In re Petition of Commonwealth-Atlantic Nat. Bank of Boston

• Decision Date: 14 June 1924
• Citation: 249 Mass. 440,144 N.E. 443
• Parties: Petition of COMMONWEALTH-ATLANTIC NAT. BANK OF BOSTON. Petition of FIRST NAT. BANK OF BOSTON. In re BABBIDGE'S ESTATE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

249 Mass. 440

144 N.E. 443

Petition of COMMONWEALTH-ATLANTIC NAT. BANK OF BOSTON. Petition of FIRST NAT. BANK OF BOSTON. In re BABBIDGE'S ESTATE.^*

Supreme Judicial Court of Massachusetts, Middlesex.

June 14, 1924.

Appeal and Report from Probate Court, Middlesex County.

Petitions by the Commonwealth-Atlantic National Bank of Boston, and by the First National Bank of Boston, for proof of will of B. Parker Babbidge, deceased, and issuance of letters testamentary. From a decree dismissing the first petition, petitioner appeals. On report as to second case. Decree dismissing petition affirmed, and decree entered dismissing second petition.

J. W. Worthen and S. C. Rand, both of Boston (S. B. Ecker, of New York City, of counsel), for petitioner Commonwealth-Atlantic Nat. Bank.

C. L. Favinger, of Boston, for petitioner First Nat. Bank of Boston.

RUGG, C. J.

[1] These two cases present the same fundamental question. Each is a petition, by a national banking association possessing a special permit to act as executor of wills under Act of September 26, 1918, c. 177, § 2, 40 U. S. Sts. at Large, 967, amending chapter 6, § 11(k), of the Federal Reserve Act of December 23, 1913, 38 U. S. Sts. at Large, 262 (U. S. Comp. St. Ann. Supp. 1919, § 9794), for the proof of a will of a deceased resident of this Commonwealth and the issuance of letters testamentary to it, where in the instrument offered for probate as the will there was named as executor a then existing Massachusetts trust company which later than the date of the said instrument became converted into a national bank under the provisions of Rev. Sts. of U. S. § 5154 (U. S. Comp. St. § 9694), and thereafter consolidatedwith another national bank under the charter of such other national bank with the approval of the comptroller of the currency, into one national banking association, in conformity with Act of Congress of November 7, 1918, c. 209, 40 U. S. Sts. at Large, 1043 (U. S. Comp. St. Ann. Supp. 1919, § 9696a, 9696b), such consolidated national banking association being the petitioner. In one case the national bank into which the trust company was converted was granted a special permit under the national bank law to act as executor before its consolidation with the other national bank, and in the other case it was not. We do not regard that factor as of significance in this connection. The question is, whether such national bank is entitled to the issuance, of letters testamentary to it as the person named as executor in the will, although the testator named as his executor a state trust company, which thereafter became converted into a national bank and still later effected a consolidation with the petitioner under its charter.

A trust company organized under the laws of this Commonwealth may be appointed executor of a will ‘under the same circumstances, in the same manner, and subject to the same control by the court having jurisdiction of the same, as a legally qualified individual.’ G. L. c. 172, § 52. There is no statute of this Commonwealth touching the appointment of a national bank as executor. By virtue of Act of September 26, 1918, c. 177, § 2, 40 U. S. Sts. at Large, 967, amending the Federal Reserve Act of December 23, 1913, 38 U. S. Sts. at Large 262, c. 6, § 11(k), as interpreted by First National Bank of Bay City v. Fellows, 244 U. S. 416, 37 Sup. Ct. 734, 61 L. Ed. 1233, L. R. A. 1918C, 283, Ann. Cas. 1918D, 1169, and State of Missouri v. Duncan, 44 Sup. Ct. 427, 68 L. Ed. 881, decided April 28, 1924, the courts of this Commonwealth are required to appoint national banks as executors upon the same conditions as they would appoint trust companies organized under the laws of this Commonwealth. Of course we accept, as we are bound to accept, that principle in all its amplitude and with all its implications. That principle does not reach to the facts here presented. It seems to us to have no controlling effect on the principle on which the cases at bar ought to be decided.

