In Re Interstate Trust Banking Co. , 188 La. 211 ( 1937 )

Two propositions are laid down in the prevailing opinion in this case. One of the propositions is that the fourth section of Act No. 300 of 1910, by necessary implication, means that, if a creditor of a bank in liquidation, other than a depositor, fails or neglects, for any reason, to file his claim with the Bank Commissioner and submit proof of the justness of his claim within the limit of time given by the commissioner in the notice which he shall publish, calling upon all claimants other than depositors to file their claims with the commissioner and "make legal proof as to the justice thereof," the creditor's claim is thereby forfeited, and he is forever barred from asserting the claim, even in a court of justice. The other proposition — or pronouncement — laid down in the prevailing opinion in this case is that the almost unanimous decision that was rendered in Re Liquidation of Hibernia Bank Trust Company (Jones County, Intervener), 181 La. 335, 159 So. 576, 577, is now all wrong, and ought to be declared overruled whenever it is cited.

The members of the court who, in this case, repudiate the doctrine of the Jones County Case have no occasion or necessity, in this case, to overrule the decision in the Jones County Case. I say this advisedly, because the five claims (amounting to $17,709) which Judge Cage held were protected by Act No. 63 of 1926, as interpreted in the Jones County Case, are now declared by the majority of the members of the court to be eliminated, — not prescribed, but proscribed — by the failure of the claimants to file their claims within the time allowed by the Bank Commissioner, in the notice which he published, under the provisions of the fourth section of Act No. 300 of 1910. I refer, of course, to the claim of the St. Tammany Parish School District No. 2, for $2,562.50; the claim of the Police Jury of Jefferson parish, for $8,645.23; the claim of Water District No. 1 of St. Bernard parish, for $551.25; the claim of the Police Jury of St. Bernard parish, for $202.50; and the claim of the Bayou Terre-aux-Boeuf Drainage District, for $5,747.52. These five claims, amounting to $17,709, are the only claims that Judge Cage found were entitled to the lien granted by Act No. 63 of 1926; and they are the only claims, besides the claim of Carroll, McCall, Plough Carroll, for $650, that Judge Cage ordered paid by preference. These six claims are all eliminated by the prevailing opinion of this court, declaring a forfeiture, under the fourth section of Act No. 300 of 1910.

There were, altogether, 98 opponents of the liquidator's provisional account. The opponents claimed to be creditors of the bank, other than depositors. And each opponent claimed a lien or preference because of the nature of his claim. Two of the 98 opponents withdrew or dismissed their claims voluntarily. The claim of another opponent was withheld from submission, by consent of counsel. That left 95 claims in dispute, for Judge Cage to pass upon. The liquidator filed what he called a plea in bar against 89 of the 95 claims in dispute, — the plea being founded upon the fact that the 89 claimants failed to file their claims with the commissioner and "make legal proof as to the justice thereof" before the expiration of the last day of the three months' publication of the notice, given by the Bank Commissioner, under the provisions of the fourth section of Act No. 300 of 1910. Judge Cage overruled the so-called plea in bar — which he preferred to call a plea of prescription — and he then took up and considered separately each one of the 95 claims, on its merits. Judge Cage sustained only the 6 claims that I have mentioned, namely, the five claims amounting to $17,709, which the judge considered protected by Act No. 63 of 1926, as construed in the Jones County Case, and the claim of Carroll, McCall, Plough Carroll, for professional services, amounting to $650. It so happens, though, that the 6 claims which Judge Cage sustained are among the 89 claims that were not filed with the Bank Commissioner before the last day of the weekly three-months' publication of his call upon all claimants other than depositors to come forward and make proof of their claims. For that reason these six claims are eliminated. I will take up that subject later.

Among the 89 claimants whose claims were rejected by Judge Cage are 5 (listed as 6) who filed their claims with the bank commissioner in time to escape the so-called plea in bar. They are (1) William H. Hickerson, Jr., and Hugo Ornstein; (2) William H. Hickerson, Jr.; (3) N.V. Nederlandsche Koloniale Hendelvereening; (4) Rouwenhorst Muller Co.; (5) Hattiesburg Grocery Company; and (6) State Agricultural Credit Corporation. None of these claims is protected by Act No. 63 of 1926, as construed in the Jones County Case. It was so held by Judge Cage, and it so appears and is not disputed in the prevailing opinion of this court. Hence there is no necessity or occasion, in denying that these claims are secured by a lien, to overrule the decision rendered in the Jones County Case.

There is no suggestion in the prevailing opinion in this case that any particular error, inadvertence, or oversight was committed in construing Act No. 63 of 1926 in the Jones County Case. There was a vacancy and hence there were only six justices on the bench when the case was decided. Only one justice dissented. He wrote a dissenting opinion, covering nearly eleven pages, and covering every point in the case. But no other justice dissented then or when the petition for a rehearing was denied — two months and nine days after this court first rendered its decision in the case — affirming the judgment of Judge Gleason, of the civil district court.

