Case ID: miss_19/html/0555-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Clayton", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Eli Montgomery, John P. Walworth and Henry D. Mandeville vs. James D. Galbraith and William Cooper, trustees of the late Planters’ Bank of the State of Mississippi.
    The act of 1840, prohibiting assignments of their choses in action, and evidences of debt, by a bank, having been declared unconstitutional by the Supreme Court of the United States, will, in obedience to that decision, be so held by the high court of errors and appeals of this state.
    Therefore, where, on the 25th of June, in the year 1843, the Planters’ Bank of the State of Mississippi made an assignment of all its effects to trustees, for the benefit of creditors, and subsequently, in the year 1843, proceedings were commenced against it, in the nature of a quo warranto, under the act of 1843, which progressed to a judgment in the year 1845, and trustees were duly appointed under the act of 1843, who sued the former trustees for the property of the bank in their possession ; it was held, that the deed of assignment being valid, the trustees appointed under it would hold the property conveyed to them, in preference to the trustees appointed by the court under the act of the legislature.
    A clause, in a deed of assignment by a bank, for the benefit of its creditors, which permitted the trustees “ to sell or pledge, any of the property or effects conveyed, including the notes of the bank, (its circulation,) in case any pressing emergency, not otherwise to be provided for, should render it necessary so to employ said bank notes,” does not (even if the bank or any of its debtors, or the trustees appointed by the court, under the law, to take charge of its assets, could call in question the validity of the assignment, on the ground of fraud, which is doubtful,) of itself vitiate the assignment, or render it fraudulent in law.
    Such a provision is not, in itself, an improper appropriation of the assets, although it may lead to such a result; if the power be improperly exercised, so as to amount to a fraud in fact, a court of chancery may check and control the abuse, upon the application of the creditors or of the stockholders.
    On appeal from the circuit court of Adams county; Hon. Stanhope Posey, judge.
    On the 30th of October, 1846, James D. Galbraith and William Cooper, trustees of the late Planters’ Bank of the State of Mississippi, sued Eli Montgomery, John P. Walworth, and Henry D. Mandeville in an action of detinue, to recover a note for $4300, payable to the president, directors, and company of the Planters’ Bank of the State of Mississippi; a certificate of forty-two shares of stock, in favor of the same bank in the West Feliciana rail-road company; and a deed from James R. Patton to the same bank; which the plaintiffs alleged they were entitled to as trustees of the bank, and which were in the possession of the defendants.
    .There was a trial and a special verdict; from the latter the following facts appear. On the 12th day of June, 1845, by the judgment of the circuit court of Adams county, the charter of the said Planters’ Bank was declared forfeited under the act of 1843, and the plaintiffs duly appointed trustees under the act by the court, that this judgment had been affirmed by the high court of errors and appeals, and executed.
    That the articles claimed in the declaration were in the possession of the defendants, who, on demand by the plaintiffs, had refused to deliver them. The verdict also fixed their value.
    The jury further found, that on the 8th day of June, 1843, the said bank made a deed of assignment to the defendants, which is set out in full in the special verdict. It recites, “That whereas the said parties of the first part (the bank) are indebted to sundry persons and bodies corporate, and are otherwise liable to the same in various ways in the sum of about one million, three hundred thousand dollars, with interest accruing and to accrue thereon, which the parties of the first part are unable at present to pay or provide for in the lawful currency of the country, but are desirous and determined to secure them fully, so that the same may be finally paid and satisfied in a fair, equitable, and equal manner; now, therefore, &c.” The deed then proceeds to convey by proper words, all the “ lands, tenements, heredita-ments, goods, chattels, moneys, stocks, rights, interests, and effects of the said parties of the first part, whether in suit, judgment, or otherwise existing, as the same are set forth and described in schedules A, B, C, and D, hereunto annexed, and to have and to hold upon these trusts in substance.
    