[2] Express and detailed provision is made by U. S. Rev. St. § 5154, for the conversion of a state bank into a national banking association. There has been compliance with all provisions of that act and the issuance of the certificate to that effect by the comptroller of the currency in each case. There is now no provision in our statutes, such as formerly existed, authorizing a state bank or trust company to become converted into a national bank. Our earlier statutes on that subject were repealed by Pub. Sts. c. 224. That is not a decisive consideration. We attribute no weight to it because in Casey v. Galli, 94 U. S. 673, at page 678 (24 L. Ed. 168), it was said that--

‘No authority from the state was necessary to enable the bank so to change its organization. The option to do that was given by the forty-fourth section of the Banking Act of Congress. 13 Stat. 112. The power there conferred was ample, and its validity cannot be doubted. The act is silent, as to any assent or permission by the state. It was as competent for Congress to authorize the transmutation as to create such institutions originally.’

That proposition must be regarded as settled and controlling in all cases to which it is applicable.

It is provided by U. S. Rev. St. § 5154, as amended by the Act of December 23, 1913, c. 6, § 8, 38 U. S. Sts. at Large, 258, 259, that upon the conversion of the state bank into the national bank, the latter ‘shall have the same powers and privileges, and shall be subject to the same duties, liabilities, and regulations, in all respects, as shall have been prescribed by the Federal Reserve Act and by the national banking act for associations originally organized as national banking associations.’

The force and effect of the federal statutes concerning the conversion of a state bank into a national bank have been adjudged in several cases. It was held in Atlantic National Bank v. Harris, 118 Mass. 147, an action of contract on a claim running to a state bank which had been converted into the plaintiff national bank, that the completion of the conversion without further action carried to the national bank by operation of law the right to all the property, and the assignment and transfer of all personal property and rights of action and the liability to pay all debts of the state bank. The case of Metropolitan National Bank v. Claggett, 141 U. S. 520, 12 Sup. Ct. 60, 35 L. Ed. 841, was an action brought on bills issued by a state bank against the national bank into which it had been converted. The action was in the nature of a contract. It was held that the change or conversion did not close the business of banking by the state institution, ‘nor destroy its identity or its corporate existence, but simply resulted in a continuation of the same body with the same officers and stockholders, the same property, assets, and banking business under a changed jurisdiction; that it remained one and the same bank, and went on doing business uninterruptedly.’ In Michigan Insurance Bank v. Eldred, 143 U. S. 293, 12 Sup. Ct. 450, 36 L. Ed. 162, action was brought on a judgment. With reference to the effect of the conversion it was said that the state bank had ‘become a national bank and its name had been changed accordingly without affecting its identity or its right to sue upon obligations or liabilities incurred to it by its former name.’

The effect of the consolidation of two national banks is stated in Act of Congress of November 7, 1918, c. 209, § 2, 40 U. S. Sts. at Large, 1043, in these words:

‘And all the rights, franchises, and interests of the said national bank so consolidated in and to every species of property, personal and mixed, and choses in action thereto belonging, shall be deemed to be transferred to and vested in such national bank into which it is consolidated without any deed or other transfer, and the said consolidated national bank shall hold and enjoy the same and all rights of property, franchises, and interests in the same manner and to the same extent as was held and enjoyed by the national bank so consolidated therewith.’

So far as we are aware there has been no interpretation of this statute by the Supreme Court of the United States. We do not regard it necessary for the purposes of this case to make a critical analysis of the meaning of this statute. It may be assumed that its purpose was to continue the identity of the old bank in the bank into which it is consolidated. See Proprietors of Locks & Canals v. Boston & Maine Railroad, 245 Mass. 52, 58, 59, 139 N. E. 839, and cases there collected; City National Bank v. Phelps, 97 N. Y. 44, 49 Am. Rep. 513;Matter of Bergdorf, 206 N. Y. 309, 99 N. E. 714;Chicago Title & Trust Co. v. Zinser, 264 Ill. 31, 105 N. E. 718, Ann. Cas. 1915D, 931;Chicago Title & Trust Co. v. Doyle, 259 Ill. 489, 102 N. E. 790,47 L. R. A. (N. S.) 1066;Coffey v. National Bank of State of Missouri, 46 Mo. 140, 2 Am. Rep. 488.

The record does not disclose to what extent the responsible management, the directors and executive officers of either of the original trust companies, is continued in the petitioning national bank. The capital stock of each petitioner is largely in excess of that of the original trust company. Inferences of important changes in executive control might be warranted by this fact. This circumstance is not regarded as decisive.

[3] The naming of the trust company as executor in the will was not a thing which, under the terms of the several statutes, passed as property or an asset when the trust company was converted into a national bank or when that bank was consolidated into the petitioner. The designation in a will of one as executor does not confer a property right upon the person so designated. However precious may be the mark of confidence bestowed by such nomination, it does not amount to property. There is nothing tangible about it. Nothing vests in a person so nominated by the mere execution of the...