McMillan v. St. Louis Union Trust Co.
| Decision Date | 11 April 1949 |
| Docket Number | 40845 |
| Citation | 219 S.W.2d 364,358 Mo. 1215 |
| Parties | Mattie Caruth McMillan, Individually and as Co-Trustee Under the Last Will and Testament of Neill A. McMillan, Deceased, Appellant, v. St. Louis Union Trust Company, a Corporation, as Co-Trustee Under the Last Will and Testament of Neill A. McMillan, Deceased; The First National Bank of Kansas City, a Corporation, the City National Bank of Galveston, a Corporation, and the First National Bank in Dallas, a Corporation, Respondents |
| Court | Missouri Supreme Court |
Appeal from Circuit Court of City of St. Louis; Hon. F. E Williams, Judge.
Affirmed.
Montague Rosenberg, R. C. Lohmeyer and Hay & Flanagan for appellant.
(1) National banks can rightfully exercise only such powers as are expressly granted by statute or such incidental powers as are necessary to carry on the business for which they are established. They have no powers beyond those expressly granted or fairly incidental thereto. Sec. 24 of Title 12 U.S.C.A.; Zollmann on Banks and Banking, sec. 342, p. 278; 9 C.J.S., p. 1207, sec. 654; Ross v. Lee, 15 F.Supp 972; Berylwood Inv. Co. v. Graham, 111 P.2d 467, 43 Cal.App. (2d) 659; Bank of Cal. v. City of Portland, 69 P.2d 273, 157 Ore. 203, 115 A.L.R. 676; State ex rel. Barrett v. First Natl. Bank of St. Louis, 297 Mo. 397, 249 S.W. 619, 30 A.L.R. 918, 263 U.S. 640, 68 L.Ed. 486, 44 S.Ct. 213. (2) The measure of the powers of national banks is the statutory grant, and powers not conferred by Congress are denied. Texas & Pacific Ry. Co. v. Pottorff, 291 U.S. 245, 78 L.Ed. 777, 54 S.Ct. 416; Brown v. Fourth & First Natl. Banks, 171 Tenn. 371, 103 S.W.2d 327. (3) The powers of national banks are strictly limited by the National Banking Act, under which they are organized. Thus they may not become endorsers, sureties or guarantors. Zollmann on Banks and Banking, sec. 356. (4) They may not enter partnerships. Idem., Sec. 364. (5) They may not acquire stock of other corporations except as specifically authorized by the National Banking Act. Idem., Sec. 382; Cassatt v. First Natl. Bank of West New York, 168 A. 585, 111 N.J.L. 536; Charlotte First Natl. Bank v. Natl. Exch. Bank, 92 U.S. 122, 23 L.Ed. 679. (6) They may not engage in outside business generally. Zollmann on Banks and Banking, sec. 223; Birdsell Mfg. Co. v. Anderson, 104 F.2d 340; Atherton v. Anderson, 86 F.2d 518; Cooper v. Hill, 94 F. 582; Cockrill v. Abeles, 86 F. 505. (7) Such rights as national banks have to engage in the trust business are derived solely from federal statutes. Annotation in 153 A.L.R. 411. (8) Respondents, being business corporations, may not be beneficiaries of a testamentary trust, as a testamentary trust for a business corporation not specifically authorized by statute and charter to become a trust beneficiary is invalid, even if the statute authorizes it to acquire property by devise or bequest for corporate purposes. In re DeForest's Estate, 263 N.Y.S. 135, 147 Misc. 82. (9) Since respondent national banks have no capacity to own stocks in other corporations, they lack capacity to be the trust beneficiaries of a trust comprised of such stocks. Scott on Trusts, sec. 117; Walker v. Taylor, 252 Ill. 424, 96 N.E. 1055; Coleman v. S.R. Turnpike Road Co., 49 Cal. 517; Williams v. Johnson, 208 Mass. 544, 95 N.E. 90; 54 Am. Jur., p. 116, sec. 137.
Rhodes E. Cave, Thomas S. McPheeters and George W. Simpkins for respondent St. Louis Union Trust Company.
(1) A national bank is authorized to accept a legacy or bequest. 12 U.S. Code Ann., Sec. 24; Fletcher on Corporations, sec. 2781; 19 C.J.S., sec. 1090; 68 C.J., sec. 148, p. 528; 68 C.J., sec. 152; 7 Michie on Banks and Banking, sec. 157; Keene's Estate, 273 N.Y.S. 532; Missouri Corporation Code, Sec. 4, p. 416, Laws 1943; Chambers v. St. Louis, 29 Mo. 543; Revised Civil Statutes of Texas (1925), Art. 1320, Chap. 3; Revised Civil Statutes of Texas (1925), Art. 1349, Chap. 3; Revised Civil Statutes of Texas (1925), Art. 1357; Second Natl. Bank v. United States, 266 Fed. l.c. 492. (2) Since the present suit was brought more than five years after the death of Neill A. McMillan and is a suit to hold void a clause of his will, it is barred by the five-year Statute of Limitations. Sec. 1014, R.S. 1939; Odom v. Langston, 195 S.W.2d 463; St. Louis Union Trust Co. v. Kelley, 199 S.W.2d 344.
