Rushton v. Schram

• Decision Date: 31 May 1944
• Docket Number: No. 9638.,9638.
• Citation: 143 F.2d 554
• Parties: RUSHTON, Atty. Gen., v. SCHRAM.
• Court: U.S. Court of Appeals — Sixth Circuit

143 F.2d 554 (1944)

RUSHTON, Atty. Gen., v. SCHRAM.

No. 9638.

Circuit Court of Appeals, Sixth Circuit.

May 31, 1944.

Arthur L. Fitch and G. Douglas Clapperton, both of Lansing, Mich. (Herbert J. Rushton, Arthur L. Fitch, and G. Douglas Clapperton, all of Lansing, Mich., on the brief), for appellant.

Robert S. Marx, of Detroit, Mich. (Frank E. Wood, Robert S. Marx, Carl Runge, Lawrence I. Levi, and Orville J. Thill, all of Detroit, Mich., and Nichols, Wood, Marx & Ginter, of Cincinnati, Ohio, on the brief), for appellee.

Before SIMONS, ALLEN, and MARTIN, Circuit Judges.

MARTIN, Circuit Judge.

After promulgation of the opinion in the declaratory judgment suit of Starr, Atty. Gen., v. O'Connor, Comptroller of the Currency, 6 Cir., 118 F.2d 548, in which were reviewed Act No. 238, Public Acts of 1897, and the amendments thereto, in their relation to the liquidation of the First National Bank-Detroit, the legislature of Michigan amended these laws by Act No. 170, Public Acts of 1941. While that cause was pending on petition for rehearing, the Attorney General of Michigan filed in this court notice of the 1941 amendatory act. In the state of the pleadings and of the record, we considered that our jurisdiction to pass upon the effect of the new law had not been properly invoked. The petition for rehearing was accordingly denied without a consideration of the amendatory act of which mere notice had been given. The Supreme Court denied certiorari. Starr v. Schram, 314 U.S. 695, 62 S.Ct. 412, 86 L. Ed. 555.

In a new petition for declaratory judgment, filed in the district court on March 14, 1942, Herbert J. Rushton, successor Attorney General of Michigan, has asserted that Act No. 170 is applicable to the First National Bank-Detroit, which is still in process of liquidation. His argument, upon final analysis, is that this new Act constitutes an effective nullification of our previous declaratory adjudication that the Michigan laws of escheat are not operative upon dormant deposits in possession of the National Bank Receiver.

Relying solely upon the opinion of this court in Starr v. O'Connor, supra, the district court decreed that the Michigan statutes considered in that case and, also, Act No. 170, Public Acts of Michigan for 1941 (which as has been stated was not considered by us), constitute an unlawful interference with the liquidation of an insolvent national bank; and that the Michigan escheat statutes, since the suspension of the First National Bank-Detroit on February 11, 1933, have been and are now inapplicable to the national bank and its receiver. The prayer of the petition of the Attorney General for declaratory judgment and other relief was, therefore, denied. From this decree, an appeal has been taken.

We now, for the first time, consider the effect of the new enactment upon the liquidation of the insolvent First National Bank-Detroit. At the threshold must be confronted the question whether or not Act No. 170, Public Acts of Michigan for 1941, should be construed as retroactive in effect upon the instant national bank liquidation.

The rule of construction has been repeatedly adhered to in the Supreme Court that all statutes are to be considered as prospective only, unless the language "is express to the contrary, or there is a necessary implication to that effect." Harvey v. Tyler, 69 U.S. 328, 347, 17 L.Ed. 871; Fullerton-Krueger Lumber Co. v. Northern Pac. R. Co., 266 U.S. 435, 437, 45 S.Ct. 143, 69 L.Ed. 367. In Shwab v. Doyle, 258 U.S. 529, 534, 42 S.Ct. 391, 392, 66 L.Ed. 747, 26 A.L.R. 1454, it was stated that "laws are not to be considered as applying to cases which arose before their passage unless that intention be clearly declared." Mr. Justice Sutherland reiterated this doctrine in Miller v. United States, 294 U.S. 435, 439, 55 S.Ct. 440, 442, 79 L.Ed. 977: "The law is well settled that generally a statute cannot be construed to operate retrospectively unless the legislative intention to that effect unequivocally appears."

In harmony with this familiar canon of statutory construction, this court has asserted that no law will be given retroactive effect, unless therein is found a declaration of retroactivity "clear, strong, and imperative." Royal Oak Drain Dist., Oakland County, Mich., v. Keefe, 6 Cir., 87 F.2d 786, 794.

