*1 TERM, 1923. . OCTOBER .. Syllabus. 263 U.S. be asserted claims means of a cross- libel.10 Thé answer to the of the Circuit Court No. Appeals FIRST NATIONAL BANK IN ST. LOUIS v. STATE AT THE
OF MISSOURI INFORMATION OF BAR RETT, ATTORNEY GENERAL.
ERROR TO COURT OF THE THE SUPREME STATE OF MISSOURI. Argued May 7, 1923; reargument No. 252. restored to docket for May reargued 21, 1923; 21, 22, January November 1923. Decided 28, 1924. subject
1. National banks are to state laws that do not interfere with destroy purposes creation, impair of their tend their effi- ciency agencies, as conflict federal with the laws of the United States. P. 656. powers expressly granted by
2. National banks can exercise
federal statutes and such incidental
as are
to the
they
conduct of the business for
are established.
Id.
subject
litigátion
parties
upon equal
same
both
should stand
terms
regards security.
designed,
It was
where the libelants in a suit iri
rem, through
property,
security
the arrest
exact and obtain
personam
demand,
their own
in a
cross-suit
for a counter
respect
subject
litigation,
claim in
to the same
the defendants in
security
the former suit should likewise be entitled to
pay-'
for the
demands,
their
in case the decision
upon
ment of
of the court
controversy
point in
should be in their favor.
designed
The rule was
injustice
inequality
process
correct the
court
rem
security
being
party,
in favor of
used to
one
in reference to a
obtain
single subject
dispute,
while it was denied to the other.”
10Compare
135, 141;
Bowker v. United
Vianello v.
Lyonnais,
637;
B. Sanford,
863;
15 Fed.
The
The Credit
C.
Fed.
296;
Electron,
689;
Zouave, 29 Fed:
48 Fed.
The
Genthner v.
The
797;
Highland Light,
Wiley,
296; George
85 Fed.
The
88 Fed.
D.
Emery
Trading Co.,
144;
143 Fed.
Venezuela,
Co. v. Tweedie
The
Transp. Lighterage
834;
Fed.
United
&
Co. v. New York & Baltimore
Transp. Line,
902;
386;
180 Fed.
Alliance,
Fed.
FIRST NATL. BANK v. MISSOURI. Argument for Plaintiff in Error. Law, power 3. Under the National Bank to establish branches Stats., 5134, 5190, withheld.. P. 657. Rev. §§ *2 The 4. cannot be as an-incidental Rev. power, sustained under Stats., 5136; multiplication places for the mere where the may a bank be not a incident of exercised is statute, business; and, power which moreover,.a the the by incidentally. construction, denies, fair cannot exist 659. P. application prohibiting A 5. state statute branch banks valid in bank; purpose a national for which for does-not frustrate discharge created, the bank was of its duties interfere with the efficiency agency. to the Government, impair as a federal ' Id. prohibition may by State, 6. The Such form of enforced procedure appropriate, this case an deem State —in quo information in the nature of warranto. P. 660. n 297 Mo. affirmed. Missouri, to a Court of .judgment Supreme Error ousting plaintiff operating error from branch warranto, in-- bank, quo in a the nature of proceeding Attorney at information her stituted State restoring For the order the case to General. docket ' ' 262 for see U. S. 732. reargument, Severance, A. H. C. with Mr. Frank Sullivan 'Mr. Cajones, Lon Frank B. Mr. James Mr. Kellogg, Mr. whom Hughes Hocker, Eugene Angert Mr. H. and Mr. 0. Wm..J. in error.1 brief, plaintiff on were - bring proceedings without I. The national bank with by a compliance charter. the National instrumentalities National banks 316; 4 Wheat. Maryland, v. 'McCulloch Government. 262 U. California, S. First National Bank-Y. prerogative this kind is A proceeding Kansas, v. Ames corporation. which created sovereign Lockwood, 3 236; Wall. Mc- Territory 460; v. 111 U. S. 1 plaintiff in hearing, on behalf argued, at the first was case Hughes Angert Jones, Hocker, error, by Mr. Sullivan. Messrs. ' the brief. also on were with hinji
74308° —24-41 642 TERM,
Argument for Plaintiff Error. 263 U. S. Silliman, 6 Clung First National Bank v. 598; v. Wheat: Co., Union Trust People’s Van Reed v. 244 U. Na- 427; S. Bank, Mellon, tional Massachusetts v. 554; 262 Taylor, Terrett 447; S. v. 9 Cr. 51; v. California Pacific Co., R. R. Hale v. Henkel, U. S. Mc- 1; 201 43; Maryland, Culloch Osborn v. Wheat. v. 316; United Bank Minnesota, Farmers 738; Wheat. v. n 232 IT. S. 516. (cid:127) The proper relations between our dual governments it impossible make that a State should possess power. supra; Booth, Ableman v. Authorities How. 518; Case, Davis, Tarble’s Tennessee 13 Wall. U. S. 257. of charter enforcement limitations on national
banks is is- citizens because it the function of denied *3 Matthews, Bank Government. National National v. Whitney, National Bank v. 98 IT. 621; S. 103 99; IT. S. Reynolds Bank, 112 v. IT. S. 405. Crawfordsville in
Such
cannot exist
the States without a sacri-
uniformity
fice of the
which was
one of
purposes
Iowa,
National Bank Act. Easton v.
