State ex rel. Barrett v. First National Bank of St. Louis
| Decision Date | 03 March 1923 |
| Parties | THE STATE ex rel. JESSE W. BARRETT, Attorney-General, v. FIRST NATIONAL BANK OF ST. LOUIS |
| Court | Missouri Supreme Court |
Ouster ordered.
Jesse W. Barrett, Attorney-General, and Merrill E. Otis, Assistant Attorney-General, for informant; Sam B. Jeffries, Carter Collins & Jones, H. R. Small, Foristel & Eagleton, Marion C Early and T. F. Chaplin of counsel.
The information states a cause of action. The information charges that respondent, without national or state authority, and in violation of national and state law, has established and is operating a branch bank at St. Louis, Missouri, and proposes to establish and operate numerous other branch banks in St Louis, Missouri. (a) It is outside the authority of and against the law for a national or a state bank to establish or operate branch banks in Missouri. National Bank Act provisions: U. S. R. S., sec. 5134 (U.S. Comp. Stat. 1916 sec. 9659; U. S. R. S., sec. 5155 (U.S. Comp. Stat. 1916, sec. 9695); Act of Congress, May 1, 1886, c. 73, sec. 2, 24 Stat. 18 (U.S. Comp. Stat. 1916, sec. 9662); U. S. R. S., sec. 5190 (U.S. Comp. Stat. 1916, sec. 9744); Act of Congress, Dec. 23, 1913, c. 6, sec. 25, as amended, Act of Congress, Sept. 7, 1916, c. 461 (U.S. Comp. Stat. 1916, sec. 9745). Special branch bank authorizations by Congress: For branch of a national bank at the Chicago Exposition, Act of Congress, May 12, 1892; for branch bank at Louisiana Purchase Exposition at St. Louis, Act of Congress March 3, 1901. Rulings and authorities: First National Bank v. Hawkins, 174 U.S. 364, 369; Opinion of Attorney-General of the United States in case of Lowry National Bank of Atlanta, Ga., vol. 29, page 81; Magee on Banks and Banking (2 Ed. 1913) pp. 42-45; Pratt's Digest of Federal Banking Laws (1920 Ed.) p. 100; Ruling of Comptroller of the Currency that national banks have no right to establish or operate branch banks in Missouri 1922; First National Bank of Elizabethtown v. Commonwealth of Kentucky, 34 L. R. A. (N. S.) 54. Missouri Statutes provisions: Sec. 11737, subdiv. 1, and Sec. 11684, R.S. 1919. (b) Courts recognize the construction placed upon statutes by officers whose duty it is to execute them, especially when such construction has been made by the highest officers in the executive department of the government and have been followed for many years, when, too, such construction is reasonable and of great persuasive force. Ewing v. Vernon County, 216 Mo. 681; United States v. Finnell, 185 U.S. 236; Sedalia v. Smith, 206 Mo. 364; Construction Co. v. Ice Rink Co., 242 Mo. 262; State ex rel. v. Cupples 283 Mo. 115. (c) The course of conduct of national banks relative to branches, the attitude of the Congress relative thereto, and the rulings and attitude of the United States Treasury Department, have fixed a positive policy of limitation against branch banking by national banks in the United States since 1864, and the courts will recognize such long-established banking practice and legislative, executive and general policies, and will adopt such construction of the statutes, there being nothing in conflict with such construction. 36 Cyc. 1140-1142; Krohn v. Kansas City Home Telephone Co., 131 Mo.App. 313; McChesney v. Hager, 104 S.W. 714; Ewing v. Vernon County, 216 Mo. 689; Corsicana Natl. Bank v. Johnson, 251 U.S. 83. (d) The national public policy and Missouri public policy on branch banking in Missouri are one and the same. There is no conflict of policies involved in this case. Missouri is simply seeking to suppress illegal, unauthorized acts of respondent that are opposed to the policy of both state and nation. Gilbert v. Minnesota, 254 U.S. 325, 329; Halter v. Nebraska, 205 U.S. 34; Hale v. Henkle, 201 U.S. 43. (e) The same act may be a transgression against both the Federal and State governments and each may punish or suppress without a conflict between their respective sovereignties. Gilbert v. Minnesota, 254 U.S. 325, 332; Hale v. Henkel, 201 U.S. 43. (f) While a suit may not be brought (because of the Eleventh Amendment to the Federal Constitution) against a state or the officials of a state, acting under and in pursuance of lawful authority, suit may be brought against state officials, even by individuals, to keep them from enforcing unconstitutional or illegal enactments, for the reason that such enactments are nullities and, therefore, such officials cannot be acting as such in attempting to enforce them. Likewise, operations of a national bank organization that are outside the field of authorized national bank operations and so are, in fact, not national bank operations, can be challenged by the state in which such operations take place. And if, besides being unauthorized by and in violation of national authority, such operations are also opposed to state law governing banks and are against the public policy of the state, such outlaw operations may properly be suppressed by the state. Ex parte Young, 209 U.S. 123, 159; Merchants Exchange v. Knott, 212 Mo. 616, 647, 648; Carson v. Sullivan, 223 S.W. 571; First Natl. Bank v. Kentucky, 34 L. R. A. (N. S.) 54; Sec. 11684, R.S. 1919.
