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general assembly shall meet at the regular time, congress (subject to the constitutional termination but gives it power to meet at another place if the of their official agency) depends solely upon their governor proclaims the fact of insurrection. own will and pleasure, with the single exception,

There is nothing peculiar in the Constitution of as will be presently seen, of cases in which the two Kentucky in this respect. On the contrary, sim- houses disagree in respect of the time of adjournilar provisions insuring the independence of the ment. In no other case is the president allowed to legislature from encroachment on the part of the interfere with the time and extent of their delibother branches of the government are contained in erations. And thus their independence is effectuthe Constitutions of almost all if not all the other ally guarded against any encroachment on the part States in the Union. In none of the Constitutions of the executive. Very different is the situation of the other States is express power granted to the of parliament under the British Constitution, for executive summarily to adjourn the general as- the king may, at any time, put an end to a session sembly while sitting in regular session at the seat by a prorogation of parliament, or terminate the of government, and to convene it at another time existence of parliament by a dissolution and a call and a different place, when there is no disagree- of a new parliament. It is true that each house ment between the two houses with respect to the has authority to adjourn itself separately; and this time of adjournment. The Constitution of West is commonly done from day to day, and sometimes Virginia, for example, provides, among other for a week or a month together, as at Christmas things, that “the legislature may when in session and Easter, or upon other particular occasions. adjourn to some other place when in his (the But the adjournment of one house is not the adgovernor's] opinion the public safety or welfare journment of the other. And it is usual, when the or the safety of the members or their health shall king signifies his pleasure that both or either of require it.” That is to say, the legislature may the houses should adjourn themselves to a certain when in session assemble at some other place pro- day, to obey the king's pleasure, and adjourn vided the governor is of opinion that the public accordingly; for otherwise a prorogation would safety or welfare or the safety of the members or certainly follow. Under the colonial governments their health requires it. This is a limitation upon the undue exercise of the same power by the royal the power of the legislature when in session to governors constituted a great public grievance, adjourn to another place, and the legislative power and was one of the numerous cases of misrule in this respect is limited to a case in which the upon which the Declaration of Independence governor is of opinion that adjournment to an- strenuously relied. It was there solemnly charged other place is necessary. Even in such case, how-against the king that he had called together legisever, the legislature may still, in the exercise of its lative (colonial] bodies at places unusual, uncomdiscretion, consider it unnecessary to adjourn to fortable and distant from the depository of the some other place, and there is nothing in the public records; that he had dissolved representaConstitution of West Virginia, as there is nothing tive bodies for opposing his invasions of the rights in the Constitution of Kentucky, authorizing or of the people, and after such dissolutions he had empowering the governor in such case by force refused to reassemble them for a long period of of arms summarily to adjourn it, and convene it at time. It was natural, therefore, that the people of another place.

the United States should entertain a strong jealThese views are justified and the correctness of ousy on this subject, and should interpose a conthem borne out, not only by a historical consider- stitutional barrier against any such abuse by the ation of the nature and extent of the legislative prerogative of the executive. The State constituand executive powers of the government gener

tions generally contain some provision on the same ally, but also particularly by a careful examination subject, as a security to the independence of the of the scope and meaning of the other provisions

legislature.” So, also, it may be as truly said that of the Constitution of the commonwealth.

the duration of each session of the legislature of Thus, section 41 of the Constitution of Kentucky

Kentucky (subject to the constitutional terminais: “Neither house, during the session of the gen

tion of their agency) depends solely upon their eral assembly, shall, without the consent of the

own will and pleasure, with the single exception of other, adjourn for more than three days, nor to

cases in which the two houses disagree with reany other place than that in which it may be sit

spect to the time of adjournment. In no other ting." This section is almost word for word the case is the executive allowed to interfere with the

as the clause in the Constitution of the time and extent of their deliberations. United States, which provides: “Neither house, So, also, when the framers of the Constitution during the session of congress, shall, without the provided that every order, resolution or vote in consent of the other, adjourn for more than three which the consent of both houses might be necesdays, nor to any other place than that in which sary should be presented to the governor for his the two houses shall be sitting.” Says Story: “It approval or disapproval, except on a question of is observable that the duration of each session of adjournment, they thereby meant to leave the



