Meadowcroft v. People

• Citation: 45 N.E. 303
• Parties: MEADOWCROFT et al. v. PEOPLE.
• Decision Date: 28 March 1896
• Court: Supreme Court of Illinois

45 N.E. 303

MEADOWCROFT et al.

v.PEOPLE.¹

Supreme Court of Illinois.

March 28, 1896.

Error to criminal court, Cook county; Theodore Bretano, Judge.

F. R. Meadowcroft and another were convicted of fraudulent banking, and bring error. Affirmed.

Phillips, J., dissenting.

Walker & Eddy, Collins, Goodrich, Darrow & Vincent, and George S. House, for plaintiffs in error.

Maurice T. Moloney and W. W. Clemens, for the People.

BAKER, J.

The indictment upon which Charles J. Meadowcroft and Frank R. Meadowcroft, the plaintiffs in error, were convicted, was based upon the first section of ‘An act for the protection of bank depositors,’ approved June 4, 1879. Said section is as follows: ‘Section 1. Be it enacted by the people of the state of Illinois, represented in the general assembly, that if any banker or broker or person or persons, doing a banking business, or any officer of any banking company, or incorporated bank doing business in this state, shall receive from any person or persons, firm, company or corporation, or from any agent thereof, not indebted to said banker, broker, banking company or incorporated bank, any money, check, draft, bill of exchange, stocks, bonds or other valuable thing which is transferable by delivery, when at the time of receiving such deposit, said banker, broker, banking company or incorporated bank is insolvent, whereby the deposit so made shall be lost to the depositor, said banker, broker, or officer so receiving said deposit, shall be deemed guilty of embezzlement, and upon conviction thereof shall be fined, in a sum double the amount of the sum so embezzled and fraudulently taken, and in addition thereto, may be imprisoned in the state penitentiary, not less than one nor more than three years. The failure, suspension or involuntary liquidation of the banker, broker, banking company, or incorporated bank within thirty days from and after the time of receiving such deposit, shall be prima facie evidence of an intent to defraud, on the part of such banker, broker or officer of such banking company or incorporated bank.’ The validity of this section of the statute is challenged on several grounds. It is urged that it is in derogation of that provision of our constitution which declares that ‘no person shall be deprived of life, liberty or property without due process of law’ (Const. 1870, art. 2, § 2), and that the case is controlled by the decisions of this court in Millett v. People, 117 Ill. 294, 7 N. E. 631;Frorer v. People, 141 Ill. 171, 31 N. E. 395;Ramsey v. People, 142 Ill. 380, 32 N. E. 364; and Braceville Coal Co. v. People, 147 Ill. 66, 35 N. E. 62. The contention is that every person living under the protection of our state government has the right to be engaged in the prosecution of any one of the ordinary and common callings or business pursuits that is innocent in itself, and has been followed from time immemorial, on the same terms that govern those engaged in other ordinary and common callings or business pursuits of life, and, as incident thereto, has the right to make the same contracts relative thereto as those engaged in such other ordinary and common callings or business pursuits are allowed to make; that the business of private banking is an ordinary and common industrial pursuit, like merchandising, manufacturing, mining, and very many other occupations of life, and is open to any one who may choose to embark in it; that one of the ordinary incidents and inherent elements of the business of a private banker is the receiving of deposits from his customer, and the relation of the banker to his depositor is the ordinary contract relation of debtor and creditor, the moneys deposited becoming the property of the banker, and not trust funds; that every person in this state, other than a private banker, engaged in the ordinary and common callings of life, is allowed to enter into contracts, the result of which is to establish for himself the relation of debtor to every other person in the community who may deal with him; and that to deny to the private banker the right to prosecute his business, and, as incident thereto, to contract in regard to the same, on the like terms as other ordinary and common callings or business pursuits are transacted, is to deprive him of both liberty and property, to the extent that he is thus denied the right to contract, without due process of law.