      1. To collect and convert into money the property conveyed in the mode pointed out, for these ends. 1st. To pay the expenses of executing the trust, including their own compensation or that of their agents. 2d, To pay debts in the order of preference named in the deed. 3d. To divide, pay, and distribute the proceeds in the mode, according to the terms, and on the notice required in the deed as they should be prepared to make dividends, until a final dividend should be made. “ And (the deed proceeds) from and after such final dividend, the trusts herein declared shall cease and determine, except to allow the said trustees to dispose of the balance on hand, if any, according to the provisions of this deed. Nor shall any claim or demand, not exhibited and proved before such dividend, be ever afterwards considered as embraced within the provisions of this conveyance.”
    The deed also provided for the issuance of certificates of indebtedness when the creditor shall surrender to the trustees the original evidence of debt. The trustees and their successors, and their survivor, and the executors and administrators of the survivor, were constituted the irrevocable attorneys of the parties of the first part to prosecute, and defend suits, &c., touching the matters of the trust; to settle and compromise all claims and demands for or against the parties of the first part, in the most effectual manner tp promote the objects of this conveyance, and to prevent loss or sacrifice; to sell or pledge any of the property or effects herein included, or which may come to their hands in the discharge of their duties as trustees, including the bank notes of the parties of the first part, in case any pressing emergency, not otherwise to be provided for, should render it necessary so to employ said bank notes ******* to transfer any claim, or property, or effects herein shown, in satisfaction in whole or in part of any claim or demand against the parties of the first part, and herein provided for.
    The deed proceeds to confer other powers and make other provision for the conduct of the trustees. It was duly executed on the day of its date, and properly acknowledged and recorded.
    The jury found that the articles sued for were assigned by this deed to the defendants. On this verdict the court rendered judgment for the plaintiffs below, and the defendants appealed.
    
