Court Opinion

ID: 6946659
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:26:24.717895+00
Date Added: 2024-06-11T16:07:56.342667
License: Public Domain

The Opinion of the Court was delivered by Wilson, C. J. The judgment in this case was entered several terms since, but owing to the press of business and the want of time, no written opinion was then filed, and inasmuch as the Bank soon after went into liquidation under an Act of the Legislature, that seemed to preclude all future litigation in any way analagous to this, or in which this case could serve as a precedent, we could perceive no useful purpose that could be subserved by placing upon the record the reasons upon which our judgment was founded. But as it is now understood that the constitutionality of the Act of the Legislature adjudicated upon in this case may be drawn in question in the United States’ Courts, we will, therefore, briefly state the points decided, without deeming it necessary to go into a full investigation of the grounds upon which our judgment was founded. The case is here by appeal from the Circuit Court of Sangamon County. The proceedings are in the nature of quo warranto, upon the information of John C. Stickney against John Marshall and twenty one others. The information alleges that the defendants were, and are, exercising franchises not authorized by the Constitution and laws of this State, to wit, that said defendants have usurped the franchise of banking, &c., contrary to law, and then prays that said defendants may be ousted, &c., of their franchises so illegally usurped and exercised, &c. To this information, the defendants filed their plea, setting out an Act passed on the twenty eighth day of December, 1816, by the Territory of Illinois, entitled An Act to incorporate the President, &c., of the Bank of Illinois at Shawnee-town; also, an Act of the State of Illinois, passed on the 12th day of February, 1835, entitled An Act to extend for a limited time the Charter of the Bank of Illinois at Shawnee-town; and also an Act passed on the fourth day of March, 1837, entitled, An act to increase the capital stock of certain Banks, and to provide means to pay the interest on a loan authorized, &c. By said plea, the defendants asserted that the laws of Illinois authorized them to exercise the franchise as charged in the information, &c. This plea was demurred to, the demurrer overruled, and judgment rendered for the defendants. From this judgment the Relator has appealed, and assigns for error this judgment, alleging those Acts set out in the plea to be unconstitutional. The first ground assumed by the counsel for the Relator questions the legality of the original charter of the Bank granted in 1816 by the Territorial Government. This objection is altogether untenable. The Ordinance of Congress delegated to the Governor, Legislative Council and House of Representatives ample powers for this purpose. They were ££ authorized to make laws in all cases for the good government of the District.” With regard to the policy of banks generally, it is not a question for our investigation, and with regard to the utility of this Bank, as a fiscal agent of the Government, or as furnishing a medium of exchange, although there may be a difference of opinion between the counsel and the authority that created the Bank, that cannot invalidate the legality of its charter. The utility and policy of the institution was referred by the Ordinance to the judgment of the Government of the Territory, and the charter it granted is an exponent of its opinion, upon this point, that is conclusive. 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. But the Convention did not make it a part of the organic law of the land, so as to place it out of the power of the Legislature to change or modify it with the consent of the corporators, as has been insisted. It only amounts to a continuance, by that solemn act, of the charter, with the powers contained in the original grant. The argument would be quite as plausible to say, that all contracts are a part of the Constitution; because it declares their validity shall not be impaired by law. Just so with regard to the Bank; the grant of the charter was a contract; its validity is acknowledged, and its inviolability guarantied. It is, as to this question, upon the same footing of other contracts, liable to he rescinded or modified at the will of the contracting parties, but by no other authority. The idea of a Constitution, subject to such change and fluctuation, is so much at variance with acknowledged principles and universal opinion, as not to be entertained for a moment. The next objection to the exercise of the franchises claimed by the defendants, is founded upon the eighth article of the twenty first section of the Constitution, which declares “that there shall be no other Banks or monied institutions in this State, but those already provided by law, except a State Bank and its branches, which may be established and regulated by the General Assembly of the State, as they may think proper.” Under this provision, it is insisted that the Act of 1835, passed prior to the expiration of the Charter of the Bank of Illinois at Shawneetown, and by which it was extended for twenty years, and the Act of 1837, by which the capital stock was increased, and authority given to- establish branches, are both unconstitutional; that by this provision, the powers of the Legislature are limited to the creation of a State Bank and branches, and that to permit it to extend the charter of the Bank of Illinois, with authority to establish branches, would