State courts have here under con- Curtis, State Bowen, State v. 374; 35 sideration. v. Conn. Guthrie, Utah, 8 Car. Harkness v. 27 400; S. affd. 199 Cincinnati, Co., etc., Ry. 47 State 148; v. Oh. U. S. St. 130. A attempting II. to limit or state statute define the of a powers national bank invalid. legislation
It is only general State which is bind- Commonwealth, on national banks. National Bank v. ing 353; Bank, v. Elmira Savings Davis 9 275; Wall. 161 U. S. BANK
FIRST NATL. v. MISSOURI. Argument for Plaintiff in Error. Chipman, 347; 164 U. First National .McClellan v. S. 366. California, v. S. Bank U. bank, defined- the Congress, having powers not
has, doing, implication, so excluded those legisla- the entire field of conferred, occupied and hence Co., v. subject. tion on that Thomas Railroad 101 U. S. Louis, etc., Co., R. R. R. R. v. St. 71; Pennsylvania Co. Co., Pullman's v. Car 290¡Central Transp. 118 U. S. Co. Exchange Í39 U. S.- Bank v. 24; First National National Bank, 92 S.U.
State in definition na- of a legislation, tional conflicts ex- bank, necessarily regulations, with Iowa, press prescribed by Congress. Easton v. implied, 220; Dearing, Farmers’ & Mechanics’ v. Kennedy, 362; Bank v. S. 29; U.. California California, supra. First National Bank v. the manner defining which statutes from enjoyed gen- shall their franchises banks exercise invalid because the government sovereignty eral McCulloch far extend to them. State does not so v.. States, supra. v. Bank United Maryland, supra; Osborn of visitatorial which the exercise Such statute is has, Congress pertains exclusively Congress, Guthrie legislatures. to state terms, forbidden 21, 38 6,c. Stats., 5241; Rev.- Harkness; 199 S. § Stat. functions, of its bank, corporate
III.
in the exercise
city
single building
limited to a
not
*4
privi-
not a
right,
a natural
does business. Banking
517;
Earle, 13 Pet.
Augusta v.
lege. Bank
276;
Leav-
Francisco, 142 Cal.
Curtiss v.
v. San
California
itt,
Except as
jurisdic-
within
point
at
conduct its business
Fletcher,
2
gives it.being..
sovereign
tion
Trus-
Lloyd’s
cited;
and cases
806,
21,
c.
Corporations,
§
644 Argument in Error. 263 Plaintiff U. S. hgre The function in- is within the incidental of- national forbidden Congress. bank unless Bank, Exchange First National hank v. National 92 S.U. 122; Co., Bay Oreen R. R. Co. v. Union Steamboat 107 U.-S.98. Statutes, 5134,
Revised
deals
with the
town
city,
§
ór
village designated
and not
charter,
with
place
city,
business within the
town or
McCormick
village.
Bank,
108;
v. Market
162 Ill.
s. c.
U.
165
S. 538.
Revised
not limit a
Statutes,
5190, does
national bank
J
to a
office for the transaction
single
Mer-
business.
Bank,
chants’ Bank
IV.
no
There has been
departmental construction which
be permitted
can
to control the construction of the statute.
Studebaker
184
Perry,
258;
Pugh,
U. S.
United States v.
265;
States,
99 U. S.
v. United
Hahn
U.
402;
S.
Swift
States,
Co. v. United
691;
105 U. S.
United States v.
Graham, 110 U.
219;
Cameron,
S.
Merritt v.
542;
United
v. Healey,
States
136;
S.
Louisville & Nash-
ville R.
Kentucky,161
R. Co. v.
677;
Wisconsin Cen-
tral R.
R. Co. v. United
V.' has been no binding congressional interpre- Rev. Stats., §5155; tation. c. 71, 33; 864, Stat. c. 21, 31 1444; 156, Stat. c. 62; Stat. ofAct April § 147, 42 400; c. Stat. Postmaster-General v. Early, Claflin, 546; Wheat. United States v. 97 U. S. Endlich, Interpretation (ed. of Statutes, 1888), 372. Beck,
Mr. Solicitor General with whom Mr. George Ross Hull Mr. Charles W. Collins were on the brief, for the States, by special leave of Court, United as amici curiae. *5 MISSOURI. BANK v. NATL.
FIRST Argument for the United States. .640 in the Comptroller The National vests Bank Act the, na- operations all Currency supervise to power bring him suit to tional authorizes banks, and specifically charter forfeiture of the for the the United States courts any provision violates bank which (cid:127) Stats., Rev. powers. act-and its corporate thus exceeds Fed- by the as amended Statutes, Revised § the Comp- Act, 271, intends eral Resérve Stat. .§21/38 ” ob- to enforce troller shall have the visitatorial Bank Act. servance of the National exercise attempt These obvious proceedings an visitatorial powers. may inquire by tyuo warranto
The United States alone acted such, has bank, operating a national whether corporate powers. excess of its and a corporation a pretended between distinction clear; is misuses its franchise legal corporation corporate privilege restrain the abuse instru- subject a federal visitatorial, and, essentially subject of a is to mentality to the visitatorial the rule of two masters —and instrumentality to a federal forbids. No other case has this, system government our has success- sovereign one attention wherein come to our to de- its own courts warranto attempted by quo fully Stand- by another. granted limits of a franchise fine -the This Missouri, distinguished. Oil Co. v. ard authority of by the paramount in Missouri Maryland, Wheat. 316. McCulloch v. States. United a high .of quo preroga- writ warranto was The .ancient for the right sovereign, nature of a writ writ tive any office, franchise, or claimed usurped one who against Crown, inquire by what he authority liberty Com., 262; High, 3'Black. Extraordi- right. claimed ed., 544. The Remedies, sovereign 3d alone nary Legal a franchise, hold how it should should who inquire might exceeded, had been or when limits exercised, when TERM, 192.3. Argument for the United States. exercise been had abandoned. The a purely writ was
civil
proceeding.
course
time
it was superseded
*6
the speedier remedy of an information in the
of
nature
v,
warranto.
quo
Territory
Lockwood, Wall.
