Court Opinion

ID: 5513566
Source: CourtListenerOpinion
Date Created: 2022-01-10 04:26:25.336963+00
Date Added: 2024-06-11T08:34:13.669338
License: Public Domain

By the Court,

Sutherland, J.
The bank of Niagara is the common source of title, and if the mortgage to the state was duly executed, delivered and recorded, the plaintiff must recover; the regularity of the foreclosure not being questioned.
The defendant however contends, 1st. That the bank of Niagara had no power to mortgage their real estate; 2d. that if they had, the mortgage in this case was not well executed ; 3d. that the comptroller had no authority to accept the mortgage on behalf of the state. We are of opinion that neither of these objections is well founded.
The act of incorporation, Laws of 1816, page 184, declares that the bank shall be capable of purchasing, holding and conveying any estate, real or personal, for the use of the corporation, provided that such real estate be requisite for the convenient transaction of their business; or such as shall have been bona fide mortgaged to it by way of security or conveyed to it in satisfaction of debts previously contracted in the course of its business, or purchased at sales upon judgments which shall have been obtained for such debts. The case does not disclose the consideration given by the bank for this lot; but it is not for the defendant to deny that *594they properly acquired and had a right to hold it. They are eXpressiy authorized to convey any estate real or personal, in their possession, for the use of the corporation. If such power, however, had not been given in terms, it would have resulted, I apprehend, by necessary implication, from the power of taking by way of mortgage, or by absolute conveyance, in satisfaction of previous debts, or by purchase at sales upon judgments obtained by the bank. The authority to purchase real estate, when conferred on a monied corporation, if the purpose to which it is to be appropriated is not particularly specified, and all other dispositions of it prohibited, necessarily involves in it the power of subsequently selling and conveying it. It is not compatible with the purposes and interests of such institutions that their funds should be permanently vested in real estate. The general authority to sell and convey, includes the authority to mortgage. A mortgage is but a conditional conveyance. It would be very extraordinary if this or any other corporation had not the power to appropriate its property to the payment or security of its honest debts.
The objection to the execution of the mortgage is founded on the supposition that it was executed by Camp, the cashier, as the attorney of the bank, specially constituted for that purpose, and that it was sealed with his individual seal. It is shown by the production of the original mortgage, that it was sealed with the seal of the corporation ; and the resolution of the board of directors, under which the cashier acted in giving the mortgage, shews that it was not intended to constitute him a special agent or attorney of the bank. It resolves that the cashier be requested to execute a bond, &c. It does not purport to invest him with any new or extraordinary power; it is a mere expression of the will of the directors that a bond be given, and securities and other property assigned to the state, and a request to the cashier as their general agent, by virtue of his office, to see that their intentions are carried into effect; that is, that the necessary instruments be drawn in legal form, and the seal of the corporation be affixed to them. It is as much the act of the corporation as though the cashier, by their verbal request, had *595drawn the bond in the presence of the directors, and affixed the seal before they dispersed. It was put in writing merely to perpetuate the evidence of its having been done at the request and by the authority of the board of directors.
The comptroller, as the general agent of the state in its fiscal department, I apprehend has authority, without any express legislative provision upon the subject, to accept additional collateral security from any of the debtors of the state. It is an act so clearly beneficial to the state that its assent is always to be presumed. The original security, whatever it might have been, was not relinquished or impaired. The acceptance of the securities could not be prejudicial to the public, and might be highly advantageous.
When this mortgage was given there was a general statutory provision, that all mortgages given to the people of the state might be registered in the office of the secretary of state; and that such registry should have the same force and effect as though the mortgage had been registered in the city or county where the lands were situated. 1 R. L. 375, § 11. This registry, therefore, was legal notice to all the world of the existence of the incumbrance.
There was no error in any of the decisions of the judge which have been excepted to, and the motion for a new trial is denied.