McDonald v. Wasson

• Decision Date: 05 February 1934
• Docket Number: 4-3330
• Citation: 67 S.W.2d 722,188 Ark. 782
• Parties: MCDONALD v. WASSON
• Court: Arkansas Supreme Court

67 S.W.2d 722

188 Ark. 782

MCDONALD v. WASSON

4-3330

Supreme Court of Arkansas

February 5, 1934

Appeal from Pulaski Chancery Court; Frank H. Dodge, Chancellor reversed.

Decree reversed and cause remanded.

Hal L. Norwood, Attorney General, and Robert F Smith, Assistant, for appellant.

Trieber & Lasley, for appellee.

MEHAFFY J. BUTLER, J., concurring.

OPINION

MEHAFFY, J.

This suit was instituted by Marion Wasson, Bank Commissioner against Ed McDonald, Secretary of State, by filing in the Pulaski Chancery Court the following complaint:

"The plaintiff, Marion Wasson, is the duly appointed, qualified and acting Bank Commissioner of the State of Arkansas, and as such he is charged with the execution of all laws of the State of Arkansas, relating to the organization, inspection, supervision, control, liquidation and dissolution of the banks and the banking business of the said State.

"The defendant, Ed McDonald, is the duly elected, qualified and acting Secretary of State of the State of Arkansas, and as such he is charged by act 632 of the Acts of the General Assembly of the said State for the year 1921 with the duty of receiving, filing, attesting and returning articles of incorporation of persons associating themselves together as a cooperative association, for the purpose of conducting a banking business on the cooperative plan pursuant to the provisions of said act.

"On July 6, 1933, the said plaintiff, as such Bank Commissioner, duly made and promulgated, and the requisite number of members of the Bank Advisory Council of the said State duly approved, rules and regulations relating to the organization, supervision, control, liquidation and dissolution of the cooperative banking associations aforesaid, which said rules and regulations were so made and promulgated, and were so approved, under and pursuant to the provisions of act 88 of the Acts of the General Assembly of said State for the year 1933. A copy of the said rules and regulations bearing the signature and seal of office of the said plaintiff, and the signatures of said members of said Bank Advisory Council, and marked Exhibit A, is hereto attached as a part of this complaint.

"The plaintiff is informed, and believes, and so charges, that certain citizens of the State of Arkansas are now about to associate themselves together as such cooperative banking association for the purpose of conducting a banking business at Corning, Arkansas, and that the said persons are about to file their articles of incorporation with the said defendant as such Secretary of State, and further that the said defendant, unless restrained by this court, will, upon the filing of said articles with him as aforesaid, take such steps, as set out in said act 632 of the Acts of 1921, as will result in the authorization of said cooperative banking association to commence business as such, although the said persons so associating themselves together, have not applied to the plaintiff, Bank Commissioner, for a certificate of public necessity in respect of said banking association, as required by the said rules and regulations, and the said persons have not in any otherwise complied with, or attempted to comply with, and have no intention of complying with, any of the other requirements of said rules and regulations.

"That plaintiff has no adequate remedy at law, and as immediate restraining order is necessary herein in order to prevent the said proposed cooperative banking association from beginning its business without authority of law, and to the detriment of the community wherein the said association proposes to conduct its business and to the public.

"Wherefore plaintiff prays that this court issue forthwith, and pending final determination of the within cause, its order restraining the said defendant from in any wise authorizing the said applicants or any other applicants to conduct a banking business, without first applying to the plaintiff for a certificate of public necessity respectively thereof, and otherwise complying with the said rules and regulations; that upon final hearing the said order be made perpetual, and the said defendant enjoined accordingly; for costs herein expended, and for all other and further relief."

The court issued a temporary restraining order, and thereafter appellant filed a demurrer, the court overruled the demurrer, and this appeal is prosecuted to reverse the decree and judgment of the chancery court in overruling said demurrer.

