Bank of America, National Trust & Savings Ass'n v. Lima, Civ. No. 50-932.

Citation103 F. Supp. 916
Decision Date21 March 1952
Docket NumberCiv. No. 50-932.
CourtUnited States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
PartiesBANK OF AMERICA, NATIONAL TRUST & SAVINGS ASS'N v. LIMA.

Leonard E. Perry, New Bedford, Mass., for plaintiff.

Allan R. Rosenberg, Boston, Mass., for defendant.

SWEENEY, Chief Judge.

In this action the plaintiff sues the defendant for an accounting. In its answer the defendant set up as a fourth defense an allegation that the plaintiff was doing business in the Commonwealth of Massachusetts but had failed to comply with Massachusetts General Laws Chapter 181 and was therefore precluded by Section 5 of that chapter from bringing suit in any court of this state. The plaintiff denies that Chapter 181 is applicable to it and denies the right of the legislature to enact any state legislation in conflict with the National Bank Act, 12 U.S.C.A. § 21 et seq. This latter view of unconstitutionality of the statute will be examined first. The question of the right of the state Legislature to enact legislation affecting this Federal Court is not raised.

National banks are creatures of the Federal Government. "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." First National Bank in St. Louis v. State of Missouri, 263 U.S. 640, 656, 44 S.Ct. 213, 215, 68 L.Ed. 486.

Chapter 181 of Massachusetts General Laws defines a foreign corporation as "a corporation, association or organization * * * which has been established, organized or chartered under laws other than those of the commonwealth." Section 1. This latter section is phrased in terms broad enough to cover a national bank and thus to make all the provisions of Chapter 181 applicable to it. The bank in question is a national bank and an instrument of the national government. Its presence in the state is attributable to the national power, not to the state's permission. First National Bank in St. Louis v. State of Missouri, 263 U.S. 640, 666, 44 S.Ct. 213, 68 L.Ed. 486. It would therefore seem that any attempt by the state to block its entry until it complied with certain conditions would violate the constitution and laws of the United States. Neither states nor subdivisions thereof have the power to levy license fees on national banks, Second National Bank of Titusville, Pa. v. Caldwell and others, D.C., 13 F. 429; State v. Thomas Cruse Savings Bank, 21 Mont. 50, 52 P. 733, 45 L.R.A. 760; Austin v. City of Seattle, 176 Wash. 654, 30 P.2d 646, 93 A.L.R. 203; Bank of California v. City of Portland, 157 Or. 203, 69 P.2d 273, 115 A.L.R. 676; Bedford v. Colorado National Bank of Denver, 104 Colo. 311, 91 P.2d 469; City of Shelbyville v. Citizens Bank of Shelbyville, 272 Ky. 559, 114 S.W.2d 719. In the Caldwell case supra, the court said in effect that a license tax imposed by a city ordinance on a national bank being a tax on the operations of the bank and a direct obstruction to the exercise of its corporate powers is unconstitutional.

Section 5 of Chapter 181 of the General Laws is very plainly in conflict with 12 U.S.C.A. The last sentence reads in part, "* * * no action shall be maintained or recovery had in any of the courts of this commonwealth by any * * * foreign corporation so long as it fails to comply with said sections." Section 24 of 12 U.S.C.A. includes among the powers of national banks the power "to sue and be sued, complain and defend, in any court of law and equity, as fully as natural persons." The effect of this provision is to place national banks in the same category as individuals in suits by and against them.