The facts in the Jones County Case conformed accurately with the conditions required by Act No. 63 of 1926 for allowing a lien on the assets of an insolvent bank. The purpose of the statute is to prevent the injustice of allowing other people's money, held by a bank only temporarily and as an agent, to be distributed among the creditors of the bank in case of its being insolvent. The first section of the statute declares:

"That when any bank receives as agent (whether as agent of another bank or of any person, firm or corporation) for collection and remittance or delivery to its principal and not for deposit any bill, note, check, order, draft, bond, receipt, bill of lading, or other evidence of indebtedness, or other instrument, and collects or realizes any money on the same, and has not deposited same to the credit of said principal, the principal shall have a privilege [lien] on all of the property and assets of said agent bank for the amount so collected or realized by said agent bank, which privilege [lien] shall be superior to the claims of all depositors of said agent bank, the claims of all creditors of said agent bank having no privilege [lien] and to all other general privileges [liens] on the property and assets of said agent bank, except those for law and judicial charges."

The conditions — and the only conditions — on which the statute confers the lien or preference are, first, that the bill, note, check, order, draft, bond, receipt, bill of lading, or other evidence of indebtedness, or other instrument, shall be received for collection by the bank as agent for the owner of the instrument; second, that the intention of the parties shall be that the money to be collected by the bank as agent is to beremitted or delivered to the principal, and is not to bedeposited to his credit in the bank so as to convert the relationof the bank, as agent, into that of an ordinary debtor, of the party who sent the instrument to the bank; and, finally, third, that the bank, in fact, "has not deposited same [meaning the proceeds of the instrument] to the credit of the principal." (I did the italicizing.)

In the Jones County Case the supervisors of Jones County, Miss., sent, through the Commercial National Bank Trust Company, in Laurel, Miss., to the Hibernia Bank Trust Company, in New Orleans, a check for $7,932.30, drawn on the Whitney National Bank, in New Orleans. The instruction in the letter accompanying the check was that with the proceeds of the check the Hibernia Bank should pay certain bonds of Jones County, and certain coupons, all payable at the Hibernia Bank, on the sixth day after the bank received the check. The Hibernia Bank collected the check on the Whitney Bank, and, of course, did not deposit the proceeds to the credit of Jones County, or to the credit of the Commercial National Bank Trust Company in Laurel, Miss., but, as a necessary bookkeeping entry, to keep a record of the money which the Hibernia Bank held as agent for Jones County, Miss., the bank set up on its books an account headed "Jones County Bonds Payment Account," to which the amount to be paid to the bondholders was credited; and the bank set up another account, headed "Jones County 6% Road Bond Coupon Account," to which the amount to be paid to the holders of the coupons was credited. Neither Jones County nor the Commercial National Bank Trust Company in Laurel, Miss., ever had an account or a deposit in the Hibernia Bank. The bank failed and went into liquidation while holding Jones County's money in its possession as agent. Of course, the bank had not kept Jones County's money separate from the bank's funds, as in a couple of sacks. Banks never do business that way. If they did there would be no need for a statute like Act No. 63 of 1926. It was so observed in Tropical Printing Co. v. Union Title Guaranty Co., 180 La. 702, 157 So. 534.

The only points in the Jones County Case on which it was argued — or could have been argued — that the facts of the case did not conform with the requirements of the act of 1926 were, first, that the money which the Hibernia Bank received as agent was in fact deposited in the Hibernia Bank; and, second, that the check was received by the Hibernia Bank not merely for collection and remittance or delivery to the principal, but primarily for the purpose of paying Jones County's bonds and coupons which were about to come due. Our answer to the first argument was that the money was not deposited "to the credit of the principal." The reason why there is no lien if the money is deposited by the agent bank to the credit of the principal is that such a deposit, if made with the principal's approval, makes him an ordinary creditor of the bank. Our answer to the second argument was that a payment, or "remittance or delivery," to the order of the principal, or to a person or persons designated by the principal, was in reality a payment or "remittance or delivery" to the principal; and that, even though the primary purpose of sending the check to the Hibernia Bank was to pay the bonds and coupons that were about to come due, nevertheless the check was received by the Hibernia Bank as agent, "for collection and remittance or delivery," and therefore, Jones County's Case fulfilled every condition that the statute required for the protection of the money with which the Hibernia Bank was intrusted as Jones County's agent.

To show that the opinion which we rendered in the Jones County Case answered every argument that was or could be made — and to show that we did not extend the terms of the statute beyond its necessary implications — I quote from the opinion the most pertinent paragraphs, viz.:

"Before the act of 1926 came into effect, one who sent a negotiable [commercial] instrument to a bank merely for collection and remittance or delivery, and not for deposit, had no protection against the bank's becoming insolvent and failing to remit or deliver the proceeds so collected. The Legislature, evidently, deemed it unjust that one whose money was collected by a bank as his agent, and who had not consented to become a depositor in the bank, should suffer the loss of his money by its distribution among the depositors, or ordinary creditors of the bank, if the bank should become insolvent. The Legislature, therefore, drew the distinction between the fiduciary relation of principal and agent, and the relation of depositor and depositary, which is the relation merely of the ordinary creditor and debtor.