duration of each session of the general assembly houses in this respect the governor has no power (subject, of course, to the constitutional limitation to adjourn them.* of sixty days) dependent solely upon their own The Constitution of Kentucky provides for the will and pleasure, with the single exception men- regular sessions of the general assembly. These tioned in section 80 in case of a disagreement must be held on the first Tuesday after the first between the two houses with respect to the time Monday in January, and cannot be held at any of adjournment. They obviously had in mind and other time. But the necessity and propriety of meant to give effect to the principle which they their assembling ostener than at these stated had just declared, that no person being of one

periods on extraordinary occasions is left by the

Constitution entirely to executive discretion. This department of the government should exercise any

discretion is wisely lodged in the governor of the power properly belonging to either of the others;

commonwealth, who is presumed to be well adthat is to say, the question of adjournment of the

vised when an extraordinary occasion has arisen general assembly being a legislative question, the l'which demands prompt legislative action. With governor, being of the executive department of the exercise of this discretion up to the time of the government, should not exercise the power of convening the legislature no can interfere. adjournment, which properly belongs to the legis- The whole matter is lest entirely to the will of lature. So the Court of Appeals of Kentucky, him who for the time being is invested with the which is a branch of the government of the com

executive authority of the State. When, however,

the general assembly has met, pursuant to the monwealth co-ordinate with the general assembly and the executive, is by the Constitution also

mandatory requirements of the Constitution, on

the first Tuesday after the first Monday in January, required to be held at the seat of government, and

and its session is being regularly held at the seat if that shall become dangerous in case of war,

of government, the governor has no power or insurrection or pestilence, the court may, in its authority under the Constitution on his own moown discretion, and without any action on the part tion to issue a proclamation summarily adjourning of the executive, adjourn to mee and transact its the general assembly and cor rening it at another business at such other place in the State as it may

time and a different place, when there is no disdeem expedient for the time being

agreement between the two houses with respect to Section 80 of the Constitution of Kentucky pro

the time of their adjournment. The governor of

the commonwealth of Kentucky can no more susvides that "he (the governor] may, on extraordi

pend the operation of that constitutional provision, nary occasions, convene the general assembly at

which requires the general assembly to convene at the seat of government or at a different place, if the time named, than he can revoke or suspend that should become dangerous from an enemy or

any other constitutional requirement. He can no from contagious disease: in case of a disagreement more revoke that constitutional provision than he between the two houses with respect to the time can take away from the Court of Appeals of Kenof adiournment. he may adinurn them to such tucky the jurisdiction conferred upon it by the time as he shall think proper, not exceeding four Constitution. The executive cannot revoke an months: when he shall convene the general assem

organic law or take away a right, and any attempt hiv it shall be hv proclamation. stating the subiects

to do so is an act of usurpation. to be considered, and no others shall be consid

When, on February 13, 1688, the lords and com

mons, representing all the estates of the people of ered." The Constitution of the United States

the realm, assembled at Westminster and precontains a similar provision, that the president

sented to William and Mary the Bill of Rights, may. on extraordinary occasions. convene hoth

they therein affirmed and asserted the rights and houses, or either of them, and, in case of a dis- liberties of the British people, and now in the agreement between them with respect to the time

United States this Bill of Rights has been incorof adiournment. he may adiourn them in such porated with the Constitutions of nearly all the time as he shall think proper." As Storv savs with States, including the State of Kentucky. The respect to the National Constitution, this power to

* It may be noted in passing that the last clause of the secadiourn the legislative body in cases of disagree- tion requires that when the governor shall convene the gen

eral assembly it shall be by proclamation, stating the ment is indispensable, since it is the only peace- subjects to be considered, and no others shall be considered.

In the proclamation above quoted there is no statement of the able way of terminating a controversy, which can

subjects to be considered by the general assembly at the ses

sion ordered to be held at London on February 6. As the lead to nothing but distraction in the public coun

requirement of the Constitution is that no other subjects shall cils. The provision in case of a disagreement be

be considered than those stated in the proclamation con

vening the legislature, it would seem that the general tween the two houses with respect to the time of assembly when thus convened would be without the power ancient Bill of Rights, after reciting that James the tutional barriers against the recurrence of any Second, by the assistance of evil counsellors, such abuse by the prerogative of the executive. judges and ministers employed by him, had en

under the Constitution to consider any subjects of legislation adjournment constitutes a limitation upon the whatever, even assuming that the action of the governor was

authorized by the Constitution when he summarily adjourned power of the executive to adjourn the legislature. the general assembly while sitting in regular session at the If there is no disagreement between the two

seat of government, and convened it at another time and a different place.

