33 Nev. 333 | Nev. | 1910
Lead Opinion
By the Court,
Petitioner asks for a writ directing the state banking board to issue a license permitting him to engage as an individual in the banking business. The question presented is whether ordinary banking by individuals may be prohibited by statutory enactment, while corporations are allowed and authorized to conduct this business.
In the act of March 24, 1909 (Stats. 1908-09, c. 191), section 2 provides that: "It shall be unlawful for any corporation, partnership, firm, or individual to engage in or transact a banking business within this state on and after the taking effect of this act, except by means of a corporation duly organized for such purpose under the laws of this state; except agencies of foreign corporations now doing a banking business in this state. * * * Any violations of the provisions of this section shall subject the corporation, partnership, firm, or individual so offending to a penalty of twenty-five ($25) dollars for each day of the continuation of such offense, and be cause for the appointment of a receiver by the state
Section 5 creates the Nevada State Banking Board.
Section 6 provides that: "Said board shall have general . supervision and control of banks and banking under the laws of this state, and no person or persons shall be permitted to engage in or transact a banking business save corporations having complied with the provisions of this act. * * *”
Section 12 provides that:. "It shall be unlawful for any person or corporation to conduct a bank or to engage in or transact a banking business in this state without having first obtained a license from the state banking board in the manner hereinafter provided, which license shall issue only to corporations duly organized for the transaction of such business. ”
Are these provisions in derogation of the state constitution? Article 1, sec. 1, provides that: "All men are, by nature, free and equal, and have certain inalienable rights, among which are those-of enjoying and defending life and liberty, acquiring and protecting property, and pursuing and obtaining safety and happiness. ”
Section 8 provides that no person " shall be deprived of life, liberty, or property, without due process of law,” and section 20 that: "This enumeration of rights shall not be construed to impair or deny others retained by the people. ”
There are only three cases, and these we will review later, which bear directly upon the question as to whether under, or regardless of, an organic act with guaranties similar to the ones contained in our constitution, the individual may be denied the privilege of engaging in the business of commercial or ordinary banking. One of these opinions holds that he cannot be denied this privilege. The other two carry a contrary conclusion, and cite decisions and extracts from text-books based on cases which when properly distinguished do not give them support because they relate to statutes repealed more than half a century ago, by which, during the
It is also conceded that the legislature may suppress any business or calling which is in itself injurious and cannot be so regulated that it will not be detrimental to the public welfare; and, while all occupations are subject to necessary or reasonable regulations and restrictions for the prevention of injury to others, the citizen may not be denied the right to follow ordinary vocations which are not injurious in- themselves, or in any way detrimental when properly regulated. All needful enactments may be passed for the protection and welfare of the people .as new conditions arise in the affairs of men. No good reason appears for upholding as a police.regulation a statute which confers no benefit to the public or any portion of the community, and results only in injury by prohibiting citizens from following a beneficial voca
In Ex Parte Pittman, 31 Nev. 43, 22 L. R. A. (N. S.) 266, we said: "That the business of banking is a lawful business in which it is the inherent right of every citizen to engage will not be denied.”