      Montgomery and Boyd, for appellants,
    
    submitted the follow-statement of points and authorities.
    The question raised by the special verdict is, whether the act of the 21st of February, 1840, renders the transfer by the deed set forth in the verdict, void. The 7th section of that act provides, “ That it shall not be lawful for any bank in this state, to transfer by indorsement or otherwise, any note, bill receivable, or other evidence of debt; and if it shall appear in evidence, upon the trial of any action upon any such note, bill receivable, or other evidence of debt, that the same was transferred, the same shall abate on the plea of the defendant.”
    We remark, 1st. The court is not called on to consider the right of the bank to transfer by indorsement. 2d. That the latter clause of the 7th section is not before the court for construction, because the action was not brought “upon any note, bill receivable, or other evidence of debt.”
    The inquiry then, is, was the deed of trust contrary to the letter or spirit of the act of 1840; and if so, was that part of the act violated, a constitutional act?
    The deed was a transfer, and so far as it transferred “ notes, bills receivable, and other evidences of debt,” was contrary to the rules of the law. But was it contrary to its spirit? We think not. The object was not to prevent the collection of the debts to or from the banks. The'assets are the primary pledge of the creditors. 4 S. <fc M. 456.
    The intention was to provide an equitable plan of settlement between the banks and their creditors, and at the same time to keep all their evidences of debt in such a situation that the debtors could have their offsets at every stage of proceeding. Beyond this there may have been an intention to expedite the withdrawal of bank circulation. But there was no state policy or interest looked to. • None existed, or could be effected by the assignment or non-assignment of these assets. It was optional with the party sued, whether he would raise the objection or not. It was like the usury act, or the gaming act, and the defendant could make the defence or waive it, as he pleased.
    All the legislation on the subject shows that the legislature had but one object, and that was to regulate the manner in which the banks having claims, and those having claims on them, should settle these mutual demands.
    The act of 1837, p. 177, sec. 2-8, compelled the banks to receive their post notes, whether due or not, and these notes, if not paid at maturity, were charged twelve and a half per cent, interest. In 1840, (page 21 of the act,) the banks were required at all times to receive any of their issues at par in payment; and to prevent this policy from being evaded by assignment, the act in question was passed, prohibiting transfers by “ in-dorsement or otherwise.” Still further, to prevent the debtors of bank debtors being compelled to pay specie under garnishment, the act of 1842, page 140, extended to the garnishee the same right as to the original debtor.
    Thus the whole object has been to compel a settlement of all debts due to the banks, with the obligations due by the banks, and where creditors who were not also debtors were concerned, to compel payment in specie. It is but an extension of the law of offset.
    All the acts in regard to the forfeited banks have had the same object in view. We refer to the act of 1844, for the liquidation of the Railroad and Planters’ banks; the quo warranto act in 1843; and the amendment to that act in 1846.
    Now an assignment by a bank in trust for creditors, is exactly in accordance with all these laws and their policy. The trustee acquires but an equity, as there can be no indorsement, as the offset is preserved. 6 G. & J. 371; S. & M. Ch. 645 ; 4 S. & M. 517. It also favors the primary pledge of the charter, by preventing sacrifice or preference. 4 S. & M. 456,
    The trust in favor of creditors is but a continuation, by spe-ciñe appropriation, of the charter trust. This deed stands on the same footing as the law in regard to the question of offset; and the interest of creditors, who are not debtors, would not be more unfavorably affected by the deed than by the law itself. 6 G. & J. 219-230, 371; 4 S. & M. 517, 456 ; S. & M. Oh. 235, 645 ; 6 Conn. R. 233.
    No one will pretend that all transfers are avoided by the act of 1840. The maker of a note paying it, or a security paying the note of his principal, would still have the right to receive a transfer from a bank. And a transfer in trust for creditors, is as little liable to objection. 6 S. & M. 566, 578, 579.
    Payment of a debt is a charter duty, and the legislature did not intend to interfere with it. 1 S. & M. 255.
    The charter is a continuing power, and whatever it would be right to do under it at one time, it must be right to do always, until the charter or franchise is resumed, or there is some judicial restraint. 4 S. & M. 494; 2 Kent, 315; 7 G. & J. 448.
    Hence, until the charter is declared forfeited, a general assignment, even with preferences, is good. 5 Peters, 648 ; 6 Conn. R. 234, 241, 242; 6 G. & J. 205, 263; 8 lb. 505; 2 Bland, 142; 4 Ark. 352 ; A. & A. on Corp. 126 ; 2 Kent, 315. At the date of this deed there was no forfeiture.
    This court has decided, that the object of the act of 1840 was to enable debtors to pay the banks in their issues; that there was no public policy in it, and the debtor could object to the transfer or not; (6 S. &■ M. 515; 4 lb. 27, 28, 30, 517; 5 lb. 443, 449;) and that the act of 1843 was intended to preserve the assets for the creditors. 6 S. M. 528.
    It is said this deed would defeat an equal pro rata division among all creditors. But it is as easy to give a preference by collecting and paying over to a preferred creditor, as to transfer the paper for his benefit. A transfer in trust prevents any unjust preference either by execution, voluntary payment or garnishment.
    2. If this act intended to prevent all transfers, we say it was unconstitutional.
    We admit the right of the legislature to regulate the mode of the transfer of all property. The judiciary may also restrain transfers for good cause shown. The legislature may even regulate to the extent of a prohibition, where public safety requires it, the acquisition and transfer of certain kinds of property, by police laws, inspection laws, and sanitary regulations. But we deny the power of the legislature, by a mere expression of legislative will, to interdict the transfer of property lawfully acquired and held. The legislature cannot take away any essential attribute of property, or prevent the transfer from person to person of whatever is in its nature transferable, and was so when acquired. There is no distinction between corporations and individuals in this respect.
    We contend,
    1. The right of transfer is a right of property. It belongs to property as such, unless limited by the terms of the social compact or constitution of a state, or modified by legislation prior to the acquisition of it. All such limitations are exceptions to the general rule, and must be affirmatively shown. They may all be resolved into the idea of consent, and, of course, require proof.
    2. The legislature cannot destroy a right of property, already vested or acquired, any more than the property itself.
    This power is not so much in reference to the person, as to the property itself. The action objected to is directed against the property rather than the person who holds it.
    Whence, then, did the bank derive the right of property in these evidences of debt ? Under the charter, under the general law, and under the common law.
    The sixth and seventeenth sections of the act 10th February, 1830, authorize the bank to acquire effects of all kinds, not exceeding $6,000,000, and to dispose of the same; also to acquire by discount, promissory notes, and bills of exchange.
    Now as these effects might reach in value double the amount of capital stock, the right to dispose in some manner, of whatever might be acquired in any lawful mode under the charter, would seem to be expressly reserved. Whatever the bank could acquire, remained, when acquired, like all other similar property in the state; and this applies to notes, as well as any thing else.
    Again, these promissory notes, &c. were, when acquired, by the general law of the state, and by the common law, disposable property. The very fact that the bank could acquire them settles that point. They could not be acquired without a transfer. To aliene is to acquire. There can be no alienation without an acquisition; nor can there be an acquisition of prop-perty without alienation, disposition, or transfer. The terms import one another, and the right of disposition is included in the right of acquisition. If it is lawful for one to acquire, it cannot be unlawful for the other to dispose. 10 Coke, 300; Ib. 30 5, 31 a.
    