This-
3
236.
criminal
proceeding was
in character
led
judgment,
not
of ouster, but of a fine for the usurpation.
Missouri,
Standard Oil Co.
224
v.
270.
In
S.
either
the
proceeding, however,
king was
person aggrieved,
were,
and it was
his initiative that the
upon
actions
begun.
When our Republic was formed with a dual sovereignty,
the Nation and the
constituent
each in their re-
spective spheres, succeeded to this prerogative of the
question
Crown. The
as what authority
may inquire
into
of a
exercise
federal office or franchise is
en-
not
tirely new in
Court.
Anderson,
this
Wallace v.
5 Wheat.
291;
v.
Territory
Lockwood, 3 Wall.
And
236.
see State
Curtis,
v.
National
organized
banks
under the National Bank Act
be
designed
instruments
used
aid the
Federal
Government
in the administration of
powers.
Davis
Savings Bank, 161
275;
v. Elmira
U. S.
McCulloch v.
4
Maryland,
316;
Wheat.
Osborn v.
United
States,
judicial, control Davis, Federal Tennessee v. diction Government. 100 U. S.
FIRST NATL. BANK v. 647 MISSOURI. Argument for 640 the United States.
Many cases have arisen where held state persons by authorities have been discharged the federal courts on the ground that act complained done under was n authority the United process courts, States state court was, therefore, jurisdic- without Fullhart,. tion. In re Neagle, 1; 135 U. S. United States v. 47 802; Fed. Ex 48 parte 77; Kelly Fed. Conway, Georgia, 68 In Waite, Fed. re 81 652; 359; Fed. affd. 88 In 102; Lewis, Thomas, Fed. re 82 Fed. In re 159; Fed. 304; 453; Weeks, affd. Fed. In 276; re 82- In 729; Comingore', Fed. re 552; 96 Fed. affd. 177 U. S. 459; Fair, In re Elliott, 149; Fed. Anderson v. 10T Fuellhart, Fed United 609; 911; States v. In re Fed. Turner, Matthews, 122 248; 119 Fed. In re Fed. re *7 Gillette, 127 Laing, parte Fed. Ex 213; 65; Drury 156 Fed. v. Lewis, Woo<d, 200 1; 205; U. S. Hunter v. 209 U. S. Pendleton, clearly Pundt 167 Fed. The principle v. 997. applies national Maryland, supra. banks. McCulloch v.
Congress
by
power
courts,
has vested no
state
quo
of na-
otherwise,
operations
warranto or
to control
tional
has
contrary,
expressly
banks. On the
it
forbidden
it.
22
Act of
July 12, 1882,
290, 4,
163;
Act
c.
Stat.
§
August 13,
866,
Stats.,
1888,
.§4,
436;
c.
25 Stat.
Rev.
Cooper,
v.
120 U.
5239; Leather
Bank
§
Manufacturers’
Bank,
S.
142
778;
644;
Petri v.
U. S.
Guthrie
Commercial
n
Harkness,
v.
199
U. S.
exercise of
If
a
for the
prescribes
penalty
the state law
any
a
bank
is not authorized
power by
national
of the United
national bank is not
laws
subject
& Mechanics’
penalty.
to such
See Farmers’
Bank,
Bank Dearing,
v.
91 U. S.
Haseltine v. Central
Gadsden,
183
132; Schuyler
National
v.
'
U. S. 451.
Vesting
To construe
in the state
this
statute
Missouri
any
right
courts
trans-
to determine whether
business
law,
a
acted
violation
a national
constitutes
bank
TERM,
thje
S.
Argument for
United States.
.with;
Stats.,
Rev.
5239,
conflict
bring
would
in direct
the Cur-
Comptroller
vests this
power
whióh
court.
suit in a United States
rency
to be exercised
.Savings
Davis v. Elmira
There is no
between
analogy
U. S.-
Bank,
275,
Chipman,
and McClellan
situation results
case. A different
present
and the
a national
authorizes
Congress expressly
an act of
where
exercise of
when the
power
to exercise a particular'
local law.”
of state or
in contravention
such
is “not
by quo
proceedings
case the
court
warranto
state
determining
for the
may'
jurisdiction
purpose
assume
question
contravenes
whether the exercise
Fellows,
any-laws of the State. First National Bank v.
Were this case ground argument whether, under §§ intended restrict Stats., was Rev. bank-in ” “ banking one house its usual business one locality, thereby meaning whettkx place,” geographical bank has the national town, village, city, now ,seem been But this does hot located. years department For the executive fifty over be open. consistently held, as matter Government has of a bank- business” administration, the/“usual (cid:127) single in a must transacted ing association building; and administrative well-defined ...this has not additional.weight, construction the law *8 has, by ac- Congress supplemental legislation, because which, in in in- by passing exceptional law's quiesced but banks, authorized branch also because the stances, have, has branch been agitation right for the banks Congress has many years, carried on refused*to ..Ops. Atty. See 29 Gen. 81. authorize such branches. the is used in the National bank, branch as term A Attorney the office of Act, the General and Currency, tiie of the. Comptroller partakes nature NATL. BANK FIRST MISSOURI. - Argument for the United States.
