Ex parte Pittman

• Decision Date: 25 January 1909
• Docket Number: 1,795.
• Citation: 99 P. 700,31 Nev. 43
• Parties: Ex parte PITTMAN.
• Court: Nevada Supreme Court

99 P. 700

31 Nev. 43

Ex parte PITTMAN.

No. 1,795.

Supreme Court of Nevada

January 25, 1909

Application by W. B. Pittman on behalf of T. B. Rickey for a writ of habeas corpus. Prisoner remanded.

This is an original proceeding in habeas corpus. The writ in this case was heretofore issued upon a duly verified petition in behalf of T. B. Rickey, alleging that he was unlawfully confined and restrained of his liberty by the sheriff of Ormsby county. From the return upon the writ it appears that the said T. B. Rickey was at the time of its issuance held in custody by said sheriff upon bench warrants regularly issued by the First judicial district court of the state of Nevada in and for Ormsby county upon seven indictments found by the grand jury of said county, six of which having been found on the 27th day of February, 1908, and one thereof having been found on the 3d of March following; that all of said indictments charged the said T. B. Rickey with the crime of embezzlement contrary to the provisions of that certain act of the Legislature of this state entitled "An act making any banker, or any officer, agent, or clerk of any bank receiving deposits, knowing that said bank is insolvent guilty of embezzlement, and providing for the punishment thereof," approved March 29, 1907. St. 1907, p. 414, c 189. This case was heretofore orally argued and thereafter finally submitted on briefs, together with cases Nos. 1,781 (100 P. 134) and 1,790 (99 P. 704), on the 17th day of December, 1908. Petitioner's contention in this case is that the said T. B. Rickey was unlawfully restrained of his liberty for the reason that the said act, for the violation of which, said indictments were found, is in contravention of the state and federal Constitutions and void, and hence that he is not charged with an offense against the law.

The above-entitled statute contains two sections reading as follows:

"Section 1. Every officer, agent, teller or clerk of any bank, and every individual banker, or agent, teller or clerk of any individual banker, who receives any deposits, knowing that such bank, or association or banker is insolvent, shall be guilty of embezzlement.

"Sec. 2. Every person, officer, agent, teller or clerk convicted under the provisions of this Act shall be imprisoned in the State prison for not less than one or more than fifteen years." James F. Peck and W. B. Pittman, for petitioner.

R. C. Stoddard, Atty. Gen., L. B. Fowler, Deputy Atty. Gen., P. A. McCarran, and E. E. Roberts., Dist. Attys., for the State.

NORCROSS C.J.

Counsel for petitioner in their brief say: "In presenting the constitutional questions we will follow these lines: That the business of banking, including the contract with depositors of the bank for every nature of deposits, is a lawful business, in which it is the inherent right of every citizen to engage; that the Legislature can only regulate such a business, or the making of such a contract in the absence of fraud or turpitude; that its power to prohibit commences and ends with the fraud or turpitude; that the statute of Nevada prohibiting the receipt of deposits is not predicated upon fraud, and it therefore prohibits an act which it is the inherent right of every person to do; that the court has no power to read into the statute the element of fraud, which must be read into the statute to sustain its constitutionality; that if the court can read into the statute the element of fraud, to wit, a false pretense, then the statute violates the provisions of the Constitution of Nevada, inhibiting a special law for the punishment of crimes or misdemeanors; that the statute is class legislation and denies the equal protection of the laws; that the law is a special law under the Constitution of Nevada in a case where a general law could be made applicable."

That the business of banking is a lawful business in which it is the inherent right of every citizen to engage will not be questioned. It is a business, however, with which the general public welfare is most clearly identified. Money is said to be the very life blood of the nation. The banking business has grown to be a part and parcel of our financial system, and is so regarded by both the federal and state governments. The great bulk of business transactions, instead of being effected by an actual transfer of money, is accomplished through the medium of bank checks and drafts. Indeed, it would be next to impossible to carry on the great business transactions of this country, which aggregate hundreds of billions of dollars annually, without the aid of a well-organized banking system. It needs no extended argument to establish the fact that the banking business is in a class by itself. The assertion of the fact should be sufficient. While the business of banking may not be prohibited, it may be regulated, and it is of the highest importance to the public welfare that it be regulated by wise legislation. It is a matter of common knowledge that the deposits in the banks of the country exceed many times the total amount of actual money within the country. The solvency of the banks of the country must of necessity rest upon the value of their securities, rather than upon the actual amount of cash which may be within their vaults, very much the same as the wealth of the nation or state is represented, not merely by the amount of money within the treasury or in circulation among the people, but mainly upon the vast resources of the country of every character and description.

Common experience has abundantly demonstrated that the prosperity of the country is very largely influenced by public confidence in its banking institutions. Anything which tends to shake that confidence and causes depositors in banks to withdraw their deposits, produces contraction in business, which may result, and at times has resulted, in panics which have brought ruin and disaster to thousands, and seriously affected the welfare and happiness of the public generally for greater or less periods of time. If a person or corporation engaged in mercantile pursuits for example should fail, the injurious results are limited. Such failure does not tend to shake confidence in the business soundness of other similar enterprises. The case is different with banking institutions. The suspension of a bank in any locality causes depositors in other banks in the same locality to become suspicious of the solvency of the bank with which they may be dealing. Withdrawals follow, and, if they are sufficiently numerous, a second bank may be forced to at least a temporary suspension. Every bank suspension tends in a greater or lesser degree to shake confidence in other like institutions. If it happens to be a large and well-known bank which fails, the greater will be the extent of the injury which its failure will produce upon other banks, not only in the locality in which the suspended bank is situated, but also in distant places. Thus may be brought about a financial panic of nation-wide extent.

To regulate the banking business so as to reduce to a minimum failures in this branch of business enterprise is not only clearly within the powers of the legislative department of government, but it may also be said to be an imperative duty for the Legislature to enact laws for the prevention, as far as possible, of bank failures. For this purpose most, if not all, of the states have enacted laws for the inspection of banking institutions by state officials. Banks organized under the federal laws are for similar reasons examined by government officials. Other laws have been enacted, all with the same general end in view. A number of states have enacted statutes making it a crime to receive deposits into a bank after it is known that the bank is in an insolvent condition. The purpose of these penal statutes is not only to protect innocent depositors, but to deter banking officials from so conducting the business of the bank as to endanger its solvency. These statutes vary in form and effect in different states, but their purpose is the same. Prior to the act of 1907, supra (St. 1907, p. 414, c. 189), this state had no legislation of this character; the general laws making it a crime for any one to wrongfully convert to his own use the property of another applied to bank officials who embezzled bank funds, the same as they did to any person who might embezzle property or funds of another. Not until this act, however, was it attempted to make it an offense for an owner, officer, or employé of a bank to receive a deposit into an insolvent bank, he knowing it at the time to be insolvent. Under the provisions of this act, although the officials receiving the deposit may have no interest whatever in the bank, and although he may receive no personal benefit from the deposit, still he is made criminally liable, if at the time he has knowledge of the bank's insolvent condition.

Counsel for petitioner argues that, unless a false pretense is read into the statute, no justification exists for penalizing the receiving of a deposit into an insolvent bank, and that a court has no power to read into the statute a false pretense. It must be conceded that a court has no legislative powers and cannot read into a statute something that is not within the manifest intention of the Legislature as gathered from the statute itself. The function of a court, however, is to determine the intention of the Legislature from the language used in accordance with the established rules of statutory construction. If it can be said that when a bank is opened and is doing business with the public that of itself is in effect a public declaration of solvency, then we can see no necessity of the Legislature in passing a statute dealing with the subject to declare...