There is but one question for our consideration, and that is whether act 88 of the Acts of 1933 suspended by implication act 632 of the Acts of 1921, or, as stated by appellee: "Whether or not the Legislature, in its passage of act 88 of the Acts of 1933, intended, as stated in the title of the act, that the provisions of act 88 should have reference to all banks."

It is contended by the appellee that by the use of the words "all banks" the Legislature intended to suspend act 632, which was an act for the formation and carrying on of cooperative associations, and providing for the rights, powers, liabilities and duties of same.

The primary rule in the construction of statutes is to ascertain and give effect to the intention of the Legislature. 25 R. C. L. 960.

The first section of act 632 is as follows: "The purpose of this act is to provide for the formation and carrying on of cooperative associations and to provide for the rights, powers, liabilities and duties of such cooperative associations. The provisions of this act shall be administered by the Commissioner of Mines, Manufactures and Agriculture, who shall have power to employ such help as in his judgment is necessary to carry into effect the provisions of this act."

Section 11 provides, among other things: "No association organized under this act shall be required to do or perform anything not specifically required herein, in order to become a corporation, or to continue its business as such."

It should be remembered that, at the time this law was passed by the Legislature in 1921, we already had a general banking law. The 1921 act provided for a cooperative association. Any number of persons more than 20 could associate themselves together as a cooperative corporation for the conducting of the business of agriculture, dairy, mercantile, banking, mining, manufacturing or other mechanical business on the cooperative plan. It has no reference to banking in the ordinary sense. It is not only not organized under the general banking law, but, under the express provisions of the act, the Bank Commissioner has nothing to do with corporations organized under the cooperative act.

Under the general banking law five persons can organize a bank. The cooperative act also expressly provides that the votes of the association are by members and not by stock. It also provides that it shall distribute its net profits first by paying a fixed dividend, and, second, that the remainder of its profits are prorated to its several stockholders.

The act further provides that the title of a corporation organized under the cooperative plan shall begin with "The" and end with "association," "company," "corporation," "exchange, " "society," or "union." Everything in the act shows that whatever business it did was to be done on the cooperative plan, and its business was in no way connected with the banking system.

Again in 1923 the Legislature passed another act, No. 627, amending the banking act, the title to which is as follows: "An Act to Amend Act 113 of the Acts of the General Assembly of 1913, entitled 'An Act for the Regulation and Control of Banks, Trust Companies and Savings Banks' as amended."

Section 19 of act 627 of the Acts of 1923, provides as follows: "Nothing in this act shall repeal, modify or in any manner affect act 632 of the Acts of the General Assembly of 1921, approved March 29, 1921, nor shall it affect any bank or other corporation organized thereunder, and said act 632 and every part thereof shall stand and be in full force and effect the same as if this act had not been passed."

It is clear that when act 88 was passed, and all times prior thereto, the Bank Commissioner had no supervision or control over associations formed under the cooperative act, and had no connection with such associations. We think therefore that it is clear that when act 88 uses the word "bank" it means a bank under the supervision of the Bank Commissioner, and has no reference to cooperative associations.

Under the cooperative plan no person is allowed to own or have an interest in more than 10 per cent. of the capital stock of such corporation, and voting upon all questions shall be by members and not by stock. The organization, management, control and purposes of an association organized under the cooperative plan is wholly different from the organizations, management, control and purposes under the general banking law.

There is, we think, no conflict between the provisions of act 88 and the provisions of act 632 of 1921.

Appellee calls attention to 57 C. J. 903, and says that in some jurisdictions such a clause is referred to as an express repeal. The clause referred to in C. J., cited by appellee, was the clause that "all laws and parts of laws in conflict or all acts and parts of acts inconsistent with the statute are repealed." There is no such provision in act 88.

Section 12 of the act says that the act is cumulative and shall not repeal, but merely suspend any law in conflict therewith. There is no repealing clause found anywhere in act 88. Therefore, so far as this citation is concerned, it has no application, because it could be neither express nor implied repeal, when no such clause is found in the act. It could not suspend the act by...