Bank of Commerce v. Wiltsie

• Citation: 153 Ind. 460,53 N.E. 950
• Parties: BANK OF COMMERCE et al. v. WILTSIE, Prosecuting Attorney.
• Decision Date: 23 May 1899
• Court: Supreme Court of Indiana

153 Ind. 460

53 N.E. 950

BANK OF COMMERCE et al.

v.WILTSIE, Prosecuting Attorney.^*1

Supreme Court of Indiana.

May 23, 1899.

Appeal from circuit court, Marion county; Henry Clay Allen, Judge.

Application by the Bank of Commerce and others for a change of the name of the corporation petitioner. From a judgment overruling a demurrer to the answer of Charles S. Wiltsie, prosecuting attorney, and ousting petitioners from exercising further corporate functions as such bank, petitioners appeal. Affirmed.A. C. Harris and Aug. Boice, for appellants. Chas. S. Wiltsie and Harding & Hovey, for appellee.

BAKER, J.

“An act to incorporate the Indianapolis Insurance Company” was passed on February 8, 1836. In section 1 it was provided that the company should be “a body politic and corporate with perpetual succession * * * for the period of fifty years from and after the passage of this law.” Section 2 gave the corporation power to insure all kinds of property, to make all kinds of insurance upon life, to lend money, etc. Section 3, among other things, made its office one of discount and deposit. Acts 1836, p. 191. The corporation was duly organized, and began operations. At the special session in 1865, section 1 was amended by striking out the limitation on corporate duration, so that the company should be “a body corporate with perpetual succession.” Acts 1865 (Sp. Sess.) p. 110. This amendment was accepted at once by the stockholders and directors. Through proceedings in the Marion circuit court, the name of the company was changed to the “Bank of Commerce,” on December 7, 1875. An act was passed on April 2, 1881, recognizing the change of name, and amending certain sections of the act of 1836 relating to liability of stockholders. On March 6, 1883, the legislature passed “An act establishing provisions respecting private corporations created and existing at and before November 1, 1851.” This statute enacts “that each and every private corporation now existing and which was created and organized by and under a special act or charter passed before the present constitution of the state took effect shall be and continue a corporation thirty years after the passage of this act: provided, that where the special act by and under which any such corporation was created, or any amendment of or supplement to such act, gives the right to continue and exist for a longer period or perpetually, such corporation shall continue for such longer period or perpetually, as so given.” The provisions of this act were accepted by the stockholders and directors. In January, 1898, the company determined to devote its attention to building up a business of writing “old-line” life insurance, and concluded that the name “Columbia Life Insurance Company” was preferable to the “Bank of Commerce.” On February 7, 1898, the company accordingly filed in the Marion circuit court its application for change of name, setting out the foregoing facts. The law requires prosecuting attorneys to resist the granting of applications of this kind. Rev. St. 1881, § 5864; Horner's Rev. St. 1897, § 5864; Burns' Rev. St. 1894, § 7812. The prosecutor answered that the acts of 1865 and 1883, under which the applicant claimed a perpetual special charter, were in conflict with the following provisions of the present constitution, in force since November 1, 1851: Article 1, § 23: “The general assembly shall not grant to any citizen or class of citizens privileges or immunities which upon the same terms shall not belong to all citizens.” Article 4, § 23: “In all the cases enumerated in the preceding section and in all other cases where a general law can be made applicable, the laws shall be general and of uniform operation throughout the state.” Article 11, § 13: “Corporations other than banking shall not be created, by special act, but may be formed under general laws.” Demurrer to answer was overruled, and judgment of ouster followed the bank's refusal to plead further.

