State ex rel. Short v. Johnson

• Decision Date: 22 May 1923
• Docket Number: Case Number: 14024
• Citation: 90 Okla. 21,1923 OK 299,215 P. 945
• Parties: STATE ex rel. SHORT, Atty. Gen., v. JOHNSON et al.
• Court: Oklahoma Supreme Court

1923 OK 299

215 P. 945

90 Okla. 21

STATE ex rel. SHORT, Atty. Gen., v. JOHNSON et al.

Case Number: 14024

Supreme Court of Oklahoma

Decided: May 22, 1923

Syllabus

¶0 1. Statutes--Validity--Violation of Constitution.

In passing upon the validity of a statute every reasonable doubt should be resolved in its favor, but where a statute is clearly violative of a plain constitutional limitation, it will be held void.

2. Same--Subjects and Titles of Statutes.

Section 57, art. 5 of the Constitution of Oklahoma, provides in part: "Every act of the Legislature shall have but one subject, which shall be clearly expressed in its title. * * *" Held, this provision is positive and mandatory. Besides it is reasonable and a substantial compliance therewith is not difficult.

3. Same--Object of Constitutional Provision.

Inasmuch as the supreme legislative power of the state, including the power to reject legislative acts, is reserved to the people by sections 1, 2, and 3, art. 5 of the Constitution, one primary object of the above provision of section 57, art. 5, is that the title of an act shall bear clear notice, not only to the legislative body, but to the electorate of the state of what an act may contain.

4. Banks and Banking--State Policy--Validity of Statute.

A distinct economic policy of the state is declared in section 1, art. 14 of the Constitution, and the Legislature is therein directed to carry out such policy by the enactment of laws for such purpose, viz., the protection of depositors in state banks; hence an act which has the effect of impairing or destroying such state policy, where a provision which has such effect is not expressed in the title, will be more strictly construed than will an act whose provisions tend to sustain a state policy.

5. Same--Statute Impairing Depositors' Rights in Assets of Failed Banks--Invalidity.

Chapters 5 and 6, Sess. Laws 1907-8, as amended and revised in chapter 6, Rev. Laws 1910, vitalized and gave effect to the state policy declared in section 57, art. 5, of the Constitution. Section 5. ch. 58. Sess. Laws 1915, has the effect of seriously impairing, if not virtually destroying, the preference right of the depositors against the assets of a failed bank by giving surety companies an equal preference right with the depositors' guaranty fund against such proceeds. Such provision, not being expressed in the title, is void.

Error from District Court, Kiowa County; Thos. A. Edwards, Judge.

Action by the State, on the relation of George F. Short, Attorney General, against C. H. Johnson, Cleve Christian, and E. J. Winningham on their liability as stockholders of failed bank. Judgment for defendants, and plaintiff brings error. Affirmed.

Geo. F. Short, Atty. Gen., William H. Zwick, Asst. Atty. Gen., Wendell Johnson, Attorney for Banking Dept., and Lee G. Gill, Special Attorney for Banking Dept., for plaintiff in error.

Geo. L. Zink, for defendants in error.

HARRISON, J.

¶1 This proceeding involves the constitutionality of section 5, ch. 58, Sess. Laws 1915, in that it is alleged to be violative of sections 57, 51, 46, and 32. art. 5, and section 7, art. 2, of the Constitution.

¶2 The controversy grew out of the following facts: The Oklahoma State Bank at Sentinel, Okla., having become insolvent, its affairs were taken charge of by the Bank Commissioner. The United States Fidelity & Guaranty Company was surety for said bank for certain deposits of the county funds of Washita county. When the bank became insolvent, the United States Fidelity & Guaranty Company paid the surety bond for said Washita county deposits. Thereupon, raider authority of said section 5, ch. 58, Sess. Laws 1915, the Bank Commissioner issued his check for $ 10,000 to the United States Fidelity & Guaranty Company as payment of its pro rata share of the assets of said bank, estimated on an equal preference right with the depositors' guaranty fund, and then brought suit against the defendants in error here on their liability as stockholders of said insolvent bank.

¶3 Said stockholders, defendants in error here, defend against liability to the United States Fidelity & Guaranty Company on the ground that said section 5, ch. 58, supra, is unconstitutional.

¶4 The questions presented to the trial court were whether said section 5, ch. 58, Sess. Laws 1915, was violative of any one or all of said sections of the Constitution, viz.: section 57, art. 5, section 51, art. 5, section 46, art. 5, section 32, art. 5, and section 7. art. 2. The trial court found in favor of defendants in error, holding that said section was unconstitutional, and the cause is briefed and has been orally argued here on the sole question whether the statute above mentioned is violative of any of the constitutional provisions, supra The section of the statute in question, including its title, is as follows:

Title: "An Act to amend sections 267 and 272 of chapter 6, art. 1, of the Revised Laws of the state, of Oklahoma of 1910, and to amend section 3, ch. 22, Session Laws of 1913, providing penalties for violations of the banking laws of this state, and to define the powers of the State Banking Board, and for other purposes; and declaring an emergency."

