31 Nev. 43 | Nev. | 1909
By the Court,
Counsel for petitioner in their brief say: "In presenting the constitutional questions we will follow these lines: That the business of banking, including the contract with depositors of the bank for every nature of deposits, is a lawful business, in which it is the inherent right of every citizen to engage; that the legislature can only regulate such a business, or the making of such a contract in the absence of fraud or turpitude; that its power to prohibit commences and ends with the fraud or turpitude; that the statute of Nevada prohibiting the receipt of deposits is not predicated upon fraud, and it therefore prohibits an act which it is the inherent right of every person to do; that the court has not power to read into the statute the element of fraud, which must be read into the statute to sustain its constitutionality; that if the court can read into the statute the element of fraud, to wit, a false pretense, then the statute violates the provisions of the Constitution of Nevada, inhibiting any special law for the punishment of crimes or misdemeanors; that the statute is class legislation and denies the equal protection of the laws; that the law is a special law, under the Constitution of Nevada, in a case where a general law could be made applicable;’
That the business of banking is a lawful business in which it is the inherent right of every citizen to engage will not be questioned. It is a business, however, with which the general public welfare is most clearly identified. Money is said to be the very life-blood of the nation. The banking business has grown to be a part and parcel of our financial system, and is so regarded by both the federal and state governments. The
Common experience has abundantly demonstrated that the prosperity of the country is very largely influenced by public confidence in its banking institutions. Anything which tends to shake that confidence and causes depositors in banks to withdraw their deposits, produces contraction in business, which may result, and at times has resulted, in panics which have brought ruin and disaster to thousands, and seriously affected the welfare and happiness of the public generally for greater or less periods of time. If a person or corporation engaged in mercantile pursuits for example should fail, the injurious results are limited. Such failure does not tend to shake confidence in the business soundness of other similar enterprises. The case is different with banking institutions. The suspension of a bank in any locality causes depositors in other banks in the same locality to become suspicious of the solvency of the bank with which they may be dealing. Withdrawals follow, and, if they are sufficiently numerous, a second bank may be forced to at least a temporary suspension.
To regulate the banking business so as to reduce to a minimum failures in this branch of business enterprise is not only clearly within the powers of the legislative department of government, but it may also be said to be an imperative duty for the legislature to enact laws for the prevention, as far as possible, of bank failures. For this purpose most, if not all of the states have enacted laws for the inspection of banking institutions by state officials. Banks organized under the federal laws are for similar reasons examined by government officials. Other laws have been enacted, all with the same general end in view. A number of states have enacted statutes making it a crime to receive deposits into a bank after it is known that the bank is in an insolvent condition. The purpose of these penal statutes is not only to protect innocent depositors, but to deter banking officials from so conducting the business of the bank as to endanger its solvency. These statutes vary in form and effect in different states, but their purpose is the same. Prior to the act of 1907, supra (Stats. 1907, p. 414, c. 189), this state had no legislation of this character; the general laws making it a crime for any one to wrongfully convert to his own use the property of another applied to bank officials Avho embezzled bank funds, the same as they did to any person who might embezzle property or funds of another. Not until this act, hoAvever, was it attempted to make it an offense for an owner, officer, or employee of a bank to receive a deposit into an insolvent bank, he knoAving it at the time to be insolvent. Under the provisions of this act, although the official receiving the deposit may have no interest whatever in the bank, and although he may receive no personal benefit from the deposit, still he is made criminally liable, if at the time he has knorvledge of the bank’s insolvent condition.
In the case of Baker v. State, 54 Wis. 368, 12 N. W. 12, the court, considering a similar statute, said: "A bank implies capital, and capital invites confidence. A man holding himself out as banker of broker thereby gives public proclamation that he has money and property readily convertible into money in -his possession and subject to his control, and for that reason he may be safely trusted. It requires no argument to show that such assurance is most inviting and influential with the mass of the people, especially with those unacquainted with the history and character of the man. With- them the banker or broker is intrusted with money merely because he is a banker or broker, and hence supposed to have surplus capital as a standing guaranty of his agreements and his integrity. For an insolvent banker, company, or corporation to continue the business of banking is to hold out assurances of responsibility and surplus capital where neither exists. To do so knowingly is to secure the confidence, and hence obtain the money, of the ignorant and unwary by an implied deception. It is the old story of securing the victim by a display of false colors. To suppress this mischief,
See, also, In re Koetting, 90 Wis. 166, 62 N. W. 622; State v. Shove, 96 Wis. 1, 70 N. W. 312, 37 L. R. A. 142, 65 Am. St. Rep. 17; In re Cook (C. C.) 49 Fed. 833, 842.
