Case Name: New Rochelle Trust Company, Plaintiff, v. William R. White, as Superintendent of Banks of the State of New York, and The City of New Rochelle, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1940-01-10
Citations: 258 A.D. 400
Docket Number: 
Parties: New Rochelle Trust Company, Plaintiff, v. William R. White, as Superintendent of Banks of the State of New York, and The City of New Rochelle, Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 258
Pages: 400–405

Head Matter:
New Rochelle Trust Company, Plaintiff, v. William R. White, as Superintendent of Banks of the State of New York, and The City of New Rochelle, Defendants.
Third Department,
January 10, 1940.
Seacord, Ritchie & Young [Albert Ritchie of counsel], for the plaintiff.
John J. Bennett, Jr., Attorney-General, and Henry Epstein, Solicitor-General [John C. Crary, Jr., Assistant Attorney-General, of counsel], for the defendant Superintendent of Banks.
Aaron Simmons, Corporation Counsel, for the defendant City of New Rochelle.
William H. Emerson, Corporation Counsel [Clarence M. Platt, Deputy Corporation Counsel, of counsel], for the City of Rochester, amicus cwrise.
James C. Tormey, Corporation Counsel [Arthur M. Beach, Assistant Corporation Counsel, of counsel], for the City of Syracuse, amicus cwrise.
Hiscock, Cowie, Bruce & Lee [George.W. Lee of counsel], for the First Trust & Deposit Co., amicus cwrise.

Opinion:
Hill, P. J.
This controversy is submitted pursuant to sections 546-548 of the Civil Practice Act on an. agreed statement of facts. The plaintiff seeks a judgment estabhshing the constitutionality of a resolution adopted by the council of the city of New Rochelle on February 3, 1936, and a portion of a local law approved by the electors of the city in 1929, providing that city funds be deposited only in banks or trust companies approved by the council, and which had furnished either surety bonds or other securities to an amount of not less than $100,000 as security for the protection and repayment of the deposits. Plaintiff, among other banks, was named in the resolution as a depositary and required to give security amounting to $150,000. It furnished the required security and since February, 1936, has had an average daily balance of $300,000 of city funds, which, it is stipulated, is a profitable deposit for plaintiff and one which it wishes to retain. The Superintendent of Banks has required plaintiff to repossess these securities upon the ground that banking is a matter of public interest to be controlled by statutes enacted by the Legislature and that the City Home Rule provisions of the Constitution and statutes passed thereunder give no jurisdiction in the premises to the legislative bodies of cities.
The Legislature has enacted general laws requiring that the public funds of the State and of counties be secured. (State Finance Law, § 8; County Law, § 145.) . Before January 1, 1939, special and local laws could only be enacted by the Legislature after receiving an emergency message from the Governor and by a concurrent resolution of two-thirds of the members of each House. Acting thereunder, the Legislature passed laws of local application requiring that security be given for funds deposited in banks by the city of Buffalo (Laws of 1933, chap. 605, amdg. Buffalo city charter, § 114) and by the city of Jamestown (Laws of 1938, chap. 616, amdg. Jamestown city charter, § 77). The opinion in the Court of Appeals in State Bank of Commerce v. Stone (261 N. Y. 175) discusses the statutes which have been enacted (p. 186): "Whatever doubt there may have been regarding the power of banks to secure the deposits of public moneys has been removed by statute. [Citations, including Greater New York Charter.] An act of the Legislature was evidently thought necessary, even as to public moneys, to enable banks to pledge certain securities for undertakings or deposits."
Assuming a law has been enacted by a governmental agency having constitutional authority, its validity is determined by the subject-matter. The local laws as to security for Buffalo and Jamestown deposits were passed by the State Legislature, it and the Governor acting under an alternative provision of the Cities' Home Rule article of the Constitution. The local legislative bodies had concurrent power to pass these laws, and they were not more constitutional because enacted by the State Legislature than they would have been if enacted by the local authorities.
Cities were authorized " to adopt local laws not inconsistent with the Constitution and laws of the State, relating to the care, management and use of its property " (former Const, art. 12, § 3) and the Legislature was denied the right to " pass any law relating to the property, affairs or government of cities, which shall be special or local either in its terms or in its effect " except after receiving a message from the Governor " declaring that an emergency exists," and then only by the concurrent action of two-thirds of the members of each House. (Former Const, art. 12, § 2.) ' The procedure followed by the Legislature in passing the Buffalo and Jamestown local laws -classified the subject-matter as affecting the care and management of city property concerning which the State Legislature and the local authorities had concurrent jurisdiction.
The power of local legislative bodies was broadened in the new Constitution (Art. 9, § 12) and that of the Legislature correspondingly curtailed.
A statute enacted by the State Legislature gains no additional constitutionality from its source over similar legislation enacted by local authorities acting within the scope of their powers. Power to legislate is granted by the Constitution. Laws passed by local Legislatures acting within the powers granted them do not differ from those passed by the Legislature under constitutional grant of power. The jurisdiction formerly enjoyed by the Legislature of the State has been bestowed, under the new Constitution, except as earlier mentioned, upon the local authorities, and as the constitutionality of legislation requiring security for city deposits has been approved (State Bank of Commerce v. Stone, supra), the acts under consideration are valid.
Plaintiff is entitled to judgment.
Heffernan, Schenck and Foster, JJ., concur; Bliss, J., dissents, in an opinion.