"It is contended by the appellants that Jones county, Miss., is not entitled to the lien provided for by the act of 1926, because the proceeds of the check on the Whitney National Bank were in fact deposited by the Hibernia Bank Trust Company in its bank. The proceeds of the check were deposited by the Hibernia Bank Trust Company, but not to the credit of Jones county, Miss. The proceeds were deposited to the credit of the two special accounts which were set up on the books of the Hibernia Bank Trust Company, as a necessary bookkeeping entry, to have an account [a record] of the funds. The act of 1926 requires, as a condition on which the lien is granted, that the bank that has collected the money as agent `has not deposited same to the credit of said principal.' The money, in this instance, was not deposited to the credit of the principal, Jones county, Miss. * * *

"It is argued, finally, for the appellants, that the act of 1926 was not intended to apply to a case like this, where the instrument was sent to the bank not merely for collection and remittance or delivery to the sender, but for the purpose of paying an obligation of the sender. It is true that the main purpose of sending to the Hibernia Bank Trust Company the check on the Whitney National Bank was not merely to collect the check, but to pay the bonds and coupons which were payable at the Hibernia Bank. That means that the authority of the Hibernia Bank Trust Company, as agent for Jones county, Miss., extended further than to collect the check. But the agency or mandate included the authority and duty to collect the check; and the fact that the mandate went further, and included also the authority and duty to remit or deliver the proceeds to the bondholders, does not take the case out of the provisions of the statute."

The Bank Commissioner and his department, and the banks and bankers and their attorneys, throughout the state, were, apparently, convinced of the soundness of the decision in the Jones County Case; otherwise, they would have proposed an amendment of the law, in one of the many sessions of the Legislature that were held during the period in which the decision in the Jones County Case was the latest decision on this important subject. The state banking department was then and is yet in harmony with the state administration, and could and would have had the Legislature to make a change in the law, as interpreted by this court in the Jones County Case, if the banking department had believed that our interpretation of the statute was wrong. The Jones County Case was decided by Judge Gleason, in the civil district court, on June 12, 1934. The judgment was affirmed by this court on November 26, 1934; and the petition for a rehearing was denied on February 4, 1935. The case of the Pan American Life Insurance Company, which was an intervention in the same liquidation proceeding, In re Hibernia Bank Trust Company, 185 La. 448, 169 So. 464, was decided by Judge Gleason on July 9, 1935; and his decision was reversed by this court on May 8, 1936; and the petition for a rehearing was denied on June 30, 1936. It was in that case that this court, by the scant majority of 1 vote, declared that the decision which had been rendered in Jones County's Intervention in the same liquidation proceeding was unsound, and that it was the duty of the court to overrule it. Meanwhile, that is, while the decision in the Jones County Case was the last word on the subject, the Legislature held nine sessions, in any one of which the State Bank Commissioner might have had the law changed if he had believed that the doctrine of the Jones County Case was unsound. The Legislature was convened in regular session on May 14 and adjourned on July 12, 1934. It was convened in its first extra session of 1934 on August 14 and adjourned on August 18. It was convened in its second extra session of 1934 on November 12 and adjourned on November 16. It was convened in its third extra session of 1934 on December 16 and adjourned on December 20. It was convened in its first extra session of 1935 on February 26 and adjourned on March 2. It was convened in its second extra session of 1935 on April 15 and adjourned on April 20. It was convened in its third extra session of 1935 on July 4 and adjourned on July 8. It was convened in its fourth extra session of 1935 on September 7 and adjourned on September 11. And it was convened in regular session on May 11 and adjourned on July 8, 1936. In none of these sessions, as far as I know, was there any suggestion that the judicial interpretation of the act of 1926 in the Jones County Case was not what the Legislature and the state banking department intended it should be.

During the period of these sessions of the Legislature the state banking department was aware that Jones county, Miss., had sued the Interstate Trust Banking Company, on August 21, 1933, for $4,135.94, being the proceeds of a check on another bank, sent by Jones County to the Interstate Trust Banking Company, for the purpose of paying certain bonds and coupons, exactly as in Jones County's Case against the Hibernia Bank Trust Company in liquidation. In fact the letter accompanying the check that was sent to the Interstate Bank bore the same date as the letter accompanying the check that was sent to the Hibernia Bank, and the bonds and coupons were due at each bank on the same date. In the suit against the Interstate Trust Banking Company, Jones County claimed an equitable lien or, in the alternative, the lien granted by Act No. 63 of 1926. The bank's defense was that the money had been deposited to the credit of Jones County and mingled with the bank's funds, and hence that Jones County had no lien on the assets of the bank. After the case was submitted on its merits in the District Court of the United States for the Eastern District of Louisiana, the bank was taken over by the bank commissioner, in this liquidation proceeding which we are now considering; and the Bank Commissioner and his special agent and the liquidator were made parties to the suit in the United States District Court. Judge Borah gave judgment in favor of Jones County for the $4,135.94, with recognition of the lien granted by Act No. 63 of 1926. The decree was affirmed by the Circuit Court of Appeals, Fifth Circuit, on May 22, 1935, following the decision which then had been rendered by the Supreme Court of Louisiana, in Re Liquidation of Hernia Bank Trust Company (Intervention of Jones County), 181 La. 335, 159 So. 576. See Interstate Trust Banking Co. v. Jones County, Miss. (C.C.A.) 77 F.2d 806. The Supreme Court of the United States refused a writ of certiorari.296 U.S. 608, 56 S.Ct. 124, 80 L.Ed. 431. The second paragraph of the headnotes, 77 F.2d 806, states the case, thus:

"Where bank receiving county's check for payment of bonds and coupons due at bank collected check but failed before paying any bonds or coupons, county held entitled to statutory lien on bank's assets for proceeds of check (Act La. No. 63 of 1926)."

