263 U.S. 640 (1924), 252, First National Bank in St. Louis v. Missouri

Docket Nº:No. 252
Citation:263 U.S. 640, 44 S.Ct. 213, 68 L.Ed. 486
Party Name:First National Bank in St. Louis v. Missouri
Case Date:January 28, 1924
Court:United States Supreme Court

Page 640

263 U.S. 640 (1924)

44 S.Ct. 213, 68 L.Ed. 486

First National Bank in St. Louis



No. 252

United States Supreme Court

Jan. 28, 1924

Argued May 7, 1923

Restored to docket for reargument May 21, 1923

Reargued November 21, 22, 1923




1. National banks are subject to state laws that do not interfere with the purposes of their creation, tend to destroy or impair their efficiency as federal agencies, or conflict with the laws of the United States. P. 656.

2. National banks can exercise only the powers expressly granted by federal statutes and such incidental powers as are necessary to the conduct of the business for which they are established. Id.

Page 641

3. Under the National Bank Law, power to establish branches is withheld. P. 657. Rev.Stats. §§ 5134, 5190, 5138.

4. The power cannot be sustained as an incidental power, under Rev.Stats., § 5136, for the mere multiplication of places where the powers of a bank may be exercised is not a necessary incident of the banking business, and, moreover, a power which the statute, by fair construction, denies, cannot exist incidentally. P. 659.

5. A state statute prohibiting branch banks is valid in application to a national bank, for it does not frustrate the purpose for which the bank was created, or interfere with the discharge of its duties to the government, or impair its efficiency as a federal agency. Id.

6. The prohibition may be enforced by the state by such form of procedure as the state may deem appropriate -- in this case, by an information in the nature of quo warranto. P. 660.

297 Mo. 397 affirmed.

Error to a judgment of the Supreme Court of Missouri ousting the plaintiff in error from operating a branch bank in a proceeding in the nature of quo warranto instituted by the state at the information of her Attorney General. For the order restoring the case to the docket for reargument, see 262 U.S. 732.

Page 655

SUTHERLAND, J., lead opinion

MR. JUSTICE SUTHERLAND delivered the opinion of the Court.

The State of Missouri brought this proceeding in the nature of quo warranto in the state supreme court against the plaintiff in error to determine its authority to establish and conduct a branch bank in the City of St. Louis. The information avers that the bank was organized under the laws of the United States and was and is engaged in a general banking business in that city at a banking house, the location of which is given; that, in contravention of its charter and of the act of Congress under which it was incorporated, it has illegally opened and is operating a branch bank for doing a general banking business in a separate building several blocks from its banking house, and proposes to open additional branch banks at various other locations, and that this is in violation of a statute of the state expressly prohibiting the establishment of branch banks. The prayer is that, upon final hearing, the bank be ousted from the privilege of operating this branch bank or any other. A demurrer to the information was interposed, and the cause thereupon submitted. The contention of the state was upheld, and judgment rendered in accordance with the prayer. 297 Mo. 397.

The correctness of the judgment is challenged under numerous specifications of error presenting federal questions, which, for the purposes of the case, may be considered under two heads: (1) whether the state statute is valid as applied to national banks, and (2) whether a proceeding to call a national bank to account for acts of the kind here alleged may be maintained by the state, [44 S.Ct. 215] and whether the form of remedy pursued is sustainable.

First. The Missouri statute (§ 11737, R.S.Mo. 1919) provides "that no bank shall maintain in this state a branch bank or receive deposits or pay checks except in its own banking house." That the facts alleged in the information

Page 656

bring the case within that part of the statute which prohibits the maintenance of branch banks and that the statute applies to national banks is conclusively established by the decision of the state court, and we confine ourselves to the inquiry whether, as thus applied, the statute is valid.

National banks are brought into existence under federal legislation, are instrumentalities of the federal government, and are necessarily subject to the paramount authority of the United States. Nevertheless, national banks are subject to the laws of a state in respect of their affairs, unless such laws interfere with the purposes of their creation, tend to impair or destroy their efficiency as federal agencies, or conflict with the paramount law of the United States. National Bank v. Commonwealth, 9 Wall. 353, 362; Davis v. Elmira Savings Bank, 161 U.S. 275, 283. These two cases are cited and followed in the later case of McClellan v. Chipman, 164 U.S. 347, 357, and the principle which they establish is said to contain a rule and an exception --

the rule being the operation of general state laws upon the dealings and contracts of national banks; the exception being the cessation of the operation of such laws whenever they expressly conflict with the laws of the United States or frustrate the purpose for which the national banks were created, or impair their efficiency to discharge the duties imposed upon them by the law of the United States.

See also Waite v. Dowley, 94 U.S. 527, 533. The question is whether the Missouri statute falls within the rule or within the exception.

Does it conflict with the laws of the United States? In our opinion, it does not. The extent of the powers of national banks is to be measured by the terms of the federal statutes relating to such associations, and they can rightfully exercise only such as are expressly granted or such incidental powers as are necessary to carry on the business for which they are established. Bullard v. Bank, 18

Page 657

Wall. 589, 593; Logan County Bank v. Townsend, 139 U.S. 67, 73; California Bank v. Kennedy, 167 U.S. 362, 366. Among other things, the federal law (Rev.Stat. § 5134) provides that the organization certificate of the association shall specifically state

the place where its operations of discount and deposit are to be carried on, designating the state, territory, or district, and the particular county and city, town, or village.

By another provision (Rev.Stat. § 5190), it is required that

the usual business of each national banking association shall be transacted at an office or banking house located in the place specified in its organization certificate.

Strictly, the latter provision, employing, as it does, the article "an" to qualify words in the singular number, would confine the association to one office or banking house. We are asked, however, to construe it otherwise in view of the rule that "words importing the singular number may extend and be applied to several persons or things." Rev.Stat. § 1. But obviously this rule is not one to be...

To continue reading