People ex rel. Badger v. Lœwenthal

Mr. Justice Sheldon

delivered the opinion of the Court:

In the year 1867, the General Assembly of this State passed and the Governor approved an act to incorporate “The International Mutual Trust Company,” with a capital of $500,000, which charter granted the right to have, hold and loan money, and to buy or sell exchange, bills, notes, bonds or other securities, and issue letters of credit. Also to hold real estate needful in the transaction of its business, and to take and hold real estate in trust as security for the payment of loans and debts due the corporation. See Private Laws, 1867, vol. 1, p. 95.

Said corporation was organized in the year 1868, and has, from that time to this, been engaged in- the business of dealing in money, loaning out its own funds on security; and in receiving deposits of money from others, and loaning the same on approved securities; and also, in buying and selling exchange, notes, bonds and other securities.

On the 16th day of May, 1879, the State’s attorney for the county filed in the Criminal Court of Cook county a petition for leave to file an information in the nature of a quo warranto, alleging in the petition that the provisions of said charter are obnoxious to the 5th section of article 10 of the constitution of 1848, in that the powers conferred are “banking powers,” and that the act in question was never submitted to a vote of the people. That the name of the corporation was changed in June, 1872, under the general statute, to that of the International Bank. That the defendants, Lcewenthal and others, claim that a corporation was duly organized under said charter; that the act in question was constitutional, and that the)1, under said charter, and in the name last aforesaid, are exercising the powers conferred by that charter, and requiring them to show by what warrant they do so.

The defendants answered showing cause, admitting the allegations of fact in the petition, and averring that the statute under which the corporation was organized was constitutional and valid, although it had not been submitted to a vote of the people. They also allege that since the adoption of the constitution of 1848, about 175 charters or statutes have been passed, establishing corporations with like powers as those conferred upon the said International Mutual Trust Company, without having been submitted to a vote of the people, giving the list of them in an exhibit attached.

That about thirty suits have been brought by or against the various corporations mentioned in the exhibit, which have been taken to the Supreme Court of the State, a list of which is contained in another exhibit, and that a large number of suits have been brought by or against such corporations which have not been taken to said Supreme Court, and that all the courts of this State have, for twenty-eight years, practically construed and treated said corporations as constitutional and valid; and that particularly the corporation in question had had five suits in this court, in no one of which was the validity of the charter questioned.

That the legislature of the State has recognized such corporations in its revenue laws, and collected large sums of money from them, and that this corporation has paid large sums of money as taxes under the revenue laws of the State. That the constitution of 1870 recognizes and treats as valid all the corporations organized with banking powers under special statutes before that time passed by the legislature of the State.

That the assets of the corporation in question amounted to over $1,600,000,

That the Merchants’ Savings, Loan and Trust Company of Chicago was organized in 1857, under a similar charter, and has been since doing business as a bank, and its assets at the present time are at least $5,000,000; and that there are other banks in Chicago doing business under a like private charter.

The criminal court, upon hearing the case, denied leave to file the information, and the relator appealed to this court.

The main question which is presented is as to the repugnancy of the charter in question to the fifth section of article 10 of the constitution of 1848, in the respect of its not having been submitted to and approved by a vote of the people.

Article 10 of that constitution, in full, is as follows":

§ 1. Corporations not possessing banking powers or privileges may be formed under general laws, but shall not be created by special acts, except for municipal purposes, and in cases where, in the judgment of the General Assembly, the objects of the corporation can not be attained under general laws.

§ 2. Dues from corporations not possessing banking powers or privileges, shall be secured by such individual liabilities of the corporators, or other means, as may be prescribed by law.

§ 3. No State bank shall hereafter be created, nor shall the State own or be liable for any stock in any corporation or joint stock association for banking purposes, to be hereafter created.

§ 4. The stockholders in every corporation or joint stock association for banking purposes, issuing bank notes, or any kind of paper credits to circulate as money, shall be individually responsible, to the amount of their respective share or shares of stock in any such corporation or association, for all its debts and liabilities of every kind.

§ 5. No act of the General Assembly, authorizing corporations or associations with banking powers, shall go into effect, or in any manner be in force, unless the same shall be submitted to the people at the general election next succeeding the passage of the same, and be approved by a majority of all the votes cast at such election for and against such law.

§ 6. The General Assembly shall encourage internal improvements, by passing liberal general laws of incorporation for that purpose.

The corporation in this case is given the power to loan money, to buy or sell exchange, bills, notes, bonds or other securities; to have and hold money and issue letters of credit; and so unquestionably has some banking powers; but it has not full banking powers, as it is not authorized to issue bank notes to circulate as money.

