Montana Attorney General Opinion 15-263

Opinion No. 263 Banks and Banking-Closed Banks, Reorganization of-Depositor's Agreements-Superintendent of Banks. HELD: The superintendent of banks ma~' fix the terms of reorgani7x'ltion agreements to be signed by depositors. but may not restrict withdrawals by depositors not signing the agreement. Such power would be legislative, not administrative. in character and can- not be implied from a statute gh'ing him power to impose conditions upon the re·opening of a closed hank. .J uly 1. HISS. It is my understanding that upon the clOsing of the Lambie Brothers bank. your department (the Superintendent of Banks), consented to the re-opening of a bank on the condition which von named, that 95% of the depositors con- sent to, and sign an agreement hy which 50% of such deposits should lie paid when certain assets were liqui- dated and the other 50% should be paid over a period of years as speci- fied in said agreement. The question is whether you may prohibit the other ii% who do not sign the agreement from withdrawing their depo;,its and whether you may make an order that they may be bound by the same restric- tion as to withdrawals as the other !l5% who have signed in the e,'ent the hank is re-opened according to said re- organizati9n plan. Attention is called to Section 126, Chapter 89, Laws of 1927, providing: "After the Superintendent has taken possession of any bank, be may permit such bank to resume Imsiness upon such conditions as ma~' he approved by him." And Section 127 Id., reading: "Upon taking the assets and busi- ness of any bank into his possession. the Superintendent is authorized to collect all moneys due to such hank, and to do such other acts as are neces- sary to consene its assets and busi- ness, and he shall proceed to liquidate the affairs thereof. He shall have general and inclusive power and au- t.hOlity, except as otherwise limited hy the terms of this act, to do any and all acts, to take any and all steps necessary, or, in his discretion, desir- . aole for the protection of the property and assets of such bank and the speedy and economical liquidation of the as· sets and affairs of Ruch hank an(l the payment of its creditors, or for the re-opening and resumption of busi- neSR hy said bank. where that is prac- tical or desirable." The statutes of Montana do not ex- pressly nor impliedly give to any num- ber of depositors or pereentage of de- posits upon their consent and agree- ment heing obtained, the right to bind the remaining depositors or deposit:;; to any reorganization agreement with- out their consent or agreement. Wheth- er such legislation, if enacted, would be constitutional, we need not consider. The statutes do not expressly grant to the Superintendent of Banks such power or the power to compel any num- her of depositors or percentage of de- posits to submit to any restriction of payment of their deposits in the event they do not consent or agree .to any reorganization agreement. The reorganization committee places reliance upon the sections quoted as giving the Superintendent of Banks im- plied power. If the Superintendent of Banks has such implied power, then by virtue of the same legislation he would ha "e power to compel all of the depositors to submit to any reorganiza- tion plan he may propose without first obtaining the consent or agreement of any of them. A mere statement of such extreme power residing in the Superin- OPINTO:\'S OF THE ATTOR~EY GENERAL 185 tendent of Banks carries its own refu- tation. The Superintendent of Banks is an administrative officer of the executh'e hranch of our state government. He possesses such reasonable administra- tive powers as may he expressly or im- pliedly granted to him by the legisla- ture. (Bank of Italy v. Johnson (CaL) 251 Pac. 784.) The legislature could not, if it would, grant to him legi~­ lative powers. An attempt to delegate !egislatiYe power would be unconstitu- tional. (S'tate Y. Holland, 37 Mont. 393, 96 Pac. 719; O'Neil \'. Yellowstone Irrigation District, 44 Mont. 492, 121 Pac. 283; 12 C. J. 839, Section 323.) By virtue of the sections of the code above referred to, the Superintendent of Banks may undoubtedly make any reasonable rules or regulations of an administrative character. To illustrate: He may impose certain reasonable con- ditions under which an insoh'ent bank may be reorganized and reopened on a solvent basis. The stockholders and depositors must submit and agree to such conditions if they choose to 'I'e- open the bank. In other words, the Superintendent of Banks may properly exercise reasonable discretion in the adoption of administrative rules. He may prescribe the method of procedure and impose the conditions upon which he will permit the bank to re-open. (St. Charles State Bank Y. 'V'isgfield, 36 f-l • .D. 493, 155 N. W. 776.) But naming the terms of a reorgani- zation agreement is far different from compelling acc-eptance of such terms by the stockholders and depositors. The latter is in the nature of legislation which is perhaps beyond the constitu- tional l)Ower of the legislature itself. Certainly snch power is not adminis- trative in character and cannot he im- Jllied. W'bile it is not always easily deter- mined at what point the exercise of the legislative will cease and the executive or administrative will become opera- tive, I am of the opinion that an order of the Superintendent of Banks requir- ing 5% of. the depositors to suhmit to a restricted withdrawal upon the re- opening of a closed bank without ob- taining their consent and agreement thereto, would be legislati\'e in charac- ter and therefore cannot be implied from the above named sections. Opinion No, 264 Schools-Budget-Warrants. HELD: The words "such warrants," as used in Sec. 1012, R. C. M. 1921, as amended by Chapter 162, Laws of 1933, refe.r to the proportion of the warrants which would be issued against moneys derived from tax levies only, and thc 00% restriction does not apply to war- rants which may be issued against cash on hand and revenue derived from other sources. July 5, 1933. We acknowledge receipt of yours of .Tune 14 requesting our decision as to the meaning of the 90% provision of Section 1012, R. C. M. 1921, as amend· ed by Chapter 162, Laws of 1933. Said ~ection is, in part, as follows: "Provided that the total of all such warrants is- sued during any fiscal year shall not (-'xceed * .. * ninety pel' cent of the alllount of all the taxes levied by such school district for the purpose of pro- viding revenues for the currelJit ex- l1enses for such fiscal year * * *." While the language of the Act might have been chosen more 'carefully, we think that the words "such warrants" refer to the .proportion of the warrants whicb would be issued against moneys derived from tax levies only, and that the 00% restriction does not apply to wal'rants which may be issued against cash on hand and revenue derived from other sourCes. Under such a construction the budg- et would be based upon (1) Cash on hand, less outstanding warrants charge- able against the same, plus (2) Re\'- enue from other sources other than ad n~lorem tax levy, plus (3) :\,inety per cent of the amount which woul() be produced hy taxes levied. if such Jevy were paid in full.