Court Opinion

ID: 3393856
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:58:00.980588+00
Date Added: 2024-06-11T13:14:41.591590
License: Public Domain

Section 1 of Chapter 9287, Acts 1923, makes it unlawful for any corporation or association to exercise any of the trustfunctions now prescribed *Page 95 
by the laws of Florida to be exercised by Florida Trust companies, or to exercise any of the duties, powers or enjoy the emoluments, profits or benefits which may be granted, or may have been heretofore granted, by the Legislature of Florida to corporations or associations chartered as Florida trust companies.
The "trust functions" of Florida trust companies are defined and enumerated in the statutes of Florida relating to Florida trust companies. Section 6126 C. G. L., 4185 R. G. S., as amended by Section 27, Chapter 13576, Acts of 1929. The powers enumerated include the execution of all kinds of specific trusts, the acting as a fiscal or collecting agent for others in a trust capacity, and the transaction of any function with regard thereto that is of a trust character. Under Chapter 9287, Acts 1923, the corporate performance of such enumerated trust functions, except by Florida trust corporations, is forbidden by law.
In this case the complainant below was a foreigncorporate trust company. It had no license or privilege to do a corporate trust business in Florida and was expressly forbidden by law to ever perform any trust "function" in this State that is within the purview of the Florida trust company Acts.
The right of a corporation to represent another in a trust capacity and to sue for such other as a plaintiff trustee is undoubtedly a "trust" function. Thus in Richards v. South Florida Mtge. Co., 102 Fla. 313, 136 Sou. Rep. 393, it was recognized by this Court that where a foreign corporationhad no interest in the subject matter of a foreclosure suit, it was forbidden by law to act as fiscal agent or trustee for another corporation in maintaining a suit in its own name as trustee, to enforce a mortgage wherein the real party in interest was a corporate cestui que trustent, for which such *Page 96 
foreign corporation was attempting to act in a trust capacity.
No foreign corporation has a right to sue in the courts of Florida as a matter of absolute right. Whatever right it may ever have rests upon the comity of states. And where a state statute provides that comity in a certain particular shall not be recognized, such statute is controlling as against the right of a foreign corporation to sue. 12 Rawle C. L. 10; 14 A. C. J. 1356; 12 Rawle C. L. 98-99.
The Legislature of Florida in enacting Chapter 9287, Acts 1923, Laws of Florida, settled the public policy of this State by providing that no right should be recognized in a foreign corporate trust company to maintain, as trustee, in the courts of this State, a suit to foreclose a mortgage held by it,not as its own property, but solely in a trust capacity for some one else as the real party in interest.
In this case it appears that the Toledo Trust Company is a foreign corporation. As such it has attempted to come into the Circuit Court of Polk County, Florida, admittedly in itscapacity as trustee on behalf of another, Katherine M. Kinsey, who is shown to be the real party in interest.
The Toledo Trust Company by so doing, is unquestionably performing a forbidden "trust function" in this State that can not be performed by a foreign trust company in view of Chapter 9287, Acts 1933, supra, in that it is functioning as a litigant in this State in its trust capacity, and is also acting in this State as a fiscal agent for Katherine M. Kinsey in the collection of money by means of this suit to enforce the mortgage owned by Mrs. Kinsey.
And in this proceeding no pretense is made that the Toledo Trust Company has any interest in the mortgage being foreclosed, except the interest that any corporate trustee for hire has in the performance of corporate trust *Page 97 
functions for its customers presumptively in consideration of the trust fee usually charged for whatever trust service it performs.
The fact that the Toledo Trust Company, as a foreign corporation, had turned over to it in Ohio the notes and mortgage involved in this suit, does not obviate the fact that, in attempting thereafter to enforce them by foreclosure in the Court of Florida not as owner, but in its capacity as trustee, is the exercise of a trust function in Florida where the suit must be conducted, the money is to be collected and a fiscal management exercised by it over the trust necessarily involved.
Where a person creates a trust and empowers a trustee to enforce a mortgage debt as a feature of that trust, it is clear that the foreclosure of the trust mortgage will be the exercise of a trust function on the part of the trustee, where it can have no justiciable interest in such mortgage except to bring suit on it in a representative capacity. Hence it must necessarily follow that one undertaking to sue as trustee is engaged in the exercise of a trust function that is a part of the execution of the trust relationship out of which the power to sue must arise. And since a mortgage on real estate can only be foreclosed in the State where the mortgaged real estate is situate, it follows that in order to maintain suit for foreclosure of such mortgage the trustee complainant in foreclosure must have a recognizable status as a trustee in the State where the suit is to be brought, in order to maintain a foreclosure suit at all.
The Toledo Trust Company knew that as a foreign corporation it could not lawfully exercise the trust function of bringing suit to foreclose a mortgage in Florida in its capacity astrustee. Therefore it should have declined the trust insofar as it involved an attempt to bring foreclosure *Page 98 
on the mortgage involved, or applied to the courts of Florida to name a domestic trustee to maintain the suit on a showing of its own inability to perform the trust function of suing as a corporate trustee in the Florida Courts.
The statutes of this State relating to trust companies were passed to prevent the very thing that is now being attempted to be justified on the part of the Toledo Trust Company. To sustain its assumption to act in this case in effect nullifies the beneficent purposes of Florida trust company statutes, withdraws from the protection of domestic trust companies the protection which they are entitled to have in consideration of the heavy burdens of regulation placed upon them as a condition precedent to compliance with Florida laws, and leaves the way open for foreign trust companies, subject to no Florida regulation, making no Florida deposits of securities, consenting to no service of process from the courts of this State upon them, and in direct evasion of our trust and banking laws, to maintain suits in Florida Courts in their capacity as trustees, which in many instances would constitute the only function of a trust character that any foreign corporation dealing at long range in unregulated competition with Florida banks and trust companies would ever have to actually transact in this State to enjoy the profits of a mortgage trustee business.
My view is that the State of Florida has the constitutional right to close the doors of its courts against the recognition of foreign corporations as litigants when they undertake tolitigate on behalf of others in their capacity as trustee forhire, and not in any lawful right of their own sought to be asserted as holder of an enforcable obligation.
I can see no justification for judicially frittering away the statutory prohibitions on this subject against foreign corporations acting for others as trustee in making themselves *Page 99 
the complainants in our courts to enforce rights on behalf of their paying clients.
I think the decree appealed from is erroneous and should be reversed with directions to dismiss the suit without prejudice to its reinstitution in the name of a proper party complainant.
BROWN, J., concurs.
                          ON REHEARING.