Judge Cage's criticism — in the opinion which he rendered in the present case — of the decision which was rendered by this court in favor of Jones County, Miss., as intervener in the Liquidation of the Hibernia Bank Trust Company — was adopted virtually as the majority opinion in the decision rendered against the Pan American Life Insurance Company, as intervener in the same liquidation proceeding — In re Hibernia Bank Trust Company (Pan American Life Insurance Company, Intervener),185 La. 448, 169 So. 464, 466. Hence it is said in the prevailing opinion (ante, p. 233, 176 So. 8) in this case:

"In the Pan American Life Insurance Company Case this court quoted with approval the reasons assigned in writing by the trial judge in this case for his disagreement with the opinion rendered by this court in the Jones County Case. Hence, the decision in the Pan American Life Insurance Company Case might well be considered as the settled law of this case."

This case is the Liquidation of the Interstate Trust Banking Company. The decision that was rendered against the Pan American Life Insurance Company, as intervener, was rendered in the Liquidation of the Hibernia Bank Trust Company. So was the decision in favor of Jones County, as intervener, rendered in the Liquidation of the Hibernia Bank Trust Company. That decision, surely, was the law of that case; and it was respectfully followed by the trial judge in deciding this case, in spite of his own opinion.

There was no necessity or occasion for declaring, in disposing of the Pan American Life Insurance Company's Intervention, that the decision which had been rendered in favor of Jones County, as intervener in the same proceeding, ought to be overruled. The attorneys for the Bank Commissioner and his special agent and the liquidator of the Hibernia Bank Trust Company, in their original brief in the matter of the Intervention of the Pan American Life Insurance Company, did not contend that the decision which had been rendered by this court in favor of Jones County, Miss., was wrong, or ought to be overruled. On the contrary, their only contention or argument, on that subject, in their original brief, was that the decision in the Jones County Case had no application to the Pan American Life Insurance Company's Case. On the third page of the brief they said: "Counsel for intervener [Pan American Life Insurance Company] rely on the decision in the Jones County Case. We submit that the Jones County decision has no application to the case at bar." And in the concluding paragraph on the last page of the brief they repeated: "We respectfully submit, therefore, that the Jones County Case has absolutely no application to the case at bar." The brief was filed two days before Judge Cage signed the judgment in the present case, and only two days after it was rendered. A month afterwards the attorneys for the Bank Commissioner and his special agent and the liquidator of the Hibernia Bank Trust Company, filed a supplemental brief, in the matter of the Pan American Life Insurance Company's Intervention, and adopted, substantially, that part of Judge Cage's opinion in the present case, in which he criticized the decision which we had rendered in the matter of the Jones County Intervention.

In the prevailing opinion rendered against the Pan American Life Insurance Company, as intervener in the Liquidation of the Hibernia Bank Trust Company, the four justices who subscribed to the opinion did not declare or find that it was necessary to overrule the decision that had been rendered in favor of Jones County, Miss., to decide against the Pan American Life Insurance Company. On the contrary, they pretermitted that question and said:

"The intervener [Pan American Life Insurance Company] admits that it did not place its bonds and coupons with the Hibernia Bank Trust Company, as agent for collection, remittance, or delivery, but presented them solely and only for payment. It contends that under the terms of the indenture agreement, since payment to the corporate trustee discharged the hotel company as mortgage debtor, the bondholders are legally subrogated to all of the rights of the hotel company; and that, as the Hotel Company placed the notes and New Orleans exchange with the Hibernia Bank Trust Company for collection, remittance, or delivery, and not for deposit, but for payment to the hotel company's order, as principal, under the provisions of Act No. 63 of 1926, as interpreted by this court in Re Liquidation of Hibernia Bank Trust Company (Jones County, Intervener), 181 La. 335,159 So. 576, intervener is entitled to a lien and privilege on all of the bank's assets.

"Conceding that the bond and coupon holders and owners are legally subrogated to the hotel company's rights, a view most favorable to the intervener, but without deciding that issue we shall pass to a consideration of whether or not the construction placed by this court upon the statute in the Jones County Case is sound. The intervener asserts that it is correct and the liquidators contend manifest error has been committed and gross injustice to innocent depositors has been done and will continue to be done to them by adhering to and following that case. At the time that decision was rendered there were six justices on the bench, one having died. The opinion was by a divided court and is the only decision in point by this court with reference to this question Some time later, in two articles in the Tulane Law Review, the authors criticised the majority view and agreed with the dissenting opinion." (I supplied the italics.)

Here the author of the 4-to-2 opinion in the Pan American Life Insurance Company's Case, who was the author of the dissenting opinion in the Jones County Case, quoted, at length, the criticism of the prevailing opinion in that case, which Judge Cage had indulged in, in his opinion in the present case. Then it was said, in the 4-to-2 opinion in the Pan American Life Insurance Company's Case, after a repetition, substantially, of what was said in the dissenting opinion in the Jones County Case:

"In view of the error into which we have fallen in interpreting Act No. 63 of 1926, in the case entitled In re Liquidation of Hibernia Bank Trust Co. (Jones County, Intervener),181 La. 335, 159 So. 576, and the injustice it does to innocent depositors, who are treated as ordinary creditors on a pro rata basis, we are of the opinion that it is our duty to overrule that decision."

