Source: https://supreme.justia.com/cases/federal/us/265/17/
Timestamp: 2019-04-24 12:13:23+00:00

Document:
l. The Act of September 26, 1918, c. 177, § 2, 40 Stat. 967, amending § 11(k) of the Federal Reserve Act, authorizes a national bank having the permit of the Federal Reserve Board to act a executor if trust companies competing with it have that power by the law of the state in which the bank is located, whether the exercise of such power by the national bank is contrary to the state law or not. P. 265 U. S. 23.
2. The power of Congress to grant such accessory functions to national banks, to sustain them in the competition of the banking business, cannot be controlled by state laws. First National Bank v. Fellows, 244 U. S. 416. P. 265 U. S. 24.
3. The authority given by the act is independent of regulations adopted by the state to secure the trust funds in the hands of its trust companies. Id.
Error to a judgment of the Supreme Court of Missouri which denied the bank's application for a writ of mandamus to compel a probate court to issue to it letters testamentary, it having been appointed executor by a will.
peremptory writ was denied. 257 S.W. 784. A writ of error was allowed by the chief justice of the state court. The bank claims the capacity to fill the office under the statutes of the United States.
"To grant by special permit to national banks applying therefor, when not in contravention of state or local law, the right to act as trustee, executor, administrator, . . . or in any other fiduciary capacity in which state banks, trust companies, or other corporations which come into competition with national banks are permitted to act under the laws of the state in which the national bank is located."
"Whenever the laws of such state authorize or permit the exercise of any or all of the foregoing powers by state banks, trust companies, or other corporations which compete with national banks, the granting to and the exercise of such powers by national banks shall not be deemed to be in contravention of state or local law within the meaning of this Act."
This says in a roundabout and polite but unmistakable way that whatever may be the state law, national banks having the permit of the Federal Reserve Board may act as executors if trust companies competing with them have that power. The relator has the permit, competing trust companies can act as executors in Missouri, the importance of the powers to the sustaining of competition in the banking business is so well known and has been explained so fully heretofore that it does not need to be emphasized, and thus the naked question presented is whether Congress had the power to do what it tried to do.
"was to be tested by the right to create the bank and the authority to attach to it that which was relevant in the judgment of Congress to make the business of the bank successful."
"This excluded the power of the state in such case, although it might possess in a general sense authority to regulate such business, to use that authority to prohibit such business from being united by Congress with the banking function."
244 U.S. 244 U. S. 425. Now that Congress has expressed its paramount will, this language is more apposite than ever. The states cannot use their most characteristic powers to reach unconstitutional results. Western Union Telegraph Co. v. Kansas, 216 U. S. 1; Pullman Co. v. Kansas, 216 U. S. 56; Western Union Telegraph Co. v. Foster, 247 U. S. 105, 247 U. S. 114. There is nothing over which a state has more exclusive authority than the jurisdiction of its courts, but it cannot escape its constitutional obligations by the device of denying jurisdiction to courts otherwise competent. Kenney v. Supreme Lodge of the World, 252 U. S. 411, 252 U. S. 415. So here, the state cannot lay hold of its general control of administration to deprive national banks of their power to compete that Congress is authorized to sustain.
244 U. S. 416, it generally has been recognized that the law now is as the relator contends. In re Turner's Estate, 277 Pa. 110, 116; Estate of Stanchfield, 171 Wis. 553; Hamilton v. State, 94 Conn. 648; People v. Russel, 283 Ill. 520, 524; In re Mollineaux, 179 N.Y.S. 90. Fidelity National Bank & Trust Co. v. Enright, 264 F. 236.
upon the latter. Certainly that precise question was not there presented for decision.
It is fundamental under our dual system of government that the nation and the state are supreme and independent, each within its own sphere of action, and that each is exempt from the interference or control of the other in respect of its governmental powers, and the means employed in their exercise. Bank of Commerce v. Comrs. of Taxes and Assessments, 2 Black 620, 67 U. S. 634; South Carolina v. United States, 199 U. S. 437, 199 U. S. 452 et seq.; Farrington v. Tennessee, 95 U. S. 679, 95 U. S. 685.
"How their respective laws shall be enacted; how they shall be carried into execution, and in what tribunals, or by what officers, and how much discretion, or whether any at all shall be vested in their officers, are matters subject to their own control, and in the regulation of which neither can interfere with the other."
"can be more invaded by the action of the general government than the action of the state governments can arrest or obstruct the course of the national power."
Worcester v. Georgia, 6 Pet. 515, 31 U. S. 570.
remembered, if the right to impose a tax at all exists on the part of the other government, 'it is a right which in its nature acknowledges no limits.' And the principle is equally true in respect to every other power or function of a government subject to the control of another."
It is settled beyond controversy that the right of a state to pass laws, to administer them through courts of justice, and to employ agencies for the legitimate purpose of state government cannot be taxed, Veazie Bank v. Fenno, 8 Wall. 533, 75 U. S. 547, and that rule is but an application of the general and broader rule, which forbids any interference by the federal government with the governmental powers of a state. The settlement of successions to property on death is a subject within the exclusive control of the states, and entirely beyond the sphere of national authority. See Tilt v. Kelsey, 207 U. S. 43, 207 U. S. 55; Plummer v. Coler, 178 U. S. 115, 178 U. S. 137. Upon the death of the owner, his property passes under the control of the state, and remains there until all just charges against it can be determined and paid and those who are entitled to become its new owners can be ascertained. The duty and power of the state to provide a tribunal for the accomplishment of these ends, Tilt v. Kelsey, supra, it follows, cannot be abridged by federal legislation.
The right of the owner to direct the descent of this property by will or permit it under statute, as well as the right of a legatee, devisee, or heir to receive the property, are rights exclusively derived from and regulated by the state. Plummer v. Coler, supra, p. 178 U. S. 137. During the process of administration, the estate, in contemplation of law, is in the custody of the court exercising probate powers, and to this court the executor or administrator is an officer. Yonley v. Lavender, 21 Wall. 276, 88 U. S. 280.
it is the possession of the court. . . ."
Byers v. McAuley, 149 U. S. 608, 149 U. S. 615.
would undoubtedly be bad against federal legislation to the contrary, but is it beyond the power of the state legislature to subject public moneys -- state, county or municipal -- to such a restriction? A state may not unconditionally require private debts to be paid only in gold and silver; but, in the exercise of its sovereign power of taxation, it may limit the payment of taxes to gold and silver, if it sees fit, in spite of a federal law making currency a legal tender, and, as this Court has said: "It is not easy to see upon what principle the national legislature can interfere with the exercise, . . . of this power." Lane County v. Oregon, 7 Wall. 71, 74 U. S. 77.
In my opinion, the exercise of the powers conferred upon trust companies by the legislation here under review is governmental in its nature, and the fact that the statute discriminates in that matter against national banks (as also it does against state banks) is a negligible incident which does not affect the validity of the statutory limitation.
The probate courts of a state have only such powers as the state legislature gives them. They are wholly beyond the jurisdiction of Congress, and it does not seem to me to be within the competency of that body, on any pretext, to compel such courts to appoint as executor or administrator one whom the state law has declared shall not be appointed.
The particular invasion here sanctioned may not be of great moment, but it is a precedent which, if carried to the logical extreme, would go far toward reducing the states of the Union to the status of mere geographical subdivisions. The case is one, to use the phrase of Mr. Justice Brewer in Fairbank v. United States, 181 U. S. 283, 181 U. S. 291-292, for the application of the maxim "obsta principiis, not de minimis non curat lex."
I am authorized to say that MR. JUSTICE McREYNOLDS concurs in this dissent.

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