Case ID: mo_358/html/1215-01.html
Source: Caselaw Access Project
Author: {"author": "LEEDY, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

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.
    No. 40845.
    219 S. W. (2d) 364.
    Division Two,
    April 11, 1949.
    
      Montague Rosenberg, R. C. Lohmeyer and Say <& Flanagan for appellant.
    
      
      Bhodes E. Cave, Thomas S. McPheeters and George W. Simpkins for respondent St. Louis Union Trust Company.
    
      
      Stinson, Mag, Thomson, McEners <& Fizzell. and Lawrence B. Brown lor respondent Tbe First National Bank of Kansas City.-
    
      Bosser J. Coke, Jack L. Coke, and Charles M. Spence for respondents First National Bank in Dallas and Tbe City National Bank of Galveston; Coke •& Coke and Thompson, Mitchell, Thompson & Young of counsel.
   [364].

LEEDY, J.

Action fry plaintiff- (individually and as co-trustee of tbe testamentary trust hereinafter described) to have cer-. tain bequests under tbe 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 disputé 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 shoujd be disposed’ of a&s 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: . . . To First National Bank, Kansas City,

Mo., Four Thousand Dollars $ 4,0001)0,

To Galveston National Bank, Galveston, Texas,

or its successor, Five Thousand Dollars - $ 5,000.00 ■

To American Exchange National Bank, ,,-

Dallas, Texas, Ninety-two Thousand, ;

Five Hundred Dollars , $92,500.00”.,

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, [365] ■ 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 presentéd 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'thé 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 ease 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 beneficiary of a trust.’ We ,are .npt here concerned, with such a question because the circumstance that the amounts specified,in the several..bequests are to b.e derived from.the corpus of the trust created for the use of testator’s wife (after the termination.and extinction of such trust), would not change the character of the bequests as outright gifts to the banks,, nor endow them with the.nature of testamentary trusts for business,.corporations of the kind'declared-invalid in the De Fore.st. case., ., ...

Appellant invokes the rule that the “extent of the powers.of national banks is to be measured by the terms of ,the federal statutes relating to. such associations, and they can rightfully, exercise. only such .as. are .expressly granted or such incidental powers as are. Acces-sary to carry on the business for which they are established.’.’ First Nat’l Bank of St. Louis v. State of Missouri at the information of Barrett, Attorney General, 263 U. S. 640, 656, 68 L. Ed. 486, 492, 44 S. Ct. 213, 215. See, also, 9 C. J. S.., Banks and Banking, § .654. From, this it is argued that.“nowhere in § 24 of Title 12, IJ. S., C.- A., which defines the corporate powers of national banking associations, or in any other section .of- the National. Banking Act .is there, any grant of power.to a national bank to take a bequest under, a will, and in the. absence,of a specific-grant of such power it does not exist.” But; the Supreme Court in the case just mentioned .(on the very page on which the quote 'relied pn by appellant appears) further. said: “Nevertheless, national banks are subject to the laws, of a. state , ip respect of their affairs, unless such laws interfere with the purposes of their creation, tend to impair or destroy their efficiency as federal agepcies, or conflict with the paramount law of the United States..” The latter principle is exemplified in McClellan v. Chipman, 164 U. S. 347, 356, 41 L. Ed. 461, 465, as will appear from excerpts therefrom appearing in the case of In re Keene’s Estate, 273 N. Y. S. 532, 152 Misc. 424, hereinafter set out.

In 6 Fletcher, Corporations (Perm.-Ed., 1931), § 2781, .it .is stated: “In the exercise of its power to. acquire personal property, a corporation is not, ordinarily restricted to any particular mode of acquisition. All .the usual and customary methods.-of obtaining prop.-erty are, as a rule, open to it. Necessarily, it may, within the scope .of •its, 'business. and in .the attainment of its corporate, objects, buy the property just as..private individuals may. Furthermore, unless expressly prohibited from so doing, it may take a .gif t. or * bequest, of property, and.,is.sometimes expressly .authorized to take property-in .that manner.”. ..(Emphasis the present -writer!s.) Similarly- in 4 Thompson, Corporations (3rd Ed., 1927), § 2493: “The statutes of mortmain had, no application to personal.property, and- corporations always, had- the-power-to take personal property by bequest..’’ .See, also, 19 C. J. S., Corporations, § 1090.. ..“In the. absence of some express restriction, the power of a corporation to take personal property by will is unquestioned.” 57 Am. Jur., Wills, § 157. Appellant does not contend the federal statutes contain any specific prohibition against national banks taking bequests, or that any such restriction arises under state law.

