56 N.H. 466 | N.H. | 1876
Lead Opinion
FROM HILLSBOROUGH CIRCUIT COURT. This case raises the question whether or not the tenth and eleventh sections of the act passed at the June session of the legislature, 1874, entitled "An act for the further protection of savings banks and savings bank depositors," are constitutional. The sections in question are as follows: Sec. 10, chap. 71. "Whenever the assets of any savings bank shall be reduced in value below the total amount of deposits, any judge of the supreme or superior court, in connection with the bank commissioners, shall, on the written petition of a majority of the trustees or directors, reduce the deposit account of such depositor so as to divide such loss equitably amongst the depositors; provided, however, if the bank shall afterwards realize from the assets a greater amount than that fixed upon by the judge and bank commissioners, the amount so realized shall be equitably divided *469 and credited to the account of the depositors which had been thus reduced, but to the extent only of such reduction." Sec. 11. "Whenever it appears to the bank commissioners that the assets of any savings bank are reduced below ninety per cent. of the deposits, it shall be the duty of said commissioners, in connection with a judge of the supreme or superior court, of their own motion, to proceed as provided in section ten."
It is important, in the first place, to see how the law stood before the act of 1874 was passed.
According to ch. 152 of the Gen. Stats., if it is judged by the bank commissioners to be necessary for the public safety that any bank should not continue to transact business, they shall represent the facts by petition to some justice of the supreme court. Such justice shall issue an injunction prohibiting, so far as may be thought necessary, the transaction of any business by said bank, and the commissioners shall cause the same to be duly served. Such injunction may be modified by said justice; and the court, upon petition and notice to the bank commissioners, may dissolve, modify, continue, or extend the same, as equity may require. The bank commissioners may apply to the court, or a justice thereof, to appoint an assignee of the property and effects of such bank, and such appointment may be made by the court.
Such assignee shall take possession of all the estate, property, rights, and credits of the bank, and may do any act necessary to convert such assets into money. Upon application the court may issue all injunction restraining all proceedings at law by any creditor against such bank, and may order notice to be published requiring all creditors to present and prove their claims against such bank, and, in default to be precluded from all benefit of the assets of such bank.
The proceeds of the property shall be holden (1) to pay the expenses of the assignment; (2) to pay all bills issued by the bank pro rata; (3) to pay in equal proportions all debts, claims, and obligations owing by such bank; (4) the remainder to be divided among the stockholders according to their interests.
The plaintiff contends that the act of 1874 is void, because (1) it impairs the obligations of contracts, and is in conflict with art. 1, sec. 10, of the United States constitution; (2) because it is retrospective in its operation, and is therefore repugnant to the 23d article of the New Hampshire bill of rights; (3) because there was a general United States bankrupt law in force when the law of 1874 was passed.
It is very well settled doctrine that courts will not declare laws unconstitutional unless they are clearly so. 1 Cow. 550; 19 John. 58; 2 Pa. St. 184; Wheat. 270; 6 Cranch 87; 2 Pet. 522; 3 Dall. 399; 4 Dall. 14; 1 Cranch 137;
I. Does the law of 1874 impair the obligation of the contract which the plaintiff made with the bank, and is it therefore repugnant to the constitution of the United states? What was the contract?
The second section of the act of 1863, incorporating the bank, provides *470 that "said corporation shall be located in the city of Nashua; shall be capable of receiving, from any person or persons disposed to enjoy the advantages of said savings bank, any deposit or deposits of money, and to use, manage, and improve the same for the benefit and best advantage of the person or persons by and for whom the same shall be deposited respectively; and the net income and profits of all deposits of money received by said corporation shall be paid out and distributed in just proportions among the several persons by and for whom the said deposits have been made." When this provision of the bank's charter is compared with the law as laid down in the General Statutes, it seems to me to be too clear for argument, that, by the contract made with the bank, the plaintiff was to receive his just proportion of the profits of the bank, and bear his just proportion of the losses. The pleadings admit that the assets of the bank are not sufficient to pay the depositors in full. The contract in this case is what the law, as it existed at the time the contract was made, implies from the acts of the parties, and its obligation consists in its binding force upon the parties. How can it be said that the law implies that other depositors, standing in precisely the same relations to the bank as the plaintiff, must hear more than their share of the losses? The law of 1874 provides a new way of getting at the just share of such depositor in the losses of the bank. It would seem to be less cumbersome than the old law. It is purely a law affecting the remedy; and it is not easy to see how the depositors of the bank are injured by it. There is great weight of authority to the point that a legislature may "vary the nature and extent of the remedy, so always that some substantial remedy be in fact left."
