Wilson v. Tesson

Perkins, J. Suit against the Bank of the Capital as a corporation, organized in 1854, under the act of 1852, and Andrew Wilson, as a stockholder therein, to recover a debt contracted by the bank, in the course of banking business, in September, 1857. Answer by Wilson in eight paragraphs, one of which alleged that said Bank of the Capital had never assumed to. comply with the requirements of the act regulating general banking, passed in 1855. The bank made default. A demurrer to Wilson’s answer was sustained, damages were assessed, and final judgment against the bank and Wilson. Wilson appeals. The case turns upon the question whether the bank had power to continue its general banking business after the coming into force of the act above mentioned, of 1855. The general banking law of 1852, under which the Bank of the Capital was organized, contained this provision: “ The legislature may, at any time, alter or repeal this act,” 1 R. S. p. 160, § 32. It was in the power, then, of the legislature to terminate the existence of banks, created under said act, at its pleasure; as it will scarcely be denied that a repeal of the law would work such termination. The right to bank as a corporation was a franchise granted by the legislature—when the franchise was taken away the right ceased. And if the legislature could unconditionally terminate ’ the existence of the banks by a repeal of the law, it could impose conditions upon whic’ they might continue to exist. It is admitted that the reprinting or reenacting of an dicisting section of a law, or of an entire statute, without material alteration, will work no change in the law. Ind. Dig. 865. But if the latter section or statute materially differs from the former, it repeals it. The latter becomes the law. In 1855 the legislature did repeal the banking law of [287] 1852; for that body amended that law by substituting a new act, covering all of the ground of the act of 1852, and also, much additional. And, as we have said, when the 7 . legislature amends a section of an existing law, or the entire law, by substituting an entirely new, and substantially different section in its place, the former -section is repealed, and the latter becomes the law. In this case the legislature amended an entire existing statute, by substituting an entirely new, and substantially different, statute in its stead. It was as if the legislature had first expressly repealed the banking law of 1852, and then enacted the law of 1855. On the repeal of the act of 1852, the powers of the banks organized under it, to do business as corporations, ceased, unless the statute provided otherwise. The State Bank v. The State, 1 Blackf. 267.—Ang. and Ames on Corp., 2d ed., pp. 128, 667. The statute did provide otherwise. The 48th section of the act of 1855 reads thus: “ Every bank or banking association, organized under the provisions of the general banking law of this state, may, in case it shall immediately after the passage of this act, pay all its circulating notes in coin, upon demand, have until the first day of March, 1857, to wind up, or accept the provisions of this act.” See, also, 1 ft. S. p. 240, § 6. Banks, then, existing under the act of 1852, on the coming into force of the act of 1855, had an election, to refuse to comply with the requisitions of the latter act, cease to do a banking business, and to wind up; or to comply with those requisitions and proceed with their banking business; but they had no power to proceed with such business till dsuch compliance. And if they failed both to comply, and to wind up, it was made the duty of the auditor of the s»ate to wind them up. But it was the duty of the banks to wind up without the interference of the auditor. The Bank of the Capital having failed to comply with the requirements of the act of 1855, had no power to do general banking business in its corporate capacity, after it came into force. We say nothing of its power as a private association. L. Barbour and J. D. ITowland, for the appellant (1). I L. Ketcham, I. Coffin, and W. W. Wick, for the appellees (2). ' It is contended by the appellees that its powers continued till a forfeiture was judicially declared. This is not correct. In cases of corporations in whose charter no power of repeal is reserved, and a forfeiture is claimed for misuser or non-user, the doctrine of judicially declared forfeiture applies. The State v. The Vincennes University, 5 Ind. R. 78. It has no application to cases of a deprivation of power by a legislative repeal, in the exercise of an unconditional right reserved. The officers of the bank, in this case, then, having assumed to make a contract, in their capacity as such, which they had no power to make, the stockholders are not liable upon it as corporators. Per Curiam. The judgment is reversed with costs. Cause remanded for further proceedings in accordance with this opinion, if by amendment or proof the case can be brought within it.