103 Wis. 43 | Wis. | 1899
In settling the affairs of the State Trust & Sayings Bank, a banking corporation organized under the laws of Wisconsin, the receiver was adjudged to give preference to the claim of the city of Superior, which was a creditor for a deposit account to a considerable share of the total indebtedness. The Northwestern National Bank of Superior, also a large creditor, appeals.
The only question presented is whether the provisions of sec. 3245, Stats. 1898, in directing a preference to the United States, the state, and any county, city, town, or village therein, out of the assets of an insolvent corporation in process of being closed up under the statutes, is, as. applied to banks, constitutional.
Two rules have become general as a guide when the decision of the legislature as to its own powers is reviewed by the judiciary: Eirst. That, while the Congress has only such powers as are affirmatively given to it, the legislature of a state has all powers of legislation from which it is not prohibited by express words of the constitution, or by necessary implication therefrom. 6 Am. & Eng. Ency. of Law (2d ed.), S33, 934; Bushnell v. Beloit, 10 Wis. 195, 221. Second. The unconstitutionality of a statute must be clear and manifest before a court should declare it, and, if there be any reasonable doubt as to its constitutionality, it should be upheld. 6 Am. & Eng. Ency. of Law (2d ed.), 1085; 3 Am. & Eng.. Ency. of Law (1st ed.), 673 et seq.; Dickson v. State, 1 Wis. 122, 126; State ex rel. Grundt v. Abert, 32 Wis. 403. Applying these rules, and keeping in mind that a co-ordinate branch of the government, much better constituted to understand and effectuate the will of the people, has deliberately enacted the statute in question, that it has passed substantially without change through two revisions of the general statute law, and that for more than twenty-five years full faith has been accorded it and rights of great magnitude, both public and private, have been rested upon it without
The only express limitation upon the power of the legislature over banking corporations, as distinguished from others, is found in Const, art. XI, sec. 4, which declares that the legislature “shall not have power to create, authorize or incorporate, by any general or special law, any bank, or banking power or privilege whatever, except as provided in this article.” Sec. 5 provides that the legislature may submit to the people the question of “bank” or “no bank; ” and, in the event of an affirmative vote, it shall have power to grant bank charters, and to pass a general banking law, with such restrictions and under such regulations as it may deem expedient for the security of the bill holders; provided, that no such grant or law. shall have any force or effect until the same shall have been submitted to a vote of the electors of the state and approved. After a preliminary affirmative vote, the banking law (ch. 479, Laws of 1852) was enacted by the legislature and submitted to the people, and by them adopted. That act, among other things, contained sec. 48: “This act may be amended by any future legislature, but no amendment thereto shall take effect or be in force until it shall have been submitted to a vote of the electors of the state,” etc.
It will thus be seen that the only express, prohibitions upon the legislature are against “ creating, authorizing or incorporating any bank, or banking power or privilege, or any institution or corporation having any banking power or privilege; ” and, secondly, the amending of the banking act adopted in 1852.
In State ex rel. Reedsburg Bank v. Hastings, 12 Wis. 47, it was said (page 51): “ This was a substantial reservation to
At a very early day it was pointed out and distinctly held that the constitutional restriction now urged was not universal, and did not preclude the legislature from passing some general laws which might affect banks in common with other individuals or corporations. In Rock River Bank v. Sherwood, 10 Wis. 230, the general legislation of 1856, providing, as a penalty for the taking of usury, the forfeiture of all interest, was held applicable to a state bank and within the constitutional power of the legislature, for the reason that the banking act made no provision with reference to penalty, although it did fix the rate of interest to be charged by banks. That case was folloAved and supplemented by Brower v. Haight, 18 Wis. 102, wherein the penalty of the then existing usury law of 1859, which forfeited the entire debt, was applied. The objection Avas distinctly made, and based on State ex rel. Reedsburg Bank v. Hastings, supra, that such legislation could not be constitutional, as applied to banks, but was overruled; the court, by Paine, J., saying: “Here there is no question about invalidating or affecting any provision of the banking law. The respondent’s counsel is undoubtedly right in assuming, as a necessary consequence of the decision in the Hashings Gase, that a mere act of the legislature is not capable of changing or amending the banking laAv, and we have so decided in Van Steenwyck v. Sackett, 17 Wis. 645. But there is no such question presented here, and it by no means follows that, because that law cannot be amended by the legislature, the banks existing under
In Rockwell v. Elkhorn Bank, 13 Wis. 653, it was held that the general law, statute or common, regulated the dealings of banks with commercial paper and making contracts with reference thereto, and that the banking act shall be deemed restricted in its application to the particular classes of contracts specified therein, and would not be construed as extending beyond its exact terms.
In Rusk v. Van Norstrand, 21 Wis. 161, Mr. Justice Cole,
In Van Steenwyck v. Sackett, 17 Wis. 645, above referred to by Mr. Justice Paine, a law of 1855, which directly amended the banking act by requiring a warrant of attorney to be attached to the stockholder’s bond required by that act, was held unconstitutional as a direct amendment. The court said: “ We do not say that it is impossible for the legislature to impose any new duties on banking corporations, in common with others, as incidental to the exercise of other acknowledged powers of legislation. But, if such legislation were sustained, it would be upon the' ground that it was not an amendment of the banking law, but a proper exercise of power outside of the scope and object of that, and by which its provisions were in no way affected.”