Morse v. Goold, 1 Kernan 281; Stocking v. Hunt, 3 Denio 274; Van Rensselaer v. Snyder, 3 Kernan 299; Ogden v. Saunders, 12 Wheat. 213; Mason v. Haile 12 Wheat. 370; Bumgardner v. Circuit Court,
It will be noticed that section ten of the act of 1874 does not relieve the bank from the claim of the depositor upon payment of his reduced account.
II. Are the tenth and eleventh sections of the act of 1874 repugnant to the twenty-third article of the New Hampshire bill of rights?
That article is as follows: "Retrospective laws are highly injurious, oppressive, and unjust. No such laws, therefore, should be made, either for the decision of civil causes, or the punishment of offences."
The last case in our reports, which interprets this article of the *471
constitution is Kent v. Gray,
Rich v. Flanders,
In Kennett's Petition,
In Willard v. Harvey,
"The courts, therefore, have everywhere recognized a distinction between statutes affecting rights, and those affecting remedies only."
Pickering v. Pickering,
In Dickinson v. Lovell,
"In cases where the legislature have unquestionable power under the constitution to take away or substantially modify the remedy in a pending suit, it is generally impolitic and unjust to exercise the power."
It seems to be conceded here by Judge PERLEY, who delivered the opinion, that there are cases in which the legislature have the power to take away or substantially modify the remedy.
Colony v. Dublin,
Dunbarton v. Franklin,
Roby v. West,
In Dow v. Norris it is held, that, where a statute gives a penalty incurred under it to an individual, the right of the individual cannot be taken away by a repeal of the statute. In this case it is also held, "That a law operating retrospectively upon an existing cause of action, when no suit is pending, is as much to be deemed a retrospective law for the decision of a cause, and as much within the prohibition of this clause in the constitution, as a law establishing a new rule of decision for an existing action." It will be noticed that the language is, "operating retrospectively upon an existing cause of action." I think there can be no doubt about the soundness of the general doctrine here laid down; and it seems to me to be equally clear, from the authorities in this state, that, where the law is one affecting the remedy alone, the question whether or not a suit has been instituted may touch the very pith and marrow of the controversy; for upon the answer to that may depend the answer to the further question, whether or not the law operates injuriously, oppressively, and unjustly. The bringing of a suit may introduce into the controversy questions in regard to vested rights, which would not otherwise arise.
In Clark v. Clark,
But, in the opinion, PARKER, C. J., says, — "Of course it is not intended to deny the right of the legislature to vary the mode of enforcing a remedy, or to provide for the more effectual security of existing rights. * * * All retrospective laws are not within the prohibition, notwithstanding the general terms of the first part of the article. * * * That a retrospective law operates oppressively and unjustly, however, tends to show that it is within the condemnation of the constitution." And he quotes from Woart v. Winnick,
In Society v. Wheeler, 2 Gall. 105, Judge STORY holds the act of 1805 unconstitutional, if applied to a possession existing and improvements made prior to its passage. The act provided that when there had been peaceable possession and actual improvement of land, by virtue of a supposed legal title under a bona, fide purchase, for more than six years before suit brought for the recovery of the land, the tenant should be entitled to the value of his improvements. The decision was, that the statute could apply only to cases where there had been possession for six years after the passage of the statute; — and Judge STORY says, — "Upon principle, every statute which takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability, in respect to transactions or considerations already passed, must be deemed retrospective." This language must, of course, be understood with reference to the facts in the mind of the court. Giving it the broadest possible interpretation, it might perhaps include a law affecting the remedy alone, and not operating injuriously, oppressively, or unjustly. But I think it should not be so interpreted.