of a primary organization,; practical operations, a com- —in plete substitute for a local bank in .the locality serves. It is to an many purposes intents and additional bank under the directors, closely same board of associated with the in parent bank, operating but matters in- most dependently. Considering in Stats., light Rev. the of this § “ ”
definition, house is the banking legal domicile bank from which 'discretionary 'its are powers exer- cised in policies which its ap- formulated and If proved. a national bank should establish attempt such a operate bank, branch such action could be treated as a His Comptroller violation of 5190. § remedy would be to suit in his bring name for for- own feiture of But remains, the charter. can business, national bank no beyond transact whatever “ May four of its building? walls office it not have ser- vice stations” for and routine If minor purposes? “ No,” answer is it clear the clearing how can its checks in usual business”, house? The words used this section, literal given strictly interpretation. can.not every Much of the routine business must be trans- from' away banking acted house. has always This been case. business of banking continually adjustment. process of growth §'5190, This of-. portion must, therefore, be construed portion connection with that provides § all may board directors exercise such incidental carry as shall be on the business banking. _ practice of modern light banking a narrow and ‘
literal 5190 is unworkable. The con- construction struction must be practical made with the situation Bank, mind.- Merchants’ Bank v. 10 Wall. operations a national association (a) be divided into two which must general classes: Those *9 TERM, 1923. Argument for 263 S. the United States. (b) those directors; of and by be the board performed officers, the delegated performed by which must be and of bank. agents, or servants the may again be divided into those powers These and require discretion, judgment, banking and experience, , of char- routine ministerial, clerical, those acter. may of by board directors powers performed those per- while discretionary powers,
(cid:127)be déscribed b referred or be by officers, agents, formed servants powers. as ministerial management of for the and control responsibility definitely of bank is vested board
the affairs or by officers performed of serviced directors, and the. of and must under direction agents performed be This delegation of from the board directors. authority not discretionary board can being true, therefore, be exercised at must, delegated banking house. actual receipts deposits, pay- On other hand, checks, payment ment the actual or certification other board, purely money on loans authorized by officers necessity performed must be acts, ministerial at the acts, usually performed while agents. or These necessarily performed banking house, are sometimes agents elsewhere. correspondents if a national has the that, bank reasonably It follows these func- administrative perform incidental servants, acting when agents or through tions may also, if neces- house, banking outside distinguished'from an or offices—as sary, maintain office banking than its house. other place branch —at strongly customers the need To distant accommodate an office for the banks to maintain many localities felt fo. houses from their at some distance offices deposits cashing checks. receiving the purpose FIRST NATL. BANK v. MISSOURI. Argument United States. A new development in banking practice has thus been *10 in a instituted number of cities the state banks. The national banks must be allowed to or suffer a compete .serious loss in business prestige. Congress and Did con- template a of policy unreasonable restriction, might system undermine the national banking cen- large ters of population? fully discussed the of authority Comp-
[Counsel troller,' citing Studebaker Perry, 184 U. S'. Cook County Natl. v. United S. 445; Rev. 5239; Agricultural Stats. Act, 1923, Credits c. § 209a, Stat. 1467.] The Comptroller Currency right has the to de- termine, whether a national bank a maintaining “ “ branch bank,” distinguished as from office,”' a branch if and, satisfied that outside business office is essen- tially a in bank,” branch he is authorized to proceed . courts of bank its require law such to abandon branch under the of penalty a forfeiture its charter.
. This administrative power, however, does not neces- sarily imply a one bank to discretionary power permit deny another, have a office permit branch and to to- deny one have branch offices locality to and to them to another. If may a national bank its minor conduct and necessary, beyond routine when the walls of operations, be a place business, right which the bank charter not dependent upon any has and part as In permission of the this discretionary Comptroller. con- significant nection it is of excesses judicial in corporate is to determined pro- ceeding Comptroller. instituted by the in Comptroller, duty compel- event the his ling their powers, national banks to act within corporate has this supervisory duty em- discretion; important phasizes again the which the Government point, upon may not, that a in a mainly relies, quo pro- warranto ceeding, interfere with the exercise such discretion. TERM, Error. for Defendant Argument of the State of General Barrett, Attorney Jesse W. Mr. Frederick W. and- Mr. Robert C. Morris Missouri, Mr. Small, R. Mr. Merton Lehmann, Mr. Harold whom with T. Jeffries, Mr. William Jones Lewis, E. Mr. Sam B. for defendant brief, on the Early Marion C. were
Mr. error.1 the State a national banking by
Branch or state the national either is conduct Missouri is in stop, authority has government conduct Nation, from the contraven- authority of any excess the state law is destructive tion and defiance ' of the State. law-abiding banks legislation virtue of exist federal National banks subject, instance, in the first to the federal agencies *11 United States and the laws under which authority ex- Their are measured powers they are created. to relating the federal statutes them and press. terms of or can exercise those they rightfully are to on carrying incidental thereto Logan County for are created. business which they Townsend, 67, provisions 139 73. Under the U. S’. Stats., 5190, the usual business transactions each Rev. § are confined to office banking association one or national general to this rule have Exceptions house. been banking meet requirements specific statutes provided comprehend not include or which do instant cases Stats., May 12, 1892, 71, Act c. case. Rev. § 3,1901, 864, 21, c. 33, Act Mar. 31 Stat. Stat. § subject the laws of a in National banks also unless such conflict their affairs laws with fed- to. respect purposes or interfere with the their creation eral laws efficiency their impair destroy or as federal tend There no conflict between the United agencies. States hearing, argued, the first behalf of' ease was on defendant The at. Merrill Otis and Mr. Harold R. Small. Mr. E. Messrs. error, by in Early, and Mr. Foristel Barrett, Jeffries, Edward W. Jones were with them on the brief. also BANK v.