The fundamental error in the contention thus formulated is the assumption that the business of banking stands upon exactly the same footing that the ordinary industrial pursuits of farming, merchandising, manufacturing, and mining, and the many other common occupations of life, stand upon. The business of a banker is not juris privati only, but, like that of an innkeeper or common carrier, is affected with a public interest, and therefore subject to public regulation. At common law the business of banking is open to all, and may be followed by the citizen at pleasure, unless forbidden by legislative enactment. The right, however, to engage in banking may be restrained by the sovereign authority, and may be regulated by legislation, and it must be commenced and carried on in strict accordance with such statutes as have been enacted for its regulation. Nance v. Hemphill, 1 Ala. 551;Atty. Gen. v. Insurance Co., 2 Johns. Ch. 377;People v. Bartow, 6 Cow. 290;Curtis v. Leavitt, 15 N. Y. 52. In Bank v. Earle, 13 Pet. 519-596, it was said by Chief Justice Taney, in delivering the opinion of the supreme court of the United States: ‘And it is very clear that at common law the right of banking, in all of its ramifications, belonged to the individual citizens, and might be exercised by them at their pleasure. Undoubtedly, the sovereign authority may regulate and restrain this right, but the constitution of Alabama purports to be nothing more than a restriction upon the power of the legislature in relation to banking corporations, and does not appear to have been intended as a restriction upon the rights of individuals. That part of the subject appears to have been left, as is usually done, for the action of the legislature, to be modified according to circumstances.’ All persons possess their rights, whether to things tangible or intangible, subject to the general police power of the state. Northwestern Fertilizing Co. v. Village of Hyde Park, 70 Ill. 634. The police power is that inherent and plenary power which enables the state to restrain or prohibit all things hurtful to the comfort, safety, and welfare of society. Town of Lake View v. Rose Hill Cemetery Co., 70 Ill. 191;Cole v. Hall, 103 Ill. 30;Harmon v. City of Chicago, 110 Ill. 400;Dunne v. People, 94 Ill. 120. In Cooley's Constitutional Limitations, in discussing the police power of the states, it is said: ‘The police power of a state, in a comprehensive sense, embraces its system of internal regulation, by which it is sought, not only to preserve the public order, and to prevent offenses against the state, but also to establish for the intercourse of citizen with citizen those rules of good manners and good neighborhood which are calculated to prevent a conflict of rights, and to insure to each the uninterrupted enjoyment of his own, so far as is reasonably consistent with a like enjoyment of rights by others.’ A banker is a dealer in capital,-an intermediate party between the borrower and the lender,-who borrows of one party and lends to another; and the business of banking is, among other things, the establishing of a common fund for lending money. Newm. Bank Dep. § 21. And as said by the supreme court of Wisconsin in Baker v. State, 54 Wis. 368, 12 N. W. 12, a bank implies capital, and capital invites confidence. A man holding himself out as a banker thereby gives public proclamation that he has money, and property readily convertible into money, in his possession and subject to his control, and for that reason he may be safely trusted; and his business not only affects himself as a banker, but every person who deals with him as such. The object of the statute that is here challenged was evidently to protect the public from being induced to deposit money with insolvent bankers, and there is manifest reason and necessity for protecting the community in their dealings with persons engaged in the banking business that do not exist in respect to their transactions with those employed in the ordinary agricultural, manufacturing, merchandising, and mining pursuits.

It is urged that proof that the accused is a banker, or person doing a banking business; that he received a deposit from a person not indebted to him, and at a time when he was insolvent, whereby the deposit is lost to the depositor,-is not, in and of itself, and without evidence from which the jury can infer a criminal intent, sufficient to convict of a crime. And, in that connection, our attention is again called to the same constitutional provision already partially considered,-that no person shall be deprived of life, liberty, or property without due process of law,-and also to the further provision of the constitution that the right of trial by jury, as heretofore enjoyed, shall remain inviolate, and, in connection therewith, to the fact that among the maxims of the common law which these constitutional provisions secure to the citizen are these: That every man is presumed innocent until proven guilty, and that the burden is upon the state to overcome that presumption of innocence by a preponderance of the evidence. And the claim is made that, in that the statute provides that the failure, suspension, or involuntary liquidation of the banker within 30 days from and after the time of receiving the deposit shall be prima facie evidence of an intent to defraud on the part of the banker, such statute is in derogation of these rights so secured, and therefore unconstitutional and void. The law always presumes an accused party innocent until he is proved to be...