In Michie on Banks and Banking, Yol. 7,'par.'157, it is said: “A national bank has ño power to deal in personal property, but it may take such property to avoid a pecuniary loss or as security for loans or for bills of exchange purchased. And it may [366] acquire personal property by bequest.” The single case cited in support of the latter statement is In re Keene’s Estate, supra, where, as here, it was contended that a bequest to a .national bank was invalid. It was there held that under the common law, as well as under the New York statutes, every corporation,' though not specified in the law under which it is incorporated, is empowered to acquire personal property by bequest for its corporate purposes. The validity of the bequest was upheld. It appears to he the only decided case dealing with the precise point here involved, and it was, in our opinion, correctly decided, and ive are disposed to follow it. It was there said:

“I hold that the legacy of the Bank of America Nátional Association, Trust Department, is valid. The powers of national banks, conferred by the Congress of the United States, are contained in title 12, USCA, §■ 24, as amended by chapter 191, § 2, of the Laws of 1927 (44 Stat. 1226). Neither under that statute nor any other statute of the United States are there contained any restrictions upon or direct prohibition against the acquiring by a national bank of personal property by bequest. Under the statutes of our own state, however, as well as under the common law of our state, every corporation, though not specified in the law under which it is incorporated, has power to acquire personal property by bequest for its corporate purposes. General Corporation Law, § 14, subd. 3 [Sherwood v. American Bible Society, 4 Abb. Dee. 227. The Bank of America National Association was created under the laws of the United States, was located within this state, and was in existence at the date of the death of the testator. It was therefore a domestic corporation of this state. As defined by section 7, subd. 7, Civil Practice Act, ‘ a “ domestic corporation” is a corporation created by or under the laws of the state, or located in the state, and created by or under the laws of the United States . . . ’ As a domestic corporation doing business within this state, the Bank of America National Association was' subject .to its laws. The United States Supreme Court has frequently held that ‘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 fedéral agencies or conflict with the paramount law of the United States. First National Bank in St. Louis v. State of Missouri at inf. Barrett, 263 U. S. 640, 656, 44 S. Ct. 213, 215, 68 L. Ed. 486; McClellan v. Chipman, 164 U. S. 347, 356, 17 S. Ct. 85, 87, 41 L. Ed. 461; Davis v. Elmira Savings Bank, 161 U. S. 275, 16 S. Ct. 502, 40 L. Ed. 700; First National Bank v. Kentucky, 9 Wall. 353, 19 L. Ed. 701. In McClellan v. Chipman, supra, the court said: ‘National banks “are subject to the laws of the State, and are governed in their daily course of business far more by the laws of the State than of the nation. All their contracts are governed and construed by state laws. Their acquisition and transfer of property, their right to collect their debts, and their liability to be sued for debts, are all based on state law. It is only when the state law incapacitates the banks from discharging their duties to the government that it becomes unconstitutional.” National Bank v. Commonwealth, 9 Wall. 362 [19 L. Ed. 701].
‘ ‘ The right to acquire personal property by bequest under the state law does not appear to conflict with the powers of national banks expressly authorized under the federal statutes. The efficiency of national banks as federal agencies is in no wise impaired or destroyed thereby, nor the regulatory powers prescribed for national ■ banks affected by the state laws.
“For the foregoing reasons the gift to the Bank of America National Association, now merged with its successor, City Bank Farmers’ Trust Company, must be given éffect.”

The judgment below should be, and it is affirmed.

All concur.