Source: https://supreme.justia.com/cases/federal/us/244/416/
Timestamp: 2019-04-23 02:22:13+00:00

Document:
the functions and attributes of the bank considered as an entity; the necessity or appropriateness of the function should be considered with reference to the situation to which it relates; and, as to what is necessary or appropriate, a court should not substitute its judgment for the judgment of Congress.
As settled also by those cases, the circumstance that a function is of a class subject to state regulation does not prevent Congress from authorizing a national bank to exercise it, nor would it lie with the state power to forbid this.
A business not inherently such that Congress may empower national banks to engage in it may nevertheless become appropriate to their functions if, by state law, state banking corporations, trust companies, or other rivals of national banks are permitted to carry it on.
"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 registrar of stocks and bonds under such rules and regulations as the said board may prescribe,"
is, as here construed, a valid exercise of the power of Congress.
The section authorizes the specified functions to be exercised by national banks when the right to perform them is given by state law, or is deducible therefrom through being so conferred on state banks or corporations whose business in some degree rivals that of national banks, and it gives administrative power to the Reserve Board as a means of coordinating such functions, in their exercise by national banks, with the reasonable and nondiscriminating provisions of state law regulating their exercise as to state corporations.
The section is not open to the objection that it confers legislative power on the Reserve Board.
In providing that the specified functions may be exercised "when not in contravention of state or local law," Congress impliedly, if not expressly, authorized the institution and conduct in the state supreme court of proceedings in the nature of quo warranto to test whether the exercise of such functions by a national bank is consistent with the state law.
the state court to determine the authority of such banks in proceedings akin to quo warranto. The case is stated in the opinion.
We are of opinion that the procedure resorted to was appropriate, and that the state court was competent to administer relief, but we postpone stating our reasons on the subject until the merits have been passed upon.
The court below held that an act of Congress conferring on national banks additional powers was in excess of the authority of Congress, and was hence repugnant to the Constitution. 192 Mich. 640. The correctness of this conclusion is, in substance, the sole question for decision on the merits.
Although the powers given were new, the principles involved in the right to confer them were long since considered and defined in adjudged cases. We shall first consider the leading of such cases, and then, after stating this case, determine whether they are controlling, causing the subject not to be open for original consideration.
end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional."
P. 17 U. S. 421.
"Congress was of opinion that these faculties were necessary to enable the bank to perform the services which are exacted from it, and for which it was created. This was certainly a question proper for the consideration of the national legislature."
P. 22 U. S. 864.
As the doctrines thus announced have been reiterated in a multitude of judicial decisions, and have been undeviatingly applied in legislative, and enforced in administrative, action, we come at once to state the case before us to see whether such doctrines dispose, without more, as a mere question of authority, of the subject under consideration.
"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 registrar of stocks and bonds under such rules and regulations as the said board may prescribe."
of when it should be used, and third, because the exercise of the powers was in contravention of the laws and authority of the state, and the Reserve Board therefore, under the act, had no power to grant the certificate.
"But in the reasoning of the judges, in the opinions to which I have referred, I find, I think, a conclusive argument supporting the proposition that Congress has exceeded its constitutional powers in granting to banks the right to act as trustees, executors, and administrators. If for mere profit it can clothe this agency with the powers enumerated, it can give it the rights of a trading corporation, or a transportation company, or both. There is, as Judge Marshall points out, a natural connection between the business of banking and the carrying on of federal fiscal operations. There is none, apparently, between such operations and the business of settling estates, or acting as the trustee of bondholders. This being so, there is in the legislation a direct invasion of the sovereignty of the state which controls not only the devolution of estates of deceased persons and the conducting of private business within the state, but as well the creation of corporations and the qualifications and duties of such as may engage in the business of acting as trustees, executors, and administrators. Such an invasion I think the court may declare and may prevent by its order operating upon the offending agency."
1. Because the opinion of the court, instead of testing the existence of the implied power to grant the particular functions in question by considering the bank as created by Congress as an entity, with all the functions and attributes conferred upon it, rested the determination as to such power upon a separation of the particular functions from the other attributes and functions of the bank, and ascertained the existence of the implied authority to confer them by considering them as segregated -- that is, by disregarding their relation to the bank as component parts of its operations -- a doctrine which, as we have seen, was in the most express terms held to be unsound in both of the cases.
only by individuals or corporations not coming at all, actually or potentially, in competition with national banks. And the far-reaching effect of this error becomes manifest when it is borne in mind that, plainly, the particular functions enumerated in the statute were conferred upon national banks because of the fact that they were enjoyed as the result of state legislation, by state corporations, rivals in a greater or less degree of national banks.
adopt rules regulating the exercise of the functions conferred, thus affording the means of coordinating the functions when permitted to be discharged by national banks with the reasonable and nondiscriminating provisions of state law regulating their exercise as to state corporations -- the whole to the end that harmony and the concordant exercise of the national and state power might result.