Is it a corporation with banking powers, in the sense in which the words “ banking powers ” are used in section 5 of said article 10? We are not to rest upon those words alone, as they are found in that section, for their meaning, but we are to view them in connection with the context. This article 10 is entitled Corporations, and it evinces the purpose, we think, to make some provision of security for the debts and liabilities of all private corporations.

Section 2 provides for the case of corporations not possessing banking powers, by saying that dues from such corporations shall be secured by such individual liabilities of the corporators, or other means, as may be prescribed by law. This leaves one class of corporations, viz: those possessing “banking powers,” unprovided for in this respect of security. Section 4 then comes in and provides for this class—the class possessing banking powers—by saying that the stockholders in every corporation, or joint stock association for banking purposes, issuing bank notes to circulate as money, shall be individually responsible to the amount of their stock for the debts and liabilities of the corporation. In this mode, we think, security was provided for as to the dues from all private corporations. Section 2 doing so as to all corporations, except those possessing banking powers, and section 4 making the provision in regard to the excepted class in section 2, viz: those possessing banking powers; so that the two sections together provide as to all private corporations. If this be not so, and it be taken that as section 4 relates only to corporations issuing bank notes to circulate as money, the two sections together do not include that species of corporations possessing only the banking powers of receiving deposits and making discounts, then the framers of the constitution did the very absurd thing of making express provision in regard to the securing of the dues from all private corporations, except those possessing the banking powers merely of deposit and discount, leaving the latter, alone, wholly unprovided for in this respect. There is no reason for such a discrimination in respect to banks of deposit and discount merely, and we can not impute to the framers of the constitution the absurdity of making or intending any such distinction.

If we hold then, as we think we reasonably must, that it was the intent of these two sections to make this provision as to security of dues, in respect to all private corporations, not excepting any, we arrive at the sense in which the words “ banking powers ” were used in section 2. Section 4 would then provide for the case of corporations possessing banking powers, and section 2 for the case of all other corporations. But by what language does section 4 provide for the case of corporations possessing banking powers ? It is this: “ The stockholders in every corporation, or joint stock association for banking purposes, issuing bank notes, or any kind of paper credits to circulate as money,” etc. Thus showing that the words “ corporations possessing banking powers,” employed in section 2, and “ corporations issuing bank notes to circulate as money,” employed in section 4, are used interchangeably, as meaning the same thing, and that corporations with banking powers, in the sense in which the words banking powers are used in section 2, mean banks of issue.

If such, then, be found to be the sense in which the words banking powers are used in section 2, we may well conclude that they were used in the same sense in section 5. That when that section enacts, that no act of the General Assembly authorizing corporations or associations with banking powers shall go into effect unless submitted to and approved by a vote of the people, it means by corporations with banking powers, corporations issuing bank notes to circulate as money, and relates to banks of issue.

Section 5, in question, is to be read in connection with section 4. Section 4 relates to banks of issue in express terms. Immediately following this section 4 relating to banks of issue, comes the 5th section. The 4th section relates to the liability of stockholders in banks of issue, and then in the 5th section follows the method for the creation of corporations with banking powers. Is it not the natural construction of the language of the 5th section in such connection, that the corporations there named, with banking powers, mean the same corporations as are mentioned in the immediately preceding section 4, viz : banks of issue—that the one section provides for the individual liability of the stockholders in banks of issue, and the other provides as to the mode of creation of such banks—the two sections each making a provision of safeguard with respect to this particular species of corporations—banks of issue.

Words often have a popular sense different from their strict technical import, and courts not infrequently are called upon, in the construction of language, to hold that words are used in a popular sense where they have a different technical meaning. The case of Comstock et al. v. Gage, 91 Ill. 328, is an instance, where it was a question whether the city treasurer of Chicago had committed a criminal offence in the violation of a provision of the city charter against the loaning of the public money, by making a deposit of it in bank. And it was held that although strictly and technically the deposit was a loan of the money to the bank, it was not in the popular sense of the term, and that the word loan was used in the charter in its popular sense.

And it is regarded here, that the popular understanding of a bank, or an institution with banking powers, is that of a bank of issue, and that there is reason to believe that the words banking powers, in this case, were employed in accordance with such popular understanding.

We think that enough of doubt thus arises to make room for construction, and to render legitimate the resort to other aids in the construction of this language of “ corporations with banking powers ” as used in this article of the constitution,— such as the evil to be remedied, contemporaneous exposition, and the consequences to follow.

Previous to the time of the constitutional convention of 1847, there had not, as we believe, been in the State any incorporated bank purely of deposit and discount, with may be the single exception of a bank at Kaskaskia. The banks of the State and the Territory previous had been banks of issue, and their history had been most calamitous.

