IN RESPONSE TO SUGGESTION OF ERROR. The particular clause of the statute involved, section 2805, Code of 1906 (section 2306, Hemingway's Code), is highly penal, and therefore must be liberally construed in favor of the mortgagee as against an adversary subsequent lienholder on the mortgaged property. Or, putting it conversely, the statute must be construed strictly against the latter in favor of the former.
The purpose of the statute was to conserve the public revenues. Its object was to facilitate the subjection to taxation of solvent credits secured by mortgages which were subject to taxation under the law. The taking of mortgages to secure notes, without any beneficiary being named in the mortgage, was a common practice in this state before the enactment of the statute. For that reason it was with great difficulty the taxing authorities could ascertain who were the holders of such securities. The record of such mortgages showed nothing that would render any aid for that purpose, except the name of the grantor in the mortgage. Oftentimes the mortgage failed to show whether the indebtedness secured was payable in this state or in another state, and failed to show the rate of interest the indebtedness bore. By the enactment of this statute the legislature thought to aid the taxing officers by setting up a signpost. It required the mortgage to show the beneficiary as a pointer for them, *Page 381 so that they could go to the beneficiary and ascertain, in the first place, whether the indebtedness secured by the mortgage was subject to taxation under the laws of this state, and, if subject to taxation, who the holder of the indebtedness was at the time taxes became a charge thereon. It would never do for the court to lose sight of the purpose and policy of the statute — the reasons for its enactment. And this is sometimes true, even though the statute be without ambiguity in its language. In construing statutes, the chief aim of the courts should be to reach the real intention of the legislature. A construction which will bring about manifestly unthought-of and unjust results will be avoided, if possible, and, if necessary to avoid such results, the courts will widen or narrow the letter of the statute. Kennington v.Hemingway, 101 Miss. 259, 57 So. 809, 39 L.R.A. (N.S.) 541, Ann. Cas. 1914 B, 392. In Queen v. Clarence, L.R. 22 Q.B. Div. 65, it was said by Lord COLERIDGE that:
"In such a matter as the construction of a statute, if the apparent logical construction of its language leads to results which it is impossible to believe that those who framed or those who passed the statute contemplated, and from which one's own judgment recoils, there is in my opinion good reason for believing that the construction which leads to such results cannot be the true construction of the statute."
The statute does not provide that the true beneficiary shall be shown in the mortgage, or that the only beneficiary shall be shown. It provides that "the beneficiary" shall be disclosed in the mortgage. The notes involved were payable to the National Stockyards National Bank. The legal title to the notes was therefore in the bank. The evidence showed that the National Cattle Loan Company was a corporation organized under the statutes of the state of Delaware, domiciled and having its principal office in the city of East St. Louis, Ill.; that it occupied the same offices and buildings as the National Stockyards National Bank; that the executive officers of *Page 382 the bank were the executive officers of the loan company; and that the stockholders of the one were the stockholders of the other.
It is true that the two corporations were separate entitles. They were separate artificial persons under the law, but because of the identity of the stock ownership in the two corporations the net profits of each belonged to the stockholders of the other. As stated, the notes were payable to the bank, and the mortgage to secure the notes showed that institution to be the beneficiary. Notwithstanding the money loaned belonged to the loan company, for the space of time between the taking of the notes and the mortgage and the transfer of the same by the bank to the loan company the former owned the legal title to the notes. There was nothing in the evidence which tended to show that the notes and mortgage were so taken in fraud of the statute involved. On the contrary, the evidence tended to show that both the bank and the loan company were in entire ignorance of the statute. We think, under that state of facts, that the bank was such a beneficiary as was contemplated by the statute. Certainly that condition answered the purpose and policy of the statute. The naming of the bank as beneficiary in the mortgage was such a signpost as pointed the way to the taxing authorities of the state to ascertain whether or not the notes were subject to taxation and their ownership. Furthermore, these notes were payable in another state. Ordinarily notes payable to a person in another state are not taxable in this state, regardless of the interest they bear; they are beyond the taxing power of this state; they have no situs here for the purpose of taxation.
If appellee's position be sound, all the beneficiaries in a mortgage, regardless of number, would have to be set out in the mortgage, Take, for illustration: A. has fifty thousand dollars belonging to himself, his wife, and eight children. He wants to lend it out on real estate security. He instructed his attorney to so lend the funds, taking *Page 383 the notes payable to his attorney, and naming the latter as beneficiary in the mortgages. That course is pursued. He pays his attorney for his services. When called upon, the attorney transfers the notes to A. Under the statute, would it be necessary that such mortgages name A. and all the members of his family as beneficiaries? Would that course be an evasion of the statute? We think not. One argument made by the appellee, and the principal one, why his suggestion of error should be sustained, is that in the opinion handed down the court misconceived and misstated the facts of the case. Whatever misstatement of facts was made in the opinion, if any, was as to facts immaterial and not controlling. We think the controlling facts were sufficiently set out in the opinion, and the reasoning therein was sound. In response to the suggestion of error, we have only undertaken to elaborate the reasoning of the opinion handed down, in the hope of adding to its force, if possible.
Overruled.