Federal Reserve Bank of San Francisco v. Citizens Bank & Trust Company, of Pocatello

• Decision Date: 28 June 1933
• Docket Number: 6008
• Citation: 23 P.2d 735,53 Idaho 316
• Court: Idaho Supreme Court
• Parties: FEDERAL RESERVE BANK OF SAN FRANCISCO, a Corporation, Appellant, v. CITIZENS BANK & TRUST COMPANY, OF POCATELLO, IDAHO, a Corporation, BEN DIEFENDORF, Commissioner of Finance of the State of Idaho, H. A. COLLINS, Liquidating Agent of the Citizens Bank & Trust Company, of Pocatello, Idaho, a Corporation, Respondents

23 P.2d 735

53 Idaho 316

FEDERAL RESERVE BANK OF SAN FRANCISCO, a Corporation, Appellant, v. CITIZENS BANK & TRUST COMPANY, OF POCATELLO, IDAHO, a Corporation, BEN DIEFENDORF, Commissioner of Finance of the State of Idaho, H. A. COLLINS, Liquidating Agent of the Citizens Bank & Trust Company, of Pocatello, Idaho, a Corporation, Respondents

No. 6008

Supreme Court of Idaho

June 28, 1933

STATUTES-TITLE OF ACT-CONSTRUCTION.

1. Where transaction in question occurred before new code, in which statute was included, became effective, sufficiency of title of statute in so far as concerning cause of action involved, must be determined as of time preceding code (Const., art. 3, sec 16).

2. Title need not be index to act (Const., art. 3, sec. 16).

3. Title of statute entitled "An Act to expedite and simplify the collection and payment by banks of checks and other instruments for the payment of money" held insufficient to express subject matter of section giving preferred claims under certain circumstances upon failure of drawee or other agent collecting bank; hence act did not become operative until adoption of code incorporating the act and did not govern transactions prior thereto (I. C. A secs. 25-1313, 25-1314; Const., art. 3, sec. 16).

APPEAL from the District Court of the Fifth Judicial District, for Bannock County. Hon. Robert M. Terrell, Judge.

Action to have a draft of the insolvent Citizens Bank & Trust Company declared to be a preferred claim or trust under the provisions of section 13, chapter 60, Sess. Laws 1931, now section 25-1313, I. C. A. Judgment for defendants. Affirmed.

Judgment affirmed; costs to respondents.

A. C Agnew and Merrill & Merrill, for Appellant.

All that section 16 of article III of the Constitution requires is that the title to the act should indicate the general scope and purpose of the intended legislation. The title of chapter 60, 1931 Session Laws, is sufficient. (State v Dolan, 13 Idaho 693, 92 P. 995, 14 L. R. A., N. S., 1259; Pioneer Irr. Dist. v. Bradley, 8 Idaho 310, 68 P. 295, 101 Am. St. 201; Boise City v. Baxter, 41 Idaho 368, 238 P. 1029; Smallwood v. Jeter, 42 Idaho 169, 244 P. 149.)

Chapter 60 of the 1931 Session Laws forms part of the 1932 code, being sections 25-1301 to 25-1317, inclusive. This was adopted before the judgment in this case was entered. Where a law has been adopted as a part of the entire body of law of the state and incorporated in the code, it is too late to raise the question of the sufficiency of the title. (Anderson v. Great Northern Ry. Co., 25 Idaho 433, 138 P. 127, Ann. Cas. 1916C, 191; Curoe v. Spokane etc. R. Co., 32 Idaho 643, 186 P. 1101, 37 L. R. A. 923; Emmett Irr. Dist. v. McNish, 38 Idaho 241, 220 P. 409.)

B. W. Davis, for Respondents.

The adoption of the 1932 code does not affect the question concerning the sufficiency of the title to chapter 60 of the 1931 Session Laws. That question is only affected from the date of the adoption of the new code, and the question here involved was raised long prior to that time. (59 C. J. 893, sec. 489 (1b); Bales v. State, 63 Ala. 30; American Indemnity Co. v. City of Austin, 112 Tex. 239, 246 S.W. 1019; Anderson v. Great Northern Ry. Co., 25 Idaho 433, 138 P. 127, Ann. Cas. 1916C, 191; Emmett Irr. Dist. v. McNish, 38 Idaho 241, 220 P. 409.)

The title to chapter 60 of the 1931 Session Laws is fatally defective, and does not meet the requirements of section 16 of article III of the Constitution of the state of Idaho as to the unity of subject and title therein required, and the act is unconstitutional. (Sec. 16, art. III, Const.; Turner v. Coffin, 9 Idaho 338, 74 P. 962; Katz v. Herrick, 12 Idaho 1, 86 P. 873; Gerding v. Board of County Commrs., 13 Idaho 444, 90 P. 357; Cohn v. Kingsley, 5 Idaho 416, 49 P. 985, 38 L. R. A. 74.)

Dean Driscoll, Amicus Curiae.

GIVENS, J. Morgan, Holden and Wernette, JJ., concur. Budge, C. J., dissents.

OPINION

GIVENS, J.

September 22, 1931, the Citizens Bank & Trust Company of Pocatello, Idaho, received from appellant certain checks for collection and remittance, drawn by depositors of the Citizens Bank & Trust Company on their respective deposits in said bank. On that day, the Citizens Bank & Trust Company stamped said checks "paid," charged the amounts to the several accounts of their depositors, and in payment thereof sent a draft in the amount of $ 26,335.70 to the Salt Lake City branch of appellant at Salt Lake City, Utah which draft reached Salt Lake the morning of September 23d, on which day the Citizens Bank & Trust Company did not open for business.