If it would have been possible, in view of the change that was sought and the declared purpose of the company, for the applicant to have separated in its petition, and the proceedings based thereon, the banking from the insurance features of the charter, the right has been waived; and the only question assigned and discussed pertains to the power of the legislature, under the present constitution, to grant a new term of existence to an insurance company organized under a special charter prior to November 1, 1851, and existing by virtue thereof on and after that date. Whether or not a general law can be made applicable to a subject-matter not included in section 22 of article 4 is held to be a question of legislative judgment. Gentile v. State, 29 Ind. 409;City of Indianapolis v. Navin, 151 Ind. 139, 47 N. E. 525, and 51 N. E. 80, and cases collated on page 155, 151 Ind., and page 529, 47 N. E. But neither a general nor a special law can stand that involves the exercise of a power withdrawn from the general assemblyby the constitution. So it is not necessary to consider whether or not the act of 1883 was in reality an aggravated form of special legislation, and the question remains, as stated, to be determined from section 13 of article 11, and section 23 of article 1. There is this difference in the rules of construction of the federal and the state constitutions: The congress may do nothing that is not permitted expressly or by clear implication; the legislature may do anything that is not forbidden expressly or by clear implication. State v. Menaugh, 151 Ind. 260, 51 N. E. 117, 357; Sharpless v. Mayor, etc., 21 Pa. St. 160; Bourland v. Hildreth, 26 Cal. 183;Southern Pac. R. Co. v. Orton, 6 Sawy. 157, 32 Fed. 457.

Attention is called to the fact that since November 1, 1851, 52 acts have been passed amendatory of special charters granted under the old constitution; and the contention is made that this practical construction of the constitution by the legislature is conclusive, by reason of the continued acquiescence of the people and the other departments of the state government. It is not conclusive, but it may be highly influential, depending in degree upon the similarity of the question presented to the court to the one acted upon by the legislature consistently, repeatedly, and throughout a long period of time, with such acquiescence. City of Indianapolis v. Navin, 151 Ind. 147, 47 N. E. 525, and 51 N. E. 80;City of Terre Haute v. Evansville & T. H. R. Co., 149 Ind. 186, 46 N. E. 77. Nearly all of those amendatory acts relate to the powers of corporations to be exercised during the term of existence originally granted. Only four of them purport to grant a new term of existence. Questions concerning the legislature's right to regulate by amendment the exercise of powers of existing corporations would naturally arise the moment the corporations undertook to exercise their powers as amended upon other persons, and cases of the kind have been before this court. But questions concerning the legislature's right to grant by amendment a term of corporate existence beyond the term originally granted would naturally not arise during the unquestionable term, and no case of the kind has been before this court until now. The legislative action and the alleged acquiescence can be allowed herein but little, if any, force.

The bank contends that the case of City of Indianapolis v. Navin, 151 Ind. 139, 47 N. E. 525, and 51 N. E. 80, is controlling in principle. The question involved was the constitutionality of the act of March 6, 1897 (Acts 1897, p. 201), regulating the fares to be charged by certain street-railway companies that had been, or might be, organized under the act of 1861 (Rev. St. 1881, c. 41; Horner's Rev. St. 1897, c. 41; Burns' Rev. St. 1894, c. 44). It was in reference to that question only that the court said (page 147, 151 Ind., and page 527, 47 N. E.): “Section 13 of article 11 of the constitution means that after it took effect on November 1, 1851, the legislature should have no power or authority to create, originate, or bring into existence, by special act, a new corporation, where none had previously existed. * * * It is one thing to create a corporation,-bring it into existence,-and quite another, as an existing corporation, to regulate its conduct and relations to other corporations and persons.” The court was concerned, not with the right to grant a new term of corporate life, but merely with the right to regulate the exercise of powers during the original term; and, after reviewing many decisions, the court approved Morawetz's limitation upon the legislative right to confer new corporate franchises under the guise of regulation (page 153, 151 Ind., and page 529, 47 N. W.): “It was, however, correctly said in Mor. Corp. § 12: ‘But it is plain that a constitutional provision cannot be avoided and practically annulled by a subterfuge. A special law, altering the charter of an existing corporation and practically changing it, must therefore be deemed a violation of a constitutional prohibition against the creation of corporations by special act. If this were not so, organizations formed under the general laws might be treated merely as the rough material out of which corporations might afterwards be fashioned at pleasure, under special acts of the legislature, and the constitutional provision would become an empty form.”’ To the same effect is Thomp. Corp. § 585: “There is no doubt that such a constitutional provision ought to be construed as restraining the power of the legislature to amend existing special charters in any way so as to enlarge the powers or privileges thereby conferred. It has been held that they do not (it does not) prohibit the legislature from passing acts regulating existing corporations, in the exercise of the powers already conferred upon them by special laws.”

The bank further relies upon the cases of Railroad Co. v. Orton, 6 Sawy. 157, 32 Fed. 457;...