FIRST NATL. MISSOURI. Argument for in Error. Defendant and as ad- Missouri, laws of the law is statutes an Missouri, national and state banks are on ministered having advantage an over the other. footing, neither equal law banking no bank shall provides Missouri a maintain within the State branch bank or receive de- except checks its own house. posits pay banking 1919, Supreme Mo. 11737. The Court of Missouri R. S. § banking to mean that a bank’s has construed this statute banking only. shall conducted in one house business 29*7Mo. authority no under
A national has its charter bank or coordinate office establish branch purpose de- place on a business thé carrying general banking Neither do organization. its certificate signated expressly implication federal statutes permit tq This construc- have domestic branches. national to national relating of the federal statutes tion been, execu- uniformly supported by has associations adminis- departments charged tive officers wjth 5155, 1913, by' Stats., amended, of the law. Rev. tration Act; Comptroller Federal Reserve §. Instructions of Branch Treasury heading for 1923 under ” 97; Op. Atty. Gen. Oct. Atty. Gen., Banks; Ops. 3,1923. action not in conflict State, with when unauthorized and unlawful conduct of suppress can
law, present bank within the State. The case is-not a national *12 of the Judicial Code or the Revised provisions within the jurisdiction or exclusive to the giving original Statutes in certain actions and proceedings courts United States Herrmann v. associations. concerning national Edwards, '238 police exercise of proper Missouri in State unauthorized, wholly a right suppress has the Harkness, v. 199 unlawful, in the State. Guthrie act
and U.S. 148. . ap-
A nature of warranto is quo proceeding stop unau- means and remedy and propriate . TERM, Argument . in Error. Defendant U.S. a conduct of unlawful thorized and Co., Missouri, v. Standard Oil of Missouri. S. Fellows, 244 TL 416. First Bank S. National the National Bank history from the Act" plain It is time to confer no at na- purpose upon that there was to establish and generally tional operate banks lo- they respectively in the cities which were branches reason of circumstances such by peculiar Where cated. thought proper, express provision was branch banks were them, as was done the case of foreign made also fof exceptional instances, expressly provided branches. These against stronger implication make branch for, banks regular If banks are to become a branch fea- generally. it should be banking system, ture our as conse- express grant of ah and until such quence made national banks should not be permitted grant system banking into effect put practical prohibited by of the State and the Nation. the laws Ekern, Hiltori, Herman L. L. Ulysses Messrs. S. Clifford. Gibson, Lesh, Benjamin J. Edward -J. Brundage, H. H. Helmiclc, Cluff, George Shafer, Milton J. F. Utley, J. S. O, Stillman, B. Griffith, Frank E. Healy, S. Charles David Howell, England, E. T. Thomas B. McGregor,, George J. Short, Dunbar, H. Attorneys Buell F. Jones John T. of the States of Wisconsin, General, respectively, Minne Iowa, Illinois, Utah, New sota, Indiana, Mexico, North Kansas, Arkansas, Nebraska, Dakota, Connecticut, Wy Kentucky, oming, Virginia, Oklahoma, West South Washington, Court, Dakota and leave filed a brief curiae. as amici Court, By filed, briefs were also at hearing, by leave of the first Wisconsin, Attorneys Minnesota, Indiana, States General Arkansas, Dakota, Kansas,
Iowa, Illinois, Connecticut, North South Washington, and Rothmann; by Mr. William Dakota Mr. City Garver, on behalf of the National Bank A. of New John York York; National Bank of New The Chemical Mr. John Quinn, Stewart, Mr. -Paul and Mr. Robert P. on behalf of Kieffer York, of Commerce in New amici curiae. National *13 BANK v. NATL. MISSOURI. FIRST Opinion of Court. opinion delivered the Mr. Justice Sutherland Court. brought Missouri in' the proceeding this na- State quo Supreme against
ture of
warranto
State
Court
to determine its authority
in error
to estab-
plaintiff
in
City
lish'
conduct a branch bank
and
St. Louis.
that the
organized
The information avers
bank was
under
of the United States
was
is
in
engaged
laws
and
a
general
city
house,
business
that
at a
banking
banking
that,
given;
.the location of
is
contravention of
of Congress
its charter and of the act
under which was
incorporated,
illegally opened
it has
a
operating
branch bank for
a
a
doing general
business in
sep-
arate building
house,
several
from its banking
blocks
proposes to open additional branch
at various other
banks
locations, and that
is in vidlation
this
statute
State expressly
branch
prohibiting
establishment of.
banks.
that,
final
prayer
upon
hearing, the bank
be ousted from the
privilege
operating this branch bank
or any other. A demurrer to the information
inter-
was
posed and the
thereupon
cause
submitted. The conten-
was
upheld
judgment
tion of
rendered
prayer.
accordance with the
The correctness of is challenged under nu- specifications merous of error federal presenting questions, which, case, may for the purposes considered (1) under two heads: the state statute is Whether valid to national applied banks; (2) and Whether a proceed- ing to call national account for acts of the kind alleged here be maintained the State, and whether the form of remedy pursued is sustainable. 1919) (§ 11737, First-. The Missouri Mo., statute R: S. no
provides bank shall maintain in this state a branch bank deposits pay receive checks except own banking house.” alleged That the facts in the in- TERM, 263 TJ.S.