defeat the intention of the Convention, which, it is insisted, was to limit the number of banks to be established to a State Bank and branches. These are the positions assumed by the Counsel for the Relator; but from the fact, that a State Bank alone could be made as prolific in branches as it, and all the other banks together, it must be apparent that the reasoning is fallacious. Let it be conceded, that by continuing the existence of one or more of the Territorial banks, with permission to establish branches, that the number might be made equal to that of all the counties in the State ; but is it not equally true, that the State Bank alone might be permitted to establish an equal number of branch banks. In no view of the subject, therefore, can the Legislature be considered as limited; either as to the number of branch banks, or the amount of banking capital they may authorize to be employed in banking. The extent of the constitutional inhibition upon the powers of the Legislature, would seem to be, to forbid any new creation of distinct and independent banks, except a State Bank and its branches. 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. How was this evil to he averted ? The idea of dispensing with, banks altogether was entertained by few, if any, of the states-: men of that time, and when the probable increase of population, wealth, trade, and general prosperity of the State was taken into consideration, no prescience of mind could fix exact limits to the amount of banking, or banking capital, that the exigencies of time and circumstances, might render expedient or necessary. Upon this point, therefore, the Convention had to trust to the Wisdom and discretion of the Legislature. But no such obstacle interposed to prevent a constitutional limitation to the number of distinct and independent banks, and this was the prevailing mischief. The declaration, therefore, that there shall be no other banks but those provided by law, and a State Bank and branches, &c., was designed to guard against the incorporation of these independent banks. But two of the territorial banks were then in operation, and there is -nothing to rebut the inference, that it was intended to be left to the discretion of the Legislature to determine what number should be allowed to expire .at the end of their charters, or be continued with such modifications as time and the light of experience might dictate. By limiting the number of independent banks, the great mischief of a currency of unequal value is diminished in the same ratio, and so, too, the danger of individual loss from insolvency will be proportionably diminished, as a knowledge of their condition will be the more easily obtained. The acknowledged intention of the Constitution was to forbid any new creation of banks, except a State Bank, &c., and in accordance with this restriction, it is to be observed that the Act of 1835 purports to be a continuation of an old charter, and is such in fact. The distinction between anew charter, and the renewal of an old one, is fully recognized by authority. The continuance of an old charter is not the creation of a new corporation, and it is said that in pleading, the latter Act need not be noticed, the vitality and authority of the corporation being derived from the former one. This principle sanctions the renewal of the Bank of Illinois, and to suppose the Convention acted in ignorance of it, would be a gratui- • tous and unwarrantable presumption. The extension of the charter as to time alone, is no violation of the Constitution, but, it is also said that enlargement of its capital, &c., is such. This is an assumption, however, that is not borne out by the terms of the Constitution itself. No restriction is to be found in that instrument, either as to the renewal of the charter of the Bank, or other enlargement, or the modification of its powers, and authority being established in the Legislature to continue the charter of the Bank, that of modification, so as make it conform to, and suit the eVer-varying exigencies of time and circumstances, would follow as a matter of course, upon the principle that every grant, or concession of power, carries with it, by necessary implication, all others essential to the efficient exercise of that granted. There are no extraneous circumstances in any way connected with the adoption of the Constitution, from which it can be inferred that the convention intended to impose a restriction upon the power of the Legislature, beyond that which may be understood from a fair and common sense interpretation of its language. Prior to the Convention, the Territorial Government had granted four bank charters, two of them, that of the Bank of Illinois and the Bank of Edwardsville, had gone into operation. These charters were contracts, and as such secure and inviolable under the provision of the Constitution of the United States. It was not merely for the purpose of ratifying them, therefore, that the Convention declared, “that there shall be no other Banks, or monied instistitutions in the State but those provided by law, except a State bank and branches, which may be established by the Legislature,” &c. By thus naming the Banks then in being, in connection with the one authorized to be established, places them all upon the same footing, and excepts them all out of the operation of the restriction imposed upon the power of the Legislature, as the creation of other banks than those designated. This is the grammatical construction, and common sense meaning of the language, as well as the legal effect. Supposing the Convention had wished to