Fusz v. Spaunhorst

Decision Date30 April 1878
Citation67 Mo. 256
PartiesFUSZ v. SPAUNHORST et al., Appellants.
CourtMissouri Supreme Court

Appeal from St. Louis Court of Appeals.

Glover & Shepley for appellants.

1. It is not the office of a constitution to engage in any matter of ordinary legislation. Its office is to lay out and establish principles of government and ordain the methods and instrumentalities of administering the laws. Cooley Const. Lim., p. 2; Mo. Constitution 1875, Art. 4, Sec. 1; Jameson Const. Conventions, p. 391. A convention cannot properly declare on what facts a cause of action shall exist, and point out a judgment to be rendered; and the courts will assume prima facie that no such thing was intended.

2. The purpose of the section was to enjoin it on the legislature to pass a law or laws showing under what circumstances the receiving of deposits and creating of debts by an insolvent bank should be a crime in its officers; and to punish the crime and to make the officers guilty of it, personally responsible for such deposits and debts.

This, the counsel argued, clearly appeared from the use in the two members of the sentence which compose this section of the words “and,” “such” and “so.”

3. The adjudicated cases sustain the view of appellants. Groves v. Slaughter, 15 Pet. 449; People v. Supervisors, 3 Barb. 332; U. S. v. Bevans, 3 Wheat. 336; U. S. v. Hudson, 7 Cranch 32; St. Jo. &c. R. R. v. Buchanan Co., 39 Mo. 485; French v. Teschemaker, 24 Cal. 518.

4. This section regarded as a constitutional direction to the legislature to enact a law or laws with a certain purpose, is practicable and possible. But, if we must regard it as constitutional work, begun and finished by the convention, it is impracticable and impossible. It does not say enough to effect the purpose, nor can it be taken for what it says.

(1.) If we take it literally, it means that one who knew the bank to be insolvent or in failing circumstances may recover for his debt or deposit. It often happens that a bank becomes embarrassed and is like to fail and that its friends are informed of the fact, and knowing it, make deposits on its credit or loan it money to save it; but in such a case the officers would be guarantors, as by the letter of section 27, to such depositors or lenders. Again, suppose certain friends of a bank in the condition just named, knowing all the facts, loan it $100,000 for ten years, and thereby restore its solvency and credit; and suppose no loss occurs from the then existing solvency, but at the end of the ten years the bank is again insolvent, are not the managers responsible personally for the loan?

(2.) Standing alone and without legislation in aid of it, section 27 is crude, indefinite, insufficient, opening a wide door to difficulties which it cannot solve. Whether the knowledge shall be actual or constructive in the officer; whether the officers shall be liable in solido, or jointly or severally, or in a certain order, or with or without loss to interested parties; whether the personal liability is to be that of principals or guarantors, or whether it shall be in contract or in tort; and whether one made liable has any recourse on another or on the bank, &c., &c., are matters not touched by the section. Yet, if it is a finished work by the convention, needing no aid from the legislature, and was so intended; that is, if the section contains all that is necessary for self-execution, the legislature can pass no act in aid of it. The legislature can never amend the constitution by statute; and all the statutes that have been passed upon the subject are simply null and void, and none of the defects of the section can be remedied without a constitutional amendment.

E. T. Farish for appellants.

1. We expect to meet, in constitutions, prohibitions, repeal of legislation, the definition of the rights and limits of the different departments of governments, the declaration of rights, and, generally, the assertion of general principles, but seldom, or never, except by way of repeal or prohibition, do constitutions become operative or effective in the way of imposing obligations or duties, or securing rights. Cooley on Const. Lim., 35, 36, 78, 79; The Constitutional Convention, Jameson, p. 83; Jameson on Constitutional Construction, § 429; Conklin's U. S. Courts, p. 138. Again, section 27 is a harsh provision, penal in its nature, and the maxim is that the general words of such enactment shall be restrained for the benefit of him against whom the penalty is inflicted. Dwarris on Stat., 736; Sedg. Cons. Law, 324. Not to observe these rules, in approaching the construction of the provision in question, is to lay aside the canons of construction, is to ignore the rules by which the investigation should be made or the problem solved.