    It is incident to corporations, at common law, to purchase and aliene lands and chattels, unless restrained. 2 Kent, 277, 281 - 283; A. & A. 59, 78; 1 Y. & B. 226, 237-244; 1 S. & M. Ch. 248,
    The jus disponendi is independent of all enactment. 1 Com. Dig. 253; A. & A. 104, sec. 9; 11 S. & R. 411; 4 J. C. R. 370 ; 5 Ohio, 205; 7 How. 522, 524, 530; 5 Watts & S. 223.
    It is not so much an incident to the corporation as to the property itself. It is a common right of whatever is or can be held. 15 Pet. 515; 3 S. & M. 578, &c.
    The right to dispose depends on the law of property itself. 3 S. & M. 679. And if the property is disposable, the bank can dispose of it. Ib. 680. Property cannot be taken away by the legislature, nor can any right of it. Ib. 675.
    These evidences of debt were assignable by common law, and by statute. They were a property, and in that term was included the right to acquire, hold, and transfer. There never was a time when they were not assignable in some way. An assignment by deed puts them under the act of 1840, where they stood at common law, prior to the statute of Anne. 2 Wheat. 376; 3 B. & P. 40 ; 3 B. & A. 697; 1 T. R. 619; 2 Moore, 181; 7 Leigh, 157.
    We are not to be misled on this question of power, by a reference to the alleged insolvency of these banks. That would not add to the constitutional power of the legislature.
    Could the legislature lawfully enact, that no person should hereafter transfer, by bill of sale, “of otherwise,” any horse, mule, or other personal property; that no miller should transfer by weight, “or otherwise,” any meal ground at his mill; that no cotton factory should transfer by sale, “ or otherwise,” any cotton goods made at such factory ? where can such laws find support ? And these cases are exactly like the case of a bank authorized to acquire notes, &c. like a natural person, but without any express power to dispose of them.
    All the writers on natural law agfee, that the term property, “proprietas," "dominium,” includes in it these three rights, to acquire, to hold or enjoy, and to aliene or transfer. They sometimes place the right of property upon the basis of occupancy, sometimes upon consent, sometimes upon labor. But they all agree that the idea of property is absolute in its nature, and includes the three rights alluded to. The right of transfer is put upon the ground, that he who holds may select his time of yielding his possession, and in that way give up his occupancy to another.
    This precedes the social organizations; and men bring their property with them, under the social compact, and this with a view to protection, and not destruction. . All the rights acquired by society over this property are modal, and extend only to regulation ; and the same principle applies to w;hat is subsequently acquired.
    We leave out of view those cases where, by the terms of the compact itself, or by the laws of nations, which are a part of the fundamental laws of all civilized states, a power is reserved to appropriate private property to public use. The legislature cannot touch the substance of property. That is not property any longer, from which the entire right of disposition is taken away. It has lost one of its essential attributes. A part of that which made it what it was, is destroyed. The term value can no longer be applied to it. It is a shadow, the substance is gone. The same power that would take away one essential attribute of property, could take away all. Lord Camden said : “ This position is founded in the laws of nature. It is more; it is itself an eternal law of nature. For whatever is a man’s own, is absolutely his own. No man has a right to take it from him without his consent. Whoever attempts to do it, attempts an injury; whoever does it, commits a robbery.”
    The case of Baldwin and others v. Payne and others, does not conflict with these views. The legislature have the undoubted power to direct in what manner the transfer shall be made, and that is the decision in that case.
    The case of Sharp v. The Planters’ Bank was decided without reference to the point we have made here, and was put upon the same ground as Baldwin et al. v. Payne et al.; and the pleadings in that case showed an actual transfer, and so there was no plaintiff on the record. Without reference to any statute, that would be fatal. It is impossible to contend that the seventh section of the act of 1840 is valid, and at the same time, that transfers under it are valid. If one is valid, the other must be invalid; and the reverse.
    As to the three counts in the declaration.
    The count on the deed is admitted not to be within the statute.
    The count on the scrip ought to be as clear. Scrip is not an “ evidence of debt.” It is evidence of an unascertained interest in the residuum of bank assets. It is like articles of partnership, and not like a debt, or evidence of a debt. The owner of it is not entitled to what is named in it, but only to a pro rata dividend, after creditors are paid. It cannot be sued on in debt or assumpsit, nor garnisheed as a debt. 3 Mason, 308; 16 Mass. 9; 1 S. & M. 446 ; 6 lb. 585 ; 1 S. & M. Ch. 207, 282.
    Again, the bank, by the seventeenth section before cited, was authorized to make loans on the security of scrip. The authority so to receive it, must include the authority to sell or transfer it. This is reserved by the charter, and could not be taken away oy the legislature.
    The count on the note has been already sufficiently explained and defended, and we hope it has been placed beyond the reach of the legislative power.
    