In The People v. Marshall et al. 1 Gilm. 682, in reference to the construction of a clause in the constitution of 1818 in regard to banks, this court used the following language: “ This construction of the constitution is warranted, not only by its language, but also by a consideration of the evils we may suppose its authors intended to guard against. By reference to the history of the country just before and about the time of the adoption of the constitution, it will be seen that it was overwhelmed with independent banks, most of them insolvent, or daily expected to become so, and as a necessary consequence the paper of almost all of them greatly depreciated. These evils were in the mind of the convention, and admonished it to guard against their recurrence in future.” In Brown’s history of the State, written in 1844, the author says: “All the banks in Illinois have ceased to be. Their history is brief, their story is instructive, and the lesson taught will long be remembered. Under the territorial government three banks were chartered: one at Shawneetown, one at Edwardsville, and one at Cairo. There was also a bank at Kaskaskia; of the latter it is needless now to speak; it issued no bills, and of course defrauded no man. We regret our inability to say as much in favor of the others,” p. 428. Again, speaking of the old State Bank, he says, “ the plates, like those of the Mormon prophet, constituted all of its capital. * * * It had hardly commenced business before its bills fell to seventy cents on the dollar, and soon thereafter to fifty. They at length fell to twenty-five cents, when they ceased to circulate. * * * A currency composed entirely of irredeemable paper flooded the country and expelled the precious metals.” pp. 431, 432.

Such had been the widespread ruinous effects which had been produced by banks of issue—paper money, the issue of such banks, every day perishing and turning to ashes in the hands of the people—and in view thereof, and as a safeguard against their recurrence, we may suppose these two constitutional provisions to have been adopted: that in section 4, for the individual liability of stockholders to the amount of their stock in banks of issue; and that in section 5, that no such bank should be chartered without the sanction of a vote of the people.

The evil from banks which had been felt, and which we may well suppose was deemed necessary, and was attempted to be guarded against; was in respect of banks of issue alone. It was only of banks of this kind that there was occasion, from experience, to declare in the constitution there should be none more such, unless the people by their vote said so.

That the legislature have passed and the Governor approved the large number of like charters, as set forth in respondent’s answer, commencing with the first legislature in 1849 passing one such charter, and the second in 1851 passing several such charters, and so down, is not questioned on the part of the relator; nor that there have been the various suits at law in the courts of this State as set forth in the answer, where this question of constitutionality was never raised. This is a contemporaneous and practical construction of the constitution of 1848 in this respect which is entitled to great weight.

Great regard ought, in construing a statute, to be paid to the construction which the sages of law who lived about the time or soon after it was made, put upon it, because they were best able to judge of the intention of the makers. It is moreover a maxim, that contemporánea expositio est fortissima in lege. 4 Bao. Abr. Stat. 648.

In Cohens v. Virginia, 6 Wheat. 264, Chief Justice Marshall says ¡“Great weight has always been attached, and very rightly attached, to contemporaneous exposition. * * * This concurrence of statesmen, of legislators, and of judges in the same construction of the constitution, may justly inspire some confidence in their construction.”

The case of The People v. Dayton, 55 N. Y. 377, is quite like the present in the facts of practical construction, where the court say: “Every year from 1853 to the present time, the legislature has passed acts of a character similar to the one in question, which have received the approval of the executive, and been acted upon by State officers without challenge, so that for nearly twenty years, through all the changes of public officers, a practical construction has been given to the clause in question, in accordance with the views here indicated. The practical construction of the clause in question by the legislature, commencing with the adoption of the amendment of 1853, and continued to the present time, which has been acquiesced in and acted upon by the executive and administrative departments of the government, and which, so far as we know, has never before been questioned, is entitled to great, and we think controlling weight in its interpretation. It has almost the force of a judicial exposition (Story on Const. § 408,) and unless such legislation and practice are manifestly in violation of the words used, the greatest weight should be given to it in construing them. Cooley Const. Lim. 67 and cases cited.”

And in The People v. Marshall, supra, 680-81, this court said: “It may also be observed that the legality of this charter has been recognized by various acts of the legislature and the reiterated action of other departments of the government for upwards of twenty years. And in addition to this evidence in its favor, it is expressly recognized by the constitution, in terms which, if not understood as direct confirmation, must be understood as such by necessary implication. They clearly indicate the sense of the convention as to its legal existence and its intention that it shall be continued. This constitutional sanction of the bank we think must put to rest all question in relation to its legality.”

