Court Opinion

ID: 9418516
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:29:10.041965+00
Date Added: 2024-06-11T17:22:04.713128
License: Public Domain

*662Mr. Justice Van Devanter,
dissenting.
■ I am constrained to dissent from the opinion and judgment just announced.
National banks are corporate instrumentalities, of the United States created under its laws' for public purposes essentially national in character and scope. Their powers are derived from the United States, are to be exercised under its supervision and can be neither enlarged nor restricted by state laws. The decisions uniformly have been to this effect and have proceeded on principles which were settled a century ago in the days of the Bank of the United States.
In McCulloch v. Maryland, 4 Wheat. 316, where the status of that bank was drawn in question and elaborately discussed, this Court reached the conclusion that the Constitution invests the United States with authority to provide, independently of state laws, for the creation of banking institutions, and their maintenance at suitable points within the States, as a means of carrying into execution its fiscal and other powers. Chief Justice Marshall there dealt with the respective'relations of the United States and the States to such an instrumentality in a very plain and convincing way. Among the other things, he said:
(p. 424) “ After the most deliberate consideration, it is the unanimous and decided opinion of this court, that the act to incorporate the Bank of the United States is a law made in pursuance of the constitution-, and is a part of the supreme law of the land.”
(p. 427) “ It is of the very essence of supremacy to remove all obstacles to its action within its own sphere, and so to modify every power vested in subordinate governments, as to exempt its operations from their influence. This effect need not be stated in terms. It is so involved in the declaration of supremacy, so necessarily implied in it, that the expression of it could not make it more certain.”
*663(p. 429) “ The sovereignty of a State extends to every-. thing which exists by its own authority, or is introduced by its permission; but" does it extend to those means which are employed by Congress to carry into execution powers conferred on that body by the people of the United States? We think it demonstrable that it does not. Those powers are not given by the people of a single State. They are given by the people of the' United States, to a government whose laws, made in pursuance of the constitution, are declared to be supreme.”
In Osborn v. Bank of the United States, 9 Wheat. 738, there was drawn in question the validity of a state statute which, after reciting that the bank had been pursuing its operations contrary to a law of the State, provided that if the operations were continued the bank should be liable to specified exactions, called a tax. The statute was held invalid, the Court saying:
(pp. 860, 861) “ The Bank is not considered as a private corporation, whose principal object is individual trade and individual profit; but as a public corporation, created for public and national purposes. That the mere business of banking is, in its own nature, a private business, and may be carried on by individuals or companies having no' political connexion with the government, is admitted; but the Bank is not such an individual or company. It was not created for its own sake, or for private piirposes . . . It is an instrument which is * necessary and proper ’ for carrying on the fiscal operations of government.”
The later legislation of Congress under which national banks are created and maintained stands on the same constitutional plane.' When its validity has been assailed, ov' its operative force in a State questioned, the cases just mentioned have been regarded as settling the principles to be applied.
In Farmers’ and Mechanics’ National Bank v. Dearing, 91 U. S. 29, 31, the Court referred to those cases, pro*664nounced their reasoning applicable to the later legislation, and said:
(pp. 33-34) The national banks organized under the act are instruments designed to be used to aid the government in the administration of an important branch of the public service. They are means appropriate to that end. . . . Being such means, brought into existence for this purpose, and intended to be so employed, the States can exercise no control over them, nor in any wise affect their operation, except in so far as Congress may see proper to permit. Any thing beyond this is ‘ an abuse, because it is the usurpation .of power which a single State cannot give.’ ”
To the same effect are Easton v. Iowa, 188 U. S. 220, 230, 237; Van Reed v. People’s National Bank, 198 U. S. 564, 557; First National Bank v. Union Trust Co., 244 U. S. 416, 425; and First National Bank v. California, 262 U. S. 366, 369. Of special pertinence are the following excerpts from Easton v. Iowa:
(p. 229) “ That legislation has in view the erection of a system extending throughout the country, and independent, so far as powers • conferred are concerned, of state legislation which, if permitted to be applicable, might impose limitations and restrictions as various and as numerous as the States.”
(pp. 231-232) “ It thus appears that Congress has provided a symmetrical and complete scheme for the banks to be organized under the provisions of the statute.
“ It is argued by the learned Attorney General on behalf of the State of Iowa that‘ the effect of the statute of Iowa is to require of the officers of all banks within the State a higher degree of diligence in the discharge of their duties. It gives to the general public greater confidence in the' stability and' solvency of national banks, and in the honesty yand integrity of their' managing officers. It enables them better to accomplish the purposes and designs. *665of the general government, and is an aid, rather than impediment, to their utility and efficiency as agents and in-strumentalities of.the United States/
“ But. we are unable to perceive that Congress intended to leave the field open for the. States to attempt to- promote the welfare and stability of national banks by direct legislation. If they had such power it would have to be exercised and limited by their own discretion, and confusion would necessarily result from control possessed and exercised by two independent authorities.”