In Merrill v. Sherburne,
The foregoing are the New Hampshire cases relied on by the plaintiff. A review of them seems to lead to this question: Do the 10th and 11th sections of the act of 1874 operate injuriously, oppressively, or unjustly upon the plaintiff? The law was passed before his suit was instituted, but after his deposits were made. He complains that his attachment is defeated as to one third of his claim; but, under the law as it stood when the deposits were made, his whole suit might be defeated, and his entire claim remain unpaid until a receiver appointed by the court should pay him a dividend, if a dividend should be declared. Under the new law, he gets two thirds of his claim without delay, and holds unimpaired the right to claim his pro rata share of the balance, if the bank realize from the assets a greater amount than that fixed upon by the judge and commissioners. If there is any injury, oppression, or injustice here, I am not able to see it.
In the plaintiff's brief, it is suggested that "This law of 1874 touches the `heart blood' of this plaintiff, because, if there had been an injunction, the defendants would have been obliged to settle the *475 plaintiff's costs as well as his debt." It would seem to be clear enough, that, if the plaintiff had accepted the amount confessed, he would have taken judgment for his costs up to the time of the confession. But now, if he suffer in the matter of costs, his tribulation will be caused not so much by the law of 1874, as by his own persistent disregard of the law.
III. Is the law of 1874 inoperative, because when enacted there was a United states bankrupt law in force?
"Whenever a corporation, created by the laws of any state, whose business is carried on wholly within the state creating the same, and also any insurance company so created, whether all its business shall be carried on in such state or not, has had proceedings duly commenced against such corporation or company before the courts of such state, for the purpose of winding up the affairs of such corporation or company, and dividing its assets ratably among its creditors, and lawfully among those entitled thereto, prior to proceedings having been commenced against such corporation or company under the bankrupt laws of the United States, any order made or that shall be made by such court, agreeably to the state law, for the ratable distribution or payment of any dividend of assets to the creditors of such corporation or company while such state court shall remain actually or constructively in possession or control of the assets of such corporation or company, shall be deemed valid, notwithstanding proceedings in bankruptcy may have been commenced and be pending against such corporation or company." Rev. Stats. U.S., tit. 61, ch. 6, sec. 5123, p. 995.
There is no doubt that the general rule is well settled, that, as soon as congress has exercised its power of making a general bankrupt law, and it has gone into operation, the state insolvent laws are suspended. Chamberlin v. Perkins,
I think the condition of the defendant bank is such as to place it among the class of cases excepted out of the operation of the bankrupt law. The demurrer must therefore be overruled.
Concurrence Opinion
The question in this case arises upon a demurrer to the plea. The plea confesses the plaintiff's action to the amount of $655.22, and pleads in bar to the residue of the plaintiff's claim that proceedings had been had under the law of June, 1874, entitled "An act for the further protection of savings banks and savings bank depositors;" and that, on April 9, A. D. 1875, the bank commissioners, in conjunction with a justice of the superior court, had examined into the affairs of the bank, and found that one third of its deposits had been lost, and that the plaintiff's just proportion of the remaining two thirds amounted to the above mentioned sum of $655.22, and no more. The plea amounts, I think, to a sufficient allegation that the whole present value of the plaintiff's share of the deposits in the bank amounts to that sum, and no more. *476
This brings us directly to the question whether a depositor in a savings bank is entitled, by getting ahead in what used to be called the race of diligence, to pay himself his whole demand out of the funds of the bank at the expense of his co-depositors. The question has only to be asked, to be answered in the negative.
In the case of Coite v. Soc. for Savings,
In the case of Bunnell v. The Collinsville Saving Soc.,
The action was brought after the plaintiff had received his seventy-six per cent., for the purpose of recovering the remaining twenty-four per cent. It was held that he could not recover. PARK, J., arguendo, says, — "Had this institution wound up its affairs in consequence of this loss, the plaintiff would not have received any portion of the sum he now seeks to recover. * * * He knew, when he deposited his money, that he was placing it at hazard. He put it into the hands of the defendant to be used by it substantially as his agent for his benefit, and in the use so much of it as has been lost. What ground has he to complain?