      It is said, “an assignment in trust to pay a debt, is no less within the law, than an assignment directly to pay a debt,” and Baldwin et al. v. Payne is referred to. That case does not decide that the transfer was void, or was not a good payment of the debt. The only point decided was, that Baldwin got no legal right of action by the indorsement of the note. His title by delivery was not questioned.
    Several questions of fraud arising on the deed are suggested. The seventh section of the act of 1840 does not speak of avoiding any deed or conveyance; and the fifteenth section is in aid of the state proceedings, and has nothing to do with the debtor. No assignment can have any eifect on the forfeiture. 4 S. <fc M. 502.
    The case in 6 S. & M. 520, was in relation to a general, and not a partial, assignment; and there was no question made in regard to any assignment.
    It is insisted the deed does not compel the trustees to receive the notes of the bank in payment. But the deed contains a power to do this, and this, power being in favor of third persons, can be enforced by them; and the trustees having no legal title, are bound by all original equities.
    The next objection is to the power to sell or pledge the bank notes. But this is only authorized “in such .emergency as was not provided for by the deed.” It might be absolutely necessary to exercise this power, if no other means of raising money could be found, for otherwise the whole assigned property might be sacrificed. Nor would it increase the circulation, because no notes were assigned by the deed, and if in the hands of the trustees, must have been collected.
    It is then insisted, that the trustees have the power to create new debts. But this is not fraudulent, if the new debts are contracted in the discharge of the trust. 1 S. & M. Ch. 259, 266; Arthur v. The Vicksburg Railroad Co., 9 S. & M. 394. But no new debts are to be created, because it would not create any new debt over what existed at the date of the deed, to re-issue all the notes collected.
    It is urged that the right to re-issue was a reservation for the benefit of the grantor. This is inconsistent with the previous objection, and not true in fact.
    Counsel insist, that if one part of the deed is void, it is all void; that is, if the bank was prohibited from conveying one species of property, named in this deed, the whole is void. This might be so, if the allegation was of fraud, going to the deed itself, but where the prohibition goes to the property, and not to the deed, a different principle arises.
    At common law, a deed might be good in part, and bad in part; and the same thing exists where a statute makes void, although a different dictum is to be found. If a statute declares a deed or conveyance void, for a particular cause, then, no doubt, it will be void, though there may be good clauses in it. But if the particular act or clause only is avoided, then a deed containing such void act or clause would be good, if there were any good clauses in it. This principle is plain, and sustained by the authorities. The case in 14 J. R. 463-465, was on the ground of fraud going to the whole deed.
    In 20 J. R. 449, the reservation was fraudulent, and went to the whole deed.
    In 1 Hopk. 373, the assignment was total, and a reservation made to the grantor, who was insolvent. Ib. 397, 405, 406. This went to the whole deed. A partial assignment like ours was put on different grounds. 5 D. & E. 420. And no one but a creditor could object. 15 J. R. 571.
    The statute of frauds, under which these decisions were made, avoids the whole deed. There is no such rule as that contended for. If the statute avoids the deed, it is void, but if only the act is avoided, the deed may be good. 7 How. 530; 10 Peters, 361 - 363 ; 9 Wheat. 673; 9 Peters, 664; 2 Ib. 216, 236.
    The history of this erroneous view is found in Hobart, 13 d, p. 53; and note 14a, p. 54. See 4 How. 604, and authorities cited.
    The case in 5 Cowen, 564, is to the same effect. This deed, then, was not a general but a partial assignment; it was not made by an insolvent.
    It is not objected to by any creditor, and is not avoided by statute; and, lastly, it has been established in this very case, by the finding of a jury, and is beyond attack.
    