In First State Bank v. Shallenberger (C. C.) 172 Fed. 1000, the court stated: "The banking business is one of the ancient and ordinary occupations, and has been and is recognized as a lawful business, not only in the State of Nebraska, but in all states of the Union, and in general in all countries that have developed civilization and. commerce. It has not been regarded as a business of such harmful tendencies that society might entirely forbid its exercise. * * * In the Slaughterhouse Cases, 16 Wall. 36, 116, 122, 21 L. Ed. 394, speaking of that portion of the fourteenth amendment to the national constitution, Mr. Justice Bradley said: 'This right to choose one’s calling is an essential part of that liberty which it is the object of the government to protect; and a calling, when Chosen, is a man’s property and right. Liberty and property are not protected where these rights are arbitrarily assailed. * * * In my view, a law which prohibits a large class of citizens from adopting a lawful employment, or from following a lawful employment previously adopted, does deprive them of liberty, as well as property, without due process of law. Their right of choice is a portion of their liberty. Their occupation is their property. ’ In the case of Allgeyer v. Louisiana, 165 U. S. 578, 589, 17 Sup. Ct. 427, 431, 41 L. Ed. 832, the court quoted with approval from the remarks of Justice Bradley, and said: 'The liberty mentioned in that amendment means not only the right of the citizen to be free from the mere physical restraint of his person, as by incarceration, but the term is deemed to embrace the right of the citizen to be free in the enjoyment of all his faculties, to be free to use them in all lawful ways, to live and work where he will, to earn his
In the Shallenberger case, the court in holding that the guaranty fund provision invalidates the Nebraska act said that it was not necessary to decide whether the state could limit the business of banking to corporations. But the decision itself, although the validity of statutes providing for a guaranty fund has not yet been determined by the United States Supreme Court, supports the contention that the citizen cannot be deprived of the privilege of engaging in banking; for, if he cannot be required to contribute to a guaranty fund as a condition to following the business, how can the legislature prohibit him entirely from pursuing the occupation when it cannot even enforce such a regulation? In the opinion
If the legislature can prohibit the individual from engaging in the banking business, as our statute seeks to do, it is evident that it may also prohibit corporations from engaging in the business, for a corporation, which is merely a creature of the law, can have no greater fundamental rights than the individual, for whom the constitutional guaranties are directly provided. Therefore, if both the individual and the corporation may be prohibited, this business, so essential to the carrying oh of commerce and trade, and so necessary to the welfare of the state, may be entirely suppressed. The sustaining of this statute would be an entering wedge and a precedent which would authorize further encroachments upon the rights assured to our citizens by the constitution. If we should uphold as valid this act, denying to individuals the right to embark in the banking business, and the next legislature should pass another providing that corporations could not engage in that pursuit, we perceive no ground upon which that act could be held invalid which would not apply to the present one. We have different statutes regulating mining and providing for the safety of the men employed. The desirability and validity of laws for the prevention of the spread of contagious diseases among animals and certain pests which destroy agricultural crops are recognized.
If the next legislature should pass a law prohibiting individuals from engaging in the business of mining and
The constitutional provision that "all men are, by nature, free and equal, and have certain inalienable rights, among which are those of enjoying and defending life and liberty, acquiring and protecting property, and pursuing and obtaining safety and happiness, ” means more than the protection of property already owned by the citizen. Most people rely for a living upon their pursuit of the ordinary vocations, and the most affluent are dependent in a large degree upon these. Comparatively few are possessed of such means that they will not need to labor or to engage in the ordinary business callings. It would not be creditable for these favored ones, while young and strong, to idle away their time and live as drones upon the world. But, regardless of them, how are the great masses of the people to acquire property, pursue happiness, and enjoy life and liberty unless they are permitted to engage in the ordinary vocations which
Any attempt of the legislature to prohibit the pursuit of these harmless and useful vocations, or to restrict them further .than necessary for the protection of the public or the prevention of injury to other persons, is an encroachment upon the liberty and just rights of the citizen. If this act can be held a valid exercise of legislative power, other laws may be passed and sustained on the grounds urged in support of this statute, which would be a discredit to a czar or absolute potentate, and which in the face of the constitutional provisions for the protection of the citizen secured by the blood of our forefathers would deny to the people the right to pursue honest, beneficial, and ordinary callings, and result in their injury and distress. That incomparable judge of the human mind and heart said: "You take my life when you take the means whereby I live. ”
Under the most grinding tyranny, privileges became vested in the lords of France until the peasant was prohibited "to hunt on his own lands, to fish in his own waters, to grind at his own mill, to cook at his own oven, to dry his clothes on his own machines, to whet his instruments at his own grindstone, to make his own wine, his oil, and his cider at his own' press, or to sell his commodities at the public market.” The subject was not allowed to set a tub of water from the ocean to evaporate in order that he might have salt for his table. The people complained that the taxes and exactions were so great that they could not obtain enough to eat, and the reply from the sovereign was that they could eat grass. In the same year that our own Declaration of Independence was declared, Louis XVI, under the fear of impending revolution, in an edict giving freedom to trades and professions, after recit
In State v. Woodmansee, 1 N. D. 246, 46 N. W. 970, 11 L. R. A. 420, in a decision rendered twenty years ago, the court sustained an act limiting banking to corporations, and went to the extreme of holding that the legislature had the power, " not only to regulate and to restrict the business, but also to grant the right to engage in it to one class and to prohibit it to others, or even forbid it altogether,” and said that this power of the legislature had never been questioned by the courts.