Opinion Court. *14 of the statute part the case within that bring formation of and that maintenance branch banks the prohibits conclusively estab- to national banks is the applies statute court, of the state and we confine by the decision lished thus the inquiry whether, applied, to the as ourselves statute is valid. into federal brought are existence under
National banks Federal Govern- the instrumentalities of are legislation, author- subject to the necessarily paramount and are ment’ Nevertheless, national banks are United States. ity of respect their affairs to the laws of a State subject their crea- interfere the of purposes such laws unless with destroy efficiency or their as federal tend to tion, impair law the paramount with the United or conflict agencies Commonwealth, 353, Wall. Bank v. 9 National States. 275, Savings Bank, 161 U. 283. 362; Elmira S. Davis v. cited, later are and followed the case two cases These 357, the Chipman, 347, prin- v. McClellan contain a rule and an establish is said to they ciple “ operation general rule state being the. exception, banks, and contracts of national dealings' upon laws operation the cessation of such exception being conflict with the laws they expressly laws whenever frustrate the for which national purpose or United States their created, efficiency discharge or impair banks were upon them the law of United the duties imposed 527, U. also v. S. Dowley, See Waite States.” the Missouri statute falls within is whether exception. rule or within the with the laws the United States? Does conflict not. extent of na opinion, powers our does by the terms to be measured federal tional banks is associations, they right can relating statutes such granted such are or expressly as fully exercise carry on the busi incidental- Bank, they are established. Bullard v. for which ness MISSOURI. NATL. BANK FIRST Opinion of the Court. v. Town 593; National 589, Logan County Wall. Kennedy, Bank v. S. send, 139 U. California (Rev. law the federal things other Among S. organization that certificate 5134) provides Stat., § state specifically place shall “the where the association are to des operations deposit on, of discount be carried district, and the ignating State, Territory, particular town, village.” By another county, city, provision “ (Rev. it is the usual 5190) required busi Stats. § ness association shall be trans of each banking-house at an office or located place acted Strictly, certificate.” specified organization does, an,” the article employing, latter as it provision, *15 singular number, would confine the qualify words house. are asked, to one office or We association in however, to construe it otherwise view rule number singular may extend and be importing words things.” Stats., Rev. i. applied to several persons § is one to obviously applied except But this rule not be out the of necessary carry it to evident intent where is Commissioners, 39 Garrigus See v. Board statute. of York, New 205 N. Y. 66, 70; City Ind. Moynahan of in Here there is the context or 181, 186. nothing not réquire in to subject matter construction contended other of for, provisions banking laws but By 5138, contrary. Stats., Rev. § to persuasively in capital amount fixed proportion the minimum the place-where the bank is to the located. population to intended allow the by If establishment an it had been only but, one in addition, .many, of not bank as association fit, remarkable, as it saw say branch banks no for provision adjust have been that there should least, contingency latter or for determining to the ing capital branch under circumstances such banks how or what regulating them. Section might established for be that it shall be lawful a stat Stats., Rev. 5155, provides TERM. Opinion of the Court. branches, joint and as- “having capital being ' to and used the mother-bank and branchés in signed become a national definite proportions, banking asso . . . and to retain and in keep operation ciation . . . the amount of the circulation . branches . the amount of regulated by capital assigned to be to and provision, terms, each.” This confined used as is, fairly existing institutions, state considered to the exception general rule, an and the constituting case, limitations in the safeguarding excepted presence otherwise, from the statute goes with their entire absence confirming the conclusion that far the direction contemplate, rule does not establishment of general was the apparently interpretation This branch banks. at Congress itself, legis since two instances least special lation to allow the establishment of was deemed 1892, banks, Chicago Exposition, branch viz: at the c. 1901, c. 33, Exposition, 27 Stat. and at the St. Louis 1444, 21, the existence the branch bank Stat. being expressly in each instance limited the period years. of two the executive charged officers with construction been, of the law has with substantial
the administration apd effect, in this the De- to the same view uniformity, considered Justice, opinion, in well rendered partment Lowry National concurred. Bank —Estab- May 11,1911-, *16 Ops. Atty. of Branches. 29 Gen. 81.1 lishment legislative of the statute the de interpretation This the executive of the government officers partment if meaning far to remove doubt as to its ex go would. Tiger Co., Investment v. Western See U. S. isted a opinion Attorney attention is directed to later Gen Our although 3, 1923, which, affirniing eral, October terms the dated limited which opinion, announces a rule does not seem to be in earlier agreement disagreement, it. To the of with extent the how precise ever, opinion. earlier the view of the accent we NATL, BANK v. MISSOURI.
FIRST Opinion of the Court. y Compañia, v. Hermanos 286, 309; United States 339 of a branch bank is is that the establishment But is said power of an incidental exercise the conferred national associations are Stats., by banicing which Rev. incidental as shall be neces- powers vested with such all banking.” of The mere on the business sary carry to where a bank places powers multiplication (cid:127) a incident of opinion, is not, exercised our be meaning of this provision. within the banking business, the existence Moreover, against reasons adduced against are conclusive exist- substantively power wholly illogical say that for it is to incidentally; ence is by fair of the statutes found which construction power an incidental denied, power. nevertheless exists as be to can avail neither to an incidental create Certainly byor are which, implication, reasonable expressly given; only to enlarge powers carry nor withheld but granted. effect those into statute, by prohibiting branches, state Clearly, the does was created purpose frustrate not duties to the discharge, govern- with the interfere or federal efficiency agency; as a This impair-its or ment if evident, but seem to be self warrant conclusion would needed, lies in the fact that sufficiently for it have on for more than half a gone banking associations upon of an ab- theory without branches century If them. to establish non-existence authority sence or the absence of to create branches such them operate calculated to detriment has is operated ' manner as to interfere or in such government, with as federal efficiency agencies, associations inconceivable that the fact their purposes, frustrate discovered taken long steps not since been would have the omission. by Congress remedy to national banks applied The state statute Second.- therefor*, corollary that valid, obligatory is, it. *17 TERM,
Opinion of- Court. necessarily and enforceable results, unless some control- forbids; and, reason since the sanction behind it is ling of the State and that not National Govern- that ment, the of enforcement must rest with the former with the To and not latter. demonstrate the binding qual- ity'of deny a statute but the power of-enforcement in- fallacy volves made apparent mere statement of for such is proposition, essentially' inherent conception is very law. It insisted with great earn- estness that the United States alone may inquire by quo whether a national bank is acting warranto in excess of its charter powers, and that the State is wholly without au- thority do-so. This contention will be conceded since is plainly but the correct, attempt apply here pro- upon ceeds a complete- misconception of what the-State (cid:127) seeking do, is -to misconception arises from con- the relief founding -sought with the circumstances relied it. The úpon justify State is neither seeking to enforce a law of the endeavoring United States nor to call the bank to account for an act excess of its charter powers. What the State is to do is to seeking vindicate and enforce law, its own inquiry the ultimate which it propounds is whether the bank is law, not violating whether it complying is with the charter or law of its creation. The inquiry preliminary latter is collateral, made determining whether purpose the state law free to act in the premises operation whether is precluded in the particular casé law. paramount Having deter- power sought mined that the to be by the exercised justification finds no authority law or the United way open for the enforcement the state statute. In other words, national statutes are inter- rogated for the sole purpose ascertaining whether any- thing they contain constitutes an to the en- impediment forcement statute, state and the answer being in ¡.of the negative, they may be laid aside as no further con- cern. NATL. BANK v. MISSOURI.