LUCIUS LAMAR. deavored to subvert and extirpate the laws and

195 Broadway, New YORK, February, 1900. liberties of the kingdom by assuming and exercising a power of dispensing with and suspending of laws, and the execution of laws, without the con

INSOLVENT BANK. sent of parliament, declared that the pretended

WITHDRAWAL OF MONEYS ON INFORMATION OBpower of suspending of laws, or the execution of

TAINED THROUGH ONE OF ITS DIRECTORS. laws, by regal authority, without consent of parliament, was illegal, and also that parliaments

NEW YORK COURT OF APPEALS. ought to be held frequently. And when, less than a hundred years later, it

Decided February 6, 1900. became necessary for the people of the American Miles M. O'BRIEN et al., Rec'rs, &c., Respondcolonies to dissolve the political bands which con- ents, v. East River Bridge Co., Appellant. nected them with the State of Great Britain, and

A corporation having money on deposit in a failto publish to the world that the United States

ing bank, 11pon being informed of its condition were and ought to be free and independent States,

by the president of the corporation, who is their statement of the causes which impelled them

also a director of the bank, may withdraw its to the separation was set forth in the Declaration

deposit on the day of failure. of Independence. They then and there declared The fact that the corporation acts upon informathat the history of the king of Great Britain was a

tion imparted to it by its president, who had history of repeated injuries and usurpations, all

gained it through his relations with the bank having in direct object the establishment of an

as one of its directors, does not bring the absolute tyranny of the States; and that the long transaction within the condemnation of sectrain of abuses and usurpations, pursuing invari- tion 48 of the Stock Corporation Law, which ably the same object, evinced a design to reduce

prohibits officers and directors of an insolvent them under absolute despotism. To prove this corporation from using their knowledge of its they submitted the facts. Hear what they said: condition to secure their own claims, or the “He (the king of Great Britain) has called to

corporation from making preferential transfers gether legislative bodies at places unusual, uncom

of its property. fortable, and distant from the depository of their

Appeal from an order and judgment of the Appublic records, for the sole purpose of fatiguing pellate Division, First Department, reversing a them into compliance with his measures. He has

judgment entered upon the report of a referee dissolved representative houses repeatedly for op

dismissing the plaintiff's complaint upon the merits posing, with manly firmness, his invasions on the

and granting a new trial. rights of the people. He has refused, for a long

Eugene Treadwell for appellant; Louis Marshall time after such dissolutions, to cause others to be

and Samuel Untermyer for respondents. elected, whereby the legislative powers, incapable of annihilation, have returned to the people at O'BRIEN, J. - The plaintiffs, as receivers of the large for their exercise; the State remaining in Madison Square Bank, brought this action to comthe mean time exposed to all the dangers of inva- pel the defendant to account and pay over to them sion from without and convulsion within."

$50,000 which the defendant had deposited in the And, finally, when the representatives of the bank, but drew out by check on the day the bank people of the two score States forming the closed. The cause was tried before a referee, who American Union respectively met in conven- dismissed the complaint, but this judgment has tion and framed their Constitutions, and been reversed by the Appellate Division. The solemnly declared in their bill of rights facts upon which the judgment depends are undisthat their general assemblies should meet puted. They are fully stated in the learned opinion frequently, and that no power to suspend laws or below, and that statement can be very safely the making of laws should be exercised unless by adopted as it there appears: their general assemblies or their authority, and “On the 8th of August, 1893, the defendant was

divided the powers of their governments into three a depositor in the Madison Square Bank, and it · distinct departments, and confined each depart- had standing to its credit on the books of the bank

