State v. Aetna Banking & Trust Co.

• Decision Date: 22 October 1906
• Parties: STATE v. AETNA BANKING & TRUST CO.
• Court: Montana Supreme Court

87 P. 268

34 Mont. 379

STATE v. AETNA BANKING & TRUST CO.

Supreme Court of Montana

October 22, 1906

Appeal from District Court, Lewis and Clarke County; J. M. Clements Judge.

Action by the state against the AEtna Banking & Trust Company. From a judgment in favor of defendant, plaintiff appeals. Affirmed.

Albert J. Galen, Atty. Gen., and E. M. Hall, Asst. Atty. Gen., for the State.

J. L Wines and W. T. Pigott, for respondent.

HOLLOWAY J.

The state of Montana and the AEtna Banking & Trust Company acting under the provisions of section 2050 of the Code of Civil Procedure, submitted to the district court a case containing an agreed statement of the facts upon which the controversy then existing between them depended. The court found for the AEtna Banking & Trust Company, and judgment was entered accordingly. From that judgment, the state appeals.

The agreed statement of facts discloses that since 1901 the AEtna Banking & Trust Company has been a foreign corporation engaged in a banking business at a known and fixed place of business in Butte, Mont., with a capital stock of $100,000. It has at all times fully complied with the laws prescribing the conditions under which foreign corporations may do business in this state. Laws 1901, p. 150. During the year ending November 1, 1904, the state examiner demanded from this respondent that it furnish certain reports ordered by him, that it permit him to examine and investigate its affairs, and that it pay into the state examiner's fund the sum of $100. Every one of these demands was refused. Like demands were made during the year ending November 1, 1905, with the same result; and these refusals gave rise to this controversy. The state contends (1) that it is entitled to collect the penalties mentioned in section 498 (chapter 100, p. 188, Laws 1903) on account of the refusal of this respondent to comply with the demands made in 1904; (2) that it may recover the penalties provided by chapter 104, p. 232, Laws 1905, on account of the failure of the respondent to comply with the demands made in 1905.

1. Chapter 100, p. 184, Laws 1903, is entitled "An act to amend an act approved March 4, 1897, entitled 'An act to amend Sections 490 and 506 inclusive, being all of article 11, chapter 3, title 1, part 3, Political Code of Montana, providing for the appointment of a state examiner and defining his duties and powers."' Section 491 of the chapter defines the duties of the state examiner, and certain penalties are provided for offenses committed by officers or agents of the concerns mentioned; but these provisions have no application here, where the corporation itself is a party to a civil action. This is not a criminal prosecution against the officers of this respondent. The chapter also fixes the salary of the state examiner and his deputy, and then, in section 497, creates the "state examiner's fund," and provides for the payment into this fund of certain amounts from the counties of the state according to classification, also for the payment into this fund by "each bank, banking corporation, savings bank, investment and loan company, incorporated under the laws of this state," of certain fees according to the capital stock of the concern. A concern with a capital stock of $100,000 is required to pay $100. Each building and loan association, whether foreign or domestic, doing business in this state, is required to pay into this fund one-twentieth of 1 per cent. of its assets as shown by its last annual statement. Section 497 then provides: "Any excess of the expenses of such examination incurred in pursuance of this title, over and above the fee herein provided for shall be paid by the state from any money in the general fund not otherwise appropriated." Section 498 of this chapter provides: "Any banks, banking corporation, savings bank, building and loan association, investment and loan company, incorporated under the laws of this state or doing business under any law of this state concerning corporations, that shall fail or neglect to pay the state treasury within ten days after the first day of November each year the sum due as specified in the section next preceding shall forfeit to the state, ten dollars ($10.00) for every day it shall so fail," etc.

In order for the state to prevail as to its first contention, it must show that this respondent is liable to pay the fee mentioned in section 497 above. This respondent is a corporation organized under the laws of the state of West Virginia and doing business in Montana. It is conceded that section 497 above does not in terms apply to such a concern. That section only mentions banks, banking corporations, etc., incorporated under the laws of this state, and foreign and domestic building and loan associations. But the Attorney General insists that the phrase "or doing business under any law of this state concerning corporations," found in section 498, should be read into section 497, immediately after the phrase "incorporated under the laws of this state," and, if this be done, then the right of the state to prevail as to its first contention is clear.

We need not consider what rule of statutory construction applies to statutes not penal in character. Chapter 100 of the Laws of 1903 is a highly penal statute, and the rule, universally recognized, is that a statute of this character must be strictly construed. The rule is founded upon the principle that the power of punishment vests in the Legislature, not in the courts. "Strict construction, as applied to statutes, means that they are not to be so extended by implication beyond the legitimate import of the words used in them as to embrace cases or acts not clearly described by such words, and to bring them within the prohibition or penalty of such statutes. It does not mean that words shall be so restricted as not to have their full meaning, but that everything shall be excluded from the operation of statutes so construed which does not clearly come within the meaning of the language used." 26 Am. & Eng. Enc. Law, 657. It is not sufficient to say that there is no good reason for the omission from section 497 above of the phrase we are now asked to supply. "Where the language of a statute is clear, it is not for the court to say that it shall be so construed as to embrace cases, because no good reason can be assigned why they were excluded from its provisions." 26 Am. & Eng. Enc. Law, 601. "It is, however, the object of the construction of penal as of all other statutes to ascertain the true legislative intent; and while the courts will not, on the one hand, apply such statutes to cases which are not within the obvious meaning of the language employed by the Legislature, even though they be within the mischief intended to be remedied, they will not, on the other hand, apply the rule of strict construction with such technically as to defeat the purpose of ascertaining the true meaning and intent of the statute." 26 Am. & Eng. Enc. Law, 659. If the intention of the Legislature is made manifest by the language employed in the act, then there is no occasion for resorting to rules of construction or interpretation. If the language is plain, it will be construed as it reads and the words employed given their full meaning.

In order to determine, if possible, just what institutions the Legislature intended to burden with the fees mentioned in section 497 above, resort may profitably be had to the history of the legislation upon the subject. The first statute dealing with the subject of bank examination was reported by the Code commission, and adopted as a part of the Political Code (sections 490-496). Provision was made for the appointment of a state examiner, his salary fixed, and his duties defined. But no fees were required to be paid by the concerns examined by him, and there is not any reference in the act to foreign banking corporations doing business in the state, or to foreign or domestic building and loan associations. Apparently the purpose in the beginning was to subject to the supervision of the state examiner only domestic corporations and private persons doing a banking and loaning business. This statute was immediately superseded by the act of March 18, 1895 (Pol. Code, §§ 497-506). By section 498 of this act of the duties of the state examiner are defined to be, among other things, "to visit each year without previous notice each of the banks, banking corporations and saving banks, investment and loan companies incorporated under the laws of this state, or doing business under any law of the state concerning corporations, and to examine into their affairs," etc. Foreign banking institutions doing business in this state were then, for the first time, made subject to the supervision of the state examiner. By section 504 of the act above, there was created the "state examiner's fund," and the state sought to provide for the expenses of the state examiner's office by requiring every county to pay an amount based upon the classification of the counties, and "each bank, banking corporation, savings bank, investment or loan company incorporated under the laws of this state" was required to pay the sum of $50, and the balance of the expenses incurred was to be paid by the state from the general fund. In order to secure the payment of the amounts apportioned among the banking institutions mentioned, there was a penalty clause added in section 505 of the act as follows: "Any bank, banking corporation, savings bank, investment or loan company, incorporated under the laws of this state that shall fail or neglect to pay into the state treasury within ten days from and after the first day of January of each year, the sum mentioned in the section next preceding shall forfeit to the...