      Geo. L. Potter, for appellees.
    1. This deed is void under the statute.
    The act prohibits banks from transferring “ any note, bill receivable, or other evidence of debt.” Statute, 21st February, 1840, p. 15, sec. 7.
    This court has declared the act to be an absolute prohibition, and that such transfer is void, as against the direct prohibition of law. Planters' Bank v. Sharp, 4 S. & M. 27; Payne et al. v. Baldwin et al., 3 S. & M. 763. See particularly, Nevitt v. Bank of Port Gibson, 6 S. & M. 528.
    It is true, the act specifies how a party, sued on a note so transferred, may defeat the action; but in this it merely declares a rule of pleading applicable only in the very case in which such party is sued, and it cannot be said that such a provision in any degree modifies or impairs the legal effect of the statutory declaration, “it shall not be lawful,” &c.
    It is also true that this court has declared that the act was, in part, enacted for the benefit of the parties to such notes, because, as we suppose, that the plea in abatement may be made by them, and also because that, by a supplemental act passed the day after, the banks are required at all times to receive their issues in payment of notes, &c., due them. Acts, 1840, p. 21, sec. 2. But it is manifest, that it. was not intended to declare this to be the whole purpose of the legislature, in prohibiting such transfers. 6 S. <fc M. 528.
    The scope of the statute seems much broader, and the ma'in intent to be to compel specie payments, and enforce a forfeiture of charter in case of non-payment. The 15th section is to prevent any act attempted “for the purpose of anticipating or avoiding in any way the effects of a forfeiture of charter.” Acts, 1840, p. 19.
    The act also prohibits the issue of post notes; dealings in stocks and cotton; any transfers of notes, &c. &c.
    It provides, that in case of refusal to pay specie, a forfeiture shall be proclaimed against the bank, and then its business shall be finally determined and settled. Commissioners are to he appointed for the purpose of liquidation.
    It further provides for injunctions, &c., in cases where the banks seek to anticipate or avoid the effects of a forfeiture. Other provisions are to the like effect. And the whole act plainly declares the intent to compel the banks to pay specie, and on default, to put them in liquidation. With this view, any such transfer is prohibited; all the provisions of the statute are to secure payments in specie, and to enforce a forfeiture on default.
    It is only by such reference to the whole act, that we can ascertain the intent of the legislature; and looking to the whole act, we think it clear that the purpose of the act was not, solely, to secure to debtors a right to pay in bank notes; nor was the anti-transfer clause enacted for bank debtors only. And it seems clear to us, that an assignment of its effects is the special thing that the bank is to be enjoined from doing, under the 15th section of the act; inasmuch as, in that way alone, perhaps, could it anticipate or avoid the effects of a forfeiture.
    All sections of the act are to be taken together; the anti-transfer clause and the injunction clause are intended for the same end, and to compel payments of specie, or insure “the effects of a forfeiture” in case of non-payment. We refer to the act of 1837, as a part of this statute, wherein provision is made to wind up, under state commissioners, insolvent banks, and such as have forfeited their charters. Acts, 1837, p. 218, sec. 5. We also cite the opinion of his honor, Judge Clayton, from which we take our view of the 15th section of act of 184.0. Commercial Bank of Rodney v. The State, 4 S. & M. 502. Also, the opinion of a majority of this court, to show that all the acts on this subject must be construed together; and particularly, to show that this act of 1840 prohibits “ a general assignment or transfer of their (the bank’s) assets to trustees, to collect for the creditors and stockholders; ” and also to show, that it was upon this construction alone that the injunction clause of the act of 1843 was sustained. Nevitt v. Bank of Port Gibson, 6 S. & M. 528.
    
      It seems to be clear, then, both upon the statute itself, and the authority of this court, that this assignment is prohibited by the act of 1840.
    Wherefore is the transfer of the note sued for in this case void, under the statute, and the deed, being tainted with this vice, is wholly void.
    The deed of assignment shows that the Planters’ Bank was, at the date of it, wholly unable to pay specie.
    It may be pretended that this deed is not vicious, inasmuch as it requires the trustees to receive the bank issues from the debtors; but we deny there is any such provision in the deed; it merely empowers them so to receive such issues. The exercise of the power is left, as in all other cases specified in the deed, to the discretion of the trustees. So that this assignment is as much against the policy of the act, in this view, as if a single note had been the subject of it.
    2. This deed is void upon its face.
    It constitutes the trustees, the attorneys in fact of the bank,'to do certain acts, and also to sell or pledge any of the property or effects thereby conveyed, or which may come to their hands in the discharge of their duties as trustees, “ including the bank notes” of the bank, “in case any pressing emergency, not otherwise to be provided for, should render it necessary so to employ said bank notes.”
    As these trustees are invested with a general discretion, it is left for them to declare the “ emergency,” and their power to act seems limited only by their discretion. It cannot be said that they could declare such emergency to exist only after all the property and effects conveyed had been appropriated, and when the purposes of the trust would have ceased. Such, plainly, was not the intent, but the object was to enable the trustees to sell the bank notes whenever they should need money, and should not deem it advisable to sell any of the trust effects, to empower them to nurse the trust estate, according to their discretion, and to sell the bank notes at any time, for any purpose, and for such sums as they might think proper, and even before any part of the trust estate had been appropriated.
    
