Commonwealth v. First National Bank & Trust Company of Easton
| Decision Date | 16 March 1931 |
| Docket Number | 41 |
| Citation | 303 Pa. 241,154 A. 379 |
| Parties | Commonwealth, Appellant, v. First National Bank and Trust Company of Easton |
| Court | Pennsylvania Supreme Court |
Argued January 12, 1931
Appeal, No. 41, Jan. T., 1931, by plaintiff, from order of C.P. Northampton Co., April T., 1930, dismissing petition for dissolution, in re Petition of Northampton Trust Co. of Easton, for dissolution, the Commonwealth intervening as plaintiff. Reversed.
Petition for dissolution of trust company. Before STEWART, P.J.
The opinion of the Supreme Court states the facts.
Petition dismissed. The Commonwealth appealed.
Error assigned was order, quoting record.
The decree appealed from is reversed, and the record remitted that a decree of dissolution may be entered in accordance with the prayer of the petition.
Harold D. Saylor, Deputy Attorney General, with him William A Schnader, Attorney General, for appellant. -- The consolidation of the trust company with the national bank did not result in a merger of the charters of the two corporations, as an Act of Congress cannot effect the dissolution of a state charter in the absence of a state act so providing: Buist's Est., 297 Pa. 537; York Haven Water & Power Co. v. Pub. Ser. Com., 87 Pa.Super. 213; Worcester Co. Nat. Bank's Petition, 162 N.E. 217; Taylor v. Holmes, 14 F. 498.
It was not the intent, purpose or effect of the Act of Congress of November 7, 1918, as amended by the Act of February 25, 1927 to merge the charter of a state trust company with that of a national bank, and the provisions of the Act of 1927 preclude such a merger: Worcester Co. Nat. Bank, 279 U.S. 347.
The charter of the Northampton Trust Company is still in existence and may be dissolved by decree of the Court of Common Pleas of Northampton County.
H. J. Steele, with him Robert W. Bowley, for appellee, cited: Minneapolis v. Gardner, 177 U.S. 332; Keokuk v. Missouri, 152 U.S. 301; Lauman v. R.R., 30 Pa. 42; Petry v. Electric Co., 280 Pa. 142; Bank v. Dearing, 91 U.S. 29; R.R. Co. v. Georgia, 98 U.S. 359.
Before FRAZER, C.J., WALLING, SIMPSON, KEPHART, SADLER, SCHAFFER and MAXEY, JJ.
The First National Bank and Trust Company of Easton is a consolidated banking corporation established in accordance with the Act of Congress of November 7, 1918, chapter 209, 40 Stat. at L. 1044, as amended by Act of February 25, 1927, chapter 91, 44 Stat. at L. 1224, 12 U.S.C.A., section 34 a. The Northampton Trust Company and First National Bank of Easton constitute the consolidated bank. The Northampton Trust Company, of Easton, Pa., was incorporated in 1902 under the provisions of the Act of the Pennsylvania Assembly of April 29, 1874, P.L. 73, and the supplements thereto. It acquired trust company powers by accepting the provisions of the Act of May 9, 1889, P.L. 159. The First National Bank, of Easton, Pa., was, as its name indicates, a chartered national bank. The consolidation of these two institutions was made under the charter of the national bank on July 1, 1929, at which time the consolidated corporation took the title of the First National Bank and Trust Company. On the latter date the national comptroller of the currency issued his certificate of approval.
To carry out the consolidation, all of the stock of the Northampton Trust Company was surrendered and new certificates of stock of the First National Bank and Trust Company of Easton were issued therefor. All the assets and property of the trust company were transferred to the bank and trust company, and the trust company ceased to transact business. Thereafter the commissioner of banking of Pennsylvania directed the trust company to petition the Court of Common Pleas of Northampton County, under the provisions of the Act of April 9, 1856, P.L. 293, for a decree of dissolution. The bank and trust company entered into these proceedings as respondent, filed its demurrer to the petition, assigning, inter alia, that the contract of consolidation worked a dissolution of the trust company and that the effect of the Act of Congress of February 25, 1927, was to extinguish the trust company and that therefore the court had "no jurisdiction of the said petition." The court took this view and dismissed the petition. The Commonwealth of Pennsylvania obtained leave to intervene as a party-petitioner and to file exceptions to the decree.
The Commonwealth contends: "(a) That the consolidation of the trust company with the national bank did not result in a merger of the charters of the two corporations, as an Act of Congress could not effect the dissolution of a state charter in the absence of a state act so providing; (b) that it was not the intent, purpose or effect of the Act of Congress of November 7, 1918, as amended by the Act of February 25, 1927, to merge the charter of a state trust company with that of a national bank, and that the provisions of the Act of 1927 preclude such a merger; and (c) that the charter of the Northampton Trust Company is still in existence, and the corporation may be dissolved by decree of the Court of Common Pleas of Northampton County."
We accept these propositions. Section 3 of the Act of February 25, 1927, chapter 91, 44 Stat. at L. 1224, 1225 (12 U.S.C.A., section 34 a), which authorizes any bank, trust company, savings bank, or other banking institution incorporated under the laws of any state to be consolidated directly with a national bank located in the same county, city, town or village under the charter of such national bank, provides in part that when such consolidation is effected:
There is no law in Pennsylvania which prevents or forbids such consolidation; neither is there any Pennsylvania legislation which recognizes such a consolidation as working a dissolution of the Pennsylvania corporation which is in the consolidation. The Act of April 9, 1856, P.L. 293, provides a method by which a charter of a corporation created by this Commonwealth may be dissolved. It is a corollary of this that only by obedience to the prescriptions of this act can a corporation called into being by Pennsylvania be dissolved. Chief Justice MARSHALL, in McCulloch v. Maryland et al., 4 Wheat. 367, said:
Article X of the federal Constitution provides that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people." The United States government has no powers except those "expressly given, or given by necessary implication." MARSHALL, Chief Justice, in Martin v. Hunter's Lessee, 1 Wheat. 304, 326, 4 L.Ed. 97, 103. The respective supremacies of the state and national government in their respective spheres of sovereignty have been meticulously observed by the nation and each individual state. Within their individual spheres they are as sovereign as if they were two independent foreign states. There are many governmental activities in respect to which the federal government is not the states' superior or sovereign. McLEAN, J., in License Cases, 5 How. 504, 588, 12 L. edition 256, 293, says: "The powers of the general government and of the state, although both exist and are exercised within the same territorial limits, are yet separate and distinct sovereignties, acting separately and independently of each other, within their respective spheres."
The United States creates national banks and is their sovereign. Pennsylvania creates its own state banks and is their sovereign. The United States has no power to create or destroy Pennsylvania corporations. They can be destroyed only by Pennsylvania or with her consent. A corporation's activities may be suspended by a resigantion of all its officers, but this would not effect a dissolution of the corporation any more than would the death or resignation of all the judges of a court dissolve that court. Corporations, like individuals, may be in a state of suspended animation. When the chief executive of the nation dies, the presidency is not ended or dissolved even during the interval before a new president is sworn in.
It is well argued by the attorney general for the Commonwealth that "it was not the intent, purpose or effect of the Act of Congress of November 7, 1918, as amended by the Act of February 25, 1927, to merge the charter of a trust company with that of a national bank, and the provisions of the Act of 1927 preclude such a merger." We agree with these...
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