In this connection, arid in view of the latter remarks, may properly be considered the claim made here, that the constitution of 1870 recognizes and treats as valid all the corporations organized with banking powers under special statutes before that time. The provisions of the constitution of 1870, relied upon to this end, are the following. Section 2, article 11,. reads:

“ All existing charters or grants of special or exclusive privileges, under which organization shall not have taken place, or which shall not have been in operation within ten days from the time this constitution takes effect, shall thereafter have no validity or effect whatever.”

It is said that in this section, by strong implication, all then existing charters or grants made by the General Assembly, under which there had been an organization, are recognized as valid.

Section 5 of that article provides that the State shall never own “any stock in any corporation or joint stock company or association for banking purposes, now created, or to be hereafter created.”

Section 7 of the same article says: “Every banking association now, or which may hereafter be organized under the laws of this State, shall make and publish a full and accurate quarterly statement of its affairs (which shall be certified to under oath by one or more of its officers) as may be provided by law.”

This last section it is said, not by implication alone, but directly, recognizes the existence of these banking corporations which had been created by act of the legislature, and by express provision brings them under control of the law.

It is answered to the above, that at the time of the framing and adoption of the constitution of 1870, there were many banks in the State legally organized under the general banking law of 1851, and that the language in the foregoing sections, “All existing charters,” “ corporations for banking purposes now created,” and “every banking association now organized under the laws of this State,” refers only to lawfully existing charters, and to banks legally organized under that general banking law.

It would hardly be pretended, we think, that under section •5, last quoted, the State could own any stock in any of these banking corporations we are considering, or that such corporations would be exempt from the requirement in section 7, to publish quarterly statements of their affairs, but that such corporations would be held to be embraced within the meaning, as they áre comprehended in the general terms of those sections.

It is not to be supposed that the members of the constitutional convention were not aware of the then existence of these many banking institutions in the State which had been created by act of the legislature without submission to a vote of the people; and it may be reasonably considered that they fell in with the uniform contemporaneous and practical construction of the constitutional validity of their charters, and that in the framing and adoption of the several provisions of the constitution relating to then existing banking institutions, there was had in mind and intended to be included all the recognized banks of the State—all de facto banks then existing which had been organized under special charters granted by the legislature. We think these provisions may not improperly be viewed as a constitutional recognition of these banking institutions.

In view of the number of these corporations with banking powers, the large amounts of capital invested, and the important interests involved in them, it may well be conceived that the consequences of declaring their charters to be unconstitutional and void, would be disastrous in the extreme. In a case of doubt, the argument ab ineonvenienti is admissible, and has weight.

Cooley, in his work on Const. Lim. p. 67, says: “But where there has been a practical construction which has been acquiesced in for a considerable period, considerations in favor of adhering to this construction sometimes present themselves to the courts, with a plausibility and force which it is not easy to resist. * * * Where this has been given by officers in the discharge of their duty, and rights have accrued in reliance upon it, which would be divested by a decision that the construction was erroneous, the argument ab ineonvenienti is. sometimes allowed to have very great weight.”

In the Matter of the will of Warfield, 22 Cal. 71, the court say: “Courts feel themselves constrained to uphold, when it is possible, contemporaneous interpretation of statutes, under which interpretation rights of property have for many years been acquired. Rogers v. Goodwin, 2 Mass. 477; Stuart v. Laird, 1 Cranch, 299.” And in The People v. Marshall, before cited, p. 688, this court, in speaking of the results of declaring unconstitutional a bank law, say: “The magnitude and pernicious character of these results are sufficiently obvious without any remarks. They are such as the court can not, and ought not to close its eyes to, neither should' they be allowed to exercise an influence further than they are calculated to illustrate the intention and true construction of the constitution. Thus far they are entitled to weight, for the rule is well established that where the consequences of a particular construction of the constitution or law would render its operation mischievous, that construction should be avoided, provided it is susceptible of a different one.”

All considered, we reach the conclusion that a sound construction does not require that we should pronounce the act of the legislature in question unconstitutional because of its not having been submitted to a vote of the people.

There are two minor objections made against the act of incorporation. One is, that it is a violation of the provision of the constitution of 1848, that “no private or local law which may he passed by the General Assembly shall embrace more than one subject, and that shall be expressed in the title.” The title of this act is “An act to incorporate the International Mutual Trust Company.”

