City National Bank of Austin v. Falkner

• Decision Date: 01 May 1968
• Docket Number: No. 11599,11599
• Parties: CITY NATIONAL BANK OF AUSTIN, Appellant, v. J. M. FALKNER et al., Appellees. . Austin
• Court: Texas Court of Appeals

Page 429

428 S.W.2d 429

CITY NATIONAL BANK OF AUSTIN, Appellant, v. J. M. FALKNER et al., Appellees.

No. 11599.

Court of Civil Appeals of Texas.

Austin.

May 1, 1968.

Rehearing Denied May 29, 1968.

Sneed, Vine, Wilkerson & Selman, Robert C . Sneed, Louis Scott Wilkerson, Austin, for appellant.

Crawford C. Martin, Atty. Gen., George M. Cowden, 1st Asst. Atty. Gen., A. J. Carubbi, Jr., Staff Legal Asst. Atty. Gen., Sam Kelley, Robert Flowers, C. Fielding Early, Asst. Attys. Gen., Austin, McGinnis, Lochridge Kilgore, Byfield, Hunter & Wilson, Joe M. Kilgore, James W. Wilson, Shannon H. Ratliff, Austin, for appellees.

HUGHES, Justice.

This is a declaratory judgment suit in which City National Bank of Austin, appellant, sought a declaration of law that it is within the power of the State Banking Board of grant or deny permission to the Texas State Bank to move its domicile and banking house from its present location in the City of Austin to another location, diagonally across the street from City National, in the City of Austin. The Board and Texas State were named defendants. City National also sought appropriate injunctive relief if the law was declared as requested.

Motion for summary judgment was made by the Board and Texas State Bank, and judgment was granted that appellant take nothing by its suit.

By Sec. 2, Ch. 673, S.B. 546, p. 1772, Acts of 60th Leg.Reg.Sess., 1967, Chapter III of the Texas Banking Code of 1943 as amended was amended, effective June 17, 1967, by adding a new section entitled Article 14. We copy all of Secs. 2, 3, 4, 5 and 6 of S.B. 546: ¹

'Sec. 2. Chapter III of the Texas Banking Code of 1943, as amended, is hereby amended by adding thereto a new Section immediately following Article 13a, to be entitled Article 14 which shall read as follows:

'Article 14.

'No state bank shall hereafter change its domicile without first having received approval for such change from the State Banking Board in the manner provided for the approval of an original application for a charter.'

Sec. 3. This Act shall have no application to any change of domicile of a state bank for which an application for approval of such change was filed with the Federal Deposit Insurance Corporation prior to April 6, 1967.

Sec. 4. If any provision, Section, sentence, clause or part of this Act or the application thereof to any person or circumstance is held invalid, such holding shall not affect other provisions or applications of this Act which can be given effect without the invalid provision or application and to this end the provisions of this Act are declared to be severable.

Sec. 5. All laws or parts of laws which are in conflict with this Act are hereby repealed or modified to the extent of such conflict only.

Sec. 6. The fact, that there is no provision in the present banking laws requiring approval of the State Banking Board of changes of domicile of state banks, creates an emergency and an imperative public necessity that the Constitutional Rule requiring bills to be read on three separate days in each House be suspended, and said Rule is hereby suspended; and this Act shall take effect and be in force from and after its passage, and it is so enacted.'

The caption to S.B. 546, Chapter 673, supra, reads:

'An Act amending Chapter III, Article 12, being a part of the Texas Banking Code of 1943, the same being Chapter 97, Acts of the 48th Legislature, Regular Session, 1943; and adding a new Section to Chapter III, as amended, to be known as Article 14; authorizing stock option plans for state banks, with certain restrictions; providing for perpetual or limited corporate existence for state banks; providing that amendments to Articles of Association of State Banks changing the domicile of any state bank shall be approved by the State Banking Board and further providing that no state bank shall hereafter after move its domicile without prior approval of the State Banking Board; providing a savings clause; providing for severability; providing that all laws or parts of laws which are in conflict with this Act are repealed or modified to the extent of such conflict only; and declaring an emergency.'

