219 U.S. 104 (1911), 71, Noble State Bank v. Haskell

Docket NºNo. 71
Citation219 U.S. 104, 31 S.Ct. 186, 55 L.Ed. 112
Party NameNoble State Bank v. Haskell
Case DateJanuary 03, 1911
CourtUnited States Supreme Court

Page 104

219 U.S. 104 (1911)

31 S.Ct. 186, 55 L.Ed. 112

Noble State Bank



No. 71

United States Supreme Court

January 3, 1911

Argued December 7, 8, 1910




The charter of a corporation which is subject to the usual reserved powers to alter or repeal is not impaired unless the subsequent statute deprives it of property without due process of law.

The broad words of the Fourteenth Amendment are not to be pushed to a drily logical extreme, and the courts will be slow to strike down as unconstitutional legislation of the states enacted under the police power.

Where the mutual advantage is a sufficient compensation, an ulterior public advantage may justify a comparatively insignificant taking of private property for what in its immediate purpose is a private use. The police power extends to all the great public needs, Canfield v. United States, 167 U.S. 518, and includes the enforcement of commercial

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conditions such as the protection of bank deposits and checks drawn against them by compelling cooperation so as to prevent failure and panic.

The dividing line between what is and what is not constitutional under the police power of the state is pricked out by gradual approach and contact of decisions on opposing sides, and while the use of public credit to aid individuals on a large scale is unconstitutional, a statute compelling banks to contribute to a guarantee fund to protect deposits, such as that of Oklahoma under consideration in this case, is constitutional.

The Fourteenth Amendment does not prohibit states from forbidding a man to do things simply because he might do them at common law, and so held that, where public interests so demand, that Amendment does not prohibit a state's placing the banking business under legislative control and prohibiting it except under prescribed conditions.

The Acts of December 17, 1907, and March 11, 1909, of Oklahoma, subjecting state banks to assessments for a Depositors' Guaranty Fund are within the police power of the state, and do not deprive banks assessed of their property without due process of law or deny to them the equal protection of the law, nor do they impair the obligation of the charter contracts.

22 Okl. 48 affirmed.

The facts, which involve the constitutionality of the Oklahoma Bank Depositors' Guaranty Fund Acts, are stated in the opinion.

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HOLMES, J., lead opinion

MR. JUSTICE HOLMES delivered the opinion of the Court.

This is a proceeding against the Governor of the State of Oklahoma and other officials who constitute the State Banking Board to prevent them from levying and collecting an assessment from the plaintiff under an act approved December 17, 1907. This act creates the Board and directs it to levy upon every bank existing under the laws of the state an assessment of one percent of the bank's average daily deposits, with certain deductions, for the purpose of creating a Depositors' Guaranty Fund. There are provisos for keeping up the fund, and by an act passed March 11, 1909, since the suit was begun, the assessment is to be five percent. The purpose of the fund is shown by its name. It is to secure the full repayment of deposits. When a bank becomes insolvent and goes into the hands of the Bank Commissioner, if its cash immediately available is not enough to pay depositors in full, the Banking Board is to draw from the Depositors' Guaranty Fund (and from additional assessments if required) the amount needed to make up the deficiency. A lien is reserved upon the assets of the failing bank to make good the sum thus taken from the fund. The plaintiff says that it is solvent and does not want the help of the guaranty fund, and that it cannot be called upon to contribute toward securing or paying the depositors in other banks, consistently with Article I, § 10, and the Fourteenth Amendment of the Constitution of the United States. The petition was dismissed on demurrer by the supreme court of the state. 22 Okl. 48.

The reference to Article I, § 10, does not strengthen the

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plaintiff's bill. The only contract that it relies upon is its charter. That is subject to alteration or repeal, as usual, so that the obligation hardly could be said to be impaired by the Act of 1907 before us, unless that statute deprives the plaintiff of liberty or property without due process of law. See Sherman v. Smith, 1 Black 587. Whether it does so or not is the only question in the case.

In answering that question, we must be cautious about pressing the broad words of the Fourteenth Amendment to a drily logical extreme. Many laws which it would be vain to...

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