and Abbie C. Ingalls, who executed the note and mortgage, were not made parties defendant. The demurrer was overruled, and the defendant appeals. The argument of the demurrant is that the holder of the equity of redemption was a necessary party defendant; that the complaint, by fair construction, shows that the mortgagors were still such holders, for it nowhere suggests any change in the ownership of the mortgaged property or in the mortgagor's relation to it; and that the defendant is only mentioned as a party claiming some interest in or lien upon the mortgaged premises. The object of the equitable action of foreclosure is, of course, to cut off the right to redeem the property mortgaged from the claim of the mortgage. By the statute there may be united with this equitable proceeding a claim for a personal judgment for any deficiency that may remain after the proceeds of a sale have been applied toward the payment of the mortgage debt, against whomsoever may be legally liable to pay such deficiency. Until foreclosure, there is an equitable right to redeem in the mortgagor, or in the person to whom he may have transferred such right. Such transfer is usually made by a conveyance of the legal title. The primary object of the action being to extinguish this right to redeem, the party who holds such right is always a necessary party 51 defendant, for it is against his interest that the relief is sought, and he would, ordinarily, be the only strictly necessary defendant. Upon this proposition there is no disagreement. The ground of demurrer is the defect of parties defendant. To be demurrable the complaint must itself show this defect. It must show that James L. Ingalls is not the holder of the equity of redemption, and consequently not the only necessary party defendant. Suppose, in this case, the fact to have been that, prior to the commencement of this action, the mortgagors had conveyed the mortgaged premises to this defendant, so that he was, at the commencement of the action, the sole owner of the equity of redemption, but that the plaintiff, desiring a personal judgment for deficiency against William H. and Abbie C. Ingalls, the makers of the note, had also made them parties defendant for that purpose, what allegation would his complaint have contained against defendant James L. Ingalls, whose equity he sought to foreclose? Probably, and almost certainly, nothing but the one contained in this complaint, to wit, that he claims some interest in, or a lien upon, the mortgaged premises, etc; for that is the

allegation in constant use in respect to all defendants whose interests are recognized, but claimed to be subordinate to the mortgage, and against whom no personal claim is made. It has been often held that this general allegation is sufficient without more particularly defining the character or extent of such interest, and in many of these cases this general allegation has been directed against and recognized as covering the interest of the subsequent purchaser and owner of the equity of redemption: Hoes v. Boyer, 108 Ind. 496; Anthony v. Nye, 30 Cal. 401; Horton v. Long, 2 Wash. 435; 26 Am. St. Rep. 867; Drury v. Clark, 16 How. Pr. 424; Short v. Nooner, 16 Kan. 220. But the object of making James L. Ingalls a party defendant is the same in both cases, to wit, to cut off his right to redeem. If, in the supposed case, the allegation that he claimed an interest in the property might mean that he was the subsequent purchaser and owner, why may it not mean the same in this case? If it does so mean, then there was no defect of parties defendant, for in such case he was the only necessary defendant. We do not think the complaint shows upon its face that any other person is a necessary defendant, because its allegations are entirely consistent with this sole defendant being the owner of the mortgaged premises, and the only person having a right to redeem the same, in which case he would be the only necessary defendant. In other words, the only strictly necessary party defendant is the owner of the equity of redemption; and the complaint does not show that defendant is not such owner. If it should transpire on the trial that he was only a subsequent lienholder the plaintiff's action would fail; if, on the other hand, he proves to be the owner of the premises, it would not fail; and, because the complaint is quite consistent with the conditions under which there would be no failure on account of defect of parties defendant, it is not demurrable on that ground. The order of the circuit court overruling the demurrer is affirmed.

All the judges concur.

MORTGAGES-FORECLOSURE.

52

PARTIES DEFENDANT: See the notes to O'Brien v. Moffitt, 36 Am. St. Rep. 574; Turman v. Bell, 26 Am. St. Rep. 43; Gaskell v. Viquesney, 17 Am. St. Rep. 372, and Berlack v. Halle, 1 Am. St. Rep. 189.

STATE V. SCOUGAL.

[3 SOUTH DAKOTA, 55.]

A FRANCHISE IS a royal prerogative, a branch of the king's prerogative vested in the hands of the subject. In this country it is a special privi. lege conferred by the government upon individuals, which does not belong to a citizen of the country by common right.

BANKING WAS NOT A FRANCHISE AT THE COMMON LAW, but, if a bank is given the privilege of issuing demand notes to circulate as money, it thereby exercises a franchise. CONSTITUTIONAL LAW-BANKING, POWER TO PROHIBIT EXERCISE OF POWERS OF.-The carrying on of the incidental powers of banking by discounting and negotiating promissory notes, bills of exchange, drafts, and other evidences of debt, receiving deposits, buying and selling exchange, coin, and bullion, and loaning money on personal security, is not a franchise, and cannot be made so by legislative action. Hence, an individual citizen cannot be deprived of the right to exercise those powers, nor can their exercise be restricted to corporations.