Stinson, Mag, Thomson, McEvers & Fizzell and Lawrence R. Brown for respondent The First National Bank of Kansas City.
(1) A national bank has the power to accept bequests. In re Keene's Estate, 152 Misc. 424, 273 N.Y.S. 532. (2) Under the laws of the State of Missouri, the domicile of this respondent, a corporation can clearly accept the bequest in the McMillan will and there is no limitation upon its right to do so. Section 4 of the Missouri Corporation Code; Laws 1943, p. 416. (3) That the words "necessary or requisite" in this statute and the words "incidental powers as shall be necessary to carry on business" in the National Banking Act, 12 U.S.C.A. Sec. 24, include the power to take the McMillan bequest is made clear by a landmark case in Missouri. Chambers v. City of St. Louis, 29 Mo. 543. (4) The text writers recognize the validity of the bequests which appellant seeks to have declared invalid. 68 C.J. Sec. 148, p. 528, also Sec. 152; The Restatement of Trusts, Sec. 116, Comment C; 54 Am. Jur. Sec. 137, p. 116; Perry, Trusts and Trustees (7th Ed.), Sec. 63; Paton's Digest, Vol. I, Banks and Banking, Sec. 23, p. 650; Fletcher, Corporations, Vol. VI, Sec. 2781; 7 Michie, Banks and Banking, Sec. 157. (5) The limitations placed on national banks by the National Banking Act were to insure the safe management of the banks and for their protection. Second Natl. Bank v. United States, 266 F. 489.
Rosser J. Coke, Jack L. Coke, and Charles M. Spence for respondents First National Bank in Dallas and The City National Bank of Galveston; Coke & Coke and Thompson, Mitchell, Thompson & Young of counsel.
(1) In general, corporations have and have always had the power to take personal property by bequest. 6 Fletcher, Corporations (Perm. Ed., 1931), sec. 2781; 4 Thompson, Corporations (3rd Ed., 1927), sec. 2493; 7 Stevens, Corporations, sec. 50. (2) The National Bank Act does not prohibit such banks from taking property by gift, and unless prohibited from doing so by state law, they have a right to do so by reason of being legal entities. McClellan v. Chipman, 164 U.S. 347, 41 L.Ed. 461; In re Keene's Estate, 273 N.Y.S. 533, 152 Misc. 424; State v. First Natl. Bank in St. Louis, 297 Mo. 397, 249 S.W. 619, affirmed 263 U.S. 640, 68 L.Ed. 486. (3) Appellant does not assert that any state law here involved precludes national banks from accepting property by gift.
Action by plaintiff (individually and as cotrustee of the testamentary trust hereinafter described) to have certain bequests under the will of her deceased husband, Neill A. McMillan, to the several defendant national banks adjudged void, and to have paid over to her, in her individual capacity, under the residuary clause of the will, the sum of $ 101,500, being the amount and value of the challenged bequests. Defendants filed separate motions attacking the sufficiency of plaintiff's petition to state facts or a claim upon which relief could be granted, which motions were sustained, and judgment entered thereon in favor of all defendants dismissing plaintiff's petition, and plaintiff appealed. The amount in dispute gives this court jurisdiction. There is, of course, no dispute as to the facts. The single issue presented is one of law.
Under the residuary clause of his will, testator created a trust in the sum of $ 125,000 for the use and benefit of his wife (she and St. Louis Union Trust Company being named co-trustees thereof) for and during her natural life, and further directed that at the time of his wife's death the corpus of the trust estate should be disposed of "as provided in my codicil to this my last will and testament hereafter executed by me." A codicil, as thus contemplated, was, in fact, executed and admitted to probate. That portion here relevant directed that "at the date of the death of my said wife the trust herein created shall cease and determine and the corpus of the trust estate and undistributed income then in the possession of the trustees or the survivor of them shall be paid over and distributed as follows: . . .
The petition avers that defendant The City National Bank of Galveston is the successor of the bank referred to in the codicil as Galveston National Bank, Galveston, Texas, and that the defendant First National Bank in Dallas is the present name of the bank referred to in the codicil as American Exchange National Bank, Dallas, Texas.
The limited question presented is stated thus in appellant's brief: "The sole question involved on this appeal is whether the respondent national banks have capacity to take the legacies provided for them in the codicil to the Last Will and Testament of Neill A. McMillan."
Appellant falls into the fundamental error of treating the bequests in question as being a testamentary trust for the benefit of business corporations, and from this premise argues that such trusts are invalid. Her brief urges: "It is respectfully submitted that the case of In re De Forest's Estate [263 N.Y.S. 135, 147 Misc. 82] is decisive of this matter, and in this case the only court to whom the question has been presented has ruled that ' . a business corporation may not be the...
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