State v. Tullock
| Decision Date | 10 March 1925 |
| Docket Number | 5703. |
| Citation | 234 P. 277,72 Mont. 482 |
| Parties | STATE ex rel. v. TULLOCK, Sheriff. BOONE |
| Court | Montana Supreme Court |
Original application by Noah Boone for writ of habeas corpus against Guy Tullock, as Sheriff of Fergus County. Proceeding dismissed, and petitioner remanded to custody.
Belden & De Kalb and Charles J. Marshall, all of Lewistown, and Norman R. Barncord, of Judith Gap, for petitioner.
L. A Foot, Atty. Gen., and I. W. Choate, Asst. Atty. Gen., for respondent.
Relator was indicted by a grand jury of Fergus county, charged with having, as president of a certain bank, permitted it, while insolvent, to accept a deposit of money and place the same in the general assets of the bank, instead of in a trust fund for the depositor as required by law. Relator was taken into custody under a bench warrant; he is before this court on a writ of habeas corpus, the return to which admits his detention and seeks justification under the bench warrant.
The indictment is predicated upon section 6081, Revised Codes of 1921, as amended by chapter 90, § 3, of the Laws of the 18th Assembly (1923). There is no dispute as to the facts. Relator contends that the above section is unconstitutional in that it does not meet the requirements of section 23 of article 5 of the Constitution, that all prior acts on the subject embraced in the section have been repealed, and that the acts charged in the indictment do not constitute a public offense.
1. It is conceded that all acts on this subject in existence prior to the passage of chapter 89, Laws of the 14th Assembly (1915), have been repealed, and therefore the indictment must stand or fall on the validity of that act, of which section 6081, R. C. 1921, is section 62.
2. The section under consideration, before amendment, provided:
"Whenever any bank shall be insolvent or in an impaired condition in the manner described and set forth in section 6078 of this code, such bank shall not accept or receive on deposit any money * * * except as trustee for the depositors, * * * and it or they shall keep all such deposits * * * separate and apart from the general assets of the bank: * * * Provided that in the event such impairment or insolvency be not made good or removed within the period stated in the notice required in section 6078, then * * * such trust deposits shall be returned to the depositors; * * * that any officer * * * thereof, who shall knowingly accept or receive, be accessory to, or permit, or connive at the receiving or accepting of such trust deposits, except in the manner hereinbefore set forth * * * shall be deemed guilty of a felony, and upon conviction thereof shall be punished by a fine not exceeding ten thousand dollars, or imprisonment in the state prison not exceeding five years," etc.
Section 6078, referred to herein, is section 59 of the act of 1915, and provides for an examination of banks organized under the act, and, if the superintendent of banks shall find evidence of impairment or insolvency, he shall report to the governor and attorney general, who, if satisfied that impairment or insolvency exists, shall order the superintendent of banks to take charge of the bank or to notify the stockholders to make good the impairment or insolvency within a specified time.
Chapter 90 of the Acts of the 18th Assembly amended section 6081 only to the extent of striking out the words "section 6078 of this Code" in the opening paragraph of the section and substituting therefor the words "subsection 10 of section 1 of this act," and striking out the words appearing later in the section "or removed within the period stated in the notice required in section 6078."
Section 1 of chapter 90, Laws of 1923, is the enactment of a new section to the "Bank Act," designated -clearly designed to clarify the meaning of the original act by defining various words and terms used therein. Subsection 10 reads as follows:
"A bank is insolvent within the meaning of this chapter when all of its capital surplus, and undivided profits are absorbed in losses and the remaining assets will not be sufficient to pay and discharge its contracts, debts and engagements."
Counsel for relator urge that it was the intention of the Legislature to substitute this provision for section 6078; that the two cannot be harmonized and, therefore, section 6078 is repealed by implication; that subsection 10, § 1, is not within the title to chapter 90, and therefore, like chapter 89, Laws of 1915, is unconstitutional, and no method is left for the determination of insolvency. It is true that the amendment to section 6081 substitutes the words "subsection 10 of section 1" of the act of 1923 for "section 6078," in section 6081, but by so doing the Legislature did no more than to declare the fact of insolvency the basis of the inhibition and consequent liability for its violation, in lieu of basing such inhibition and prosecution upon the finding and notice of insolvency. Such a substitution does not, however, necessarily lead to the conclusion that the Legislature intended thereby to do away with action looking to a determination of insolvency, nor repeal section 6078 by implication. The fact of insolvency, if it exists, is present regardless of action or nonaction on the part of the superintendent of banks.
