A bank may purchase its own shares unless the statute expressly or by implication forbids it,1 but of course if the act is expressly or impliedly forbidden .by its charter or by a governing statute it may not do so.2 But how such a purchase can be a banking transaction, unless the stock is taken to cancel a stockholder's debt to the corporation,3 or as collateral to a debt, is hard to understand. There seems to be no difficulty in holding that a bank may take a lien upon its own shares to secure a previously existing debt,4 or that it may take its own shares to cancel a debt from a stockholder.5 National banks are prohibited from purchasing their own .shares, nor can the bank by such a purchase, it has been held, vest title in another.6 But this latter case is wrong, because a national bank may under some circumstances sell its shares, and a purchaser in good faith would obtain a good title, whatever might be the holding as to one cognizant of the defect in the title.7 It has been held that one who sells to a broker, who is really acting for the bank, stock in the bank, makes a valid sale, where he did not know the broker was acting for the bank.8 Of course the bank can sell its own stock, even upon credit, where it has lawfully acquired it.9 Even if the purchase by bank officers were illegal it has been held that the bank may ratify the act;10 but an illegal act, our v. Beall, 26 Ga. 17. Contra, German Sav. Bank v. Wulfekuhler, 19 Kan. 60. See also Bundy v. Jackson, 24 Fed. R. 628, as to a ratification.

14 Cookendorfer v. Preston, 4 How. 317.

1 Crain v. First Nat. Bank, 114 III 516.

2 See the former chapter entitled 3Unauthorized Banking." In a later chapter will be considered the effect of unauthorized acts of banking, where the objection is made on behalf of the state. The powers of savings banks are noticed in the chapter upon Savings Banks. 1 Farmers' Bank v. Champlain Transp. Co., 18 Vt 131; Robinson highest court holds, cannot be ratified by the bank so as to make itself liable on a contract.11 Sometimes the statute forbids a bank to loan money upon its own shares, and such a loan is illegal though made in the form of a deposit in another bank.12

2 Gillett v. Moody, 3 Comst. 479; Myers v. Valley Nat. Bank, Fed. Cas. No. 9519.

3 Taylor v. Miami Ex. Co., 6 Ohio, 177.

4 German Sav. Bank v. Wulfekuhler, 19 Kan. 60.

5 Taylor v. Miami Ex. Co., 6 Ohio, 177.

6 Myers v. Valley Nat. Bank, Fed. Cas. 9519. This case holds that a national bank cannot be sued in trover for conversion of its shares, because judgment satisfied passes title to bank. But the case is hopelessly wrong, because under some circumstances the bank can acquire its own stock, and in any event its transfer is good. Wallace v. Hood, 89 Fed. R. 11.

7 If cognizant of the defect the purchaser could be said to be a party to an illegal transaction, yet it is the purchase and not the sale which is illegal. But the bank cannot agree to take shares in payment of a note which has been given to it for shares sold. Att-water v. Stromberg, 77 N. W. R. 963.

8 Johnson v. Laflin, 103 U. S. 800, 3 Dili 65.

9 Union Bank v. Hunt, 7 Mo. App. 42.

10 Bundy v. Jackson, 24 Fed. R.