The pronoun "we," in the reference to "the error into which we have fallen," included only two members of the court, as it was then constituted. The author of the prevailing opinion in the Pan American Life Insurance Company's Case had no error to confess, because he alone dissented from the prevailing opinion in the Jones County Case. The then newly elected member of the court, who was one of the four subscribers to the prevailing opinion in the Pan American Life Insurance Company's Case, was not responsible for the so-called error into which the two other subscribers to the prevailing opinion in the Pan American Life Insurance Company's Case confessed they had fallen into in the Jones County Case. Inasmuch as these two subscribers to the 4-to-2 decision in the Pan American Life Insurance Company's Case subscribed also to the 5-to-1 decision in the Jones County Case, I respectfully submit that the latter decision is a better guide than the 4-to-2 decision in the Pan American Life Insurance Company's Case. The reason why that decision was a 4-to-2 decision is that I was absent from the state when it was rendered; otherwise it would have been a 4-to-3 decision. The two other justices who had subscribed to the 5-to-1 decision in the Jones County Case, in dissenting from the 4-to-2 decision in the Pan American Life Insurance Company's Case, published as their reason for dissenting that they were "of the opinion that the court should adhere to the interpretation which it placed on Act No. 63 of 1926 in the case of In re Liquidation of Hibernia Bank Trust Co. (Jones County, Intervener),181 La. 335, 159 So. 576, and, on the authority of that case, affirm the judgment." Of the two justices who subscribed to both the 5-to-1 decision in the Jones County Case and the 4-to-2 decision in the Pan American Life Insurance Company's Case, one has retired from the bench. Taking all of these matters into consideration, I respectfully submit that the 5-to-1 decision that was rendered in favor of Jones County, Miss., as an intervener in the Liquidation of the Hibernia Bank Trust Company, is better authority than the 4-to-2 decision that was rendered against the Pan American Life Insurance Company, as an intervener in the same liquidation proceeding.

I do not regard the decision that was rendered in favor of Jones County, Miss., as having been overruled by the decision that was rendered against the Pan American Life Insurance Company, as an intervener in the same liquidation proceeding. A court cannot overrule one of its own decisions without first deciding that the decision, if not overruled, would be in conflict with the decision about to be rendered. For a court to overrule one of its own decisions without first deciding that it is necessary to overrule it, would be like declaring a statute unconstitutional without first deciding that the statute is applicable to the case in hand. In the Pan American Life Insurance Company's Case, the four members of the court who subscribed to the prevailing opinion did not decide that the decision in the Jones County Case was applicable to the case in hand, but, without deciding that issue, said: "we shall pass to a consideration of whether or not the construction placed by this court upon the statute in the Jones County Case is sound." And, having duly considered the question of soundness of the decision in the Jones County Case, the four justices came to the conclusion, "that it is our duty to overrule that decision." That expression is referred to by the lawyers in their briefs in this case as obiter dictum. The same may be said of the repudiation of the doctrine of the Jones County Case in the prevailing opinion in the present case, because, as I have pointed out, there is no necessity or occasion in this case to overrule the decision in the Jones County Case.

There never has been a decision by this court in conflict with the decision rendered in the Jones County Case. The members of the bar will observe hereafter that even the decision in the present case is not in conflict with the decision rendered in the Jones County Case. The decision in that case was supported by the decision in S.E. Hall, Inc., v. Farmers' Trust Savings Bank,177 La. 659, 148 So. 909, decided in May, 1933; and it was in accord with Joffrion-Woods, Inc., v. Brock, State Bank Commissioner, 180 La. 771, 157 So. 589; and Vivian State Bank v. Satterwhite, 180 La. 856, 857, 157 So. 788. In the latter case, two promissory notes, one for $5,646.67 and the other for $2,448, were brought from the bank on March 7, 1930, and on the same day were left by the purchaser with the bank "for `safekeeping and collection.'" The notes were collected by the bank on May 29, 1930, and January 29, 1931, respectively. The proceeds were not deposited to the credit of the owner of the notes, and she did not know that they had been collected until the bank went into liquidation. Notwithstanding the main purpose of leaving the notes with the bank was for safe keeping, the court allowed the lien under Act No. 63 of 1926, because the purpose of leaving the notes in the bank was to collect them, eventually, and to remit or deliver the proceeds to the owner. That was not as plain a case for the application of the act of 1926 as the Jones County Case was.

Of course, if the Jones County Case was decided wrong, the error committed by the five members of the court has cost the innocent depositors of the Hibernia Bank Trust Company $7,932.30; and, if, for the same reason, the federal courts were wrong in the way they decided their Jones County Case, their error has cost the innocent depositors of the Interstate Trust Banking Company $4,135.94. Those judgments, in favor of Jones County, have become final, and I assume that they have been paid. But it is puzzling to imagine how our refusal — and the federal courts' refusal — to distribute among the depositors in these banks money which the innocent supervisors of Jones County intrusted to these banks as their agents, for collection and delivery to their bondholders, and not for deposit, was an injustice to the innocent depositors. Depositors in a bank have no right to expect that, in the event of the bank's becoming insolvent, they may share in other people's money, intrusted to the bank as agent, for collection and remittance or delivery, and not for deposit.

