Ingraham v. Speed

HANDY, J., delivered the opinion of the court. This was an action at law, brought by the plaintiff in error, to recover a tract of land. In support of the plaintiff’s title, there was read in evidence a record of a judgment in Copiah Circuit Court, rendered in November, 1840, in favor of the Grand Gulf Bank, against one Jesse J ones and others, and executions thereon, under which the land in controversy was levied upon and sold. The plaintiff then offered in evidence a sheriff’s deed for the land, dated 15th August, 1842, by which it was conveyed to John Lindsey and Alfred Ingraham, assignees of the Grand Gulf Bank, and to the survivor of them, and to the heirs and assigns of such survivor. To the admission of this deed, the defendant objected, on the ground that by the act of 21st February, 1840, (Hutch. Code, 325, § 5,) banks are prohibited from purchasing and holding lands; and that they cannot do that through assignees, which they are prohibited from doing directly, and that the purchase in this case is within the prohibition of the statute. This objection was sustained, and the deed not permitted to be read in evidence : the propriety of which action presents the only question to be settled. We do not think that the purchase in this ease is within the spirit and true intent of the statute. Conceding that the deed is [413] to be considered as virtually made to tbe bank, and that the plaintiff occupies the same position with reference to the statute, that the bank would have occupied if the deed had been made to it by name, yet it appears that the purchase was made at sheriff’s sale, under an execution in favor of the bank, for a debt due before the passage of the statute. The policy of the statute was doubtless to restrain and prohibit reckless expansions in banking, and speculations in property, in violation of the purposes for wdiich banks were incorporated, and by which a great evil had been inflicted on the community. The object was to keep them within the sphere of safe and legitimate banking business, to prevent them from overtrading, and to coerce them to pay specie upon their liabilities. It was not intended to restrain them in the collection of their debts, according to the laws of the land, or to deprive them of the benefit of any security they had by law for those debts. This is manifest, not only from the consideration that such a course of policy would have tended to defeat the principal object manifested by the statute, (which is to require the banks to pay specie,) by depriving them of the full use of the means they had of making such payments, but from the proviso in the act, that the prohibition against purchasing and holding real estate, should “not prevent any bank from taking mortgages or other liens on lands or other property to secure debts already existing.” The power to take a mortgage or other lien upon property to secure existing debts, might, and in all probability would, be of very little value, if upon an enforcement of such mortgage or lien by sale, the party holding the lien were debarred of the right to purchase the property, which would necessarily also debar him of the right of entering into competition in bidding at the sale; for the property might be always subject to sacrifice, by means of combinations to prevent a sale for its full value, and the creditor’s hands would be tied, so that he could not prevent the sacrifice of the property, and the loss of the security guaranteed by law for the debt. A construction of the statute which would lead to such results, is unreasonable, and not to be indulged; and it must, therefore, be intended that the legislature in saving the right to banks to take mortgages and other liens on property to secure their debts, recog [414] nized tbe right to nse and enjoy such securities in any manner allowed under existing laws, that might be necessary to render them effectual, and to give to banks the full benefit of them; and consequently, that a bank having obtained a lien upon property by judgment, would be competent to purchase at execution sale under that judgment, such property of the defendant as might be necessary to the enjoyment of the benefit of the judgment. The judgment below is in opposition to this view, and it is therefore reversed, and the cause remanded for a new trial.