Court Opinion

ID: 7949138
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:24:22.957437+00
Date Added: 2024-06-11T16:34:00.729601
License: Public Domain

Osteandee, J.
(concurring). If at any time in this State only individuals could execute trusts, manage trust fúnds, and act as executors and administrators of estates of deceased persons, it was because there had been created no corporation with the proper powers. It was within the power of the legislature to create, or provide for creating, such corporations, and, as the idea of corporate usefulness and efficiency became general, the legislature did provide for creating corporations with the necessary powers. Having provided for the creation of such domestic corporations, foreign corporations, having proper powers, may, upon such reasonable conditions as the legislature may prescribe, be admitted to do in this State what domestic corporations may do.
There is therefor no State policy opposed to corporate trustees, executors, or administrators. No corpo*651ration, and for that matter no individual, can in any event act in any of the capacities indicated except by appointment. And a corporation or an individual in such relations is governed by the laws of the State and the orders of State courts.
National banks are, and are not, foreign corporations. They are creatures of Congress, agencies of the Federal government, domesticated in the State. They may sue and be sued in the courts of the State, but the powers they shall possess, their management and control are beyond State authority, except that a bank like the respondent may not exercise certain powers —cannot lawfully possess them — in contravention of State law.
No State law is contravened — opposed, come into conflict with — because a corporation exercises the indicated powers, nor by the act of Congress creating national banks. The legislature has not declared that national banks in this State shall not have the right “to act as trustee, executor, administrator, or registrar of stocks and bonds.” U. S. Comp. Stat. 1913, § 9794 (k) (38 U. S. Stat. 262). And I do not find in Brother Brooke’s opinion reference to any State law that will be contravened if respondent continues to act in the indicated capacities. To say that because the legislature has required certain things of a domestic corporation as a condition to the exercise of the right, and cannot require the same or similar things from national banks, therefore the exercise of the right by national banks will be in contravention of State law, seems to me to be an unsound argument. The bank is here with such structure as Congress has given it, and Congress has in terms declared that, among other functions, it may perform that of a trustee, etc., if anybody wants it to. The mere element of safety of a fund is a matter to be considered by those applying to the corporation to take charge *652of it, or by the court making an appointment. That one may regard the domestic corporation as the safer institution is not evidence that the other, if it acts, acts in contravention of State law. Certain safeguards surrounding the execution of trusts, etc., by domestic corporations are lost when individuals are appointed to execute them. The individual does not therefore act in contravention of State law.
Mr. Justice Beooke does not point out in what way, if respondent acts within' its apparent powers, the operation of any State law governing trusts, or the settlement of estates, will be interfered with. I am not content to rest so important a decision upon a doubtful inference. We must come, I think, to the question: Has respondent the power which the court is informed it is exercising? The question is a delicate one, less so, I think, because of the decisions of the Federal court. The power of Congress to create national banks is sustained upon the theory that a bank, to the government,
“is a convenient, a useful, and essential instrument in the prosecution of its fiscal operations.” M’Culloch v. State of Maryland, 4 Wheat. 316.
“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 connection 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 purposes. It has never been supposed that Congress could create such a corporation. * * * Why is it, that Congress can incorporate or create a bank? This question was answered in the case of M’Culloch v. State of Maryland. It is an instrument which is ‘necessary and proper’ for carrying on the fiscal operations of government. Can this instrument, on any rational calculation, effect its object, unless it *653be endowed with that faculty of lending and dealing in money, which is conferred by its. charter? If it can, if it be as competent for the purposes of the government without as with this faculty, there will be much difficulty in sustaining that essential part of the charter. If it cannot, then this faculty is necessary to the legitimate operations of government, and was constitutionally and rightfully ingrafted on the institution. * * * The operations of the bank are believed not only to yield the compensation for its services to the government, but to be essential to the' performance of those services. Those operations give its value to the currency in which all the transactions of the government are conducted. They are, therefore, inseparably connected with those transactions. They enable the bank to render those services to the nation for which it was created, and are, therefore, of the very essence of its character, as national instruments. The business of the bank constitutes its capacity to perform its functions as a machine for the money transactions of the government. Its corporate character is merely an incident, which enables it to transact that business more beneficially.” Osborn v. Bank, 9 Wheat. 738.
See, also, Farmers’, etc., Bank v. Dearing, 91 U. S. 29.
Undoubtedly all presumptions are in favor of the constitutionality of the act in question here, and Congress is the judge, within the exercise of its powers, of the functions a national bank should perform. 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 con-, nection between the business of banking and the carry*654ing on of Federal fiscal operations. There is none apparently between such operations and the business of settling estates or acting as a 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.
I concur, therefore, in the conclusion arrived at by Mr. Justice Brooke.
Stone, C. J., and Kuhn, Bird, Steere, and Person, JJ., concurred with Ostrander, J.
MOORE, J. I think the writ ought to be granted for the last reason stated by Justice Ostrander.