In Meadoiocraft v. People, the Supreme Court of Illinois, considering the statute of that state, said: "As said by the Supreme Court of Wisconsin in Baker v. State, 54 Wis. 368, 12 N. W. 12, a bank implies capital, and invites confidence. A man holding himself out as a banker thereby gives public proclamation that he has money and property readily convertible into money in his possession and subject to his control, and for that reason he may be safely trusted; and his business not only affects himself as a banker, but every person who deals with him as such. The object of the statute that is here challenged was evidently to protect the public from being induced to deposit money with insolvent bankers, and there are manifest reason and necessity for protecting the community in their dealings with persons engaged in the banking business that do not exist in respect to their transactions with those employed in the ordinary agricultural, manufacturing, merchandising and mining pursuits.” (Meadowcraft v. People, 163 Ill. 56, 45 N. E. 303, 35 L. R. A. 176, 54 Am. St. Rep. 477.)
See, also, State v. Darrah, 152 Mo. 522, 54 S. W. 226; McClure v. People, 27 Colo. 358, 61 Pac. 612; Robertson v. People, 20 Colo. 279, 38 Pac. 326; State v. Beach, 147 Ind. 74, 43 N. E. 949, 46 N. E. 145, 36 L. R. A. 179.
In the case of Gommonwealth v. Rockafellow, 163 Pa. 139, 29 Atl. 757, considering the case of a defendant convicted for the violation of a statute very similar to ours, and which statute, hereinafter quoted, makes no reference to fraud or false pretense, the court said: "The offense clearly and distinctly defined is the fraudulent receipt of the money of a depositor.”
A bank of necessity must do business with the public upon its virtual declaration of solvency. The legislature, within the lawful exercise of its police power, can impose a penalty for
Judge Cooley treating this subject in his work on Constitutional Limitations, at pages 482, 483, says: "The legislature-may also deem it desirable to prescribe peculiar rules for the several occupations, and to establish distinctions in the rights, obligations, duties, and capacities of citizens. The business of common carriers, for instance, or of bankers, may require special statutory regulations for the general benefit, and it may be a matter of public policy to give laborers in one business a specific lien for their wages when it would be impracticable or impolitic to do the same for persons engaged in some other employments. If the laws be otherwise unobjectionable, all that can be required in these cases is that they be general in their application to the class or locality to which they apply, and they are then public in character, and of their propriety and policy the legislature must judge.” "Laws which regulate criminal prosecutions and proceedings or provide that acts done by certain classes of persons shall be crimes and state the punishment therefor are valid as applying to all of a class, where the classification is based upon a reasonable distinction; and it is for the legislature, and not the courts, to decide what is a reasonable distinction; the courts being able to hold a law unconstitutional only when the classification is based on purely statutory grounds;’ (8 Cyc. 1055, and authorities cited.)
In the case of Gulf R. R. Co. v. Ellis, 165 U. S. 150, 17 Sup. Ct. 255, 41 L. Ed. 666, the Supreme Court of the United States said: "It is not within the scope of the fourteenth amendment to withhold from the states the power of-classification, and, if the law deals alike with all of a certain class, it is not obnoxious to the charge of a denial of equal protection.
In the case of Easton v. Iowa, 188 U. S. 220, 23 Sup. Ct. 288, 47 L. Ed. 452, a case involving the conviction of a president of a national bank under the Iowa statute, the Supreme Court of the United States said: "Undoubtedly a state has the legitimate power to define and punish crimes by general laws applicable to all persons within its jurisdiction. So, likewise, it may declare, by special laws, certain acts to be criminal offenses when committed by officers or agents of its own banks and institutions. But it is without lawful power to make such special laws applicable to banks organized and operating under the laws of the United States.” See, also, Dreyer v. Pease (C. C.) 88 Fed. 878.