The late case of Weed v. Bergh, 141 Wis. 569, 124 N. W. 666, 25 L. R. A. (N. S.) 1217, upholds as valid the statute in Wisconsin limiting the business of banking to corporations.
Notwithstanding the great regard we entertain for the opinions of the highest courts in these two sister states, which have rendered the only opinions sustaining acts forbidding individuals to engage in ordinary banking, we are unable to agree with their decisions or to find anything in the cases they cite which really support the conclusions they reach. We believe that through inadvertence they have misapplied to ordinary banking one or two cases relating to insurance, and a few others bearing upon the restrictions and limitations which long ago were properly held to pertain to banks that issued notes to circulate as money, a government prerogative, when those institutions were under the control of the states.
As we distinguish these cases, Weed v. Bergh is without support, except by the decision in State v. Woodmansee, which is, in turn, unsupported. In the Wisconsin opinion are cited Meyers v. Bank, 20 Ohio, 282, which has no
In the course of a vigorous dissenting opinion in the Vrooman case, Judge Dean said: "Is the business of fire insurance deleterious to the public? If so, the legislature may absolutely prohibit it. But no one contends that it is. On the contrary, it is admitted it is to the advantage of the public. The legislature admits this by expressly authorizing artificial persons to conduct it. If such contracts be not injurious to the public, and may not be altogether prohibited, then where is the authority to prohibit one class, natural persons, from entering into them, and specifically empowering another and numerically a very much smaller class, artificial persons, to make them? In so doing the state grants a monopoly in a particular business to a particular class. * * * That in some states the legislature has restricted the business of banking to corporations has no analogy to the case in hand. The banking intended to be restricted by the New York act was issuing of notes, receiving of deposits, and discounting. In People v. Utica Ins. Co., 15 Johns. (N. Y.)
In Weed v. Bergh the court admits that " banking is a common-law right pertaining equally to every member of the community; that it cannot be prohibited; that it may be regulated as far as may be reasonably necessary to secure the public welfare and safety, but it must be true regulation, not prohibition under the guise of regulation.” (1 Morse on Banks and Banking, sec. 13.) The court based its opinion upon the conclusion that the private banker by engaging in outside business, ventures may subject his banking assets to the claims of creditors and prejudice or destroy the remedies of bank depositors, and that, when he dies, the business may have to be temporarily suspended for the purpose of probating the estate, and said: "The obtaining of a bank charter is made by the act practically a matter of course. Three adult residents of the state may at any time associate together, execute the required articles and file them, and the corporation is formed. The danger that any citizen who wishes to go into the banking business will be unable to find two other adult residents who will be willing to join in executing the written articles of incorporation is so small as to be negligible. People can do banking as before, except that they must do it by means of a corporate organization. This is regulation, not prohibition. ”
In view of the rights which the constitution guarantees specifically to the people, we are unable to concur in the
No argument or words defining or masquerading prohibition as regulation can overcome the fact that, if the act is enforced, the citizen will be prohibited from engaging in the banking business as an individual, while the constitutional guaranties protect him as an individual, and do not make an exception in favor of corporations. He may not wish to sacrifice his personality or individuality in conducting the business, nor to importune others to join him, even if assured of their ability and integrity, nor to entrust the control of his money or property to others who would constitute the majority of the board of trustees or directors of any corporation that could be formed. He may not desire to be burdened with the
We think the danger suggested, that the private banker may engage in other business and become indebted to creditors so as to endanger depositors, may be avoided easily without prohibiting the individual banker from doing business by statutes requiring him to have as much in net assets in order to open a bank as corporations are required to have, and by providing, under penalties as severe as the ones which apply to the embezzlement or improper use of funds of incorporated banks, that the capital with which the private bank is opened shall not be used for speculative purposes, or in any business other than that of the bank, until it is closed and all depositors and creditors are paid, unless the capital is reduced or withdrawn by consent of the banking board. The Indiana act requiring the net worth of the individual members of a banking firm to be equal to at least double the amount of capital paid into the bank was held valid. (State v. Richcreek, 167 Ind. 217, 77 N. E. 1085, 5 L. R. A. (N. S.) 874, 119 Am. St. Rep. 491.)
By far the heaviest failures in this state have been of incorporated banks, and, as the law existed before amendment, there was not as much liability on the part of the officers for receiving deposits on the eve of a closing of these banks as would have attached to the receipt of deposits by private bankers about to fail. (Ex Parte Rickey, 31 Nev. 83.)
