When a board of chosen freeholders acts to establish a sewer district it is to carry out the legislative will as set forth in the statute; the authority created has no legislative will of its own. The borough relies on the case of McSweeney v. Equitable TrustCo., 16 N.J. Misc. 193, 198 A. 529 ( Sup. Ct. 1938), affirmed 127 N.J.L. 299 ( E. A. 1941), on the ground of estoppel only, with no consideration of other points, and In reMechanics Trust Co., 119 N.J. Eq. 141 ( Ch. 1935), in support of its argument that the State may not divest itself of its police power, but we fail to see how the appellant derives any comfort therefrom. Neither case constitutes a determinative declaration on the specific point here involved.
The statute under which the company was reorganized has been held to be constitutional and all the depositors have been held to be bound by the reorganization, even though they did not all assent, provided the plan was approved by the requisite percentage of depositors. In re Mechanics TrustCo., 119 N.J. Eq. 141; McSweeney v. Equitable Trust Co.,16 N.J. Mis. R. 193; affirmed, 127 N.J. Law 299; Newman v. AsburyPark and Ocean Grove Bank, 15 N.J. Mis. R. 395. It is argued on behalf of the petitioners that a different construction should be given to the preferred stock certificate because of certain statements made on behalf of the Trust Company in order to secure the consent of the depositors to the reorganization plan. Stress is laid upon such statements as that the 30% proposed to be applied to the preferred stock would be safe in a good interest-bearing security, and that this was to be really regarded as a deferred deposit to be temporarily deferred only.
He says that their claims are contingent and, therefore, should not be proved and allowed. In support of this argument he cites the following cases: Kelly v. Middlesex, c., Trust Co.,116 N.J. Eq. 228; In re Mechanics Trust Co., 119 N.J. Eq. 141,147; Kipp v. Fidelity Title and Mortgage Co., 116 N.J. Eq. 409,415, and In re Guarantee Mortgage and Title Insurance Co.,128 N.J. Eq. 48, 49. The above cases cannot be said to sustain the commissioner's contention. The Guarantee Mortgage andTitle Insurance Co. Case held that where the court had previously made a decree holding that the obligations under title insurance policies would terminate unless a claim thereunder should occur within two years and that where such a provision was equitable a non-objecting policy holder could not complain after the expiration of said time limit.
I am of the opinion that the plan of reorganization in the instant case is in compliance with the statute. The constitutionality of this act was considered in the case of In re Mechanics Trust Co., 119 N.J. Eq. 141, 181 Atl. Rep. 423. The constitutional grounds upon which the act was attacked in that case are identical with those advanced in the instant case.
In addition to the cases from courts of several states cited above by the Supreme Court, there are a number of other decisions of courts of last resort upholding the validity of statutes similar to the act of 1933. Among these are Lansing Drop Forge Co. v. American State Savings Bank, 273 Mich. 124, 262 N.W. 756, 104 A.L.R., 1199; In re Mechanics Trust Co., 119 N.J. Eq. 141, 181 A. 423; Priest v. Whitney Loan Trust Co., 219 Iowa 1281, 261 N.W. 374; Corstvet v. Bank of Deerfield, 220 Wis. 209, 263 N.W. 687. Other kindred cases are collected in notes, 92 A.L.R., 1337, and 104 A.L.R., 1203. As stated by the Supreme Court, no depositor has a constitutional right to have the affairs of an insolvent bank liquidated by a superintendent of banks or like official.
The law is quite clear that the business of building and loan associations, is charged with a public interest, and is subject to regulation under the police power of the state, and accordingly, under such power, the legislature may lawfully enact a reorganization statute under which the rights of all persons having a direct contact with the business may be altered and changed, in a reasonable manner. This right is substantially expressed in In re Mechanics Trust Co.,119 N.J. Eq. 141, and in Bucsi v. Longworth Building and LoanAssociation, 119 N.J. Law 120. It seems quite clear that the defendant association, in its plan for reorganization, in all respects, has complied with the provisions of chapter 55, laws of 1937. If the complainant disapproved of the plan, she, under the provisions of the act, could have filed her dissent in this court within five days before the day fixed for the meeting of the shareholders.
" In In re Mechanics Trust Co., 119 N.J. Eq. 141, involved a situation similar to the one here present. In that case, a plan of reorganization was submitted by the Mechanics Trust Company, in accordance with P.L. 1933 ch. 116, and the acts amendatory thereof.
"As we have pointed out, the questioned sections deal only with private rights, and are not adapted to the legitimate end of conserving or equitably administering the assets in the interest of all members." The same principle is enunciated by this court in the case of In Re Mechanics Trust Co., 119 N.J. Eq. 141, in which, interalia, it was said: "While the United States constitution prohibits a state from passing a law which will impair the obligation of contracts, the prohibition does not remove from state control the rights and properties which depend for their existence upon the enforcement of contracts as to relieve them from the operation of such general regulations for the good government of the state and the protection of the rights of individuals as may be deemed important.
In such circumstances the discretion conferred is legislative, as contrasted with quasi-judicial and the public hearing of the incidentally affected interests is not requisite to compliance with due process requirements, since no basically adversary proceeding is involved. The business of banking so intimately affects the commercial welfare and business interests of the people as to render it a proper subject of regulation by the State. Bank of Italy v. Johnson, 200 Cal. 1, 12, 251 P. 784, 788 ( Sup. Ct. 1921); see In re Mechanics Trust Co., 119 N.J. Eq. 141, 153 ( Ch. 1935). One does not have a right to engage in the business of banking; indeed, all banking is a matter of legislative grace. Bank of Italy v. Johnson, loc. sit.
The Statute under which the Company was reorganized has been held to be constitutional and all the depositors have been held to be bound by the reorganization, even though they did not all assent, provided the plan was approved by the requisite percentage of depositors. In re Mechanics Trust Company, 119 N.J.Eq. 141, 181 A. 423; McSweeney v. Equitable Trust Company, 198 A. 529, 16 N.J.Misc. 193, affirmed 127 N.J.L. 299, 22 A.2d 282, 139 A.L.R. 653; Newman v. Asbury Park & Ocean Grove Bank, 191 A. 864, 15 N.J.Misc. 395. It is argued on behalf of the petitioners that a different construction should be given to the Preferred Stock Certificate because of certain statements made on behalf of the Trust Company in order to secure the consent of the depositors to the reorganization plan.