It is the rule, of course, that where two provisions of an act of the Legislature are conflicting and cannot be harmonized, the last in order of arrangement controls. State ex rel. Koefod v. Board of Commissioners, 56 Mont. 355, 185 P. 147. But where there is a statute dealing with a subject in general and comprehensive terms, and another dealing with a part of the same subject in a more minute and definite way, the two should be read together and harmonized, if possible. State ex rel. Esgar v. District Court, 56 Mont. 464, 185 P. 157.
Invoking this latter rule, we find no inconsistency here. The superintendent of banks may still proceed as in section 6078 provided, and an action be prosecuted under section 6081 on the fact of insolvency, after such proceedings are had, as such determination and notice as are there provided for do not affect the actual condition of the bank existing either then or theretofore.
3. The wording of subsection 10, § 1, of the act of 1923, is not as clear as it might be, in that it is not specific as to the time when the "remaining assets will not be sufficient to pay and discharge the debts." However in the construction of a statute, the intention of the Legislature is to be pursued, if possible. Section 10520, Rev. Codes 1921; Lerch v. Missoula B. & T. Co., 45 Mont. 314, 123 P. 25, Ann. Cas. 1914A, 346; State ex rel. Carter v. Kall, 53 Mont. 162, 162 P. 385, 5 A. L. R. 1309. And we must look not only to the words employed, but also to the evil to be remedied. Johnson v. Butte & Superior C. Co., 41 Mont. 158, 108 P. 1057, 48 L. R. A. (N. S.) 938. Of two admissible constructions of a statute, the courts are never justified in adopting the one which defeats the manifest object of the law. Wilkinson v. La Combe, 59 Mont. 518, 197 P. 836.
In enacting this subdivision or definition, the Legislature had a definite purpose in view. That purpose was clearly to provide a rule by which the insolvency of any bank could be determined at any given time. The intention was, manifestly, to designate a time to which proof of insolvency could be directed in an action arising out of a violation of the provisions of the act, of which that subsection was made a part. That intention and purpose could only be carried out by placing on the statute books a definition, every phrase of which referred to but a single instant of time.
It cannot be that the Legislature intended that its reference to absorption of the capital, surplus, and undivided profits should be in the present tense, and the provision as to the remaining assets should refer to some time in the future. But, having in mind the nature of the remaining assets, after what may be termed the liquid assets have been absorbed in losses, it seems reasonable to presume that the phrase "will not be sufficient," though appearing in the act in the future tense, was intended to refer to the then value of such assets, admitting that such value could not, at that time, be applied to pay and discharge the debt and liabilities of the bank. This being the intention of the Legislature, manifested by the purpose to be accomplished, the wording of the provision and the evils to be remedied by the act of which this subsection is a part, the definition is construed as though it read "and the remaining assets will not be (when converted into cash at their present value) sufficient to pay and discharge its contracts, debts, and engagements." This is but the reasonable construction of the statute, and, when so construed, the act furnishes a concise rule for determining the insolvency of a bank at any given time.
4. We enter upon a determination of the question as to the constitutionality of the act of 1915 bearing in mind the principles governing our consideration thereof heretofore announced by this court. In the case of State v. McKinney, 29 Mont. 375, 74 P. 1095, 1 Ann. Cas. 579, is found a summary of the rules theretofore announced by this and other courts, in five "general principles" with reference to this constitutional provision, viz.:
(1) The purposes of the provision are to prevent the enactment of laws surreptitiously; to give notice to the Legislature and to the people that they may not be misled; to guard against fraud in legislation.
(2) The courts should give to this provision a liberal construction, so as not to interfere with or impede proper legislative functions.
(3) "The Legislature is the judge,...
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