The opinions of the Supreme Court of Michigan are in consonance with the federal decisions in reiterating that all statutes are to be treated as prospective rather than retrospective in operation, unless a legislative intent to the contrary clearly appears, either by express provisions or by necessary implication. Ramey v. Michigan Public Service Commission, 296 Mich. 449, 460, 296 N.W. 323; Detroit Trust Co. v. City of Detroit, 269 Mich. 81, 256 N.W. 811; People v. Foster, 261 Mich. 247, 255, 246 N.W. 60; Price v. Oakfield Township Board, 188 Mich. 524, 530, 154 N.W. 657; Board of Sup'rs of Arenac County v. Board of Sup'rs of Iosco County, 158 Mich. 344, 347, 122 N.W. 629; Davis v. Michigan. Cent. R. Co., 147 Mich. 479, 111 N.W. 76; In re Lambrecht, 137 Mich. 450, 100 N.W. 606; Phillips v. Township of New Buffalo, 68 Mich. 217, 35 N.W. 918; Maxwell v. Bay City Bridge Co., 46 Mich. 278, 287, 9 N.W. 410; Fuller v. City of Grand Rapids, 40 Mich. 395; Smith v. Humphrey, Auditor General, 20 Mich. 398, 405-408; Harrison v. Metz, 17 Mich. 377, 382.

But the Attorney General of Michigan insists that upon the authority of Evans Products Co. v. State Board of Escheats, 307 Mich. 506, 12 N.W.2d 448, Act No. 170 must be applied retroactively in the instant case. In our interpretation, the Supreme Court of Michigan did not indicate that the state statute was intended by the legislature to apply retroactively to the liquidation of a national bank. The court's words were obviously chosen with care: "Plaintiffs assert that in any event Act 170 must be held to be prospective only, and not to be given any retroactive effect. In substance, this would mean that the act does not apply to the facts and circumstances set up by plaintiffs — particularly to circumstances alleged by the Consumers Power Company. As construed, and within the limitations of this proceeding, we conclude that under the circumstances of this case emphasis supplied Act 170 does not disturb vested rights. The legislature may pass statutes of limitation and give them retroactive effect. Austin v. Anderson, 279 Mich. 424, 272 N.W. 730. A reading of the entire act clearly indicates a legislative intent to give it retroactive effect. Section 9b expressly refers to property that has been unclaimed, uncalled for, or abandoned, for seven years or more. Similar expressions are found in other sections of the act.

"Our conclusion that Act 170 does not disturb vested rights and is retroactive in effect is in line with our decisions in comparable situations: * * * Under the construction given Act 170 herein and within the restricted jurisdiction of the court under the declaration of rights act, we hold that Act 170 is not violative of section 21, article 5, of the Michigan Constitution of 1908, or the due process clauses of the State and United States Constitutions." 307 Mich. at pages 545, 546, 548, 549, 12 N.W.2d at page 461.

The court commented that the Michigan escheat law, and particularly the 1941 amendment, is "piecemeal legislation with many apparent inconsistencies"; is not "plain and unambiguous" and therefore is subject to judicial construction "in such manner as to avoid constitutional pitfalls, if this can be reasonably done within the legislative intent." The cautious expressions of the Supreme Court of Michigan do not support the insistence of the Attorney General that the Act in question must be retroactively applied to the liquidation of a national bank.

The depositories to which Act No. 170 was declared retroactively applicable were a products company, a power company and two intervening railroad companies, all of which were possessed of moneys, credits, deposits, securities or other intangible personal property concerning which no dealings or transactions had been had with the persons entitled to such intangibles for a period of seven years or more. No national bank, or even a state bank, was involved. These depositories had sought declaratory judgment that the Act was unconstitutional in entirety as violative of the Michigan Constitution in amending and repealing by implication certain statutes of limitation and as depriving them of their property without due process of law in violation of both the Constitution of the State of Michigan and the Constitution of the United States. An injunction restraining the Board of Escheats from enforcing the Act had been prayed.

It was in this context and setting, and with the repeated admonition that the consideration of the court was limited to determination of whether the statute was unconstitutional upon the asserted grounds, that the holding was made that the Act applied retroactively to the factual situation presented. The opinion stated: 307 Mich. at page 527, 12 N.W.2d at page 454 "Plaintiffs ask that we construe various provisions of the act, determine the legal status of particular transactions where an actual controversy may hereafter exist between persons not now parties herein, and where extraneous or special circumstances may control a decision. Such questions have no proper place in this proceeding, and the construction of the act will not be here considered except as it may be necessary in a determination of the constitutional questions involved." The limited scope of the subject matter covered by the opinion was thus emphasized. The court expressly declined to adjudicate issues upon diversified transactions which might be subsequently presented in litigation between other parties. Certainly the Act was not accorded universal retroactivity. With full faith and credit extended the state law, as interpreted by the state's highest court, the question...