ment to a separate body of magistracy, and com- on that day the sum of $50,000. As to that amount, manded that no person being of one of those the ordinary relation of debior and creditor, and departments should exercise any power properly no other, existed between the bank and the debelonging to either of the others, it may well be positor. On the night of the 8th of August, 1893, said, in the language of the great jurist now gone it became known to Frederick Uhlman, a director before, that they entertained a strong jealousy on of the Madison Square Bank and also the president these subjects, and accordingly interposed consti- of the East River Bridge Company, that the bank was insolvent, or in imminent danger of insol- The only authority claimed in behalf of the vency, and that it would be closed the following plaintiffs to sustain the judgment is section 48 of day. Frederick Uhlman also knew that the St. the Stock Corporation Law, which reads as folNicholas Bank was the agent at the clearing house lows: No corporation which shall have refused of the Madison Square Bank, and that on the 8th to pay any of its notes or other obligations when of August, 1893, the St. Nicholas Bank had in its due, in lawful money of the United States, nor possession a large amount of securities belonging any of its officers or directors, shall transfer any to the Madison Square Bank, and that it held such of its property to any of its officers, directors or securities as collateral for any and all obligations stockholders, directly or indirectly, for the payas agent of the Madison Square Bank. He also ment of any debt, or upon any other consideration knew that the St. Nicholas Bank had notified the than the full value of the property paid in cash. clearing house that it would cease to act for the No conveyance, assignment or transfer of any Madison Square Bank, and that the St. Nicholas property of any such corporation by it or by any Bank, by the rules and regulations of the clearing officer, director or stockholder thereof, nor any house, was responsible for all checks of the Madi-payment made, judgment suffered, lien created or son Square Bank that would be presented at the security given by it or by any officer, director or clearing house in the exchanges on the morning of stockholder, when the corporation is insolvent or the 9th of August. All this knowledge was ac- its insolvency is imminent, with the intent of givquired by Frederick Uhlman as a director of the ing a preference to any particular creditor over Madison Square Bank. On the night of August other creditors of the corporation, shall be valid. 8th Simon Uhlman, who was largely interested in Every person receiving by means of any such the stock of the East River Bridge Company, prohibited act or deed any property of the corpolearned of the imminency of insolvency of the ration shall be bound to account therefor to its Madison Square Bank and that it would probably creditors or stockholders or other trustees. No be closed the following morning. Thereupon he stockholder of any such corporation shall make caused a check to be filled up, drawn upon the any transfer or assignment of his stock therein to Madison Square Bank, for $50,000, and took it to any person in contemplation of its insolvency. the treasurer of the defendant at Brooklyn, where Every transfer or assignment or other act done in it was signed by such treasurer at about it o'clock violation of the foregoing provisions of this secat night. That being done, Simon Uhlman re- tion shall be void." turned to New York city with the check and It will be seen that the money drawn from the handed it to Frederick Uhlman, who also signed it failing bank belonged to the defendant, and the as president of the East River Bridge Company check drawn against the deposit was the check of and retained it in his possession over night. Early the defendant. The defendant's president being on the morning of the oth of August Frederick also a director in the failing bank, owed certain Uhlman took the check to the Hanover National duties to the defendant and its shareholders and Bank, and instructed the authorities of that bank creditors, as well as to the bank, its shareholders to have it presented at the clearing house that and creditors. It is obvious that the judgment of morning, so that it might be paid by the St. Nich- reversal cannot be sustained without holding that olas Bank in the exchanges of that morning and the two following propositions are law: thus be credited to the East River Bridge Com- (1) That the statute quoted forbids a director in pany, and a withdrawal effected of so much from a bank who has knowledge of its insolvency from the funds and moneys or securities of the Madison communicating this knowledge to a depositor, Square Bank under the control of the St. Nicholas even though the depositor happens to be a corpoBank. The check was presented at and passed ration in which the director is interested, and of through the clearing buse. The ast River which he is president. Bridge Company received a credit with the Han- (2) That the statute forbids a corporation havover Bank, and thus the transfer of the $50,000 ing money on deposit in a bank about to fail from was completely made from the Madison Square drawing its check against the deposits, on learnBank to the defendant. The Madison Square / ing that the bank was about to fail from a director Bank was closed on the morning of the 9th of of the bank, who was also president of the corpoAugust, or, more properly speaking, was never ration, and communicated the knowledge to the opened for business after the 8th, and went into latter with the intent that it should draw out the insolvency."

money. The language of the statute does not There is no dispute about the facts, nor are support either of these propositions, and it would they open to different inferences. The only ques- be judicial legislation simply to hold that they are tion is with respect to the law, or, in other words, within the intention and purpose of the law. We whether the transaction was forbidden by the must not only produce by judicial construction a statute, since the judgment is reviewable in this new law, but a law which could not have been court, notwithstanding the statement in the order within the intention of the legislature. The statute that the reversal was upon the law and the facts. is in derogation of the common law and should ary loss.