2. Regard being had to the whole subject matter embraced in the constitutional provision under consideration, and the language employed, it is manifest that the same was never meant to be self-enacting, but that legislative action was necessary to enforce its provisions. The mode and manner of such enforcement is not prescribed. It is not declared in what manner the officers shall be responsible, whether the remedy is by action at law or proceeding in equity; whether the defendants may be sued jointly; whether, in the event of a judgment against them and a payment of the amount, they would have any recourse against the bank, the original debtor; whether any right of contribution exists. There is no idea of subrogation. If the officer is to be responsible, that is, stand as surety, and be made to respond, it certainly can only be in the case and to the extent the principal is in default. If he is to be liable for the whole debt in the first instance, he ought to be subrogated at once to the rights of the depositor, and yet all these difficulties and many others arise; and it would be singular, indeed, if the framers of the constitution intended to leave the solution of these questions, growing out of the enactment, to the courts, without the aid of any positive statute regulating the subject. Nor will the language bear any other interpretation than that this whole matter was referred to the Legislature.

The convention was here dealing with a matter which they proposed should be a crime, and, at the same time, constitute a civil liability, but after all it was but one and the same subject matter, and when they referred the criminal branch of the provision in express terms to the Legislature, they necessarily referred its accompaniment; until the Legislature grades the offense, and affixes the penalty, there is no crime, and as the civil liability is imposed for deposits so received, it refers to the reception of deposits after the crime has been defined.

3. The legislative branch of the government did not understand that the provision was self-enacting; but on the contrary, and accordingly to carry this provision into effect, an act was passed. Acts 1877, p. 35; also Sec. 21, p. 33; also p. 239.

Henry Hitchcock for appellants, submitted the following propositions:

I. The inquiry for this court is simply--what was the true intent of the framers of the constitution, in using the language which they adopted?

II. A particular construction will not be established merely because it is one which the language will bear, not even though apparently reasonable by itself. It must also appear, that such construction is the one most natural and probable, due regard being had to all the circumstances, and to the accepted principles of constitutional interpretation.

III. The following elements are proper to be considered, upon such an inquiry:

1. That the clause in question is found in a constitution, and not in a statute. 2. The context of the constitution itself--and whether, in view of that, the construction proposed is the most natural and reasonable one. 3. The nature of the evil to be remedied or prevented,--and whether, in view thereof, the construction proposed is the most probable and reasonable. 4. The effect of the construction, as compared (1) with the probable intent of the clause in question, and (2) with a different construction contended for. 5. The legislative interpretation, if any, of the clause in question.

Under the last four subdivisions, the counsel argued at length: 1. The construction proposed by respondents is inconsistent with section 1 of the schedule to the constitution which distinctly refers to the General Assembly whenever practicable, the enforcement of its new provisions. 2. The construction proposed by respondents is not probable or reasonable, because the clause in question is inadequate and incomplete for its supposed purpose. 3. The construction proposed by respondents asserts an intent on the part of the convention which is less reasonable and probable than that contended for by appellants. 4. Finally, the General Assembly at its first session after November 30th, 1875, construed this clause as requiring further legislation.John M. Woodson, B. Gratz Brown and McComas & McKeighan for respondents.

The provision of the constitution is remedial, and not penal, in so far as it undertakes to create a civil liability. It undertakes to prevent fraud, and to create a civil liability in the interest of the public. The liability imposed is a remedy given to the creditor of the bank, not for the punishment of directors, but for the protection of depositors. It fixes the liability completely, and needs no legislation. The Legislature could not do more, so far as the creditor is concerned, than to re-declare the constitution. Smith's Com. on Const., pp. 848, 851; 5 Ben. 219; Ochiltree v. R. R., 21 Wall. 249; Citizens Bk. v. Wright, 6 Ohio St. 318.

There is nothing in the nature of a constitution which inhibits it from establishing a right and providing a remedy, or from directly or indirectly prohibiting certain acts and providing the remedy. In this case the constitution might have fixed the nature of the crime...

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