CONSTITUTIONAL Law.—Under THE POLICE POWER it is not competent

for the state to prohibit a citizen from carrying on any trade, occu pation, or business not injurious to the community. The business may be regulated, but not prohibited. BANKING, STATUTE RESTRICTING POWERS OF TO CORPORATIONS.—A constitutional provision that no law shall be passed giving to any citizen, class of citizens, or corporations privileges and immunities which upon the same terms do not equally belong to all citizens or corporations, inhibits the enactment by the legislature of a statute confining the right to exercise banking powers, other than the issuing of bills to circulate as money, to corporations. CONSTITUTIONAL LAW-BANKING, RESTRICTING Right of.-A state statutə prohibiting the exercise of banking powers by natural persons, and authorizing their exercise by corporations, is in conflict with the provision of the constitution declaring that all men have inherent rights, among which are those of enjoying and defending life and property, and of acquiring and protecting property, and the pursuit of happiness. Robert Dollard, attorney general, for the plaintiff in error.

Bartlett Tripp, for the defendant in error.

69 CORSON, J. This case comes before us on a writ of error issued on behalf of the state, to the county court of Yankton county, to review the judgment of that court sustaining a demurrer to the information filed against the defendant in error, and quashing the same. The legislature of this state at its last session passed an act for the organization of state banks, entitled "An act to provide for the organization and government of state banks," approved March 10, 1891, and constitutes chapter 27 of the Laws of 1891. The first section of the act is as follows: "Associations for carrying on the

business of banking under this title may be formed by any number of natural persons not less than three (3), one-third of whom shall be residents of the state. They shall enter into articles of association, which shall specify in general terms the object for which the association is formed, and may contain any other provisions not inconsistent with law, which the association may see fit to adopt for the regulation of its business and the conduct of its affairs. These articles shall be signed by the persons uniting to form the associa tion, and a copy of them shall be forwarded to the secretary of state of the state of South Dakota." The second section provides what the certificate of incorporation shall contain, and the third section provides for the manner of its execution, filing, etc. The fourth section confers upon such corporations or associations the following powers: 1. To adopt and use a corporate seal; 2. To have succession for twenty years; 3. To make contracts; 4. To sue and be sued; 5. To elect officers and prescribe their duties; 6. To make by-laws to govern and control the business; and 7. "To exercise by its board of directors or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking, by discounting and negotiating promissory notes, bills of exchange, drafts, and other evidences of debt, by receiving deposits, by buying and selling exchange, coin, and bullion, by loaning money on personal security." And section 27 provides as follows: "It shall be unlawful for any individual, firm, or corporation to continue to transact a banking business, or to receive deposits, for a period longer than six months immediately after the passage and approval of this act, without 60 first having complied with and organized under the provisions of this act. Any person violating the provisions of this section, either individually or as an interested party in any association or corporation, shall be guilty of a misdemeanor, and, on conviction thereof, be fined not less than five hundred dollars, nor more than one thousand dollars, or imprisonment in the county jail not less than ninety days, or either or both, at the discretion of the court." These are all the provisions of the law that it is necessary to give to a proper understanding of the questions presented for our decision.

On the twenty-second day of September, 1891, the state's attorney filed an information against the defendant in error in the county court of Yankton county, containing eleven

counts, charging him in the various counts with carrying on the business of banking "discounting and negotiating promissory notes, bills of exchange, drafts, and other evidences of debt, by receiving deposits, by buying and selling exchange, coin, and bullion, by loaning money on personal property," without having complied with the provisions of the banking act. A demurrer was interposed to each count of the information on the ground that it did not state facts sufficient to constitute a public offense. The demurrer was sustained by the county court, and judgment rendered quashing the information. The principal ground relied on to sustain the demurrer and judgment of the court below is the unconstitutionality of section 27 of the act, under which the informa tion was filed, and this presents the only question we shall discuss or consider, as the other objections to the information. were purely technical, and in our opinion are without merit.

The learned attorney general contends: 1. That the privilege of banking is, or may be made by the legislature, a franchise, and as such is subject to the control of the legislature of the state, and that, it being a franchise, or made such, the legislature has the power of conferring upon or granting the privilege to such persons, associations, and corporations as it may deem proper, and of excluding all other persons from the exercise of such privilege; and 2. If the privilege of banking is not a franchise, and cannot be made such by the legislature, then the legislature, by virtue of 61 the police power vested in the state, may regulate the business, and may, under such power, prescribe the manner in which the business shall be conducted, and may exclude all persons from exercising the privilege of banking, except in the manner prescribed by the law

The learned counsel for the defendant in error contend: 1. That only the banking privilege proper, namely, the privilege of issuing demand notes to circulate as money, or, as defined in the state constitution, the power "to issue bills or paper credit, designed to circulate as money," constitutes, or can by legislative power be made, a franchise, and that carrying on a banking business by exercising the incidental powers of banking specified in subdivision 7 of section 4 of the act is a right belonging to the citizens of the country generally, and not a franchise, and cannot be made such by legislative power. 2. That under the police power vested in the state the legislature may regulate, but it cannot prohibit