Thomaston Bank v. Stimpson , 21 Me. 195 ( 1842 )

The opinion of the Court was drawn up by.

Whitman C. J.

— The deed of Mrs. Sawyer and Brown Stimpson was made to the bank absolute and unconditional in its terms. It is contended, by the counsel for the defendant, that the bank could not take and hold real estate by a deed of this description, other than for its own accommodation and" particular use. It appears on the minutes of the proceedings of the' directors of the bank, sometimes called their records, that the deed was made to secure the payment of a loan, obtained by said Brown Stimpson of the plaintiffs; and no'question is in fact made but that this was the real object of the transfer. No doubt can be entertained but that a Court, having’general equity jurisdiction, would regard such a conveyance as a mortgage. But the statute of this State, concerning mortgages, has entrusted the Courts with very limited powers on this subject; and is specific as to the cases in which , a right of redemption shall remain to the grantor, beyond the time stipulated in the mortgage. In the case of mortgages of this description no such right is saved to him ; and when the time, stipulated for the payment of the money, had elapsed, and payment had not been made, the estate became absolute in the grantees, so that they might alienate the estate to reimburse the amount of the loan.

By the statute of 1831, c. 519, § 2 and 6, banks were authorized to hold real estate for their own accommodation; and such other real estate as they might “ hold on mortgage, receive on execution, or take as security for, or in payment of any debts.” The real estate in question was, in the first instance, received as security for a loan, and finally in payment, for a debt due. These purchases, in both instances, would seem to be within the very terms of the statute. No question therefore would seem to remain, but that the bank conducted, in both instances, within the scope of its legitimate powers.

In the sale of the estate the plaintiffs appear to have conducted with entire good faith. They allowed Brown Stimpson to find a purchaser, and to secure to himself all possible benefit from the sale, beyond the amount requisite to replace the money borrowed; and he received from the purchaser a stipulation to convey the land to him, within a certain term agreed upon between them, upon his paying to the purchaser the amount paid to the plaintiffs, being only the amount due them, together' with the amount of a further loan obtained by him upon the same security, with interest on both sums.

The counsel for the defendant contends, that this transaction was tantamount to a redemption of the estate from the plaintiffs; and that it thereupon revested in Mrs. Sawyer, who was the real owner of it in fee at. the time she joined her son-in-law, Brown Stimpson, in a conveyance of it to the plaintiffs. But we do not perceive any ground upon. which it can be so considered. The estate had become absolute in the plaintiffs, and irredeemable by our law. The grantors were unable to pay the amount for which it had become forfeited. It was sold and conveyed by the plaintiffs to a stranger to the original transaction, with the approbation, and indeed by the procurement, of Brown Stimpson, and without the slightest complaint, so far as appears, on the part of Mrs. Sawyer. The vendee of the plaintiffs therefore must be deemed to have acquired a perfect title to the estate.

The counsel for the defendant further contends, that the transaction, between Brown Stimpson and the plaintiffs’ vendee, was usurious and therefore void. How that may have been it seems to us unnecessary to inquire. The estate must have vested in the vendee, and could not have been divested out of him by any usurious transaction between him and Brown Stimpson. Being thus vested, he conveyed it to one Paine, to whom Brown Stimpson had assigned his obligation for a conveyance to himself; and subsequently Paine, as cashier to the bank, having become a defaulter, conveyed the same to the plaintiffs, in part payment for the amount found to be due from him. It is not pretended that Paine or the plaintiffs were conusant of the supposed usurious transaction, or had any connection with it. We cannot doubt, therefore, that, in the hands of the plaintiffs, the estate is entirely clear of any taint of that kind.

It is further objected, that some of the facts in the case were proved by incompetent testimony, which, though objected to, was admitted by the Court. It is contended, that Edwin Smith, from whom this testimony was derived, had an interest in the event of the suit. , It appeared that he had been a stockholder and director in the bank; but, some few months before he testified, he had sold his stock, and must thereupon have ceased to be a director. It was then contended, that he stood liable, for the term of one year after the sale, to be called upon to the amount of his stock, so sold, for the debts of the bank, in case of the mismanagement of the directors, and their inability to reimburse the loss, &c. This liability was remote, uncertain and contingent. It depended upon such a loss of the stock, by the mismanagement of the directors, as rendered it impossible for the creditors of the bank to obtain remuneration therefrom, and upon the further contingency, that the directors should be unable to respond therefor; and still further, that a suit should have been commenced within one year, next after the sale of the stock, by any such creditor. But there is a still more incontrovertible answer to the defendant’s exception to the ruling of the Judge in this particular. The statute of 1839, c. 418, § 1, and the Revised Statute c. 77, § 76, both provide, that a stockholder, so liable, may nevertheless, be a competent witness in any case in which the bank may be interested.

On the whole, it seems to us, that the default must remain undisturbed; and that judgment must be entered thereon.