In Porter v. State, 46 Wis. 315, 319, the court, speaking by Ryan, C. J., after stating the reasons for the constitutional provision, says: “ As might have been expected, in the circumstances, this law contains many safeguards to protect the paper currency which it authorizes, and no con
In Garden City B. & T. Co. v. Geilfuss, 86 Wis. 612, it was held that banking corporations, like all others, were governed by the legislation on the subject of voluntary assignments, all of which legislation was subsequent to 1852. And in Slack v. W. W. Mat. Bank, post, p. 57, the general law as to preferences by insolvent corporations is held applicable to banks.
In In re Koetting, 90 Wis. 166, the statute prohibiting insolvent banks from receiving deposits, and imposing penalty therefor, was held valid and within the power of the legislature. The constitutional provisions were reviewed, together with the decisions on the subject, and the law summed up thus: “ First, the general banking act cannot be materially amended, except by a law submitted to and approved by the people; second, banks organized under that law are subject to general statutes and rules of law which apply to them alike with other corporations and persons, provided there be no impairment of the powers and privileges given them by the banking law.” The court also said: “There were in existence, at the time of the enactment of the banking law, plain and clear provisions for the summary winding up of the business of any banking or insurance corporation, as soon as it became insolvent, either upon application of the attorney general or of any creditor or stockholder. R. S. 1849, ch. 114, secs. 9-12 et seq.; R. S. 1818, sec. 3218 et seq. No question has ever been raised as to the validity of these provisions, nor is it perceived how any such question could be raised. They have been acted upon and enforced in numerous cases in this court, which it is unnecessary
It thus appears that the court has uniformly taken the view, which must result from a thoughtful examination of the act itself, that the banking act was not an attempt to codify a'll laws which should in any way affect, control, or regulate a banking corporation. It is apparent that the scheme of that act was to provide for the creation of corporations with certain peculiar powers, and to enact a body of special provisions required for some of the peculiar and distinguishing business of such corporations and of individuals similarly engaged, leaving the corporation so created, as a, member of the business and commercial community, to be regulated by the laws governing other individuals and corporations therein, except so far as the very act itself had defined the differences. Mr. Justice Paine, as quoted above, has pointed to the necessity of this view in certain illustrative cases. Many others might be suggested. As a legal entity, the bank, corporate or individual, had the power to own and transfer real estate with certain limitations, and immediately became amenable to the general laws governing registry of conveyances and to the common or statute law governing real-estate rights. As an owner and dealer in commercial paper, it fell at once under the law merchant and under statutes regulating rights in such property. Rockwell v Elkhorn Bank, 13 Wis. 653. In the nature of things, such a corporation might incur debts and must be enabled
A study of the banking act discloses that its regulations are confined to the creation of the corporation with banking powers and to the regulation of the conduct of its business while running as a bank. Indeed, as pointed out by Ryam, C. J., in Porter v. State, 46 Wis. 315, apparently, the scope of the banking act hardly exceeds the field of regulating the issue of currency and protecting the bill holders, which is the purpose designated for it by the words of the constitution, though such limitation of its scope we do not here decide. There is not an intimation from beginning to the end of that act of any attempt or purpose to regulate either the conduct of, or the remedies against, a banking
On the other hand, at the time the act was passed we had ch. 114, R. S. 1849, devoted largely to the methods of procedure and distribution of assets in the event of insolvency of corporations, intended to include banking corporations, for two or three of its sections apply to them expressly and others inferentially; and in that chapter have been cbn-tained all of the various provisions controlling proceedings to administer the affairs of insolvent banking corporations, in common with others, since their first existence in Wisconsin.
From these circumstances, it seems clear that the people, when exercising their sovereign discretion as to the scope of a general banking act, had decided that the methods of procedure in case of insolvency, the remedies of creditors, and the rights of the latter in the assets had been deemed a subject upon which banking corporations and individuals
It is argued that because, at the time the banking act was adopted, sec. 18, ch. 114, R. S. 1849, not a part of the banking act nor referred to therein, provided for a distribution of the assets of insolvent corporations to creditors “ in the order and in the proportions prescribed in a voluntary dissolution of a corporation,” and that at that time there was no order prescribed by statute, so that a ratable distribution was held, on equitable grounds, to be the rule,- — therefore that rule must be deemed to have been adopted into the banking act, so that it could not thereafter be changed. Such contention is negatived: First, by the obvious purpose, already pointed out, of leaving banking corporations to stand with others, under the general law, as to their winding up; second, by the intrinsic evidence of the act itself which specifically named that part of the statute law which it was proposed to adopt into it (vide sec. 19, where the “powers and immunities incident to corporations, as provided Toy chapter 5J± of title 13 of the revised statutes,” are conferred); and, thirdly, such construction, applied to the banking act generally, would necessitate the view that all rules of common law or statute existing in 1852 had been so adopted by the people into the banking act that no legislative change could thereafter be made therein and affect banks or bankers. If we say that the general rule of equity, in absence of statute, that assets ought to be ratably divided among creditors, was
It is further urged that we must read in the banking act a general purpose or scheme that the-creditors of a banking corporation are to share equally in its assets. No support for such inference is presented, save that at the time of its enactment creditors of all corporations shared equally. The consideration is overlooked that the banking act applied as
¥e conclude, therefore, that neither the express words of the constitution, nor any necessary implication therefrom or from the words of the banking act, prohibit the legislature from regulating the administration of insolvent banking corporations, in common with others, and the distribution of their assets. The respondent city was and is entitled to the priority accorded it by-the judgment.
By the Court.— Judgment affirmed.