Court Opinion

ID: 3609737
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:54:14.679295+00
Date Added: 2024-06-11T14:23:46.744509
License: Public Domain

The bond and mortgage in question were assigned to the comptroller on the 5th day of September 1844, by Elisha Crawford the mortgagee, who was then the president *Page 541 
of the White Plains Bank; the object of which assignment, as therein declared, being to secure the redemption of the circulating notes of said bank. The evidence then shows, that upon receiving the bond and mortgage so assigned, and a written admission by Cook, the mortgagor, of his indebtedness to the mortgagee in the amount to secure which the bond and mortgage were executed, and of his having received notice of the assignment, the comptroller issued and delivered to Craw ford, circulating notes to be issued and put in circulation by the bank, to the amount secured by the bond and mortgage.
On the 18th day of July 1846, Crawford delivered to the comptroller, circulating notes of the bank, to an amount equal to that secured by the bond and mortgage, and received from him a reassignment thereof. The notes so delivered to the comptroller were the property of the plaintiff, and had been received by Crawford from him, who procured the reassignment for the use and benefit, and at the request of the plaintiff; and he immediately redelivered the bond and mortgage to the plaintiff. These are all the facts in the case which go to show the plaintiff's right to the bond and mortgage; and the question to be first determined, is, whether they are sufficient to constitute him the owner of them in law or equity.
The 5th section of the act, called the general banking law, passed April 13th, 1838 (Laws of 1838, ch. 260), authorizes the comptroller, among other things, to retransfer mortgages which have been transferred to him by individual bankers or associations under the act, as security for the redemption of circulating notes, to such persons or associations, upon receiving and canceling an equal amount of such circulating notes, c. The 9th section of the act authorizes the comptroller to reassign such bonds and mortgages to the person or association who transferred the same, on receiving other approved bonds and mortgages of equal amount. The 11th section provides that the comptroller may sell such bonds and mortgages at public auction, in case of failure or refusal by such person or association to pay such circulating notes, on demand, in the manner specified in the 4th section. *Page 542 
These are all the provisions of the act which give the comptroller authority to reassign or retransfer, or in any manner to sell or dispose of mortgages assigned or transferred to him as security for the redemption of circulating notes under the act. The act nowhere authorizes him to transfer or assign bonds and mortgages pledged with him as such security, otherwise than to the person or association by whom they were transferred excepting in the case of failure to redeem the notes, by the persons or associations who issued them. Could the plaintiff have acquired a valid title to the bond and mortgage in question by procuring from the comptroller an assignment thereof directly to himself? That he could not, it seems to me perfectly plain. It would have been an act on the part of the comptroller, utterly destitute of authority, and a plain violation, not only of the letter but of the spirit of the law. To allow it, would not only be placing the banks at the mercy of individuals, but might do great injury to mortgagors.
If the plaintiff could not thus purchase the bond and mortgage directly, it is equally clear that he could not, as it is evident he has attempted in this case, do it indirectly. It is not pretended that there has been a sale of these securities by the bank to the plaintiff, since the reassignment thereof by the comptroller, the only effect of which was to vest the title to them, discharged of the comptroller's lien, in the bank, and placing them in the same condition they were in before the transfer of them to the comptroller. All that has been done, which tends to show a sale to the plaintiff, has been the handing the papers over to him by Crawford. This can not be regarded as a sale by the bank to the plaintiff, admitting Crawford had authority from the bank to make such sale, which the case utterly fails of establishing. It was not done with that intent, but merely for the purpose of carrying out and completing, by Crawford, as the plaintiff's agent, the purchase of the bond and mortgage of the comptroller for the plaintiff, in pursuance of the previous arrangement between them; which, it has been shown, could not be legally done.
The foregoing view puts an end to the plaintiff's claim, and *Page 543 
disposes of his right to any relief whatever. A consideration of the other questions raised is therefore unnecessary. The judgment of the supreme court should be reversed, and the plaintiff's bill should be dismissed with costs; and the defendants should have costs of the appeal.
GARDINER, JEWETT, JOHNSON, MORSE, WATSON and WELLES, JJ., concurred.
RUGGLES, Ch. J., gave no opinion.
Decree of the supreme court reversed and bill dismissed with costs.