Abie State Bank v. Weaver
| Decision Date | 07 December 1929 |
| Docket Number | 27070 |
| Parties | ABIE STATE BANK ET AL., APPELLEES, v. ARTHUR J. WEAVER, GOVERNOR, ET AL., APPELLANTS |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Lancaster county: LINCOLN FROST JUDGE. Reversed and dismissed.
Judgment reversed, and action dismissed.
Syllabus by the Court.
Where a state bank has accepted the benefits arising from the deposits of money pursuant to the terms of the bank depositors guaranty law, such bank should not be heard, in a proper case, to make complaint of a special assessment upon such deposits which has been levied for the benefit of the depositors guaranty fund.
Where a special assessment has been levied upon the state banks pursuant to the provisions of section 8028, Comp. St. 1922 section 26, c. 191, Laws 1923, such assessment does not constitute the taking of private property without due process.
It is elementary that it is not within the province of the courts to annul a legislative act unless its provisions so clearly contravene a provision of the fundamental law, or it is so clearly against public policy, that no other resort remains.
" The banking business, carried on pursuant to a state charter, is quasi public and, for protection of the public and in its interests, is subject to reasonable regulation by the state." Citizens' State Bank v. Strayer, 114 Neb. 567, 208 N.W. 662.
Appeal from District Court, Lancaster County; Frost, Judge.
Suit by the Abie State Bank against Arthur J. Weaver, as Governor, and another, wherein Willis M. Stebbins, as State Treasurer, Mary E. Gandy, James H. Covey, Theodore H. Buelt, Huffman & Seymour, Inc., Leonard N. Seymour, John Halbur, Frank A. Hebenstreit, and others intervened. Judgment for plaintiff, and defendants and interveners named appeal. Reversed, and action dismissed.
C. A. Sorensen, Attorney General, Charles E. Abbott, Edgar Ferneau, L. Ross Newkirk and Roy M. Harrop, for appellants, Weaver and others.
William J. Hotz, Clinton J. Campbell, Frank A. Hebenstreit, Ralph G. Coad and Robert Hotz, for intervening appellants.
Gaines, McGilton, Van Orsdel & Gaines, Courtright, Sidner, Lee & Gunderson and Hainer, Flansburg & Lee, contra.
Albert S. Johnston, amicus curiae.
This is an injunction suit begun in the district court for Lancaster county by the Abie State Bank, plaintiff, on its own behalf, and in which plaintiff is joined by 558 other Nebraska state banks. The suit was brought to enjoin the collection of a special assessment of one-fourth of one per cent. of the average daily deposits from the state banks for 1928. It is alleged by plaintiff that the special assessment complained of was made December 15, 1928, by the department of trade and commerce, for the benefit of the depositors' guaranty fund, pursuant to authority conferred by section 8028, Comp. St. 1922, section 26, ch. 191, Laws of 1923. The act, as amended, follows:
"If the depositors' guaranty fund shall, from any cause, be depleted or reduced to any amount less than one per cent. of the average daily deposits as shown by the last semi-annual assessment statement thereof filed, the department of trade and commerce shall levy a special assessment against the capital stock of the corporations governed by the provisions of this article, to cover such deficiency, which special assessment shall be based on the said average daily deposits, and, when required for the purpose of immediate payment to depositors, said special assessment may be for any amount not exceeding one per cent. of said average daily deposits for the year 1923 and thereafter not exceeding one-half of one per cent. of said average daily deposits in any one year."
The governor of Nebraska and the secretary of the department of trade and commerce are both made parties defendant in official capacity. The state treasurer and a number of individual bank depositors intervened in the action adversely to the plaintiff's contention. The court, however, found generally in favor of the plaintiff bank and against the defendants and interveners. Thereupon defendants were ordered to pay all costs of the action, except those incurred by the interveners, and the cross-petitions of the interveners were dismissed and interveners ordered to pay their own costs. Defendants and a number of the interveners have appealed.
The secretary of the guaranty fund commission, hereinafter called the secretary, testified that up to and including December 31, 1928, 269 state banks were closed by the state and placed in the hands of the commission, and that the total amount of the adjudicated claims was then $ 10,536,518.59, exclusive of interest; and that in 72 state banks, then being operated as going concerns, the amount due depositors was $ 13,726,441.26, and the total amount due depositors in banks which were in receivership, but whose claims were not yet adjudicated, was $ 2,133,627.54. It also appears from the secretary's evidence that the total amount, including claims adjudicated, and claims not adjudicated, or present liabilities against the guaranty fund, was $ 26,400,282.76, and that the total sum of assets to be realized would be $ 10,451,932.65, leaving $ 15,948,350.11 as a deficit. The secretary also testified that the majority of the losses sustained by the banks resulted from loans made prior to 1923 during the deflation period.
From the evidence of Clarence G. Bliss, secretary of the department of trade and commerce, it appears that since 1919 the total amount of bank assessments was $ 14,609,576.65, and that these assessments, in the above sum, were paid over and became a part of the guaranty fund.
It appears from the evidence of the president of one of the largest Nebraska state banks that he was active in the publication of 2,000 pamphlets which were distributed generally in respect of the establishment of the guaranty fund, and he was also chairman of a committee of three bankers by whom this suit was begun. In his expressed opinion, the payment of the special assessment, and its continuance for a number of years, would have the effect of causing the large state banks to
In 1926, during the months of June, July, August, and September, twenty-six, full-page newspaper advertisements, attractively featured with pictures and aptly prepared reading matter, appeared in one of Omaha's leading newspapers. These advertisements stressed the proposed protection that was shortly to be afforded the depositors of money in the state banks throughout Nebraska. And on one page of these advertisements 336 banks are listed as having paid their pro rata share of the cost of the publication. The largest state bank, located in Omaha, paid between $ 500 and $ 600 as its share of the expense of this newspaper publicity. The enterprise was given wide circulation in practically every town and its suburbs where a state bank was located, by illustrated newspapers with reading matter that was calculated to attract favorable attention, and the patronage as well, of those having money for bank deposit. Following are some of the headings of the illustrated pages:
"A Story no other State can Tell;" "No Mattress Banks in Nebraska;" "Strong Banks make Strong States;" "In the Hands of Skilled Bankers;" "State Banks Protect Their Deposits in Nebraska; " "Nebraska is a Remarkable State;" "Pushing Your Money Through the Window;" "In Nebraska the Guarantee Works both Ways;" "All Work together in Nebraska;" "Safe...
To continue reading
Request your trial
-
Neb. Const. art. I § I-3 Due Process of Law; Equal Protection
...assessment levied upon state banks was not deprivation of private property in violation of this section. Abie State Bank v. Weaver, 119 Neb. 153, 227 N.W. 922 (1929), affirmed in Abie State Bank v. Bryan, 282 U.S. 765 Sanitary District Law does not require the officers of a sanitary distric......