FIRST n Opinion of Court. *18 case present of statute the the state application established, being enforce it of the State to and question a for is remedy employed the nature of the be court of the state determination; judgment state and the is was conclusive appropriate that one here employed law, of a of due process unless it involves denial ques with the not. are riot concerned it does We plainly war- quo in of tion an the nature information whether law, ranto, according general principles is It enough Supreme appropriate. fact v. Mis Court of Standard Oil Co. the State has so held. Jersey, 211 U. S. souri, 270, Twining 224 U. S. v. New Iowa, Ry. 160 U. S. Co. v. 78, Iowa Central 110-111. “ n But clear that the Four 389, this Court said: it is no undertakes to control the way teenth Amendment by legal rights of what process a State to determine obligations enforced, provided be legal asserted or gives purposes for these method procedure adopted fair heard opportunity reasonable notice affords to.be case, was being before This the issues are decided. immunity of a citizen not a obviously right, privilege, in 'the controyersy the United to have States state in one form action court or determined prosecuted of last re Whether court another. . . . stead its own con construed properly sort of the State of Iowa summary that the determining pro stitution and laws matter which applicable under those laws was cess of a the decision state adjudged, was purely Louisville & See also this court.” law, binding upon Hooker Schmidt, 230, 236; 177 U. S. v. Nashville R. R. Co. Peck, Rogers v. 199 U. 314, 318; Los Angeles, S. Court Missouri Supreme judgment
therefore
Affirmed-'' TERM, 1923. dissenting. J., Butler, J., Devanter, J., Taft, .Van Ch. Devanter, dissenting. Justice Mr. Van n I from the opinion judg- am constrained to dissent just ment announced. instrumentalities,
National corporate banks are States created under its laws' public purposes United essentially in character and Their scope. from United are to derived be exercised supervision under its can be neither nor re- enlarged stricted uniformly state laws. The decisions have been on proceeded to this effect and have principles which were days century ago settled the Bank of the United States.
In Maryland, McCulloch v. Wheat. where the of that bank status was drawn in and elaborately discussed, this Court reached the conclusion that the Con- stitution invests the United States with authority to pro- vide, laws, independently of state for the creation of bank- ing institutions, and their maintenance at suitable points States, within the as a means of into carrying execution its fiscal and other Chief powers. Justice Marshall there respective'relations dealt with the of the United States and the States such an in instrumentality a very plain way. convincing Among the other things, he said: “ 424) (p. After the most deliberate consideration, it is opinion court, the unanimous decided of this that the incorporate Bank act to of the United States is a law in pursuance of the constitution-, and ais part made of of law the land.” supreme “ (p. 427) very It is of essence supremacy to re- move all obstacles to its within action its own sphere, and every so to vested subordinate govern- modify ments, as to exempt its from operations their influence. This effect not need be stated terms. It is so involved supremacy, in the declaration of so necessarily implied expression that it, could not make it more certain.”
FIRST NATL. BANK v. MISSOURI. Devanter, Taft, J., J., Butler, J., dissenting. Van Ch. “ 429) (p. sovereignty a State every-. extends to thing which exists its by authority, own or is introduced its by permission; but" does extend to those means which are employed Congress carry into execution powers on that body conferred people of United States? We think it demonstrable that it does not. Those are not given by the a people of single State. They given by people the' United States, a government laws, whose made pursuance the constitution, are declared to supreme.” Osborn Bank the United 9 Wheat. there in question was drawn the validity of a state statute which, after that reciting had been pursuing a operations contrary if State, to law the provided operations were the bank continued should be liable specified exactions, called tax. The in- statute was held valid, the Court saying: (pp. 860, Bank 861) private is not considered as a object corporation, whose trade and principal individual profit; corporation, but as a created public individual public and national That the mere purposes. business in is, own nature, private business, be carried on individuals no' companies having polit- government, ical connexion with but the admitted; an company. is not such individual or It was not *20 own sake, created its or for . . private piirposes . * ’ for It is an instrument which is and proper operations government.” on the fiscal of carrying Congress The later under legislation which national banks are created and maintained stands on the con same stitutional has ov' plane.' validity assailed, When been in a questioned, force State operative just cases regarded as mentioned have been settling the principles to be applied. Dearing, Mechanics’ National Farmers’ and Bank v. to 29, 31, Court referred those cases, pro TERM, 1923. .OCTOBER dissenting. J., Taft, J., Butler, U. S. Devanter, J., Chi
Van legislation, to the later their reasoning applicable nounced said: under organized banks 33-34) The national (pp. govern- used to designed are instruments be aid act an of the branch important ment the administration that means end. They appropriate public service. brought into existence for . . Being means, the States and intended to so purpose, employed, this nor in wise affect them, can exercise no control over in so far see except Congress their as operation, ‘ this an thing beyond abuse, proper permit. Any usurpation single it is which a State because .of ” give.’ cannot Iowa, 220, Easton v. S. the same effect are 188 U. To Bank, People’s v. 237; Van Reed National U. S. 230, Co., Union Trust 557; First National California, Bank v. 416, 425; and First National S. are the special pertinence following Of from Easton v. Iowa: excerpts “ has 229) legislation That view the erection (p. throughout country, and extending independ- system (cid:127) concerned, far conferred are state so as ent, if applicable, to be which, permitted might legislation restrictions as various and limitations impose as the States.” numerous “ appears pro- It thus has 231-232) Congress (pp. complete