Before passing to the question of procedure, we think it necessary to do no more than say that a contention which was pressed in argument, and which it may be was indirectly referred to in the opinion of the court below, that the authority given by the section to the Reserve Board was void because conferring legislative power on that board, is so plainly adversely disposed of by many previous adjudications as to cause it to be necessary only to refer to them. Marshall Field & Co. v. Clark, 143 U. S. 649; Buttfield v. Stranahan, 192 U. S. 470; United States v. Grimaud, 220 U. S. 506; Monongahela Bridge Co. v. United States, 216 U. S. 177; Intermountain Rate Cases, 234 U. S. 476.
are of opinion that, as the particular functions in question, by the express terms of the act of Congress, were given only "when not in contravention of state or local law," the state court was, if not expressly, at least impliedly, authorized by Congress to consider and pass upon the question whether the particular power was or was not in contravention of the state law, and we place our conclusion on that ground. We find no ambiguity in the text, but if it be that ambiguity is latent in the provision, a consideration of its purpose would dispel doubt, especially in view of the interpretation which we have given the statute, and the contrast between the clause governing the subject by the state law and the provision conferring administrative power on the Reserve Board. The nature of the subject dealt with adds cogency to this view, since that subject involves the action of state courts of probate in a universal sense, implying from its very nature the duty of such courts to pass upon the question, and the power of the court below, within the limits of state jurisdiction, to settle, so far as the state was concerned, the question for all such courts by one suit, thus avoiding the confusion which might arise in the entire system of state probate proceedings and the very serious injury to many classes of society which also might be occasioned. And our conclusion on this subject is fortified by the terms of § 57, c. 106, 13 Stat. 116, making controversies concerning national banks cognizable in state courts because of their intimate relation to many state laws and regulations, although, without the grant of the act of Congress, such controversies would have been federal in character.
I dissent from the conclusion that this proceeding could be brought and maintained in the state court. It is an information in the nature of a quo warranto against a federal corporation -- a national bank. It calls in question the bank's right to exercise a privilege claimed under an act of Congress, the privilege, under the terms of the act, being conferred only when "not in contravention of the state or local law." The information was brought by the attorney general of the state in his own name, and charges that the bank's exercise of the privilege is "in contempt of the people of the state," by which it is meant, as the record discloses, first, that the exercise of the privilege by the bank is in contravention of the law of the state, and, second, that the act of Congress under which the privilege is claimed transcends the power of Congress, and is void. The state court dealt with both grounds. The first was overruled and the second sustained. The judgment rendered enjoins and excludes the bank from exercising the privilege.
as the lawmaking power of the government may permit."
Davis v. Elmira Savings Bank, 161 U. S. 275, 161 U. S. 283; Van Reed v. People's National Bank, 198 U. S. 554, 198 U. S. 557. Indeed, they are upon much the same plane as are officers of the United States, because their conduct can only be controlled by the power that created them. M'Clung v. Silliman, 6 Wheat. 598, 19 U. S. 605. If it were otherwise, the supremacy of the United States and of its Constitution and laws would be seriously imperiled. Ableman v. Booth, 21 How. 506; Tarble's Case, 13 Wall. 398; Tennessee v. Davis, 100 U. S. 257; State ex Rel. Wilcox v. Curtis, 35 Conn. 374.
Thus, much, as I understand it, is conceded in this Court's opinion, the conclusion that the state court could entertain the information and proceed to judgment thereon, as was done, being rested upon an implied authorization by Congress. This authorization is thought to be found in the provision stating that the privilege claimed is given only "when not in contravention of state or local law," and in the provision in the Act of June 3, 1864, c. 106, § 57, 13 Stat. 116, now in Rev.Stats. § 5198, which makes suits against national banks cognizable in certain state courts. I do not find any such authorization in either provision.
The first does no more than to withhold the privilege in question from national banks located in states whose laws are opposed to or not in harmony with the possession and exercise of such a privilege on the part of the banks. It says nothing about judicial proceedings, nothing about who shall bring them or where they shall be brought. There is in it no suggestion that quo warranto proceedings were in the mind of Congress. Had there been a purpose to do anything so unusual as to authorize a state officer to institute and conduct such a proceeding in a state court against a federal corporation, is it not reasonable to believe that Congress would have given expression to that purpose?
As before indicated, it said nothing upon the point, just as it would have done had no such purpose been in mind. But if the words "when not in contravention of state or local law" could be regarded as giving any warrant for a quo warranto proceeding by a state officer in a state court, I should say they would do no more than to permit such a proceeding to determine whether the privilege was in contravention of the state law. There is nothing in them which points even remotely to a purpose to sanction a proceeding to determine the power of Congress under the Constitution to clothe a national bank with the privilege indicated. That would be without any precedent in the legislation relating to federal corporations, and I submit that it is most improbable that Congress either did or would entertain such a purpose.
The provision cited from the Act of 1864 has been in the statutes for fifty-three years, and no one seems ever to have thought until now that it was intended to authorize a proceeding such as this against a national bank. I think its words do not fairly lend themselves to that purpose. They have hitherto been regarded, and in practice treated, as referring to ordinary suits such as may be conveniently prosecuted against a bank in its home town and county. Besides, the terms of the provision show that it can have no application here. After providing for suing a national bank in the federal or territorial court of the district in which it is established, the provision adds, "or in any state, county or municipal court in the county or city in which said association is located." This bank, as the record discloses, is located in Bay City, Bay County. The proceeding was begun and had in the supreme court of the state at the capital, which is Lansing, Ingham County. Therefore, the provision can give no support to the proceeding.
with a direction to dismiss the information for want of jurisdiction.

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