Placek v. Edstrom
| Decision Date | 22 April 1949 |
| Docket Number | 32588. |
| Citation | 37 N.W.2d 203,151 Neb. 225 |
| Parties | PLACEK et al. v. EDSTROM. |
| Court | Nebraska Supreme Court |
Syllabus by the Court.
1. Chapter 11, Laws of Nebraska, 1945, is a fair and reasonable exercise of police power with relation to banking, a business pre-eminently public in nature, and thus does not impair the obligation of contracts or unreasonably deprive state banks of their right to contract or deprive them of due process or equal protection of the laws.
2. The act does not prohibit state banks from collecting legitimate exchange charges from their own customers or depositors for making their funds available, by one recognized mode or another, at distant places for their own purposes.
3. The act does not compel drawee state banks to donate the use of their services or property without compensation, but simply requires that if they clear checks, it must be done at par, without deduction of any exchange charges whatever from remittances to forwarding banks.
4. 'Special collection items' within the purview of the act, are those which are sent to a bank for collection only and which in fact actually require the employment of unusual and individual treatment or services in the act or process of collection and remittance thereof, as distinguished from those which require only the treatment or services ordinarily involved or employed in the general course of clearance transactions between a forwarding bank and the drawee bank.
5. Private rights must yield to the public welfare, and one whose rights are appropriately declared and defined by a valid legislative enactment under the police power of the state cannot, by purported contractual authority or otherwise, avoid observance thereof or make such legislation ineffectual.
Peterson & Devoe, of Lincoln, for appellants.
James H. Anderson, Atty. Gen., Homer L. Kyle, Asst. Atty. Gen., and Myrl D. Edstrom, pro se, of Wahoo, for appellee.
Heard before SIMMONS, C. J., CARTER, MESSMORE, YEAGER CHAPPELL, WENKE, and BOSLAUGH, JJ.
Plaintiffs filed this action in the district court for Saunders County to obtain a declaratory judgment construing and applying Chapter 11, Laws of Nebraska, 1945, p. 110, now appearing as sections 8-163.01 and 8-163.02, R.S.Supp., 1947, commonly known as the 'par-check law,' but hereinafter designated as the act, contesting its constitutionality as applied to three types of banking transactions respectively pleaded in separate causes of action, and to enjoin threatened enforcement of the act by prosecution or otherwise, with relation to such transactions.
Defendant demurred generally to each cause of action, separately and severally. The trial court, after hearing thereon, sustained defendant's demurrer to the first and second causes of action, and overruled demurrer to the third. Each party on open court elected to stand upon their respective pleadings and it was stipulated that the trial court should proceed to enter a decree adjudicating the issues raised thereby. Thereupon, a decree was entered, dismissing plaintiff's first and second causes of action, adjudging that the act had no application to the transaction set forth in the third cause of action, and permanently enjoining defendant from prosecuting plaintiffs on account thereof. Therefrom, plaintiffs appealed and defendant cross-appealed. We affirm the judgment of the trial court.
Heretofore, in Placek v. Edstrom, 148 Neb. 79, 26 N.W.2d 489, 174 A.L.R. 856, an action similar in its primary aspects with that at bar, this court not only construed the act involved, but also particularly designated the field of its application, and affirmatively adjudged its constitutionality. With reference to constitutionality, we concluded that the act was a fair and reasonable exercise of the police power of the state to promote the public welfare with relation to banking, a business preeminently public in nature, and thus the act did not impair the obligation of contracts or unreasonably deprive these same plaintiffs or other state banks of their right to contract, or deprive them of due process or equal protection of the laws.
In that connection, our conclusions and the reasons therefor will not be generally repeated in this opinion, but included only by reference, because, as we view the matter, the sole question presented here is whether or not the act prohibits the banking transactions set forth in plaintiffs' three respective causes of action. We conclude that it prohibited the first and second but not the third.
Section 8-163.01, R.S.Supp., 1947, provides: 'All checks drawn on any bank or trust company organized under the laws of this state shall be cleared at par by the bank or trust company on which they are drawn; Provided, the foregoing direction shall not be applicable where checks are sent to banks or trust companies as special collection items.'
Section 8-163.02, R.S. Supp., 1947, provides: 'Any officer or employee of any such bank or trust company who violates the provision of section 8-163.01 shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not less than five dollars nor more than ten dollars for each offense.'
As disclosed by plaintiffs' petition, after the judgment in Placek v. Edstrom, supra, became final, plaintiff bank, by plaintiff Emil Placek, its president, mailed a notice to 'All Correspondent Banks And Federal Reserve Bank' notifying them that on and after July 31, 1947, all checks drawn on it would be paid at par, only over the counter of its banking house in Prague, Nebraska, and that if a remittance by draft was requested, then their cash mail letters for collection and remittance should clearly indicate that plaintiff bank would be permitted and authorized to make a charge of 10 cents per $100 or fraction thereof for issuing and remitting by draft, otherwise all items would be returned.
Enclosed with such notice was a letter stating in effect that, in conformity therewith, all checks drawn upon plaintiff bank would be paid at par only over its counter, and if such banks desired to save the expense of bringing such checks to its banking house for payment, it would be necessary that they mail plaintiff bank a letter permitting and authorizing it to make such exchange charges for issuing and mailing a draft to cover items sent to it.
Plaintiffs' first cause of action alleged substantially that such a notice and letter were mailed to its correspondent, First National Bank of Kansas City. On July 31, 1947, it replied that effective August 1, 1947, plaintiffs would be authorized to assess the aforesaid exchange charges, but that in keeping with the Federal Reserve Bank Regulation 'Q' such charges 'will be assessed to our endorsers should the accumulated totals amount to $2.00 and over for a current month.'
Thereafter, upon several designated occasions, checks drawn on plaintiff bank by its depositors, were forwarded in cash mail letters by said correspondent for collection and remittance of their aggregate proceeds. Upon each such occasion, in conformity with its purported contractual authority, plaintiff bank remitted the aggregate amount of the checks contained in each such cash mail letter, less exchange charges upon the total amount thereof, as aforesaid, by draft drawn on a correspondent bank.
For its second cause of action, plaintiffs alleged substantially that it mailed a like letter and notice to its correspondent, First National Bank of Omaha. On July 28, 1947, it replied, acknowledging receipt of the notice that such exchange charges would be made effective August 1, 1947, but stating that 'When depositors instruct that items be sent you as 'special collection', any charge for remitting will be charged to the endorser.'
Thereafter, upon several designated occasions, checks drawn on plaintiff bank by its depositors were forwarded in cash mail letters by said correspondent for collection and remittance of their aggregate proceeds. Each such cash mail letter contained a slip listing the checks enclosed, and at the bottom of the slip appeared the words 'Special Collection.' Upon each such occasion, in conformity with its purported contractual authority, plaintiff bank remitted the aggregate amount of the checks contained in each cash mail letter, less exchange charges upon the total amount thereof, as aforesaid, by draft drawn on a correspondent bank.
For their third cause of action plaintiffs alleged substantially that by letter dated August 14, 1947, Omaha Provision Company, as...
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