not be construed so as to include cases not fairly tion of secrecy upon him with respect to the real within its terms. We do not mean to say that it condition of the bank it is very difficult to see how is one of those statutes that must receive a very he could be guilty of any legal or moral wrong in strict construction, but when given a fair construc- participating with the other officers and directors tion the plaintiffs can claim nothing more. No of the defendant in saving it from a great pecunione can safely assert that there is any law that requires a director of an insolvent bank, or a bank There is no law that forbids a depositor in a about to become insolvent, to conceal the fact bank, who is not an officer or director, from drawfrom any one. No one can claim that there is any ing a check against the deposit whenever the law that forbids a director of such a bank from money is needed, or even when it is thought the disclosing the fact to a depositor, even though the bank is liable to fail. The act by means of which depositor should be a corporation in which the the money was withdrawn in this case was the bank director is interested and of which he is corporate act of the defendant and not the indipresident. So long as he confines himself to the vidual act of the president. The money on deposit truth with respect to the condition of the bank, he belonged to the defendant, and it was subject to violates no law and is guilty of no moral wrong. check. The circumstance that the defendant in its Indeed, it is not very difficult to conceive of cases corporate capacity was induced to exercise its where, in the forum of morals at least, he would right by information of the condition of the bank be bound to speak. A bank director with such communicated by the president, who was also a knowledge who would look on and see his neigh- director of the bank, cannot change the case so bors depositing their money where it would be long as the right to withdraw the money existed. likely to be lost, without giving to them any hint | The defendant cannot be compelled to restore the or warning of the danger, might very well be rated money simply because it made use of knowledge as a man whose moral standard was not very high. possessed by one of its own officers. In the care We may go further and look at the actual trans- and management of its finances a corporation is action in this case. The defendant's president was

entitled to the benefit of all the knowledge upon a director of the bank. The defendant was dealing that subject that any of its officers may possess, with the bank, making deposits of money in large and to their best judgment. The act by which the sums, and had then to its credit the entire sum deposit was transferred from the failing bank to which the plaintiffs seek to recover. Assume that the defendant was not in any proper sense the act the director of the bank and president of the of the bank or any of its officers or directors. It defendant advised the board of directors of the was not a transfer prohibited by any law. It is latter to make no more deposits as the bank was true that one of the bank directors participated in about to fail, he would not violate any law, but on it, but not as such director or as an individual, but the contrary would be performing a duty which as an officer of the defendant acting in its interest. he owed to the defendant to save it from loss. Whatever he did to withdraw the moneys is to be Such a suggestion would no doubt result in a with imputed to the defendant, and, of course, is imdrawal of the moneys already deposited, which is puted to it by the judgment below. But the quesall that the plaintiffs complain of, but it would be tion is, Did the defendant, in drawing its check difficult, if not impossible, to show that under such against the deposit, violate any law or perpetrate circumstances any law was violated or any wrong any wrong? If it did not, then the participation done. In the present case we must assume that of one of the bank directors in the transaction the defendant's president not only advised the cannot change the situation. It would, I think, withdrawal of the deposit, but signed the check be an unwarranted construction of the statute to for that purpose, and had it deposited to the de- hold that a depositor in a bank, who has withfendant's credit in another bank for the very pur- drawn the deposit on learning that the bank was pose of having it paid by the bank that was the about to close, is liable to be sued for the money clearing house agent of the bank on which it was whenever it can be shown that he acted upon drawn and in which he was a director, knowing information given to him by a director of the all the time that it was about to fail. What the bank, and yet the judgment now under review statute forbids is that the director shall not, under cannot very well be sustained without such a consuch circumstances, draw out his own money. The struction, or that in substance. case has been decided in the court below precisely The learned court below has, I think, recast the as if such was the fact. Suppose the director of the statute and applied it to a state of facts not fairly bank, knowing all about its condition, concealed within it, and to which it was never applied before. it from his associate officers and directors in the The language of the statute is not very concise or defendant and by this course the $50,000 was lost, clear and the phraseology is somewhat involved. it might then be difficult to show that the president When carefully read, however, the things that are of the defendant had discharged the duty imposed prohibited may be stated in very few words: upon him by his trust to its creditors or share- (1) It prohibits officers and directors of an inholders. If the law had not placed some injunc- , solvent corporation, or of one about to become

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