It is argued on behalf of the liquidator, and hence on behalf of the depositors, that section 1 of Act No. 63 of 1926 is applicable only to what are called "cash items", meaning checks or drafts received by a bank for collection and remittance of the proceeds to the sender, and not to cases where the proceeds are to be paid to a third party named by the sender of the instrument. That idea is dispelled by the fact that the first section of the statute is not confined to the commercial instruments that are referred to ordinarily as cash items, such as checks and drafts, but extends the protection of the statute to all kinds of instruments, viz.: "any bill, note, check, order, draft, bond, receipt, bill of lading, or other evidence of indebtedness, or other instrument." To show that these terms were not employed indifferently in the first section of the statute, the only instrument mentioned in the second section, which does apply only to cash items, is "a check or draft." The expression "remittance or delivery," instead of the word "remittance," also has its significance. How can a bank deliver the proceeds of an instrument to the party who sent the instrument from another city, except by remittance? Hence I say that delivery means delivery either to the owner of the instrument or to any one to whom he directs the proceeds to be delivered.

In the opinion rendered in the Pan American Life Insurance Company's Case, 185 La. 448, 456, 169 So. 464, at page 467, it is said:

"Some time later [meaning some time after the Jones County Case was decided], in two articles in the Tulane Law Review, the authors criticised the majority view and agreed with the dissenting opinion."

It is a mistake to say that the authors of two articles in the Tulane Law Review criticized the majority view and agreed with the dissenting opinion in the Jones County Case. It was in only one article in the Tulane Law Review that the decision in the Jones County Case was, in a way, criticized. The article is published in vol. IX, No. 2, p. 301. It was written by one of the student editors. He criticized the decision in Hall v. Farmers' Bank, 177 La. 659, 148 So. 909, and the decision by the Court of Appeal in Re Canal Bank Trust Co. (Intervention of Palmer), 154 So. 498. But it seems that his criticism of the decision in the Jones County Case was founded upon his understanding that the proceeds of the check which the Hibernia Bank collected for Jones County were, as he said, "unconditionally credited to Jones County by the bank." Hence he said:

"The present decision [meaning the decision in the Jones County Case] is based principally upon Hall v. Farmers' Bank, supra. Conceding the authority of that case, the court might well have concluded that, since the proceeds of the check had beencollected and unconditionally credited to Jones County by thebank, which was not contrary to instructions and was in accordwith their previous dealings, no privilege should be conferred upon Jones County, even though the bank had the duty of disbursing the proceeds in a particular way. No distinction should be made as to the creditor's rights, whether the irregular deposit is made for the primary purpose of establishing credit or in a special account for a special purpose. Matthews, Finley Co. v. Their Creditors, (1855) 10 La.Ann. 342; In re Louisiana Savings Bank (1888) 40 La.Ann. 514, 4 So. 301."

As I have pointed out, and as the record in the Jones County Case shows, the proceeds of the check collected by the Hibernia Bank were not "unconditionally credited to Jones County by the bank." The proceeds of the check were held by the bank under two bookkeeping entries, which were set up, necessarily, to have a record of the funds, "in accord with their previous dealings" with Jones County, Miss. The supervisors of Jones County knew, from their previous dealings with the Hibernia Bank, that the proceeds of the check would not be deposited to the credit of Jones County, but would be delivered to the bondholders, as directed in the letter accompanying the check. And, from their previous dealings, the supervisors of Jones County knew that the proceeds of the check would not be kept by the bank in two envelopes, or two bags, labeled, respectively, "Jones County Bonds Payment Money," and "Jones County 6% Road Bond Coupon Money," but would be mingled with the funds of the Hibernia Bank; and that a record, in the form of a bookkeeping entry, would be kept of both the fund to be paid to the bondholders and the fund to be paid to the coupon holders; hence the supervisors knew, from their previous dealings with the bank, if they knew the law of Louisiana on the subject, that their money which they had intrusted to the bank as their agent would be protected by Act No. 63 of 1926.

Judge Cage, in his opinion in this case, which opinion is published at length as the basis for the 4-to-2 opinion in the Pan American Life Insurance Company Case, 185 La. 448, at page 457, 169 So. 464, at page 467, said, en passant, that his conviction, concerning the decision in the Jones County Case, was substantiated by the criticism of the case in IX Tulane Law Review, 301; but the judge added: "See also IX Tulane Law Review, 416-628." Perhaps that is what brought forth the statement in the prevailing opinion in the Pan American Life Insurance Company Case that there were two articles in the Tulane Law Review criticizing the majority view and agreeing with the dissenting opinion in the Jones County Case. An examination of the pages from 416 to 628 of IX Tulane Law Review fails to disclose any criticism of the Jones County Case, though it is cited on page 469.

