Citizens' Bank & Trust Co. v. Mabry
| Decision Date | 02 October 1931 |
| Citation | 136 So. 714,102 Fla. 1084 |
| Court | Florida Supreme Court |
| Parties | CITIZENS' BANK & TRUST CO. et al. v. MABRY. |
En Banc.
Error to Circuit Court, Pinellas County; O. L. Dayton, Judge.
Action by Milton H. Mabry, as liquidator of the Franklin Bank against the Citizens' Bank & Trust Company, and John A Newsom, as liquidator of said Citizens' Bank & Trust Company. To review a judgment for the plaintiff, the defendants bring error.
Reversed.
Syllabus by the Court.
Banks are indispensable agencies through which the industry, trade and commerce of all civilized countries are carried on. The business which they transact, though for private profit, is of a pre-eminently public nature and is therefore universally recognized as a proper subject of legislative regulation under the police power of the state. A banking corporation is quasi public in character and as such is subject to statutory regulation for the protection of the public.
No principle is better settled than that a special charter to any corporation to engage in a business of a public or quasi public nature cannot be set up as exempting the institution from that regulation by the state in the exercise of its police power which the public necessity demands.
The provisions of chapter 8874, Special Acts of 1921, cannot confer any special charter rights or privileges on Citizens' Bank & Trust Company, and that part of such act which attempted to re-enact by confirmation of the rights powers, and privileges granted to that corporation by chapter 4460, Laws of 1895, was void and of no effect, being in conflict with the organic law in that regard.
When a contract is expressly prohibited by law, no court of justice will entertain an action upon its or upon any asserted rights growing out of it. And the reason is apparent, for to permit this would be for the law to aid in its own undoing. Where the contamination reaches, it destroys. The principle to be extracted from all the cases is that the law will not lend its support to a claim founded on its own violation.
Courts will take notice of their own motion, of illegal contracts which come before them for adjudication, and will leave the parties where they placed themselves.
As under the provisions of chapter 7269, Acts of 1917, a bank or trust company is prohibited from either directly or indirectly investing its funds in the capital stock of any other corporation except in the Federal Reserve Bank of this district, it is immaterial whether Citizens' Bank & Trust Company acquired the stock by direct purchase or acquired it by reason of having accepted it as security for a loan, and the act of the bank was ultra vires and void and the liquidator of the Franklin Bank cannot enforce the payment of the stock assessment made by the comptroller on the capital stock so held by Citizens' Bank & Trust Company.
Whitaker, Himes & Whitaker and Jackson, Dupree & Cone, all of Tampa, for plaintiffs in error.
Mabry, Reaves & White, of Tampa, for defendant in error.
In this case the defendant in error sued the plaintiffs in error as owners and holders of the capital stock of the Franklin Bank on a stock assessment made by the comptroller in process of liquidation of the affairs of the Franklin Bank, which had become insolvent.
The defense interposed was that the assessment could not be enforced against Citizens' Bank & Trust Company or the liquidator thereof, because the acquisition of the capital stock of the Franklin Bank by Citizens' Bank & Trust Company was ultra vires and the obligation created by the statute and the assessment therefor nonenforceable.
The plaintiffs contended that inasmuch as Citizens' Bank & Trust Company was created by a special act of the Legislature, to wit chapter 4460, Acts of 1895, section 11 of which act provided, 'That said corporation shall have right to acquire shares of the capital stock of any duly incorporated company, and manage the affairs or any such company upon obtaining a majority of shares of said company,' this bank was not precluded from acquiring the capital stock of the Franklin Bank under the provisions of chapter 7269, Acts of 1917, and contended furthermore that if the provisions of the Act of 1917 prohibiting the acquisition of capital stock of other corporations by any banking corporation organized under the laws of the state of Florida applied to Citizens' Bank & Trust Company, such inhibition was overcome by the provisions of chapter 8874, Special Acts of 1921.
That Citizens' Bank & Trust Company, the institution here involved, did not possess immunity from the provisions contained in chapter 7269, Acts of 1917, is definitely settled by the opinion and judgment of this court in the case of State ex rel. Davis, Attorney General, v. Knight, 98 Fla. 891, 124 So. 461, 463, in which this court speaking through Mr. Justice Ellis said:
Section 25 of article 3 of our Constitution as amended by Joint Resolution No. 2, Acts of 1899, adopted at the general election of 1900, provides as follows: 'The Legislature shall provide by general law for incorporating such educational, agricultural, mechanical, mining, transportation, mercantile and other useful companies or associations as may be deemed necessary; but it shall not pass any special law on any such subject, and any such special law shall be of no effect; Provided, however, That nothing herein shall preclude special legislation as to a university or the public schools, or as to a ship canal acress the State.'
Therefore, the provisions of chapter 8874, Special Acts of 1921, cannot confer any special charter rights or privileges on Citizens' Bank & Trust Company and that part of such act which attempted to re-enact by confirmation of the rights, powers, and privileges granted to that corporation by chapter 4460, Laws of 1895, was void and of no effect, being in conflict with the organic law in that regard.
In City of Tampa v. Tampa Water Works Company, 45 Fla. 600, 34 So. 631, 639, this court, speaking through Mr. Justice Carter, discussing the provisions of section 30, article 16, of the Constitution, said:
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...long recognized that the facial illegality of a contract may be raised sua sponte by any court. See, e.g., Citizens' Bank & Trust Co. v. Mabry, 102 Fla. 1084, 136 So. 714, 717 (1931). We disagree not with the district court's decision to raise this issue, but with its conclusion that the co......
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