It is said that the body of the act confers banking powers, and nothing else. But such banking powers as are conferred by this act may be held as not improperly pertaining to the purpose and object of a mutual trust company. We do not perceive that the act can be truly said to contain more than one subject, or that that is not expressed in the title, viz: the subject of a creation and administration of a trust fund, and the powers given are incidental and auxiliary thereto. We think the words mutual trust company describe with sufficient fullness the functions and objects of the institution as set out in the charter. The law, in the respects named, is sustained, we think, by the following cases: Belleville R. R. Co. v. Gregory, 15 Ill. 20; Neifing v. Town of Pontiac, 56 id. 172; O’Leary v. County of Cook, 28 id. 534; Prescott v. City of Chicago, 60 id. 121; Johnson v. People, 83 id. 431.

In the latter case it was said: “ The provision of the constitution does not require that the subject of the bill shall be specifically and exactly expressed in the title, hence we conclude that any expression in the title which calls attention to the subject of the bill, although in general terms, is all that is required.”

The remaining objection is, that the act of incorporation was not passed in compliance with the provisions of section 21, article 3, of the constitution of 1848, as follows:

“§ 21. Bills may originate in either house, but may be altered, amended or rejected by the other; and on the final passage of all bills the vote shall be by ayes and noes, and be entered on the journal; and no bill shall become a law without the concurrence of a majority of all the members elect in each house.”

The non-compliance which is claimed with this constitutional provision is in this respect:—It is claimed that the bill after having passed the Senate, was amended in the House, and that the journal of the Senate does not show that the Senate concurred in the amendment of the House. It is insisted that concurrence of the Senate in the amendment of the House is the final passage of any bill so amended, and hence that such concurrence should appear by an aye and noe vote entered upon the journal, showing the vote of a constitutional majority in its favor.

Without intimating an opinion as to the correctness of the position taken if the bill had been amended in the House, we think we may rest upon the fact that it does not appear with certainty that the bill was amended by the House.

The bill originated in the Senate. It was read twice in that body, and then amended by the Senate and ordered to be engrossed for a third reading. Some days afterward the bill came up in the Senate and was regularly passed, and sent to the House, asking its concurrence in the passage of the bill. There is no report of the committee, or other entry in the Senate journal, more than such order for engrossment, tending to show that the bill was in fact engrossed before its passage.

In the House, the amended bill as passed by the Senate was read a first and second time and referred to a committee; and afterwards a member of that committee “ reported the same back with amendments, and recommended its passage as amended,” and it was passed; and the House then “ordered * * * that the clerk inform the Senate thereof,” and the clerk of the House reported to the Senate that he was directed to inform the Senate that the House had concurred with them in the passage of the bill “ amended as per amendments attached thereto.”

Now what amendments were these

May we not fairly presume that they were the very same amendments which the Senate had adopted before its- passage of the bill? If the House reported an amended bill to the Senate with the “ amendments attached,” and not written out in the body of the bill, may there not be ground to think that the Senate did the same thing; and that when it originally passed the bill after having been amended, it simply sent over the original bill, with the amendments attachedj to the House; and that when the House committee reported the Senate bill back “ with amendments, and recommended its passage as amended,” these amendments were the same amendments which were attached to the bill when sent over from the Senate.

It will be observed the House committee do not recommend that the House adopt the amendments as such, or that the bill be amended by the House, but the recommendation was the passage of the bill “ as amended.” As amended by whom? The committee had no power to amend a bill. The Senate had made one or more amendments. May not this e< as amended” have meant as amended by the Senate?

Again, the House do not order the clerk to ask that the Senate concur in any amendments to the bill, but that he inform the Senate of the passage of the bill, and the clerk reports to the Senate that the House has concurred with the Senate in the passage of the bill amended as per amendments attached thereto. Had these been amendments made by the House, we understand that according to the practice of legislative bodies in such case the House should have asked the concurrence of the Senate in the amendments adopted by the House. The fact that no such request was here made supports the idea that the amendments referred to by the House committee, and by the clerk of the House in his report to the Senate, were in truth but the Senate amendments.

The journals further show affirmatively, that the bill was after this laid before the joint committee of both houses on enrolled bills, and from that committee a report was made to the House that the bill had been duly enrolled, and a report from the same committee was made to the Senate that the bill had been laid before the Governor for his approval.

The law appears signed by the speakers of both houses, and approved by the Governor, and is duly published as a law of the State. The presumptions should all be in its favor as a law duly passed.

The objection taken to it is, that there were amendments made to the bill by the House which were not duly concurred in by the Senate. The burden is upon the party assailing the validity of the act in this respect, to show its invalidity, and make out "a clear case. It is not enough to raise a doubt. We think we may well say, that upon the showing here, it is not clearly and convincingly proved that the amendments in question to the bill, were made to it by the House.

We come to the conclusion, that the judgment of the Criminal Court should be affirmed.

Judgment affirmed.