Judge Cage's criticism of the decision in the Jones County Case was based mainly upon hypothetical and imaginary cases, or examples which the judge gave, and which he said seemed to him "to demonstrate that the Legislature never intended such absurdity." For example, the judge said that, if Jones County had drawn the $7,932.30 in coin or currency, from the bank in Laurel, Miss., and had sent the coin or currency to the Hibernia Bank, by express or by mail, or by Jones County's "own private messenger," with instructions to the bank to hand the coin or currency over to the bondholders, Jones County's coin or currency would not have been protected by a lien under Act No. 63 of 1926. Of course not. The members of the Legislature of 1926 knew that business men did not remit money — especially large sums of money — in coin or currency. Hence the Legislature did not make provision for such a case, in Act No. 63 of 1926. But, if the board of supervisors of Jones County had done such an extraordinary thing as to ship $7,932.30 in coin, or in currency and coin, to the Hibernia Bank, instead of remitting a check for the amount, the board of supervisors, very likely, would have instructed the bank to keep the package of money intact, and apart from the bank's money, so that the board of supervisors would not need the protection of any such statute as Act No. 63 of 1926. This illustration, however, goes very far afield, and is not complimentary to the members of the board of supervisors of Jones County, Miss. I do not believe that there is a man in Jones County, Miss., who, if he had to send $7,932.30 to a New Orleans bank to pay an obligation falling due at the bank, would have so little business sense as to ship the amount in coin or currency, instead of sending a check, or New Orleans exchange, for $7,932.30. The Legislature does not enact laws to provide for cases that will never happen. Another illustration, suggested by Judge Cage, was that, if Jones County had sent the check to the Whitney National Bank, on which the check was drawn, and had instructed that bank to use the proceeds of the check for the payment of Jones County's bonds and coupons, Jones County would not have had a lien under Act No. 63 of 1926. Of course not, because, in that case, Jones County, or the party drawing the check, would have been a depositor, and hence an ordinary creditor, of the Whitney National Bank; and the check would not have been sent "for collection," in any sense. Judge Cage gave still another illustration which made the Jones County decision seem to him absurd, thus: If "A," in New Orleans, desiring to remit $1,000 to his bank in New York, carried $1,000 in currency to the Interstate Bank with a letter instructing the bank to transmit the money to the New York bank to be placed to "A's" credit, and, if "B," at the same time and with the same intention, should present to the Whitney Bank his check for $1,000, drawn on the Canal Bank, and instruct the Whitney Bank to collect the check and remit the $1,000 to "B's" bank in New York, to be placed to "B's" credit, "A" would not have a lien, but "B" would have a lien. And the judge asks: "In common sense and common justice, why the difference?" There would be no difference. "A" and "B" each would ask for and receive immediately a cashier's check, or New York exchange, to be sent to his New York bank. If the Whitney Bank should first cash "B's" check on the Canal Bank, before giving "B" a cashier's check or New York exchange for the $1,000, "B's" lien, under the act of 1926, would not last any longer than the few minutes that it would take for the Whitney Bank to hand "B" the cashier's check or New York exchange for the $1,000. That is my understanding as to how such transactions are handled.

Cases arise sometimes where a court of last resort, in the interest of justice, is compelled to overrule one of its decisions and establish a new rule. But such instances arise only when the court has committed a palpable error, by oversight or inadvertence, and where the overruling of the decision can do no harm. A court of last resort is never justified in overruling a decision by which the court has given a reasonable and deliberate interpretation to a statute, particularly if the statute is one of vast importance or of general application in the commercial world, or if the interpretation has established a rule of property. In such cases, even though the statute may be one of doubtful meaning, the decision in which the court has declared what the statute means should not be overruled merely because of a change of opinion of one or more of the individual members of the court. The public is not concerned so much with the opinions of the individual members of the courts as with the right of the public to depend upon the stability of the judgments and decisions of the courts. An oscillating jurisprudence tends to impair that faith and confidence which the public should have in the decisions of the courts, and which is so essential to the administration of justice. An ever-changing jurisprudence hinders the practice and the teaching of law; for it prevents the making of an exact science of the profession of law.

As long as the court has not rendered a decision contrary to the decision that was rendered in the Jones County Case, and hence contrary to the decision that was rendered by the federal courts in their Jones County Case, the members of the bar will understand that the decision in the Jones County Case is not overruled.