preserve the judicial system as then organized, and for that purpose had said, there shall be no other Courts, or tribunals of justice in the State, but those already provided by law, excepta Supreme Court, which may be established and regulated by the legislature, &c. Could it for a moment be contended that the authority of the legislature was limited by this language, to the establishment of a Supreme Court, and that all poyrer, not only to continue the existence of the Courts then in being, but also all authority to enlarge and regulate their powers and duties, so as more effectually to enable them to answer the purposes of their creation, was -denied the legislature ? Certainly not, and if so, how can the authority of the legislature be considered limited except in relation to the establishment of new banks; for there is a strict analogy between the case supposed, and the one under consideration. The plain interpretation of the Constitution is, that there shall be no banks but those already in being, and a State bank, which the legislature may establish.- They may exist subject to the control of the legislature as to the period of their existence, the amount of their capital, and all other modifications compatible with their legal rights. If the exercise of this power was intended to be inhibited, it is difficult to conceive why it was not forbidden in explicit terms. It is not pretended to be thus forbid, and as the subject is one of legislative cognizance, the powers of the Legislature must be considered plenary, unless restricted by clear and explicit language. This res-ults from the well settled principle of constitutional law, that a State Constitution is a limitation upon, and not a grant of legislative power; that all legislative power is inherent in the Legislature, unless clearly withheld by the people in their organic law, or prohibited by the Constitution of the United States to the State. Corporations are legitimate subjects of legislative cognizance. The extension of the charter of the Bank of Illinois must, therefore, be clearly inhibited by some constitutional provision, or the power to do so, is possessed by the Legislature. No express inhibition can be shown, but it is sought to be inferred from the twenty first section of the eighth article of the Constitution. But even if it was competent to restrict the Legislature in the exercise of a legitimate authority, by mere inference and presumption, yet there is no rule of construction by which such inference can be drawn from the language of this provision cf the Constitution. With the knowledge, on the part of the Convention, that the Legislature would possess the power of renewing and enlarging the charters of the Territorial hanks, unless, expressly taken from them, is it not a fair presumption that they would have said that the charters of those banks shall not be renewed, or their powers enlarged, or used some other terms that would clearly express that intention, if in fact such intention was entertained. No such language, however, is used, but on the contrary that which is employed implies the absence, if not the reverse of such intention. It is declared that there shall be no other banks but those already provided by law, of which the Bank of Illinois was one, except a State Bank,'&c., which may be established by the Legislature. This provision recognizes the banks then in existence, and permits their continuance, without giving or taking from the Legislature any authority over the subject. . The declaration that there shall be no other banks but those provided by law, is in effect an affirmation that they may be, that they are not forbid, but there shall be no others, except a State Bank. The Legislature may bring into being one more bank, but that is the extent of their powers as to new creations. As to those already in being, however, and the one permitted to be brought into being, there is no restriction, and we may infer that they are only mentioned in order to except them out of the limitation imposed upon the power of the Legislature, in reference to the creation of other banks. In speaking of them in this connection, it will be observed that no terms of negation are applied either to them, or the authority of the Legislature over them. The only prohibition to the power of the Legislature is acknowledged to be the declaration that there shall be no other banks, &c. Suppose the Legislature had imagined that the Territorial banks were sufficient, and had said that there shall be no other banks or monied institutions in the State, but those provided by law, no one could understand this as intending to forbid the Legislature to renew the charters of those banks, for that would be to leave the State altogether without such an institution, after the charters of those in existence had expired, and such a result was certainly not contemplated. A policy like this, is of more recent origin in this country than the adoption of our Constitution. If this language, then, which is identically that of the Constitution, so far as relates to the Territorial banks, would not prevent the Legislature from continuing them, how can the additional exception in favor of a State bank, which follows, have that effect, without ascribing to that combination of words a magical influence altogether different from their ordinary meaning. We have been earnestly admonished not to look to the consequences, which are to result from adecision against the constitutionality of the law under consideration. When a law clearly and palpably violates the Constitution, the Court can look no farther ; it is bound to declare it void without regard to consequences. Butin a case that admits of doubt, and when, as in this case, the principal arguments are drawn from historical reminiscences, and the impolicy of banking corporations generally, the views of the Court ought not to be so restricted as to exclude all considerations of the consequences of a decision against the validity of the law, particularly when their character and magnitude are such as must follow a decision of this case. Here is an institution bearing the imposing name of the Bank of Illinois, which has been in operation and in good credit for years, and under the sanction of a law of the State, inviting and holding out inducements to the investment of capital from abroad and at home, and upon the faith of which, capital to a large amount has been invested by individuals, and by the State to the amount of a million. In addition to which, notes to probably an equal or greater amount have been put in circulation by the Bank, and are now in the hands of innocent holders, who are in no way connected with the institution. This, together with all the capital stock paid in by individuals and by the State will be lost, without any fault on the part of the sufferers, but simply because of the confidence they reposed in a public law of the State. Nor is this all. Under these circumstances, it could not be expected that the State would escape the imputation of bad faith, when it is believed that most of the capital paid in on stock is from abroad, while all the loans of the Bankha've been made to citizens. Themag-nitude and pernicious character of these results are sufficiently obvious without any remarks. They are such as the Court cannot, 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 a Constitution or law would render its operation- mischievous, that construction should be avoided, provided it is susceptible of a different one. A recurrence to consequences, however, is not necessary. The application of one principle to this case, when it is considered in one aspect in which it presents itself, leaves' no question as to the duty of the Court. The Constitution has prescribed to each department of the government its appropriate duties and sphere of action, and it is devoutly to be wished that each one should keep within its proper sphere, without venturing upon the exercise of doubtful authority. By acting upon this safe and salutary rule, all conflict of jurisdiction, and all question of authority would be avoided, and still leave ample scope for useful action to each department. But a departure from this rule by the Legislature can furnish no- apology to the Court for a like practice. It does not necessarily follow that a law which, as legislators, we might decline voting for, because of prudential doubts, we ought, as a Court, to declare void. The degree of opposition between the law and the Constitution should govern the determination of the Court. When the conviction of their incompatibility is clear and strong, the duty of the Court becomes equally so. It should declare the law to be void. But it has been repeatedly decided, and is well settled by the highest tribunals in the nation, that it is seldom, if ever, in a doubtful case, or upon slight implication, that the Court should declare the Legislature to have transcended its authority. Upon this principle, then, aside from all other considerations, we are constrained to say, that we cannot declare the law under consideration to be a violation of the Constitution. After allowing to the able and ingenious arguments of the counsel of the Relator the utmost weight they are entitled to, and they only prove that the Constitution is somewhat obscure and ambiguous in its phraseology, that it does not expressly confer upon the Legislature the power of renewing the charters of the then existing banks, and consequently the most that can be claimed is, that the passage of the law for that purpose was the exercise of a barely doubtful power on the part of the Legislature. It is not, however, in a doubtful case, as has been said, that the Court is warranted in declaring an act of the Legislature unconstitutional. The principle which should govern the decision of the Court in such a case is clearly and concisely expressed by Chief Justice Marshall, in giving the opinion in the case of Fletcher v. Peck, 2 Peters’ Cond. R. 317. It is there said by the Court, that “the question whether a law be void for its repugnancy to the Constitution is, at all times, a question of much delicacy, which ought seldom, if ever, to be decided in the affirmative in a doubtful case. The Court, when impelled by duty to render such a judgment, would be unworthy of its station, could it be unmindful of the solemn obligation which that station imposes. But it is not on slight implication and vague conjecture, that the Legislature is to be pronounced to have transcended its powers, and its acts to be considered void.” The opposition between the law and the Constitution must be clear and strong, in the judgment of the Court, otherwise it cannot pronounce the law to be void. That opposition does not exist in this case. There is not that incompatibility between the Constitution and the law under which the defendants below claim to exercise the franchise of banking, as to justify the Court in pronouncing the law unconstitutional and void. The judgment is therefore affirmed.*  Justices Breese and Douglass dissented from the Opinion of the Court. Judgment affirmed.  This case was decided at the December term 1841, but no opinion was delivered until the present term,