      If the judgment in favor of the United States, mentioned in the deed, should be levied upon the property of the bank or its sureties, that might well be considered the emergency in which bank notes were to be sold in the market “by the bushel, and for a song,” to raise the needful sum.
    If such was not the intent in this particular, why was it not provided that, on such emergency, a sale was to be made of the real estate and personalty, or even of the bills receivable?
    We object against this clause as fatal to the deed, inasmuch as it in effect authorizes the trustees to create, at their discretion, an indefinite indebtedness against the bank, to be paid, pari passu, with its bona fide circulation, out of the proceeds of the trust' property.
    Such a provision is manifestly inadmissible, and a fatal vice in the assignment.
    Its purpose seems to have been, not the benefit of the creditors, but to obtain, in some way, a benefit for the members of the corporation.
    The following are authorities to show that the deed, being an invalid transfer of the note, under the act of 1840, or invalid as to the sale of the bank notes, is wholly void. Hyslop v. Clarke, 14 J. 465; Austin v. Bell, 20 J. 449; Mackie v. Cairns, 1 Hopkins, 373; S. C. 5 Cow. 547. Galbraith and Cooper, being trustees for creditors, may avoid this deed in the same cases where the creditors might avoid it.
    It has been held that a trustee by deed for benefit of creditors, may avoid a previous fraudulent assignment. Englebert v. Blanjot, 2 Wharton, R. 240.
    
      Davis and Cox, on same side.
    1. The deed of assignment, under which appellants claim, was executed in June, 1843, and delivered for record on the 25th of same month, from which date it took effect. H. & H. 344, sec. 5. The act of the legislature, prohibiting, among other things, assignments by the banks, was enacted February 21, 1840, and took effect, by the constitutional proviso, in sixty days after its passage. H. & H. 33, sec. 6.
    
      2. The language of the act of 1840, above referred to, is in section 7th, as follows: “It shall not be lawful for any bank in this state to transfer, by indorsement or otherwise, any note, bill receivable, or other evidence of debt.” The decisions of this court dispense with the necessity of any argument upon merely the constitutionality of the above act. The legislation of a state is in none of its varied forms entitled to higher consideration, than when conservative of the rights of its citizens; most especially so, when the protection it interposes is intended to shield private individuals against powerful, yet bankrupt and irresponsible, corporations. In Payne et al. v. Baldwin et al., 3 S. & M. 661, this court unanimously decided that the act of 1840, so far as it prohibited an assignment by “indorsement,” was valid and constitutional. And in Planters' Bank v. Sharp et al., 4 S. & M. 17, where the assignment was general, that is, otherwise than by indorsement, the same decision was made. These two cases have since been incidentally recognized and confirmed in 6 S. & M. 326, 641. See also Ang. & Ames on Corp. 195, (edition 1843.)
    3. The act of 1840 being constitutional, are the articles sued for embraced within the 7th section already recited?
    The promissory note, described in the first count, is in the class specifically designated.
    The bank stock, described in the second count, is comprehended in the phrase “ other evidence of debt.” Such stock, it is well settled, is not property in possession, but a chose in action, either equitable or legal, according to the character of the incorporation. It cannot, in the absence of a statutory provision, be levied upon, or sold under execution. It is an evidence of debt merely in the nature of an annuity, entitling the owner or holder to its periodical interest or dividend. Ang. & Ames on Corp. 435, (edition 1843); 9 Johns. R. 96; Com. Dig. Execution, C. 4; 7 Martin, (La.) R. 31; 17 Mass. R. 243; 8 Pick. R. 98; 3 Binney, R. 394; 16 Mass. R. 402 ; 9 Vesey, R. 177; 5 Price, R. 217. To illustrate still further that the stock in question is a chose in action, or merely an evidence of debt, let us have recourse to the common law rights of husband and wife.
    