In the case of Baker v. State, supra, which was decided in 1882, the Wisconsin court mentions the States of Illinois, Iowa, Kansas, Louisiana, California, Missouri, South Carolina, and Michigan as having statutes of this character, and says: "These statutes like our OAvn are of recent date, and we are not aware of the constitutionality of any of them having been brought in question in any court; but the extent of the legislation seems to indicate a pretty general belief in the legislative power.” To the foregoing list of states may be added many others, but in all cases where the constitutionality of these statutes have been raised so far as Ave are aware they have in every instance been sustained. In a number of cases
A case to which our attention has been called, but which, Ave think, can hardly be regarded as exceptional, is that of Carr v. State, 106 Ala. 35, 17 South. 350, 34 L. R. A. 634, 54 Am. St. Rep. 17. The act in question in that case made it a misdemeanor for the president, cashier, or. other officer of a bank, etc., to receive a deposit, knowing or having good cause to believe that the bank is in a failing condition. For such an offense a fine was imposed of not less than double the amount of the deposit, one-half of Avhich should go to the person who made the deposit. A further section provided that the payment back to the depositor of the amount of the deposit before conviction together with costs "shall be a good and lawful defense to any prosecution under this act.” A brief excerpt from the opinion will serve to distinguish this case from other cases, although it is manifest, we think, that the Alabama statute under consideration differs materially in character from those adopted in other states to which our attention has been called:
"There cannot be two opinions as to the intent and meaning or the effect upon the whole enactment of this last and most remarkable provision. It is a declaration of the baldest and the most direct character to one party to a transaction whereby he has incurred a debt to the other in the name of the state that, unless he has paid that debt, he shall be arrested, held to trial, tried, convicted, fined and imprisoned at hard labor, and this obviously not for any taint of criminality in the transaction out of which the debt arose, but purely and simply for the nonpayment of the debt. For this default, and until it is purged either by simply paying the debt and accrued costs before conviction or by working out double the debt and costs, the debtor may be imprisoned for an indefinite time before trial merely and only because he does not pay the debt and expenses of putting this coercion upon him, there being no pretense of even ultimately punishing him for taking the deposit, if the preliminary imprison
This statute was .held unconstitutional because it violated the provisions of the Alabama Constitution inhibiting imprisonment for debt, which constitutional provisions, however, differ from ours, in that the Nevada Constitution makes an exception in cases of fraud, libel, or slander, while the Alabama Constitution makes no exceptions. The Pennsylvania statute heretofore referred to provides: "That any banker, broker or officer.of any trust or savings institution,.national, state or private bank, who shall take and receive money from a depositor with the knowledge that he, they or the bank is at that time insolvent, shall be guilty of embezzlement and shall be punished by a fine in double the amount so received, and imprisoned from one to three years in the penitentiary.” Laws Pa. 1889 (P. L. 145).
In a note to the case of Commonwealth v. Junkin, 170 Pa. 194, 32 Atl. 617, 31 L. R. A. 124, we find: "In Commonwealth v. Smith, 31 Lanc. Law Rev. 350, the Pennsylvania act of May 9, 1889, was attacked as unconstitutional, but the court, without directly passing upon the question, upheld the indictment, thereby implying that the statute was constitutional.”
In the case of Commonwealth v. Rochafellow, supra, the conviction of a private banker was sustained under the act. The question of its constitutionality, however, was not brought in question. The court said: "The indictment charges that the defendant, being a banker and knowing he was insolvent, received money from a depositor. The averment in' the indictment follows the language of the act, and is in substantial compliance with the rules of criminal pleading. The offense clearly and distinctly defined is the fraudulent receipt of the money of a depositor. The act is not to be nullified because this is called embezzlement, and by a construction which reads into its provisions the definition of that offense. The word was not well chosen, but the intention is clear.”
See also the case of Commonwealth v. Hazlett, 14 Pa. Super. Ct. 352.
The statute of this state is identical with, and was doubt
Our attention has not been called to, nor have we been able to find, any decision by the California courts based upon this statute.
A very careful and extended consideration of the able and exhaustive argument of counsel for petitioner fails to convince us that the act in question is violative of any constitutional provision. Our conclusion is to the contrary.
No valid reason appearing for the discharge of the said T. B. Rickey, it is ordered that he be remanded to the custody of the sheriff of Ormsby County, to take effect Monday, February 1, 1909, at 2 o’clock p. m., subject to the further order of the court.