ABIE STATE BANK V. BRYAN, 282 U. S. 765 (1931)

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U.S. Supreme Court

Abie State Bank v. Bryan, 282 U.S. 765 (1931)

Abie State Bank v. Bryan

No. 63

Argued January 22, 23, 1931

Decided February 25, 1931

282 U.S. 765


1. A decision of this Court, rendered soon after the enactment of a state law by which state banks were assessed for the establishment and maintenance of a common fund for the protection of depositors, and upholding it as a then valid police regulation, does not preclude banks on whose behalf the question was litigated from maintaining a subsequent suit to test the validity of later assessments in the light of later experience. P. 282 U. S. 772.

2. The state supreme court, deciding that the state bank guaranty law was not repugnant to the Fourteenth Amendment, ruled also that the plaintiff banks were estopped by their conduct from assailing its validity. Held that the latter is not an independent nonfederal ground broad enough to sustain the judgment, but is interwoven with the federal question, and therefore this Court has jurisdiction to review the case. P. 282 U. S. 772.

3. The principle that a police regulation, valid when adopted, may become invalid because, in its operation, it has proved to be confiscatory implies that the right of protest when the regulation becomes intolerable is not forfeited by earlier compliance with it. P. 282 U. S. 776.

So held where state banks, after defeat of their effort to have the state bank guaranty law declared unconstitutional, endeavored to do business under it and therein advertised its purposes and the contemplated advantages that led to its enactment, but later, in the light of further experience, sued again to have it set aside.

4. On appeal from a state court, this Court takes judicial notice of statutes of that state, including those passed after the appeal was taken. P. 282 U. S. 778. chanrobles.com-red

Page 282 U. S. 766

5. A case appealed here and involving the right of appellant banks to enjoin, as confiscatory, the collection of specified assessments under a state bank guaranty statute is not made moot by a statute, enacted after the appeal, repealing the section under which such assessments were made and otherwise modifying the old law, but retaining in force the assessments immediately complained of and leaving open the question whether, notwithstanding the changed situation, they are unconstitutional. P. 282 U. S. 781.

6. The Nebraska Bank Guaranty Law (Comp.Stats., 1922, § 8024 et seq.), providing for a fund, to be raised by assessments upon all the state banks and to be applied, when any of them failed, to meet deficiencies owing from it to its depositors, was a police regulation designed to promote the public welfare; the rights of depositors arising under it (aside from the contract of each depositor with his own bank) are not contractual, and did not prevent the legislature from modifying the plan, for the public welfare, or from exercising a reasonable discretion in so doing. P. 282 U. S. 782.

7. This law provided for two semiannual assessments against each bank of 1/20th of 1% of its average daily deposits, and special assessments, to repair deficiencies in the guaranty fund, up to 1/2 of 1% each year of such average deposits. The present suit was to enjoin collection of a special assessment, recently made, and any other such in the future, on the ground that, through failure of the guaranty scheme, such assessments became confiscatory. After the appeal here, a statute was passed for the liquidation of the scheme; only three special assessments and two regular assessments were retained by it, and future assessments were restricted to 2/10ths of 1% of average daily deposits annually, limited to a period of ten years. Held that, since the law in its modified form cannot be regarded as confiscatory, or as other than a reasonable method of liquidating the guaranty plan, a decree of the state court denying an injunction to restrain collection of assessments should be affirmed. P. 282 U. S. 783.

119 Neb. 153, 227 N.W. 922, affirmed.

This was a suit brought by the above-named appellant for itself and on behalf of several hundred other state banks of Nebraska to enjoin the Governor of the state and the Secretary of its Department of Trade and Commerce from collecting special assessments under the chanrobles.com-red

Page 282 U. S. 767

State Bank Guaranty Law. The Treasurer of the state, as depositor of public moneys, and several private depositors, intervened as defendants. A decree granting an injunction was reversed by the court below. The reversal is affirmed here because of subsequent modifications of the law assailed.