I agree with Judge Cage that there is nothing in the provisions of the fourth section of Act No. 300 of 1910, p. 506, to justify the imposing of the penalty of forfeiture for a failure or neglect of a creditor of a bank in liquidation to file his claim with the bank commissioner and to make proof of the justness of the claim within the time limit fixed by the commissioner in the publication of his notice to all claimants other than depositors to file and make proof of their claims. This section of the statute declares that, as soon as practicable after the State Bank Commissioner has taken over an insolvent bank for the purpose of liquidating its affairs, he shall publish a notice, at least once a week for three months, "in such newspaper as he may select," calling upon all persons, other than depositors, who may have claims against the bank, to file their claims with the commissioner "and make legal proof as to the justice thereof, at a place and within a time not earlier than the last day of publication of such notice to be specified therein." The court has construed the words "not earlier" to mean "not later." What the statute means is that the Bank Commissioner shall specify in the notice, which he shall publish at least once a week for three months in a newspaper to be selected by him, the place at which, and the period of time in which, he, the commissioner, will receive and pass upon the proofs of claims to be submitted by persons, other than depositors, having claims against the insolvent bank; which period of time, "to be specified" by the commissioner, shall begin "not earlier than the last day of publication of such notice." The period, to be fixed by the commissioner, during which he will receive and pass upon proofs of claims against the insolvent bank, may begin at any time after the last day of publication of the three months' notice, according to the convenience of the commissioner, but it must begin "not earlier than the last day of publication of such notice." It seems impossible that the Legislature intended to say to the State Bank Commissioner that he should give three months' notice to all persons (except depositors) having claims against the insolvent bank, of the time when and the place where he would receive and consider their proofs of claims, and at the same time forbid the claimants to file their claims after the last day of the three months' notice. Besides, why should the Legislature have to remind the Bank Commissioner that he could not give the creditors of the bank (other than depositors) three months' notice of the time and place for the filing of their claims, and at the same time compel them to file their claims "earlier than the last day of publication of such notice." The commissioner would know, without being told, that there would be no use in continuing the publication of the notice for three months if he could make the time limit for filing the claims earlier than the end of the three months. The word "earlier" is used advisedly, because, in the same section, it is provided that the notice to depositors shall call upon them to present their claims not "later" than six months after the Bank Commissioner has taken over the insolvent bank.

I respectfully submit that it is unreasonable for the court to give the Bank Commissioner the arbitrary power — especially when the Legislature has not declared that he shall have the power — to deprive the creditors of a bank of their day in court, by publishing a notice "in such newspaper as he may select," calling upon the creditors to present their claims and make legal proof thereof on or before the last day of publication of such notice. In every instance where the law requires that a notice shall be published for a given time, before a specified judicial proceeding can be had, such as a sale of property under execution, or the homologation of an administrator's account, the proceeding cannot be had until the last day of publication of the notice has expired. In this case, the commissioner published the notice on January 25, and on February 1, 8, 15, 22, and on March 1, 8, 15, 22, 29, and on April 5, 12, 19, and 26; and in the notice he declared: "Claims must be filed not later than April 26, 1934." In fact, therefore, the notice was not published for three full months before the expiration of the last day on which the claims were allowed to be filed; and the creditors were not informed by the commissioner's notice that his interpretation of the law would be that all creditors who failed to file their claims on or before the last day of publication would be forever barred from presenting their claims, even to the court having jurisdiction of the liquidation of the affairs of the bank.

The penalty of forfeiture of a claim for failure to present it within a given time is never implied unless the terms of the statute are such as to make the implication unavoidable. That is not the case here. It is said in the prevailing opinion in this case (176 So. 6) that, if the penalty of forfeiture is not to be imposed upon the creditors who fail to file and make proof of their claims within the time allowed by the commissioner, the notice calling upon the creditors to file and make proof of their claims has no legal or practical effect whatever. The purpose of the notice is to give the creditors an opportunity to have their claims recognized by the commissioner, and placed upon his account, without a lawsuit. It is said that there is nothing in the act that either expressly or impliedly authorizes the commissioner to reject claims that are not timely filed. It goes without saying that the commissioner may not only reject but may refuse to pass upon a claim that is presented after the expiration of the time which he has allowed for the submission to him of proofs of claims, and that he may thus require proof in court of all of such belated claims. The reason why the statute puts a time limit (six months) on the right of claimants whose claims are rejected to bring suit on their claims is that such claimants are informed by the rejection of their claims that the commissioner will not recognize their claims unless compelled to do so by a judgment of court. The reason why a depositor's failure to respond to the notice that is given to him does not deprive him of his right to share ratably in the assets of the bank is that a depositor does not have to take any action on his claim. It is recognized as a valid claim on the books of the bank.

The fact that the National Bankruptcy Act (11 U.S.C.A. § 93 (n), and the statutes of several of the states on this subject, declare in terms that an action on a claim shall be barred if it is not presented within the time specified by the statute, only strengthens my belief that the Legislature of Louisiana did not intend to impose the penalty of forfeiture by mere implication. I do not believe that the Legislature would have given to the Bank Commissioner the unlimited and unqualified authority to select any newspaper in which to publish his notice, if the Legislature had intended that the failure of any creditor to respond to the notice should forever deprive him of his claim. The giving of such arbitrary power to the commissioner might lead to a denial of due process of law, or of the equal protection of the law. In this instance, where the commissioner allowed no time at all beyond the last day of publication of his notice, and where neither the notice nor the statute itself gave any warning of the penalty, the judgment appears to me to be a denial of due process of law.

The fact that only 5 out of 98 claimants in this case avoided the penalty of forfeiture of their claims is a strong indication that the penalty is not warranted by the statute. It may be that all of the 98 claimants and their attorneys construed the statute as I construe it, and that the 5 who filed their claims within the three months did so merely as a precaution, or without any thought or fear of the penalty. But it seems certain that at least 93 out of the 98 claimants, and the same proportion of a hundred or more lawyers who represented them, did not interpret the statute as it is interpreted in the prevailing opinion in this case. If that is not true it is because some or all of the 93 claimants who failed to file their claims in time failed to see the notice which the commissioner published once a week for three months. In either case the percentage of victims indicates that the imposing of the penalty of forfeiture is an unwarranted interpretation of the statute.

For these reasons I respectfully decline to subscribe to the prevailing opinion in this case.