From the foregoing it would appear that if the provisions of Chapter 181 are held to include national banks within the scope of their coverage, then the effect of that statute is to place national banks on the same level as foreign corporations as regards capacity to sue. Such a result is plainly unconstitutional, since it conflicts with the federal statute empowering national banks to sue as fully as natural persons. But I do not feel that it is necessary to declare Chapter 181 unconstitutional in its application to national banks, for it is commonly accepted that in the absence of clear and unequivocal language to the effect, national banks are generally not held to come within state statutory requirements relating to foreign corporations unless the legislative intent to treat such institutions as foreign corporations is clearly manifested in unmistakable language. In Steward v. Atlantic National Bank of Boston, 9 Cir., 27 F.2d 224, 228, the court passing on this question stated, "in the absence of unmistakably clear language, it will not be found that the state has attempted to exercise a regulatory power over national agencies established in aid of governmental purposes." See also Federal Land Bank of Spokane v. Statelen, 191 Wash. 155, 70 P.2d 1053; First National Bank of Tonasket v. Slagle, 165 Wash. 435, 5 P.2d 1013.

I therefore conclude and rule from the foregoing that Chapter 181 would be unconstitutional if applicable to national banking corporations, but favoring the constitutionality of the state statute, I conclude and rule that as a matter of law Chapter 181 was not intended to apply to national banking institutions.

The other theory advanced in support of the fourth defense, that the bank was "doing business" within the commonwealth so as to make it subject to the provisions of Chapter 181, is equally untenable. Each case in which the question of doing business is raised must stand upon its own peculiar facts. Atlantic Nat. Bank v. Hupp Motor Car Corp., 298 Mass. 200, 10 N.E.2d 131. First, it is clear that the Legislature of Massachusetts did not intend that the registration provisions of Chapter 181 should apply to business done by foreign corporations in interstate commerce. See Thurman v. Chicago, Milwaukee & St. Paul R. Co., 254 Mass. 569, 573, 151 N.E. 63, 64, 46 A.L.R. 563, where the court says, "The defendant, being engaged exclusively in interstate commerce, so far as concerns its solicitation of business in this commonwealth, had a right to come here for that solicitation without let or hindrance from this commonwealth.

"`A corporation of one state may go into another, without obtaining the leave or license of the latter, for all the legitimate purposes of such commerce; and any statute of the latter state which obstructs or lays a...

To continue reading

Request your trial
20 cases
  • Association of Banks in Ins., Inc. v. Duryee, C-2-98-1120.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • June 18, 1999
    ...See, e.g., Gade, 505 U.S. at 103, 112 S.Ct. 2374; Morales, 504 U.S. at 389, 112 S.Ct. 2031. In Bank of America, National Trust & Savings Ass'n v. Lima, 103 F.Supp. 916 (D.Mass.1952), the court addressed the question of whether a national bank was required to comply with Massachusetts law go......
  • Citibank N.A. v. City of Burlington
    • United States
    • United States District Courts. 2nd Circuit. District of Vermont
    • September 13, 2013
    ...efficiency as federal agencies, or conflict with the paramount law of the United States.’ ” Bank of Am., Nat. Trust & Sav. Ass'n v. Lima, 103 F.Supp. 916, 917 (D.Mass.1952)(“Bank of Am.”) (quoting First Nat. Bank in St. Louis v. State of Missouri at Inf Barrett, 263 U.S. 640, 656, 44 S.Ct. ......
  • Brewster v. Boston Herald-Traveler Corporation, 4-63.
    • United States
    • United States District Courts. 1st Circuit. United States District Court (Maine)
    • May 24, 1956
    ...business within the State so as to be amenable to its process must stand upon its own particular facts. Bank of America Nat. Trust & Sav. Ass'n v. Lima, D.C. Mass.1952, 103 F.Supp. 916; Hinchcliffe Motors v. Willys-Overland Motors, D.C. Mass.1940, 30 F.Supp. 580. Because the factors enterin......
  • Remington Arms Co. v. Lechmere Tire & Sales Co.
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • April 30, 1959
    ...certificate of condition required by § 12, $25. § 23, as amended through St.1957, c. 698, § 18.1 Accord: Bank of America, Nat. Trust & Sav. Ass'n v. Lima, D.C.Mass., 103 F.Supp. 916. Cf. Canadian Pac. R. Co. v. Sullivan, 1 Cir., 126 F.2d 433.2 Reversed on other questions in Alpha Portland C......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT