Miners' Bank v. United States

Opinion by

Hastings, C. J.

The issue presented by the amended rejoinder of the plaintiff in error, and the demurrer thereto by the defendants in error, raises the question for the adjudication of this court, of the validity of the act of repeal, pleaded in defendant’s replication.

By the 23d section of the, Act of Incorporation, it is provided—

“ That if the said Corporation shall fail to go iñto operation, or shall abuse or misuse their privileges under this charter, it shall be in the power of the Legislative Assembly of the territory to annul, vacate, and make void this charter.”

There was much said in the argument of this case about the character of this institution, as to whether it is a public or private corporation. The stock being owned by individuals, it cannot be reasonably doubted that it is a private corporation in which the public have no interest or control, except to exercise a supervisory power, and to annul its charter when the franchises granted are misused or abused.

Had the stock been entirely owned by the state, it would have possessed the character of a public corporation.

The plaintiffs in their rejoinder would go behind the act of repeal, and set up matters in avoidance of the act, averring it was passed without the happening of the events which would authorize the legislature to annul and make void .the charter.

There appears to be no rule of construction better established in the English books, than that “ public grants are construed strictly in favor of the king,” and in this country in all conflicts between the sovereign power, and grantees enjoying exclusive privileges conferred upon them by acts of incorporation, the same rule of construction prevails. See United States v. Arrendondo et al. 6 Pet. Rep. 738. Also, Charles River Bridge v. Warren Bridge, et al. 11 Pet. 514.

It is argued that the investigation of the facts to be inquired into, and found to exist, as an abuse or misuse of privileges of the corporation, was a judicial act; — that before the legislature had a right to repeal the act of incorporation, such facts must have been judicially ascertained. It is conceded that without any reservation of the right to repeal, the judicial tribunals would have the power to annul and make void the charter upon ascertaining, by a proper issue, such misuse and abuse.

If, then, it .were now necessary to form an issue in the courts and judicially investigate such facts, it would seem absurd in the legislature to have reserved the right thereafter to repeal, when the same end could be accomplished as substantially and more speedily by the court which tried the issue. Such reasoning must lead to the inference that the clause providing for a repeal means nothing.

The more reasonable construction of this clause, it is believed, is, that the legislature, in order to protect the public from the frauds frequently practised by banking institutions at the time when the corporation was created, especially in many of the western states, and also to prevent the mischief of great delay in the territorial courts, [then imperfectly organized in legal proceedings,] reserved to itself the power of inquiring into and finding the facts which the act of incorporation declares shall exist before the right of repeal shall be exercised.

•' It is urged as a great hardship for this' right-to be interposed to the detriment,, if not destruction of the property of the corporation, which engaged in the enterprise at great expense, and in good faith.

The legislature made a liberal grant of power and privileges to the original grantees, and they accepted of the grant, subject to the limitation and restrictions imposed. It is again urged, that the act of incorporation is a solemn contract, which the legislature, by their act of repeal, have violated.

Follow the strict rules of construction which prevail in questions of grants and contracts between private persons, and it will be seen that the legislature have not violated the conditions upon which the corporation was created. The plain interpretation of the grant is, that the legislature did grant certain powers and privileges to be exclusively exercised and enjoyed, upon a reservation of the power of cancelling the grant and annulling the same whenever such privileges should be misused and abused, the members of the legislature being the judges of the time when, and extent to which such abuse and misuse should be committed. If the corporation have suffered from the undue exercise of such power, they have only to censure themselves for the folly of accepting the grant upon the terms specified.

It is to be presumed that the original grantees believed that no legislative assembly would ever' exercise the power of repeal until the contingencies contemplated had happened. Such was the confidence reposed in the good faith which the. legislative assembly is presumed always to exercise toward» the rights of the citizens, and it is to be regretted, that the plaintiffs in error should have had their confidence so shaken, as to feel themselves authorized to spread upon the records-of a court, facts, if true, which would involve the members of the legislature in the deepest turpitude and corruption. The plaintiffs propose to prove, that'when the act of repeal was passed, the bank had never misused dr abused its privileges, and did not fail to go into operation. However legitimate it might have been for the plaintiffs in error to prove such facts, before the legislature and its committee, they are-now forever estopped by a solemn decision in both branches of the legislative assembly. If we award to the act of repeal the weight and power of a judgment of a court of record, or even of a justice o'f the peace, it will be readily admitted, that it is not in the power of this or any other tribunal to collaterally question the validity of this act.

In Voorhees v. The U. S. Bank, 10 Pt. the court say, “ If the principle once prevails, that any proceeding of a court of competent j urisdicticn can be declared a nullity by any court after a writ of error or appeal is barred by limitation, every county court or justice of the peace in this Union may exercise the same right from which our own judgments or process would not be exempted.”

It is true, that from a judgment of inferior judicial tribunals, in some manner an appeal can be taken to a superior within a limited timé, but not so from the decision of the supreme judicial power of the land. Their decisions aré final, and their judgments import absolute and unquestionable verity; and so it is with the sovereign legislative power in all their decisions and acts upon “ rightful subjects of legislation and that the investigation into the facts upon the ascertainment of which the legislature reserved the right of repeal, is a rightful subject of legislation, is clear from the fact, that the corporators have made it so by their acceptance of the charter with such a right reserved.

In the case of Crease v. Babcock, 23 Pick. 340, the court say, “If a default has been committed, then, by the express terms of the compact, they [the legislature] have the right to exercise the power.” They have exercised it, and therefore by the courtesy and confidence'which is due from one department of the government to another, we are bound to presume that the contingency, upon which the right to exercise it depended, has happened. • Nor is the objection, that the legislature had no power to inquire into the contingency, valid. If any man or body of men is invested with power to do certain acts upon the occurrence of a certain event, when the event happens, they have a right to perform the act. But we do not believe that the inquiry into the affairs of a corporation, with a view to a continuance or discontinuance of it, is a judicial act.

Had the defendants in error traversed the rejoinder, and formed an issue to the jury, the trial would have directly resulted in an investigation into the evidence before the committees and the two houses of the legislative assembly, and if such an investigation should have been permitted, it would follow that the motives of the members would have come under the review of the court and jury; and if this could be done in this case, the same practice as to other acts of the legislature might prevail; this would extend the jurisdiction of the courts, from expounding the law as they find it, to decisions of what the law should be, a doctrine repudiated by all enlightened courts, except in cases of clear conflict between the constitution and legislative acts, when it is made the duty of the judicial department of the government to interpose and preserve the integrity of that instrument, which is above the reach of legislative interference.

In the case of Fletcher v. Peck, 6 Cranch. Rep. (2 Cond. 318,) Chief Justice Marshall, in delivering the opinion of the court, says, “ That it may well be doubted how far the validity of the law depends upon the motives of its framers, and how far the particular inducements, operating on members of the supreme sovereign power of a state, to the formation of a contract by that power, are examinable in a court of justice. If the principle be conceded, that an act of the supreme sovereign power might be declared null by the court, in consequence of the means which procured it, still there would be much difficulty in saying to what extent those means must be applied to produce this effect.”

It is argued for the plaintiff in error, that the legislature have pronounced their own contract rescinded, and annulled the same; and this is urged as an objection to the validity of the act of repeal.

However oppressive it may appear for a party to a contract to reserve the right of rescinding the same at pleasure, or upon the occurrence of events, of the existence of which he is to be the judge, yet that a party has a right to make such a reservation, will not be questioned. The members of the legislature are the agents of the public, and are presumed to have no personal interests to serve, other than what pertains to their constituents in common with themselves. They act in a fiduciary capacity, and are not amenable to the odium attached to a party who reserves the right of being a judge in his own case.

The judgment of the district court is affirmed.