Court Opinion

ID: 9558173
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:03:45.983559+00
Date Added: 2024-06-11T09:08:25.546374
License: Public Domain

Hill, J.
(dissenting) — I dissent. The result attained by the majority opinion, while probably desirable from the standpoint of public policy, cannot be justified in the existing status of our Washington statutes.
The applicable statutes relating to a conversion from a state bank to a resulting national bank are found where one would expect to find them, in that part of the banking code entitled “Chapter 30.49, Merger, Consolidation, and Conversion.” RCW 30.49.020 states:
A. That this section is applicable where there is to be a resulting national bank.
B. Nothing in the law of this state shall restrict the right of a state bank to convert into a resulting national bank.
C. The action to be taken by such converting state bank, and its rights and liabilities, shall be the same as those prescribed at the time of the action for national banks converting into a resulting state bank by the law of the United States and not by the law of this state, except that a vote *716of the holders of two-thirds of each class of voting stock shall be required for the conversion and that, on the conversion by a state into a national bank, the rights of dissenting stockholders shall be those specified in RCW 30.49.090.
This enactment is part of the comprehensive banking code adopted in 1955. Another chapter of that code is chapter 30.08 “Organization and Powers,” which deals inter alia with how a state bank or trust company is to be organized; and in this chapter is found RCW 30.08.020 which states what shall be included in the articles of incorporation of a state bank or trust company. This section was amended in 1959 to add a seventh item to those matters which the articles of incorporation shall state. The entire section, as amended, is set forth in the addendum to this dissent. It is this seventh item that the supervisor refers to as RCW 30.08.020(7) in his brief and states it to be the “controlling law.” It is said to have placed a further condition on sales, conversions, mergers, and consolidations, i.e., the approval of the supervisor.
It is patently not the law of the state of Washington, as it relates to merger, consolidation, and conversion as found in chapter 30.49. It does not purport to be a law giving the supervisor power to approve or disapprove conversions et al. It is a law relating to what shall he stated in articles of incorporation, no more, no less.
The legislature cannot, by the devious route of requiring certain statements to be included in articles of incorporation, thereby amend RCW 30.49.020, the statute which purportedly states all the requirements of conversion from a state bank to a resulting national bank and makes the federal law applicable thereto.
Neither am I persuaded that when the 1959 legislature used the words “any other banking entity” in the seventh item to be contained in the articles of incorporation of a state bank (see RCW 30.08.020 in addendum), it intended to repudiate what it had said in RCW 30.49.080,1 i.e., that in *717the conversion of a state bank to a resulting national bank the resulting national bank shall be the same business and corporate entity with all of the property rights, powers, and duties of the converting state bank, except as affected by federal law in the case of a resulting national bank and by the charter and bylaws of the resulting national bank.
If Security Bank and the resulting national bank are not the same entity, it must be to the extent indicated by the exception, i.e.,
“. . . except as affected by . . . the federal law in the case of a resulting national bank, and by the charter and bylaws of the resulting . . . national bank.” RCW 30.49.080.
A study of § 30.49.080 satisfies me that it was enacted to make a part of the statute, relative to conversions between state and national banks, what had been earlier pointed out in many decisions.
A conversion of a state bank into a resulting national bank has been referred to as a transition and not a new creation. Coffey v. National Bank of Missouri (1870), 46 Mo. 140, 2 Am. Rep. 488.
The New York Court of Appeals explained why there is no change of entity, in the conversion from a state bank into a resulting national bank, in these words:
“. . . The general scheme of the National Banking Act is that State banks may avail themselves of its privileges and subject themselves to its liabilities, without abandoning *718their corporate existence, without any change in the organization, officers, stockholders, or property, and without interruption of their pending business or contracts. All property and rights which they held before organizing as National banks are continued to be vested in them under their new status. Great inconveniences might result if this saving of their existing assets -did not include pending executory contracts, and pending guarantees, as well as vested rights of property. Although, in form, their property and rights as State banks, purport to be transferred to them in their new status of National banks, yet in substance there is no actual transfer from one body to another, but a continuation of the same body, under a changed jurisdiction. As between it and those who have contracted with it, it retains its identity, notwithstanding its acceptance of the privilege of organizing under the National Banking Act.” City Nat. Bank of Poughkeepsie v. Phelps (1884), 97 N. Y. 44, 50, 49 Am. Rep. 513.
It is significant that the statute (RCW 30.49.080) which provides that a resulting state or national bank shall be the same business and corporate entity as each merging state or national bank, or as the converting state or national bank, is applicable only where the transition is from a state to a resulting national bank or vice versa.
I cannot but believe that the legislature did have this “same entity” concept in mind when it made its 1959 amendment to RCW 30.08.020 and, by its reference to “any other banking entity,” intended to exclude state banks converting to a resulting national bank, or national banks converting to a resulting state bank.
It seems to me that chapter 30.49 and, particularly RCW 30.49.020 and .080 govern the present situation and that the Security Bank is entitled to a decree so stating.
For the reasons heretofore indicated, I dissent.
Donworth and Finley, JJ., concur with Hill, J.
*719September 16, 1964. Petition for rehearing denied.

“A resulting state or national bank shall be the same business and corporate entity as each merging state or national bank or as the *717converting state or national bank with all property, rights, powers and duties of each merging state or national bank or the converting state or national bank, except as affected by the state law in the case of a resulting state bank or the federal law in the case of a resulting national bank, and by the charter and bylaws of the resulting state or national bank.
“A resulting state or national bank shall have the right to use .the name of any merging state or national bank or of the converting bank whenever it can do any act under such name more conveniently.
“Any reference to a merging or converting state or national bank in any writing, whether executed or taking effect before or after the merger or conversion, shall be deemed a reference to the resulting state or national bank if not inconsistent with the other provisions of such writing. [1955 c 33 § 30.49.080. Prior: 1953 c 234 § 8.]”