239 N.W. 144 | Minn. | 1931
The action is brought by the commissioner of banks of this state to recover an assessment levied by him against the defendant as a stockholder of an insolvent bank. The action is brought under *499 L. 1927, p. 376, c. 254, to enforce the stockholder's constitutional double liability.
As defenses to the action defendant alleges that L. 1909, p. 191, c. 179, now G. S. 1923 (2 Mason, 1927) §§ 7688, 7689, as amended (L. 1927, p. 198, c. 127) is unconstitutional and void under Minn. Const. art.
The two sections challenged are a part of our laws regulating and defining the powers and duties of the commissioner of banks in taking over and liquidating state banks which he finds are insolvent or unsafe or have violated their charters or the banking laws of the state.
Do these sections attempt to confer judicial powers and duties upon the commissioner of banks? Art. 3, § 1, of the state constitution, provides:
"The powers of the government shall be divided into three distinct departments, the legislative, executive, and judicial; and no person or persons belonging to or constituting one of these departments shall exercise any of the powers properly belonging to either of the others, except in the instances expressly provided in this constitution."
Art. 6, § 1, of the constitution, vests the judicial power of the state in the courts.
The question arises as to what is the judicial power of the state, vested exclusively in the courts, under these constitutional provisions.
The commissioner of banks is an administrative officer of the executive department of the state. He is given power to ascertain, in the first instance, without notice or hearing, whether in fact the bank is insolvent or unsafe or has violated its charter or the state laws governing banks. For that purpose he is authorized to examine the books, records, and business of the bank. He is not required *500
to make any formal decision or findings. If he concludes that one or more of the causes stated for taking possession of the bank exist, he takes it over for liquidation. If the bank feels aggrieved, it may apply to the district court to enjoin further proceedings and have a trial on the merits of the right of the commissioner to take possession and liquidate its business. As said in the case of Main v. Schroeder,
It must be borne in mind that banks are a distinct class of corporations, charged with a public interest and subject to strict supervision by the executive department of the state.
The meaning and application of the term "judicial power" contained in the federal constitution and in state constitutions, vesting *501
such power exclusively in the courts, has been considered in many cases. State ex rel. Bd. of Co. Commrs. v. Dunn,
As gathered from these and other cases, the power of administrative and executive officers of the government to hear and determine many matters more or less directly affecting public or private rights, not being in the nature of a suit or of an action between the parties, is not the exercise of judicial power, within the meaning of these constitutional provisions.
The question whether judicial power was conferred on the comptroller of the currency by the acts of congress empowering him to take possession of and liquidate national banks and assess their stockholders was raised in Bushnell v. Leland,
Our laws in reference to the liquidation of state banks are practically copied from these federal laws, and it is conceded that so *502
far as this question is concerned there is no material difference between them. Defendant seeks to distinguish the federal cases by calling attention to the fact that the federal constitution contains no express provision prohibiting the exercise of judicial power by a person or persons belonging to other than the judicial department. But the federal constitution, like our own, divides the government into three separate departments, the executive, the legislative, and the judicial. It vests all the judicial power of the United States in the federal courts, except the limited judicial powers vested in congress in the matter of impeachment, punishing its own members, etc. or in the executive department by constitutional provisions. U.S. Const. art.
The Federal Supreme Court has repeatedly held that under the constitution all judicial power of the United States is vested in its courts, with the limited exceptions noted, and that neither congress nor the executive department has any such power, except in the few instances where such power is expressly granted by constitution. So far as national banks are concerned, there is no grant of judicial power either to congress or to the executive department. Union Pac. R. Co. v. U.S.
The Bushnell case,
2. Does this law attempt to deprive this defendant of property without due process of law? It is difficult to see how the taking over of the property of the bank deprives him of any property. He had no title to or right to the possession of any property owned by the bank. The only interest a stockholder has in such property would seem to be his interest in any surplus of the bank's property over and above what is required to pay its depositors and creditors. If the bank is insolvent, the stockholder has no interest except to have the property liquidated and applied on the debts *503 of the bank. Should there perchance be more property than necessary for that purpose, the law provides for the return of the surplus to the stockholders. Quite clearly the state has and should have the power to designate one of its officers to liquidate state banks.
Even if the stockholder is entitled to hearing, we think opportunity is not denied. G. S. 1923 (2 Mason, 1927) § 7689, before referred to, provides that whenever any bank is taken over by the commissioner, the bank may within ten days apply to the proper court to enjoin further proceedings and to have a hearing and present evidence, and have the court determine on the merits whether the commissioner was authorized and justified in closing the bank. This right in terms is given to the bank. But the bank, while a legal entity and legal owner of its property, is composed of its stockholders and officers. The word "bank" in this statute need not be construed strictly. If a stockholder of a bank is aggrieved and the officers of the bank fail or refuse to act, it would seem reasonable that, acting not for himself individually but on behalf of all the stockholders, he could obtain the same relief from the court as if the bank had acted by its officers.
The time given is short; but, as already noted, public interest is involved, and there is reason for prompt action. The power to legislate in reference to the business of banks is often based on the police power of the state. Noble State Bank v. Haskell,
In Hoff v. First State Bank,
3. L. 1927, p. 376, c. 254, is now a part of the law governing the commissioner of banks in the matter of liquidating state banks. It is not referred to in defendant's answer or in his brief, but should be briefly considered on the questions presented. This act provides for the levying of an assessment against the stockholders *504 by the commissioner and for notice thereof to all stockholders within ten days. It provides that any stockholder may within 20 days after service of notice of the assessment serve a notice upon the commissioner in the nature of a notice of appeal to the district court; and, upon filing such notice, with proof of service, with the clerk of the court, the district court shall hear the matter de novo. All questions raised by the stockholder would seem to be open for determination on the merits on such appeal. The act further provides that in all other respects the stockholders shall have and retain all defenses that they now have in case an action is brought to enforce payment of the assessment. The assessment levied by the commissioner is not a judgment and can be enforced by him only by bringing suit thereon in district court. Reading this chapter of L. 1927 in connection with G. S. 1923 (2 Mason, 1927) §§ 7688, 7689, the rights of the stockholder appear sufficiently safeguarded.
Order affirmed.