Appellant attacks the validity of Sec. 3 of S.B. 546, on grounds that it violates the Equal Protection Clause and the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States, and that it violates Sec. 35 of Art. 3 of the Constitution of Texas, Vernon's Ann.St., for the reason that the subject of Sec. 3 is not expressed in the title.

The following facts are undisputed:

Appellee Texas State Bank presently has its domicile at 1904 Guadalupe Street in Austin, Texas. It proposes to move to 900 Congress Avenue in such city. Appellant, a national Bank, has its domicile 144 feet diagonally across the intersection of Ninth and Congress Avenue from the place to which appellee Texas State Bank proposes to move. Texas State Bank contemplates making such move without making any showing to the Board that public necessity and convenience exists for the establishment of a bank at 900 Congress Avenue in Austin, Texas, or that the establishment of a bank at such location would probably be profitable.

Prior to April 6, 1967, Texas State Bank filed with the Federal Deposit Insurance Corporation in Washington an application for approval of a change of its domicile from where now located to 900 Congress Avenue, in Austin, Texas.

Upon learning of Texas State Bank's proposed change of its domicile to diagonally across the intersection for appellant's domicile, appellant petitioned the State Banking Board to give notice of and hold a hearing upon the question of whether Texas State Bank should so move. The Board acknowledged receipt of such petition for a hearing but expressly refused to hold such a hearing.

We do not find it necessary to pass upon appellant's contentions that Sec. 3 of S.B. 546 violates the Due Process or Equal Protection Clauses of the Fourteenth Amendment to the United States Constitution for the reason that, in our opinion, such Sec. 3 is invalid for the reason that its subject is not expressed in the title as required by Sec. 35, Art. 3 of the Texas Constitution, which provides:

' § 35. Subjects and titles of bills

Sec. 35. No bill, (except general appropriation bills, which may embrace the various subjects and accounts, for and on account of which moneys are appropriated) shall contain more than one subject, which shall be expressed in its title. But if any subject shall be embraced in an act, which shall not be expressed in the title, such act shall be void only as to so much thereof, as shall not be so expressed.'

The caption gives notice that a law is being enacted which provides that '* * * no state bank shall hereafter move its domicile without prior approval of the State Banking Board. * * *' Yet, in spite of this all encompassing mandate Section 3 of the Act provides that some state banks, under the conditions stated, are exempted and need not procure Board approval before changing domicile. This exemption, as to which no fair notice is given in the captions, renders such exemption void under Sec. 35, Art. 3, supra. See Harris County Fresh Water Supply Dist. No. 55 v. Carr, 372 S.W.2d 523, Tex.Sup. (1963) and Falkner v. Allied Finance Co. of Bay City, 394 S.W.2d 208, Tex.Civ.App., Austin (1965), writ ref. n.r.e., 397 S .W.2d 846, Tex.Sup. (1966).

We must now determine the effect of this holding upon Art. 14, sec . 2, S.B. 546.

It is our opinion that Art. 14 falls with Sec. 3 even though Sec. 4 of S.B. 546 provides for severability. The rule to be applied is stated in Texas-Louisiana Power Co. v. City of Farmersville, 67 S.W.2d 235, Tex.Com.App. (1933), quoting from Lewis' Sutherland, Statutory Construction (2nd Ed.) Vol. 1 Sec. 306, as follows:

'If, by striking out a void exception, proviso or other restrictive clause, the remainder, by reason of its generality, will have a broader scope as to subject or territory, its operation is not in accord with the legislative intent, and the whole would be affected and made void by the invalidity of such part.'

This rule is amplified in 16 Am.Jur.2d, Constitutional Law, Sec. 192, from which we quote:

'One important class of cases in which questions as to the severability of valid and invalid portions of an act and the determination of the legislative intent are involved consists of statutes containing invalid exceptions or provisos. The general rule is that if such a proviso operates to limit the scope of the act in such a manner that by striking out the proviso the remainder of the statute would have a broader scope either as to subject or territory, then the whole act is invalid, because such extended operation would not be in accordance with the legislative intent. In all such cases the exception of a particular group from the provisions of a general statute may have been a material consideration with the...