Stephens v. St. Louis Nat'l Bank

• Citation: 43 Mo. 385
• Parties: I. L. STEPHENS, Respondent, v. THE ST. LOUIS NATIONAL BANK, Appellant.
• Decision Date: 31 March 1869
• Court: United States State Supreme Court of Missouri

43 Mo. 385

I. L. STEPHENS, Respondent,

v.THE ST. LOUIS NATIONAL BANK, Appellant.

Supreme Court of Missouri.

March Term, 1869.

Appeal from St. Louis Circuit Court.

The facts appear in the opinion of the court.

Dryden & Lindley, and Whittelsey, for appellant.

The provisions of the act of February 15, 1864, do not violate the provisions of art. I, § 10, of the constitution of the United States, nor those of art. XIII, § 17, R. C. 1855, p. 85, of the constitution of this State. The act is but a statute of limitations, requiring all parties to present their claims within two years or to stand barred. It is not in any way retrospective in its operations; it acts only on the future. All parties having demands against the bank, due at the branch, are allowed two years within which to present their claims after notice given. The authority of the State to enact such a limitation can hardly be questioned. “There is no direct constitutional inhibition upon the States, nor any clause of the constitution from which it can be even plausibly inferred, that the State may not legislate upon the remedy in suits upon judgments of other States, exclusive of all interference with their merits.” (McElmayle v. Cohen, 13 Pet. 312, 328; Bank of Alabama v. Dalton, 9 How. 522.) “A State may regulate at pleasure the mode of proceeding in its courts, in relation to past contracts as well as future. It may, for example, shorten the period of time within which claims shall be barred by the statute of limitations.” (Bronson v. Kinzie, 1 How. 311, 315; Jackson v. Lamphire, 3 Pet. 280, 290; Sturgis v. Crowninshield, 4 Wheat. 122.)

It is true that the original charter of the Bank of St. Louis did not require its notes to be presented within any definite time; and, as they were payable only on demand, until demanded no limitation could commence running, had the statute applied to such cases, which it did not. (R. C. 1855, p. 1052, § 11.) But that did not prevent the Legislature from enacting a statute to wind up the banks, and to limit the time within which demand should be made or suit instituted. In this case the Bank of St. Louis has ceased to exist as a State corporation, and has become a corporation under the act of Congress, as the St. Louis National Bank. The Kirksville Branch was wound up and all its assets distributed among those who held its stock; and now, when the time limited by the statute has passed, the new company is called upon to pay the debts of this extinct corporation. There has been no violation of any contract. The holders of notes were required to make demand within two years from the date of notice given of the winding up, which they have failed to do, and are bound by their own laches.

Draffin, Hutchinson & Muir, for respondent.

The sixth section of the act of the Legislature, approved February 8, 1864 (Sess. Acts 1863-4, p. 151), is in contravention of the tenth section of the first article of the constitution of the United States, which provides that “no State shall pass any law impairing the obligation of contracts.”

The notes on which this suit is instituted were issued and put into general circulation by the Kirksville Branch; they are made payable “on demand.” The contract, then, between the bank and the holders of these notes, was that the notes should be paid when presented by the holders. No time was limited by the contract, the notes, or by the act of Legislature incorporating said bank, within which these notes should be presented. The holders of the notes had the right to present them whenever it suited their interest or convenience, with no limitation on this right other than that imposed by the general limitation law. This was the condition of the parties at the time these notes were issued. The act of the Legislature, against the interest and consent of the holders, steps in and declares that if these notes shall not be presented within a given time--viz: two years--they shall be forever barred.

It has been authoritatively decided that the Legislature possesses no power to alter a charter of a bank against the consent of the corporation, for the reason that it infringes the provision of the constitution of the United States as above quoted; that is, that it impairs the obligation of the contract created in favor of the corporation by the original charter. But the question here is, can the Legislature, at the instance of the corporation, pass a law which in its operation interferes with and injuriously affects the rights of third parties in reference to their existing contracts with said corporation?

Plainly, it is incompetent for the Legislature so to do. This provision of the constitution of the United States has been so repeatedly the subject of consideration by the courts of this country that it is not deemed necessary to cite to this court particular cases.

WAGNER, Judge, delivered the opinion of the court.

The plaintiff sued the defendant upon notes issued by the Kirksville Branch of the Bank of St. Louis. The Bank of St. Louis had organized under the act of 1857 (Sess. Acts 1856-7, pp. 14-31), and had established a branch at Kirksville. By the act of the Legislature of February 15, 1864 (Sess. Acts 1863-4, p. 13), entitled “An act amendatory of the act to regulate banks and banking institutions,” provisions were made for winding up the branch banks, and section 3 provided that all claims, dues, and demands of said banks not presented within two years should be forever barred, saving the usual disabilities.

The defendant answered, setting up the fact that said Kirksville Branch had been wound up in accordance with the said statute, and that due notice had been given as required by the act, and that the demand of the plaintiff was not prosecuted within two years after notice given by advertisement, as required by law.

To this answer the plaintiff demurred, on the ground that the provisions of said act of February 15, 1864, were unconstitutional, as impairing the obligations of a contract. The demurrer was sustained by the Circuit Court, and, the defendant having no other defense, final judgment was given for the plaintiff, and the defendant appealed.

The validity of the law limiting the time for the presentation of the notes...