Jones, Hocker, Sullivan & Angert for respondent.
(1) The temporary injunction issued in aid of the writ of quo warranto was invalid and contrary to the Federal statute. U. S. Compld. Stat., sec. 9834; Pacific Natl. Bank v. Mixer, 124 U.S. 721; Van Reed v. People's Natl. Bank, 198 U.S. 554; 3 R. C. L. sec. 323, p. 691; 7 C. J. sec. 803, p. 838; Freeman Mfg. Co. v. Natl. Bank 160 Mass. 398; Meyer v. First Natl. Bank, 10 Ida. 175; Hazen v. Natl. Bank, 70 Vt. 543; Dennis v. First Natl. Bank, 127 Cal. 453; Chesapeake Bank v. First Natl. Bank, 40 Md. 269. (2) The State has no power to complain. A national bank is the creature of national sovereignty, and amenable to and controllable by it and no other, and an information in quo warranto against a corporation lies only at the instance and in the name of the sovereign power which created it. State ex rel. v. Curtis, 35 Conn. 374; State ex rel. Parker v. Bowen, 8 S.C. 400; McCulloch v. Maryland, 4 Wheat. 429; Ableman v. Booth, 21 How. 516; Territory v. Lockwood, 3 Wall. 238; McClung v. Silliman, 6 Wheat. 603; Tarble's Case, 13 Wall. 405; Tennessee v. Davis, 100 U.S. 263; In re Neagle, 135 U.S. 1; State ex rel. v. Cincinnati Ry. Co., 6 L. R. A. 321; 22 R. C. L. 685; First Natl. Bank v. Union Trust Co., 244 U.S. 427. (3) A national bank is given authority to transact such a banking business as is specified in the act of Congress, and all incidental powers necessary to carry on that business are granted. 13 U.S. Stat. sec. 5136; First Natl. Bank v. National Exchange, 92 U.S. 127; Western Natl. Bank v. Armstrong, 152 U.S. 351; Bullard v. Bank, 18 Wall. 593; Logan County Natl. Bank v. Townsend, 139 U.S. 73; Shoemaker v. Natl. Mechanics' Bank, Fed. Cas. 12801; Shinkle v. First Natl. Bank of Ripley, 22 Oh. St. 524; Weekler v. First Natl. Bank, 42 Md. 592; Yerkes v. National Bank, 69 N.Y. 385; Wiley v. First Natl. Bank, 47 Vt. 553; Head v. Providence Ins. Co., 2 Cranch. 127, 169; Bank of United States v. Dandridge, 12 Wheat, 68; Green Bay & Minn. Railroad v. Union Steamship Co., 107 U.S. 100; People v. Pullman Palace Car Co., 175 Ill. 136; State v. Hancock, 35 N. J. L. 545; Wright v. Hughes, 119 Ind. 328. (4) Banking corporations have power to establish and maintain agencies. Bank of Augusta v. Earle, 13 Pet. 517; Tombigbee Railroad Co. v. Kneeland, 4 How. 15; Zane on Banks & Banking, sec. 24.
OPINION
In Banc.
Quo Warranto.
-- This is an original proceeding in quo warranto to determine the authority of a national bank engaged in business in the city of St. Louis to establish and conduct a branch bank at another than its regular place of business in said city.
I. A national bank is an artificial legal entity, created to facilitate the transaction of fiscal affairs under the authority of the laws of the United States. Like other corporations, it possesses such powers as are granted to it by the act of its creation, or more comprehensively stated, which have been or may be conferred upon it by Congress within the limitations of the Federal Constitution. This reference as to the origin of its powers does not, as we shall subsequently show, prevent state legislation in regard thereto. Existing, as it necessarily does, by law, it possesses only such powers as are expressly granted or which may necessarily be implied for the effective discharge of its corporate functions. As to powers expressly granted, no difficulty need be encountered in defining their limitations. As to those incidental, it must appear, to authorize their exercise, that they are clearly within the scope and purview of the purpose for which the corporation was created. This rule is especially applicable when it is sought to invoke what are termed the powers of a corporation incident to it at common law; such application being authorized only when it is apparent that the power invoked is a necessary incident to the proper exercise of the corporation's existence or functions. [Kerens v. Trust Co., 283 Mo. l. c. 601, 223 S.W. 645; State ex inf. v. Mo. Ath. & St. L. Club, 261 Mo. l. c. 576, 170 S.W. 904; Millinery Co. v. Trust Co., 251 Mo. l. c. 553, 158 S.W. 359.]
These rules are elementary in character to the extent that they may be termed horn-book law on this subject. They have been stated to emphasize their general application to all classes of corporations in the absence of statutes to the contrary.
While we have contented ourselves with the citation of cases in this behalf determined within our own jurisdiction, they assert a general doctrine which does not contravene the rulings of any cour...
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