Court Opinion

ID: 7816539
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:38:22.869047+00
Date Added: 2024-06-11T16:30:37.068151
License: Public Domain

Jim Johnson, Associate Justice (dissenting). I do not agree with the majority view. If the majority opinion is allowed to stand, appellee and those similarly situated will be deprived of their property without due process of law in contravention of Article II of the Constitution of Arkansas and the 14th Amendment of the Constitution of the United States. The rationale of the majority if carried, to its logical conclusion could open the door for the summary closing of any state chartered bank in Arkansas, protestations contained in the opinion to the contrary notwithstanding. While it’s true as cited by the majority that regulation and control of banks come under the internal police power of the state, never has the power been extended to permit the closing of any entire facility. If a teller’s window can be closed in this case under the guise of a proper exercise of the police power, what is to prevent the closing of the entire bank at some future date by the exercise of that same power. The precedent is being set. The majority seems obsessed with the struggle to breathe life into Act 191 of 1935. This act is dead. The slate was wiped clean when Act 190 of 1961 said in Section 14: “That Act 191 of 1935, and all other laws in conflict herewith, are hereby repealed.” This specific repeal caused Act 191 of 1935 to be no more. Upon its effective date Act 190 of 1961 became the law applicable to appellee’s teller’s window in Caraway. Section 4 of this act is as follows: “Every legally chartered banking institution, which, on or before the effective date of this act, was engaged in operating, or had obtained a permit to operate, any banking facility, may continue to retain and operate sáme wherever now located under the general banking laws of the State of Arkansas; and the requirements and restrictions set forth in this Act shall not apply to any such banking facility which on or before the effective date of this Act, established, engaged in operating, or had obtained a permit to operate, but the provisions and restrictions as set forth in this Act shall be applicable only to those teller’s windows which shall be henceforth established pursuant to the provisions of this Act.” [Emphasis mine.] This provision is so clear as to defy misinterpretation. It emphatically says that the restrictions contained in Section 8 of Act 190 of 1961 providing -for closing of a teller’s window operated in a different city from that in which the banking institution is operating “upon the granting of a new charter for a banking institution,” is inapplicable to appellee’s teller’s window which was in operation on and prior to- March 7, 1961, the effective date of Act 190 of 1961. To construe this act otherwise is to legislate, a function which is beyond the province of this court. Aside from the business appellee does through its Caraway facility (which amounts to about one-third of its deposits), it is undisputed that appellee has invested a considerable amount of money in machinery, equipment, fixtures, leasehold improvements and other tangible and intangible property in Caraway for the single purpose for use in a banking business. Under the law appellee had a perfect right to build this business and make these investments. Whatever doubts which might have existed as to the status of these rights under the dead 1935 act, certainly under the unmistakable terms of Act 190 of 1961 appellee acquired vested property rights to operate and continue to operate its facility at Caraway. There is nothing conditional about these acquired rights — they are absolutely vested. I have no quarrel with the holdings in the cases cited by the majority seeking to support their declarations on this point. The cases simply are not applicable here. It is fundamental as stated by the majority that “banking by corporation is a privilege,” jnst as it is fundamental that the state through its internal police power has the right to promulgate and execute reasonable regulations of banking corporations. But such is not the case in the matter confronting us. The net effect of the majority holding goes beyond reasonable regulation and destroys a preexisting right to do business. To infer as the majority does that a corporate privilege cannot evolve into vested rights is to fly into the teeth of the momentous decision rendered in the celebrated case, Trustees, Dartmouth College v. Woodward, 4 Wheat. 518, 4 L. Ed 629, and the myriad cases which have never deviated from the rule there set. As spelled out unequivocally in Article II, § 22 of the Constitution of the State of Arkansas, “the right of property is before and higher than any constitutional sanction. ’ ’ Following the passage of Act 190 of 1961, a bank was established in Caraway. The Caraway Bank was chartered during the period when appellee was operating its facility in Caraway under the property rights vested in it by Act 190 to 1961. Subsequently the General Assembly met and passed Act 544 of 1963, the relevant portions of which provide: “Section 1. That Section 4 of Act 190 of the Acts of the General Assembly of the State of Arkansas for the year 1961, approved March 7, 1961, be, and the same is hereby, amended to read as follows: “Section 4.- Every legally chartered banking institution, which, on or before the effective date of this Act, was engaged in operating, or had obtained a permit to operate, any banking facility, may continue to retain and operate same under the general banking laws of the State of Arkansas, except as provided in Section 8 hereof; and the requirements and restrictions set forth in this Act, except as provided in said Section 8, shall not apply to any such banking facility which, on or before the effective date of this Act, was established, engaged in operating, or had obtained permit to operate; but the provisions and restrictions set forth in this Act, except as provided in said Section 8 shall be applicable only to those teller’s window which shall henceforth be established pursuant to the provisions of this Act; provided, however, the provisions of Section 8 hereof shall in any event apply to all tellers windows and branch offices established subsequent to the effective date of Act 191 of the Acts of the General Assembly of the State of Arkansas for the year 1935.” In commenting on this last pronouncement by the legislature the majority says, “There is no question but that the General Assembly could retroactively alter that provision [Section 4 of Act 190 of 1961, supra] by Act 544 of 1963.” That is not my understanding of the law. Vested property rights are not to be treated so lightly. This court distinctly declared the law applicable here in Gillioz v. Kincannon, 213 Ark. 1010, 214 S. W. 2d 212, as follows: “The rule appears to be well settled generally that retrospective laws as the one here, are unconstitutional if they interfere with substantive, or substantial rights, and valid only when they effect remedies or procedure. C.J.S. 16, p. 861, § 417 et seq. “ 'Rights conferred by statute are determined according to statutes which were in force when the rights accrued and are not affected by subsequent legislation. The Legislature has no power to divest legal or equitable rights previously vested.’ Coco v. Miller, 193 Ark. 999, 104 S. W. 2d 209. “In 50 Amer. Jur., p. 493, § 477, the author says: 'Because every law that takes away or impairs vested rights under existing laws, is generally reprehensible, unjust, oppressive, and dangerous, such retroactive' laws have not been looked upon with favor, but with disfavor, so that courts are loath to give a statute such effect. To the contrary, a prospective interpretation of statues affecting substantive rights is favored. It is a maxim, which is said to be as ancient as the law itself, that a neAV law ought to be prospective, not retrospective, in its operation (nova constitutio futuris formam imp oners debet, non praeteritis).’ ” See also Brown v. Morison, 5 Ark. 217; Porter v. Hanley, 10 Ark. 186; Beavers v. Myar, 68 Ark. 333, 58 S. W. 40; Tipton v. Smythe, 78 Ark. 392, 94 S. W. 678; Smith v. Spillman, 135 Ark. 279, 205 S. W. 107, 1 A.L.R. 136; Robinette v. Day, 210 Ark. 219, 242 S. W. 2d 124. On the whole case I cannot escape the conclusion so eloquently stated by this court in St. Louis, I. M. & S. Ry. Co. v. Alexander, 49 Ark. 190, 4 S. W. 753, “This is not legislation, but confiscation, and is beyond the power of the legislature.” The learned Chancellor’s decree should he affirmed in toto. For the reasons stated I respectfully dissent.