Thereafter, respondent Diefendorf, as Commissioner of Finance of the state of Idaho, as authorized by law, took over the affairs of the Citizens Bank & Trust Company, returning the respective checks to the depositors of the Citizens Bank & Trust Company, and refused the demand of appellant that the amount of the draft, less $ 129.05, the difference being for reasons immaterial herein, be a preferred claim or trust under sec. 13, chap. 60, Sess. Laws 1931, p. 102, now sec. 25-1313, I. C. A., and subd. 2, sec. 77, chap. 133, Sess. Laws 1925, instead, classifying it under subdivision 3, sec. 77, chap. 133, Sess. Laws 1925, now sec. 25-915, I. C. A.

The trial court sustained a demurrer to the complaint and this appeal is here from a judgment of dismissal upon the contention that chap. 60, Sess. Laws 1931, now secs. 25-1313 to 25-1317, inclusive, are unconstitutional, because the title to the original enactment did not comply with and violated sec. 16 of art. 3, and that the substance of the act is in violation of sec. 19 of art. 3, secs. 8 and 12 of art. 11 of the state Constitution, and the fifth amendment of the Constitution of the United States.

Taking up the question of the title, appellant urges that since the statute has been taken into the codification of 1932, the defect in the title is immaterial, relying upon Curoe v. Spokane etc. R. Co., 32 Idaho 643, 186 P. 1101, 37 A. L. R. 923; Brady v. Cooper, 46 S.D. 419, 193 N.W. 246; Skaggs v. Grisham-Hunter Corp., (Tex. Civ. App.) 53 S.W.2d 687.

Whether the Idaho Code Annotated became effective upon the Governor's proclamation, December 1, 1932, made pursuant to sec. 5, chap. 213, Sess. Laws 1931, p. 415, at 417, now paragraph 5, p. 2, I. C. A., or pursuant to chap. 1, Sess. Laws 1933, p. 3, the transactions upon which the action herein is based transpired prior to the time the Idaho Code Annotated came into force and effect, though the judgment in the trial court was signed thereafter.

Therefore the sufficiency of the title as to the cause of action here must be determined from the standpoint of its sufficiency prior to the incorporation of this statute in the code. (Bales v. State, 63 Ala. 30; American Indemnity Co. v. City of Austin, 112 Tex. 239, 246 S.W. 1019; Anderson v. Great Northern Ry. Co., 25 Idaho 433, 138 P. 127, Ann. Cas. 1916C 191; Emmett Irr. Dist. v. McNish, 38 Idaho 241, 220 P. 409; Cook v. Massey, 38 Idaho 264, 268, 269, 220 P. 1088, 35 A. L. R. 200; Ward v. Burley St. Bank, 38 Idaho 764, 768, 225 P. 497; 59 C. J., sec. 489, p. 893.)

From the briefs, it appears that chap. 60, Sess. Laws 1931, was promulgated by the American Bankers' Association under the title of the "Bank Collection Code," and that it has been adopted by some eighteen states, including Idaho. The title of the proposed act as submitted by the American Bankers' Association was: "An Act to expedite and simplify the collection and payment by banks of checks and other instruments for the payment of money," under which title the act was adopted with but slight change in the body of the act, in Idaho, Indiana, Michigan, New Jersey, New Mexico, Pennsylvania, South Carolina, Washington and Wyoming. We do not have the West Virginia Session Laws, though it was adopted in that state.

In Illinois the title was thus arranged:

"Negotiable Instruments.

"Banks--Deposit and Collection of Checks.

" § 1. Definitions.

" § 2. Bank is agent for collection.

" § 3. Item on same bank.

" § 4. Legal effect of indorsement.

" § 5. Duty and responsibility of bank collecting agents.

" § 6. Rule of ordinary care in forwarding and presentment.

" § 7. Items received through the mail.

" § 8. Items lost in transit.

" § 9. Medium of payment.

" § 10. Medium of remittance.

" § 11. Election to treat as dishonored item presented by mail.

" § 12. Notice of dishonor of items presented by mail.

" § 13. Insolvency and preferences.

" § 14. Cases not provided for in act.

" § 15. Inconsistent laws repealed.

"An Act defining the relations between banks and their depositors with respect to the deposit and collection of checks and other instruments payable in money." (Page 671, Laws of Illinois, 1931.)

Of course in Idaho, the title to an act need not be an index thereof. (Barton v. Alexander, 27 Idaho 286, 148 P. 471, Ann. Cas. 1917D, 729.)

The Kentucky title was as follows:

"An Act to amend chapter 90b, section 3720b, Carroll's Kentucky Statutes, 1922 edition, entitled Negotiable Instruments in General and being chapter 102, page 213, of the Acts of the General Assembly of 1904, by adding thereto an additional section providing for: duties and liability of bank as agent of collection; rights of banks in regard to credit items; the legal effect of endorsements; the duty and responsibility of bank collecting agents; rules of ordinary care in forwarding and presentment; items received through the mail; items lost in transit; medium of payment; medium of remittance; election to treat as dishonored items presented by mail; notice of dishonor of items presented by mail and insolvency and preferences, in order to make and keep the Negotiable Instruments Law uniform." (Page...