Case Name: STATE OF MISSOURI AT THE RELATION OF THE BURNES NATIONAL BANK OF ST. JOSEPH v. DUNCAN, JUDGE OF THE PROBATE COURT OF BUCHANAN COUNTY, MISSOURI
Court: Supreme Court of the United States
Jurisdiction: United States
Decision Date: 1924-04-28
Citations: 265 U.S. 17
Docket Number: No. 762
Parties: STATE OF MISSOURI AT THE RELATION OF THE BURNES NATIONAL BANK OF ST. JOSEPH v. DUNCAN, JUDGE OF THE PROBATE COURT OF BUCHANAN COUNTY, MISSOURI.
Judges: 
Reporter: United States Reports
Volume: 265
Pages: 17–29

Head Matter:
STATE OF MISSOURI AT THE RELATION OF THE BURNES NATIONAL BANK OF ST. JOSEPH v. DUNCAN, JUDGE OF THE PROBATE COURT OF BUCHANAN COUNTY, MISSOURI.
ERROR TO THE SUPREME COURT OF THE STATE OE MISSOURI.
No. 762.
Argued April 11, 1924.
Decided April 28, 1924.
1. 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 as 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. 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 ü. S. 416. P. 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.
302 Mo. 130, reversed.
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.
Mr. Justin D. Bowersock, with whom Mr. John C. Landis, Jr., Mr. William T. Jones, Mr. Henry L. McCune, Mr. Armwell L. Cooper, Mr. I. P. Ryland and Mr. Samuel McReynolds were on the brief, for plaintiff in error.
I. When Congress enters any field over which it is given jurisdiction by the Constitution, it appropriates that field to the fullest extent necessary to insure the complete exercise of its sovereignty. Its enactments are the supreme law of the land, paramount to any state law or authority. McCulloch v. Maryland, 4 Wheat. 316; Northern Pac. Ry. Co. v. North Dakota, 250 U. S. 135; Smith v. Alabama, 124 U. S. 465; Mondou v. N. Y., N. H. & H. R. R. Co., 223 U. S. 1.
II. Congress has jurisdiction to establish and regulate national banks, and its action in that regard, if constitutional, is entirely independent of and superior to all state laws. McCulloch v. Maryland, supra; Osborn v. Bank, 9 Wheat. 738; D.avis v. Elmira Savings Bank, 161 U. S. 275; Farmers’ & Mechanics’ Bank v. Dearing, 91 U. S. 29; Easton v. Iowa, 188 U. S. 220; Van Reed v. People’s National Bank, 198 U. S. 554.
III. The act of Congress granting trust powers to national banks is constitutional and such power cannot, therefore, be nullified, impeded, burdened or controlled by state law or authority, except as permitted by Congress. First National Bank v. Fellows, 244 U. S. 416.
IY. Such powers have been granted to relator in so far as they are not in contravention of state or local law, and the power to act as executor (included therein) is not in contravention of the laws of Missouri.
1. This is a federal and not a state question. Congress has here provided for the exercise of certain functions “when not in contravention of state or local law” and has laid down certain conditions under which it “ shall not be deemed to be. in contravention of state or local law within the meaning of this Act.” Manifestly, the funda mental question is what intention Congress expressed by the language of the act. The law of the State enters into consideration only incidentally as affecting that expressed intention. It might well be that an act would, as a mere question of state law, contravene such law, and yet not do so within the meaning of the act of Congress.
If this were not true, a State might enact a law expressly forbidding national banks to act as executor, and the State Supreme Court might hold that the exercise of such power was therefore in contravention of state law. See Andrews• v. Hovey, 124 U. S. 694; The J. E. Rumbell, 148 U. S. 1; Scott v. McNeal, 154 U. S. 34.
2. Even aside from the provisions of the amendment of September 26, 1918, there is no law in Missouri inconsistent with the appointment of a national bank as executor.
3. The question is, however, forclosed in Missouri by the amendment to the Federal Reserve Act, enacted September 26, 1918. In re Mollineaux, 179 N. Y. S. 90; Estate of Stanchfield, 171 Wis. 553; Hamilton v. State, 94 Conn. 648; Turners Estate, 277 Pa. St. 110; Fidelity National Bank & Trust Co. v. Enright, 264 Fed. 236; Fellows v. First National Bank, 192 Mich. 640.
4. The amendment of 1918 is more than a mere definition of terms. In effect it is a legislative declaration and clarification of the law as laid down in the original enactment.
5. The question for determination is reduced to this: Do the laws of Missouri authorize or permit the exercise of trust powers, including the power to act as executor, by state banks, trust companies or other corporations which compete with national banks? This question is answered in the affirmative by the statutes of the State.
V. Cases distinguished: People v. Brady, 271 Ill. 100; cf. People v. Russel, 283 Ill. 520; Appeal of Woodbury, 78 N. H. 50; Aquidneck National Bank v. Jennings, 44 R. I. 435.
Mr. Solicitor General Beck, with whom Mr. Walter Wyatt and Mr. Edgar W. Freeman were on the brief, for the United States, as amicus curiae, by special leave of Court.
By the Act of September 26, 1918, Congress declares that national banks may exercise trust powers if such exercise is not in contravention of state laws; but it goes further and provides in unmistakable language that the exercise of trust powers by national banks shall not be deemed in contravention of the laws of a State within the meaning of the act if the laws of such State permit the exercise of those powers by state corporations which compete with national banks.