for the symmetrical scheme banks vided of the provisions under the statute. organized to be on Attorney the learned General behalf argued It is of Iowa that‘ effect statute Iowa of all within the banks State a require is to officers discharge diligence their degree higher duties. greater confidence in general to the the' public It gives banks, and' and in stability solvency of yand managing of their' It integrity officers. en honesty accomplish purposes and designs. them better ables *21 FIRST NATL. BANK v. MISSOURI. Devanter, J., J., Butler, dissenting.. Taft, J., Van and Ch. M*. O Oi - of the general government, aid, and is an rather than im to their pediment, utility efficiency agents and in- strumentalities of.the United States/ we are unable to perceive that Congress intended But. to leave the field for the. open States to to- attempt pro- stability mote the welfare and national by banks direct If had such legislation. they power it would have to be limited their own discretion, exercised and and con- necessarily fusion result from control possessed would independent exercised authorities.” by two far that, legislation It admitted so as the must be otherwise, general not of a Congress provide does laws to the trans- application ordinary State have the same bank, national as incurring actions of a and dis- —such charging obligations depositors, presenting drafts notice of giving- dishonor, or their payment acceptance repayment money loaned, for the and. taking pledges conveyances of real making property, receiving —that like of others. But not so of have to they transactions Easton v. As power. explained questions corporate Iowa cases, other their solution must turn on the laws under which United States the.bank created. .the other banks, corporations, like have pow
National them, confers on fair expressly ers as their creator Jersey and none other. Thomas v. West R. implication, Co., 71, 82; Logan County R. National Bank U. S. Townsend, 67, 73. not so conferred Powers v. from implied denied; prohibition are in effect Bank v. them. First National National grant failure to Bank, Exchange 122, 128; U. S. California all the of a Kennedy, 167 shqrt, all, to exist at have their bank, right like its Only of the United States. where source in the laws .those the problem, by enabling laws into laws bring state —as executors, administrators, etc., act as national banks to the latter have laws, is permitted where that state —can TERM, *22 dissenting. Devanter, J., Taft, J., J., Butler, Van Ch. and 263 U. S. the any bearing on corporate —the the privileges which bank exercise. First National Co., Bank Union Trust U. S. 416.
The proceeding now .before us is an information in the in nature of quo brought Supreme warranto the Court of Missouri, whereby that State of a challenges City national bank of St. Louis to conduct branch city bank that and asks that the bank established in from that on that privilege grounds, first, be ousted establishing conducting branch is a violation of the powers, and, secondly, prohibited bank’s charter that it is by a of. the State. law the laws of
It is not claimed that the United States con- asserted whereby privilege tain any provision depend to on the will legislative policy bank made or in nor do fact such State; they pro- of the contain which has the it as- privilege vision. Whether the bank dependent in on or way no affected serts is therefore the laws exclusively turns on law, the state but If the privilege, or they grant expressly United States. abridge no law State can it or by fair implication, grant it, they And if do not in they take it effect away. strengthen no of the State can law prohibit it, In either nothing, event can turn the prohibition. weaken no It has on the simply bearing law. solution on the state of the question. not, my opinion,
In the State en this situation It no proceeding. has distinctive maintain titled to nor law to any applicable vindicate or right protect, is one bemay proceeding maintained enforce. Here the State is not right. authorized public The bank public. is not a speak represent instrumentality State, but the Na creation in the State is presence Its attribut tional Government. not to permission. the State’s national power, able kept legitimate shall within its pow the bank Whether from or any departure to discontinue abuse and made ers NATL. BANK v. MISSOURI. FIRST CDCD Butler, dissenting. Devanter, J., Taft, J., and J., 640 Van Ch. them is a matter which the of all the States people have the same a national creation interest, being instrumentality. merely of Missouri people share the common interest. that field it is the United and not the them State, represents parens patriae, representation ap when becomes they the latter, and to the and not to propriate; former, must look that for such measures as flow from protective Mellon, 486 It status.” Massachusetts v. mistakenly therefore is the State is here apparent function which to the belongs to itself a appropriating *23 United States. Case, which 397, 407, possessed Tarble’s 13 Wall. here, making pertinent
features this Court particularly pointed out of the independent the distinct and character national and state their governments, respective within spheres, that connection said: into the judicial Neither can intrude with its process domain of the far such intrusion other, except so be government on the of the National part preserve its in cases of conflict of rightful supremacy authority. In their laws, enforcement, and mode of neither is responsible to the other. How their respective laws shall be how shall into enacted; they be carried execution; and in what tribunals, officers-; what how much discretion, or whether all at shall be vested officer's, their are subject matters to their own con- trol, and in regulation the neither can interfere with the' other.”
Another case
apposite
principle
Territory
Lock
wood,
Van Ch. from government without consent Territory This the can appointment derived. was ^.o subject' way in one in another. The more than accomplish authority of its as it is beyond sphere is as much , as to Federal beyond authority of the States discharged within their .officers whose duties to be The right proceedings limits. to institute respective in the Government of nation.” inherently I deference, judgment below great With think is with- ground on the that should reversed bring proceeding, maintain this capacity out to entertain it. authority the court without below Butler authorize The Chief and Mr. Justice Justice say they mé to concur in dissent. this