      At common law, a husband is entitled absolutely, upon the marriage, to all the personal property in the possession of the wife. He is also entitled to her choses in action, upon reducing them into possession. If he die, however, without reducing them into possession, the wife, surviving, is entitled to them herself; and the books are laden with authorities, that where bank stock and other similar stocks, are owned by a wife, before cover-ture, and the husband die, not having reduced them into possession, the wife, surviving, is entitled to them, as before the marriage. Wall v. Tomlinson, 16 Yesey, 415; Milford v. Milford, 9 Yesey, 87; Clancy on Rights, 125 et seq.; Grey v. Kentish, 1 Atk. 280; Bosvil v. Brander, 1 P. Wms. 459, (in note;) Saddington v. Kinsman, 1 Br. C. C. 44; Gayer v. Wilkinson, lb. 49, in note.
    The third count is for a deed of a tract of land, conveyed by the late Planters’ Bank to the appellants, after the act of 1840. If the appellees, as trustees appointed upon the judgment of ouster, are entitled to the real estate of the bank, they are also entitled to the title papers of such estate. But we are not disposed to discuss this question, (if question it can be deemed,) and therefore submit it without argument.
    4. But it is argued, that though the claims sued for, to wit, the note and stock, are within the plain letter of the law, yet they are excluded by its spirit. This argument is no less dangerous than fallacious. It presumes a judicial authority paramount to legislative; it invokes loose equities in lieu of positive" legal direction, and under pretence of construction, seeks to fritter and explain away the plain and unambiguous language of the text. A sufficient answer, however, to this, is to be found in Planters’.Bank v. Sharp et al., 4 S. & M. 27, where this court say: “ The terms of the act forbid all transfer,” and “ we cannot refuse to enforce it, because the case may not seem to come fully within the mischief intended to be remedied.” And to the same effect are the following authorities. 7 B. & 0. 569; 6 lb, 712 ; 10 lb. 527; 8 lb. 104; 8 lb. 164; 1 T. R. 52; 2 B. & A. 522; 8 M. & S. 20; 2 B. & A. 578; 6 B. & C. 475. Special attention is requested to the last authority cited.
    
      5. We deny, however, that the case is not within both the language and intent of the law. The act of 1840 had in view, among other things, two objects; one, to prevent frauds upon the debtors of the banks, the other to save the rights equally of their creditors. To have allowed their paper, when assigned, to be collected in gold or silver, would have been to defraud the debtor; to have permitted their paper to be assigned at all to one creditor or class of creditors, in preference to another, would have created an unjust and invidious distinction. The creditors preferred, would obtain their claims in full; others would receive, out of any precarious remainder, only their rateable proportion. Of this complexion is the character of the first assignment, under which the appellants claim. The assignment is in trust to pay creditors, various classes of whom are specifically designated; of these, some are to be paid in full, others only pro rata. Such an assignment, and for such a purpose, is clearly to be discountenanced. But we beg leave to ask this simple question: Is an assignment in trust to pay a debt, less within the law, or entitled to more favorable consideration, than an assignment directly or absolutely in payment of a debt! With due deference, assuredly not. Well, in Payne et al. v. Baldwin et al., 3 S. & M. 661, the jury especially found, that “ the railroad company being indebted to Baldwin and others, had transferred and delivered the notes sued upon, for a valuable consideration in payment of said debts.” And yet this court unanimously decided, after elaborate discussion, that the assignment was void.
    And the same decision, we confidently expect, will be made in the present instance.
    
      
       The arguments of the counsel for appellants exceeded sixty pages of foolscap. The brief published was prepared by them in accordance with the act of the legislature, which requires a concise statement of the points and authorities.
    
   Mr. Justice Clayton

delivered the opinion of the court.

This was an action of detinue instituted in the circuit court of Adams county, to test the validity of the assignment of its assets made by the Planters’ Bank previous to the judgment which deprived it of its charter. The plaintiffs are the trustees appointed by the court, upon the rendition of the judgment of forfeiture; the defendants are the assignees in the deed of assignment. The case thus presents the question of the validity of an assignment made by a bank, since the prohibitory act of 1840.

The views of this court were expressed on this subject in the case of Payne et al. v. Baldwin et al., 3 S. & M. 661. That opinion was. reversed in the supreme court of the United States, and we have since conformed to their decision.

There is also an objection taken to' the deed of assignment in this case, on account of its containing a provision alleged to be fraudulent in law. The objection is, that in a certain contingency, the assignees are authorized to sell the bank notes or issues of the bank.

It might, perhaps, be doubted, whether either the bank or the debtors of the bank, or the trustees, can call in question the validity of the assignment upon the ground of fraud. But we see nothing in the deed which can justify us in saying that it is fraudulent upon its face. It is not in itself an improper appropriation of the assets, although it may lead to such a result. It is not, therefore, fraudulent in law. If the power be improperly exercised, so as to amount to a fraud in fact, a court of chan-eery may check and control the abuse upon the application of the creditors or of the stockholders.

The. judgment of the court below is reversed; and this court proceeding to give the judgment which that court ought to have given upon th.e special verdict, doth direct judgment to be entered for the defendants in the court below, the plaintiffs in error here.

Judgment reversed.