"The assets this institution now has belong substantially to the present depositors. How can he obtain his loss? Shall he be paid out of their money? They have an equal right to be paid out of his. Substantially, he has lost the sum he now seeks to recover by his own act, through the instrumentality of his agent, and he has no cause to complain."
In the present case, it stands admitted on the pleadings that the defendants have confessed the plaintiff action for the whole amount of his share of the present value of the assets of the bank. There can be no hardship in holding him to this, because, by the provisions of the statute, if anything more should be realized out of the assets of the bank, he is to have his share.
This view of the case entirely avoids all question as to the constitutionality of the statute under consideration, because there never was and contract on the part of this bank to pay any more than the *477 plaintiff's share what should be found to be the actual value of the deposits.
The charter of the bank, as well as the general law of New Hampshire, provides that the legislature may at any time amend, alter, or repeal the charter, but always so as not to affect any existing rights or liabilities. The charter of this bank must be taken, therefore, to be now amended by the provisions of the act.
It should be remembered that this case comes up on a demurrer to a plea by which, as I think, it is substantially admitted that the plaintiff's share of the assets of the bank amounts to no more than the sum confessed, so that the question is distinctly raised whether the plaintiff can recover more than his share of the assets of the bank.
From the charter of the bank, taken in connection with the general law — Gen. Stats., ch. 152, and Comp. Stats., ch. 148 — I infer that the depositors are entitled to their shares of the profits and bound to bear their shares of the losses according to the amount of their deposits, and each depositor is entitled to his share of the assets of the bank. I do not think there is any contract, express or implied, on the part of the bank, to pay any more.
With this view of the matter, I confess I do not see any room for the intervention of a bankrupt law at all, if there are no claims against the bank excepting those of the depositors. How can it be said, in any just sense, that the bank, under such circumstances, is owing debts which it cannot pay? Nor can I see of what use a certificate of discharge would be. The depositors are entitled to the aid of the statute, and, in the absence of statute provision, to the aid of chancery, to effect a fair distribution of the assets.
If there were anything conclusive as to the final result in the action under the statute of 1874, I should be extremely doubtful of its constitutionality, in so far as it attempted to provide for a permanent adjudication without notice to all the parties who are entitled to be heard.
The statute, however, does not, as I understand it, propose any final result, or deprive the depositors of the right to a full hearing before the proper tribunal for the purpose of determining the exact value of each depositor's share. There is nothing in the act under consideration, which I can see, which purports to interfere with or prevent the statutory provisions for winding up such banks whenever the bank commissioners think it expedient. The statute furnishes a very convenient mode by which the bank can be put in condition to go on if the depositors acquiesce; but it does not, that I can see, present the plaintiff, or any other depositor, from applying to the commissioners, and putting in motion the statutory provisions for winding up the bank and dividing the deposits.
Neither does it, in any way that I can see, interfere with the operation of the bankrupt law, if the bank should be so situated as to come within its provisions, — i. e., if it should be found to be owing debts which it could not pay, — to which the bankrupt law could apply. I do not now see how the claims of the depositors to their shares of the *478 capital stock or deposits can be considered such a debt; but that need not be determined here.
Concurrence Opinion
I am of the same opinion. The object of the statute of 1874 clearly was, to provide a simple and inexpensive mode by which the rights of the depositors inter sese, as they exist at common law under the charter of the bank, as well as the rights and obligations of the bank, may be protected and enforced. I cannot see that it does anything more than a court of equity would be bound to do, upon proper application, without any statute, — namely, secure a pro rata division, among its equitable owners, of a common fund, which has been placed in the hands of a common agent, to be used by such agent for the common purpose of making gain and profit for the principals. It seems to me that this view, which has been fully presented by the chief-justice as well as by my brother RAND, disposes of the whole case, and that we need go no further.
Demurrer overruled.