It must be admitted that, in so far as the legislation of Congress does not provide otherwise, the general laws of a State have the same application to the ordinary transactions of a national bank, — such as incurring and discharging obligations to depositors, presenting drafts for acceptance or payment and giving- notice of their dishonor, taking pledges for the repayment of money loaned, and. receiving or making conveyances of real property, — that they have to like transactions of others. But not so of questions of corporate power. As explained in Easton v. Iowa and other cases, their solution must turn on the laws of .the United States under which the.bank is created.
National banks, like other corporations, have such powers as their creator confers on them, expressly or by fair implication, and none other. Thomas v. West Jersey R. R. Co., 101 U. S. 71, 82; Logan County National Bank v. Townsend, 139 U. S. 67, 73. Powers not so conferred are in effect denied; a prohibition is implied from the failure to grant them. First National Bank v. National Exchange Bank, 92 U. S. 122, 128; California Bank v. Kennedy, 167 U. S. 362, 367. In shqrt, all the powers of a national bank, like its right to exist at all, have their source in the laws of the United States. Only where .those laws bring state laws into the problem, — as by enabling national banks to act as executors, administrators, etc., where that is permitted by state laws, — can the latter have *666any bearing on the question of corporate power — the privileges which the bank may exercise. First National Bank v. Union Trust Co., 244 U. S. 416.
The proceeding now .before us is an information in the nature of quo warranto brought in the Supreme Court of Missouri, whereby that State challenges the power of a national bank in the City of St. Louis to conduct a branch bank established by it in that city and asks that the bank be ousted from that privilege on the grounds, first, that establishing and conducting the branch is a violation of the bank’s charter powers, and, secondly, that it is prohibited by a law of. the State.
It is not claimed that the laws of the United States contain any provision whereby the privilege asserted by the bank is made to depend on the will or legislative policy of the State; nor do they in fact contain any such provision. Whether the bank has the privilege which it asserts is therefore in no way dependent on or affected by the state law, but turns exclusively on the laws of the United States. If they grant the privilege, expressly or by fair implication, no law of the State can abridge it or take it away. And if they do not grant it, they in effect prohibit it, and no law of the State can strengthen or weaken the prohibition. In either event nothing, can turn on the state law. It simply has no bearing on the solution of the question.
In this situation the State is not, in my opinion, entitled to maintain the proceeding. It has no distinctive right to protect, nor any applicable law to vindicate or enforce. The proceeding is one which may be maintained only in the public right. Here the State is not authorized to represent or to speak for the public. The bank is not a creation and instrumentality of the State, but of the National Government. Its presence in the State is attributable to the national power, not to the State’s permission. Whether the bank shall be kept within its legitimate powers and made to discontinue any departure from or abuse *667of them is a matter in which the people of all the States have the same interest, the bank being a national creation and instrumentality. The people of Missouri merely share in the common interest. “ In that field it is the United States, and not the State, which represents them as parens patriae, when such representation becomes appropriate; and to the former, and not to the latter, they must look for such protective measures as flow from that status.” Massachusetts v. Mellon, 262 U. S. 447, 486. It therefore is apparent that the State is here mistakenly appropriating to itself a function which belongs to the United States.
In Tarble’s Case, 13 Wall. 397, 407, which possessed features making it particularly pertinent here, this Court pointed out the distinct and independent character of the national and state governments, within their respective spheres, and in that connection said:
“ Neither can intrude with its judicial process into the domain of the other, except so far as such intrusion may be necessary on the part of the National government to preserve its rightful supremacy in cases of conflict of authority. In their laws, and mode of enforcement, neither is responsible to the other. 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 officer's, are matters subject to their own control, and in the regulation of which neither can interfere with the' other.”
Another case apposite in principle is Territory v. Lockwood, 3 Wall. 236. It was a proceeding in the nature of quo warranto brought by the Territory of Nebraska to test the defendant’s right to hold a federal office in the Territory which he was charged with unlawfully usurping. This Court disposed of the matter by saying, p. 239:
“ The right of the Territory to prosecute such án information as this would carry with it the power of amotion *668without the consent of the government from which the appointment was derived. This the Territory can ^.o more accomplish in one way than in another. The subject' is as much beyond the sphere of its authority as it is beyond , the authority of the States as to the Federal .officers whose duties are to be discharged within their respective limits. The right to institute such proceedings is inherently in the Government of the nation.”
With great deference, I think the judgment below should be reversed on the ground that the State is without capacity to bring or maintain this proceeding, and the court below without authority to entertain it.
The Chief Justice and Mr. Justice Butler authorize mé to say that they concur in this dissent.