"Section 5. On and after the passage and approval of this act, in all cases where a surety company is compelled to pay, or voluntarily pays, a deposit of any state, county, municipal or other public funds for which it is liable in a failed bank, operating under the banking laws of this state, such surety company shall be entitled to participate in a pro rata division of the proceeds of the assets of any such bank with the depositor's guaranty fund; and the Bank Commissioner shall have exclusive control of the administration and collection of the assets of failed banks, in which any part of the depositors' guaranty fund has been used in payment of depositors, until the depositors' guaranty fund is fully reimbursed and the Banking Board shall pay to such surety company its pro rata share of the proceeds of such assets from time to time as collections from such assets are made; and such surety company in writing a depository bond for any such bank specifically agrees to such administration and that the Bank Commissioner's jurisdiction shall be exclusive. All public deposits secured by surety company bonds or by the assets of any bank shall be included in the computations of average daily deposits as a basis for assessments for the depositors' guaranty fund."

¶5 In determining whether the above section of the statute is violative of any of the foregoing constitutional provisions, we should do so in the light of the following universal canons of construction, viz.:

"That the presumption is in favor of the constitutionality of a statute." Fletcher v. Peck. 10 U.S. 87, 6 Cranch 87, 3 L. Ed. 162:6 R. C. L. 97, sec. 98; Ex parte Hunnicutt, 7 Okla. Crim. 213, 123 P. 179; State v. Coyle et al., 7 Okla. Crim. 50, 122 P. 243; Ex parte Ambler, 11 Okla. Crim. 449, 148 P. 1061: Dickinson v. Perry, 75 Okla. 25, 181 P. 504; Ledegar v. Bockoven, 77 Okla. 58, 185 P. 1097: Leach v. State, 17 Okla. Crim. 322, 188 P. 118.

"That every reasonable presumption will be made in favor of the validity of a statute." Louisville v. Cumberland, etc., Co. 225 U.S. 430, 56 L. Ed. 1151, 32 S. Ct. 741; 12 C. J. 794.

"That any and all reasonable doubts and every reasonable doubt as to the constitutionality of a statute will be resolved in favor of its validity." Ex parte Young, 209 U.S. 123, 52 L. Ed. 714, 28 S. Ct. 441; 12 C. J. 795.

"That the presumption in favor of the constitutionality of a statute will be indulged in by the courts until the contrary is clearly shown" 8 Cyc. 801; 12 C. J. 795; Booth v. Ill., 184 U.S. 425, 46 L. Ed. 623, 22 S. Ct. 425; Fairbank v. U.S. 181 U.S. 283, 45 L. Ed. 862, 21 S. Ct. 648; Henderson Bridge Co. v. Henderson, 173 U.S. 592, 43 L. Ed. 823, 19 S. Ct. 553; 8 Cyc. 803.

"That it is not within the province of the judiciary to question the wisdom or motives of a lawmaking body in the enactment of a statute." Doyle v. Continental Ins. Co., 94 U.S. 535, 24 L. Ed. 148; Ex parte McCardle 74 U.S. 506, 7 Wall. (U.S.) 506, 19 L. Ed. 264; 12 C. J. 799; 6 R. C. L. 101-2; 8 Cyc. 804-5.

"That courts will presume that the Legislature in passing a statute was cognizant of the facts relating thereto and familiar with the existing conditions sought to be remedied." 12 C. J. 799; 6 R. C. L. 101; 8 Cyc. 803-4.

¶6 We should bear in mind, also, that under section 36, art. 5, of the Constitution of Oklahoma the authority of the Legislature shall extend to all rightful subjects of legislation.

¶7 In the light of the foregoing canons of construction and from an examination of other authorities bearing more directly upon the points involved in each proposition, it is our opinion that neither section 51, art. 5, section 46, art. 5, section 32, art. 5, nor section 7, art. 2 of the Constitution, is contravened by said section 5, ch. 58, Sess Laws 1915; but having reached the conclusion that said section 5, ch. 58, Sess. Laws 1915, or at least a portion thereof, must fall for failure to meet the requirements of section 57, art. 5 of the Constitution, it is unnecessary to discuss the remaining provisions.

¶8 Said section 57, art. 5 of the Constitution, or the portion thereof bearing directly upon the question at issue, is as follows:

"Every act of the Legislature shall embrace but one subject, which shall be clearly expressed in its title. * * *"

¶9 That the foregoing provision has a definite purpose in our organic law is clearly apparent, and the purpose of such provision is by no means new to our jurisprudence. Most every state has a similar provision in its Constitution, many have the identical provision, and none but what have some provision looking toward the same purpose. Hence, as its necessity is so generally recognized, its purpose should not be lightly treated. The primary purpose of such provisions has long been recognized,...