Nor do we see that any great danger is likely to result to the public or the patrons of the bank from the death of the private banker if the bank, under proper safeguards provided by the legislature, and the supervision of the bank examiner and the banking board, has been opened and operated on a sound basis and kept solvent, so that, upon the death of the banker, the business may be continued or settled by surviving partners or by executors, special administrators, trustees, or receivers acting under the supervision of the court. With proper protection afforded the depositors and the public by statutory
In State v. Scougal, 3 S. D. 55, 51 N. W. 858, 15 L. R. A. 477, 44 Am. St. Rep. 756, the most carefully considered of the three cases relating to the right of the legislature to restrict ordinary banking to corporations, the court held that the individual could not be prohibited from engaging in the business, and that the South Dakota act infringed three provisions of her constitution, two of which are similar to sections 1 and 8 in our organic act. In the opinion it is said: “But, under this power, it is not competent for the state to prohibit the citizen from carrying on any trade, occupation, or business that is not offensive to the community, or injurious to society. The business may be regulated, but not prohibited. Mr. Tiedeman in his excellent work on the Limitations of Police Power says: ‘In order to prohibit the prosecution of the trade altogether, the injury to the public which furnishes the justification for such a law must proceed from the inherent character of the business. Where it is possible to conduct the business without harm to the public, all sorts of police regulations may be instituted which may tend to suppress the evil. License may be required, the most rigid system of police regulations may be established, and heavy penalties may be imposed for the infraction of the law; but, if the business is not harmful, the prosecution of it cannot rightfully be prohibited to one who will conduct the business in a proper and circumspect manner. Such a one would be deprived of his liberty without due process of law.’ (Tiedeman, Pol. Powers, p. 290.) Again the same author says: Tt has been demonstrated and satisfactorily explained in its application to a sufficient number of parallel and similar cases, in order to lay it down as an invariable rule, that no trade can be subjected to police regulation of any kind unless its prosecution involves some harm or in j ury to the public or third persons, and in any case the regulation cannot extend beyond the evil which is to be restrained. It has also been maintained, and I think
In Alabama a statute which made it a misdemeanor for an individual banker to discount negotiable paper at a higher rate of interest than 8 per cent was declared to be unconstitutional because this restriction could not be placed upon the individual banker when it did not apply to incorporated banks. (Carter v. Coleman, 84 Ala. 256, 4 South. 151; Youngblood v. Birmingham Trust Co., 95 Ala. 521, 12 South. 579, 20 L. R. A. 58, 36 Am. St. Rep. 245, 10 Am. & Eng. Ann. Cas. 904, note.)
In the carefully prepared note in 5 L. R. A. (N. S.) 875, it is said: "Thus in Bank of Augusta v. Earle, 13 Pet. 519, 596, 10 L. Ed. 274, 311, the court said that it was very clear that at common law the right of banking in all its ramifications' belongs to individual citizens, and may be exercised by them at their pleasure. * * * The statement in the opinion in State v. Richcreek that it is unquestionably settled that the sovereign authority of the state may regulate and restrain the right of banking is also true, if 'restrain’ be understood not to include 'prohibit. ’ The question as to the power of a state to prohibit the business of banking by individuals, and to confine such right to corporations exclusively — in other words, to convert what is conceded at common law to be a natural right into a franchise — cannot be regarded as settled by the authorities, except as to the particular banking privilege of issuing bills to circulate as money. ”
In Ex Parte Boyce, 27 Nev. 329, 330, 65 L. R. A. 47, we stated: "The right to acquire and hold property guaranteed by our constitution is one of the most essential for the existence and happiness of man, and for our purposes here we may consider it to be the cornerstone in the temple of our liberties, and that it 'implies and includes the right to labor. * * * Broadly speaking, the right to acquire and hold property, which presupposes the one to labor at all ordinary pursuits, is subordinate to this
In Corfield v. Coryell, 4 Wash. C. C. 380, Fed. Cas. No. 3,230, Justice Washington classed among the fundamental privileges of the citizen "the enjoyment of life and liberty, with the right to acquire and possess property of every kind, and to pursue and obtain happiness and safety, subject, nevertheless, to such restraints as the government may justly prescribe for the general good of the whole.”
