for It is no answer to this to say that in an aceign corporation as a corporation created by tion in such a case you must bring the suit in Georgia is a foreign corporation in Alabama, the names of all the partners. This is a quescreated by a different government, with dif. tion as to the remedy; but it can in nowise af. ferent powers and different local jurisdiction. fect the power of contracting, or of suing. One

How does the Court of the United States ac is a matter of form, the other is matter of subquire its jurisdiction in this case? From the stance. Constitution, and the laws of Congress passed There remains another point in the case to under the Constitution. Now, the Constitution which the attention of the court is respectfully gives the courts of the United States no juris called. By the constitution of Alabama it is diction where a corporation created by a State declared that there shall be established a bank, is a party, and a citizen of another State is the to be called “The Bank of the State of Ala. other party; but it does give the courts of the bama ;” and that the Legislature may from United States jurisdiction in all cases between time to time establish as many branches of that citizens of different States.

bank, to be located in different parts of the In the case of The Hope Insurance Company State, as they may think proper. v. Boardman, this court many years ago de. This constitutional provision has been con. cided that the courts of the United States had strued as a prohibition on the Legislature, no jurisdiction in cases where a State corpora- which precludes them from establishing any tion was a party; but the plaintiff must aver, other bank in the State; and upon the argu. in order to give the court jurisdiction, that the ment of this cause, it is presumed that it must stockholders and persons interested in and com be taken for granted that the construction posing the corporation were citizens of one given to the constitution in this particular, is State, and the defendant a citizen of another the true construction. State. And the practice has been uniform ever A large portion of the stock of the bank and since, to make such an averment in order to of its branches is reserved for the State; in. bring the case within the jurisdiction of the tending, no doubt, thereby to acquire a revenue courts of the United States.

for the State by means of their interest in the This averment is material, and its truth must bank. Now, it is supposed that to permit a be proved if put in issue by a plea in abate bank of Georgia, or of any other State, to ment. It is manifest, then, that the Circuit transact its business in Alabama, would interCourt had jurisdiction in this case, because it fere with the profits of the Bank of Alabama, appeared on the record that the plaintiffs, or and would therefore be in direct opposition to the persons interested as plaintiffs, were citizens the settled policy of the State, as declared and of Georgia, and the defendant was a citizen of established by the constitution. Alabama.

Let us examine this argument. It is readily And when the courts of the United States admitted, for the purposes of this (*530 sustain an action in the name of a State cor. case, that the State of Alabama has a right to poration, it is only because citizens of the State pass a law declaring that no bank shall exist $29*] 'bave associated together under the and do its business in that State, unless it be name and in the form of a corporation. Still chartered by the Legislature of the State. This it is those citizens only who are the parties be- is an adn ssion as broad as can be called for: fore the court, and not the corporation, quasi but it by no means follows that the transaction corporation. Upon no other hypothesis can the which is the subject of the present controversy courts of the United States have any jurisdic. is an illegal one. tion in the cause, none other being justified What is legitimate banking business? It or authorized by the Constitution.

consists of three things. First, discounting Now, it is asked of this court if citizens of notes. Second, receiving money on deposit. the State of Georgia have a right to sue in the Third, issuing notes or bills to be circulated as courts of the United States in the State of Ala money. It seems to be clear and certain that bama, under the name of an association called all these operations must be combined to conthe Bank of Augusta; does not this amount to stitute banking, as understood among us, and in & recognition on the part of the courts of the the commercial world. United States of their rights to act under that The mere discounting notes is not of itself a associated name? And if they may act under banking operation. It is indeed doing one that name in one thing, why not in all things I thing which banks are authorized to do, but it If you recognize their right of acting in bring is not therefore banking. May not a merchant ing a suit to enforce a contract, why not in discount his own notes without being consid. making the contract itself, which is the foun. ered a banker? The mere receiving money on dation of the suit? In principle there is seen deposit, to be paid out again whenever called no difference. Twenty merchants in Augusta, for is not banking. Surely a man may deposit in Georgia, may be concerned as partners in bis funds in safe keeping in the hands of a carrying on business, in the name of one of friend, without making that friend what is them, or they may assume any other name. known in our law and in the commercial law, Can it be contended for a moment that under as a banker. Issuing a note to be put into that assumed name they would not have a circulation as money may, perhaps, be evidence right to make contracts, purchase cotton, bills of itself of an act of banking, and this may be of exchange, or do any other business not for the most important power which a bank posbidden by the laws of Alabama! Hi this is not

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