Little v. Am. State Bank of Dearborn

• Decision Date: 05 June 1933
• Docket Number: No. 18.,18.
• Citation: 263 Mich. 645,249 N.W. 22
• Parties: LITTLE v. AMERICAN STATE BANK OF DEARBORN et al.
• Court: Michigan Supreme Court

263 Mich. 645

249 N.W. 22

LITTLE

v.AMERICAN STATE BANK OF DEARBORN et al.

No. 18.

Supreme Court of Michigan.

June 5, 1933.

Appeal from Circuit Court, Wayne County; Theodore J. Richter, Judge.

Action by Alonzo R. Little against the American State Bank of Dearborn and another. From an adverse order, plaintiff appeals.

Affirmed.

Argued before the Entire Bench except FEAD, J.

Philip Buchanan, of Detroit, for appellant.

Longley, Bogle & Middleton, of Detroit, for appellees.

BUTZEL, Justice.

Alonzo R. Little alleged in his declaration that on January 13, 1931, the board of disrectors of the American State Bank of Dearborn adopted a resolution appointing him executive vice president at an annual salary of $7,200; that on the 13th day of March, 1931, pursuant to the statutes of the state of Michigan, and particularly sections 11953 and 11954, C. L. 1929, the bank, in order to effect a liquidation, turned over its assets to the Dearborn State Bank, which also assumed certain liabilities; and that he was discharged on April 15, 1931, notwithstanding his claim to the benefits of a contract for a year's employment. He sought to recover approximately ten months' salary, less a small amount he earned in mitigation of damages from the two banks, which were both made defendants, and are described by him as banking corporations organized under the laws of this state.

Defendants moved to dismiss, claiming that the declaration failed to state a cause of action; that the action was based upon an alleged breach of an alleged contract; that such contract was void and unauthorized by the law and statutes of this state; and that a banking corporation may not enter into contracts of employment which are not terminable at the pleasure of its directors. Section 4, Act No. 66, Public Acts of 1929 (section 11901, C. L. 1929). Plaintiff thereupon filed a motion to dismiss defendants' motion, asserting that section 11901, supra, was in contravention of the equality and due process clauses of the Fourteenth Amendment to the Constitution of the United States, in so far as it gave banking corporations special immunities from liability not afforded other employers, etc.

Plaintiff contends that the provisions of the banking act heretofore quoted are not to be construed as depriving banks of the power to make binding employment contracts for definite terms; that, even assuming that banking corporations have the power to terminate such contracts of employment at pleasure, they cannot evade a duty to pay compensation for the balance of the period covered by the agreement. Such a construction is not tenable; it would defeat the very purpose of the statute. Westervelt v. Mohrenstecher (C. C. A.) 76 F. 118, 34 L. R. A. 477;Wells v. National Surety Co., 194 Mo. App. 389, 184 S. W. 474; Citizens' Bank of Hayti v. Wells, 269 Mo. 190, 190 S. W. 314;Van Slyke v. Andrews, 146 Minn. 316, 178 N. W. 959, 12 A. L. R. 1068;First National Bank of Colquitt v. Miller, 23 Ga. App. 441, 98 S. E. 402.

The constitutional mandate that there shall be equal protection of the laws does not prevent a reasonable classification by legislative enactment. Thomas v. Union Trust Co., 251 Mich. 279, 231 N. W. 619. The claim cannot be made that section 11901, C. L. 1929, is such an arbitrary restriction of the right of freedom of contract as to offend the due process clause. It is a reasonable regulation, designed to safeguard the public interest. Ultimate decision as to its wisdom rests with the Legislature, not with this court. Banking is a public business, the regulation of which is highly necessary, and all reasonable restrictions will be sustained. Stewart v. Algonac Savings Bank (Mich.) 248 N. W. 619;Noble State Bank v. Haskell, 219 U. S. 104, 31 S. Ct. 186, 55 L. Ed. 112, 32 L. R. A. (N. S.) 1062, Ann. Cas. 1912A, 487;Security Savings Bank v. California, 263 U. S. 282, 44 S. Ct. 108, 68 L. Ed. 301, 31 A. L. R. 391. The justification for legislation of the type considered is stated in Webster v. Jossman, 199 Mich. 98, 165 N. W. 802, 807, as follows:

‘A savings bank is a creature of the statute, and has the powers expressly granted to it, and such as are fairly incidental thereto. It has power to elect a cashier, and the term of such officer is fixed in the same section as the grant of power. It cannot be said that it is an incident to such granted power to fix a different term than that fixed by the statute to pass a by-law in conflict with ...