In the Slaughterhouse Cases, 83 U. S. 109, 21 L. Ed. 394, Justice Field said: "This equality of right, with exemption from all disparaging and partial enactments, in the lawful pursuits of life, throughout the whole country, is the distinguishing privilege of citizens of the United States. To them everywhere all pursuits, all professions, all avocations are open without other restriction than such as are imposed equally upon all others of the same age, sex, and condition. The state may prescribe such regulations for every pursuit and calling of life as will promote the public health, secure. the good order, and advance the general prosperity of society, but, when once prescribed, the pursuit or calling must be free to be followed by every citizen who is within the conditions designated, and will conform to the regulations.” In reference to monopolies he said: "All such grants relating to any known trade or manufacture have been held by all the judges of England, whenever they have come up for consideration, to be void at common law as destroying the freedom of trade, discouraging labor and industry, restraining persons from getting an honest livelihood, and putting it into the power of the grantees to enhance the price of commodities. ”
In the same cases Justice Bradley said: "And in my judgment the right of any citizen to follow whatever lawful employment he chooses to adopt (submitting himself to all lawful regulations) is one of his most valuable rights, and one which the legislature of a state cannot
In Lawton v. Steele, 152 U. S. 136, 14 Sup. Ct. 501, 38 L. Ed. 385, the court said: "The legislature may not, under the guise of protecting the public interests, arbitrarily interfere with private business,-or impose unusual and unnecessary restrictions upon lawful occupations. ”
In Lochner v. NewYork, 198 U. S. 45, 25 Sup. Ct. 539, 49 L. Ed. 937 (Ex Parte Kair, 28 Nev. 426), the Supreme Court of the United States held that an act limiting employment in bakeries to sixty hours a week and ten hours a day was an arbitrary interference with the freedom of the individual to contract and to work longer as guaranteed by the fourteenth amendment to the federal constitution. It is said in the opinion: “This interference on the part of the legislatures of the several states with the ordinary trades and occupations of the people seems to be on the increase. In the Supreme Court of New York, in the case of People v. Beattie, Appellate Division, First Department, decided in 1904 (96 App. Div. 383, 89 N. Y. Supp. 193), a statute regulating the trade of horseshoeing, and requiring the person practicing such trade to be examined, and to obtain a certificate from a board of examiners and file the same with the clerk of the county wherein the person proposes to practice such trade, was held invalid, as an arbitrary interference with personal liberty and private property without due process of law. The attempt was made unsuccessfully to justify it as a health law. The same kind of a statute was held invalid (Re Aubry) by the Supreme Court of Washington in December, 1904, 36 Wash. 308, 78 Pac. 900, 104 Am. St. Rep. 952. The court held that
If the legislature of the State of New York cannot prohibit individuals from following the baking business more than ten hours per-day, we are unable to perceive how the legislature in this state can entirely prohibit individuals from following the banking business. Although the latter vocation is more importantly connected with the arteries of trade, both are beneficial and for the public benefit, as well as for the profit of the persons who engage in these vocations, and both are subject to all necessary regulations. In the Lochner case the supreme court said that the provisions in the act for the inspection of premises, for separate washrooms, height of ceilings, for cleanliness, and for the health of. the employees were reasonable and valid. Some of the states have laws against the use of alum and other injurious ingredients in baking powders. Because some unworthy or selfish persons may, if not regulated, conduct the baking or the banking business to the detriment of the public in order to enhance their own profits, is no sufficient reason for
In section 61 of the banking act it is declared that " the holding of any section or part thereof to be void or ineffective for any cause shall not be deemed to affect any other section or part thereof.” From this it would appear that the legislature was in doubt as to the validity of some of the provisions. It is conceded that the banking act of 1907 was repealed. As the present act provides for the issuance of licenses to transact banking to corporations only, and nowhere directs the state banking board to issue a license to an individual, there is no authority for the issuance of any license to petitioner. Until provision is made by the legislature, he may conduct the banking business without a license, and without being liable to the penalties sought to be imposed by the act upon individuals for engaging in that business.
The petition for the writ is denied.
Concurrence Opinion
concurring:
I concur in the judgment. Upon the question of the power of the legislature, as a police regulation merely, to restrict the business of banking to corporations, I express no opinion. Whether we regard the provisions of the act regulating the business of banking which restrict such business to corporations as unconstitutional or not, nevertheless there is no duty imposed by law upon the banking board to issue to any person as an individual a license as prayed for in the petition.