Under this act, if state corporations which compete with national banks may act in a fiduciary capacity, national banks may do so.
Neither a state legislature nor the state courts may place national banks in a class by themselves and decide whether or not they shall be permitted to act in a fiduciary capacity.
So interpreted, the act of Congress is constitutional. The exercise of trust powers is reasonably incidental to the operation of a national bank. First National Bank v. Fellows, 244 U. S. 416. When a State creates competitors of national banks it thereby engenders in Congress an implied authority to protect those banks by empowering them to meet their competitors on an equal footing. Under such circumstances, Congress may constitutionally authorize national banks to act in a fiduciary capacity. Fellows Case, supra. An attempt by a State to define the duties of national banks or to control the conduct of their affairs is absolutely void wherever such attempted exercise of authority expressly conflicts with the laws of the United States and either frustrates the purpose of the national legislation or impairs the efficiency of these agencies of the Federal Government to discharge the duties for which they were created. Davis v. Elmira Savings Bank, 161 U. S. 27^283; McClellan v. Chipman, 164 U. S. 347; First National Bank v. Missouri, 263 U. S. 640.
Missouri trust companies are authorized to exercise wide trust powers and engage in the banking activities which are the usual and characteristic functions of commercial banks, such as national banks. Section 11799 of the Banking Laws of Missouri (Revision of 1919); Denny v. Jefferson County, 272 Mo. 436. Thus they inevitably come into competition with the national banks in that State.
Mr. Morton Jourdan and Mr. Charles H. Mayer, for defendant in error,
submitted.
That an act of Congress, within the field covered by its constitutional power, is the supreme law of the land; that Congress has complete constitutional power to establish and regulate national banks, and that the act of Congress granting trust powers to national banks is constitutional and cannot be nullified or controlled by the States, are three propositions contended for by the plaintiff in error, which are conceded by the defendant in error.
The Missouri Supreme Court committed no error in holding that the exercise of the office of executor, here sought to be exercised, would be in contravention of the state law.
The power to regulate descents and distributions and the devolution of estates is exclusively within the State. Overby v. Gordon, 177 U. S. 214; Pennoyer v. Neff, 95 U. S. 714.
Executors and administrators are instruments through which the States regulate and control descents, distributions and the devolution of estates, and therefore, it seems to us, the State must have the right to determine what instruments may be used, without contravening the state law. First National Bank v. FellotJos, 244 U. S. 416.
The amendment to § 11 (k) of the Federal Reserve Act was not intended to and did not deprive the States of this right.
Inasmuch as the act, before and after amendment, conferred no power directly upon national banks, but conferred a mere administrative power upon the Federal Reserve Board, it would seem that the second paragraph of the amendment was intended as an interpretation of the act for the benefit of the Federal Reserve Board, and was not intended to render meaningless and to destroy one of the principal provisions of the original act, which provision was retained in the act as amended.
Unless the clause “when not in contravention of state law ” is to be held to be meaningless, then the Missouri Supreme Court had the duty and the right of determining whether or not the appointment of a national bank as executor in Missouri was in contravention of state law; and, therefore, the Court committed no error in declining to issue its mandamus. First National Bank v. Fellows, 244 U. S. 416; People v. Brady, 271 Ill. 100; Appeal of Woodbury, 78 N. H. 50; First National Bank v. Missouri, 263 U. S. 640; Aquidneck National Bank v. Jennings, 44 R. I. 435.

Opinion:
Mr. Justice Holmes
delivered the opinion of the Court.
The relator, the Bumes National Bank of St. Joseph, was appointed executor by a citizen of Missouri who died on November 27, 1922, leaving a will. The Bank applied to the proper Probate Court for letters testamentary, but was denied appointment on the ground that by the laws of Missouri national banks were not authorized to act as executors. Thereupon it applied to the Supreme Court of the State for a writ of mandamus to the Judge of the Probate Court and an alternative writ was issued. The respondent demurred, the demurrer was sustained and the peremptory writ was denied. 302 Mo. 130. 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.
By the Act of September 26, 1918, c. 177, § 2, 40 Stat. 967, 968, amending § ll(k) of the Federal Reserve Act, the Federal Reserve Board was empowered " 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." If the section stopped there the decision of the State Court might be final, but it adds the following paragraph, "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 power 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.
The question is pretty nearly answered by the decision and fully answered by the reasoning in First National Bank of Bay City v. Fellows, 244 U. S. 416. That case was decided before the amendment to the Federal Reserve Act that we have quoted and came here on the single issue of the power of Congress when the state law was not contravened. It was held that the power " 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." 244 U. S. 420. The power was asserted and it was added that " 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. 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, 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, 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.
The fact that Missouri has regulations to secure the safety of trust funds in the hands of its trust companies does not affect the case. The power given by the act of Congress purports to be general and independent of that circumstance and the act provides its own safeguards. The authority of Congress is equally independent, as otherwise the State could make it nugatory. Since the decision in First National Bank of Bay City v. Fellows, 244 U. S. 416, it generally has been recognized that the law now is as the relator contends. Turner's Estate, 277 Pa. St. 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 Fed. 236.
Judgment reversed.