*1 NATIONAL COUNTY LOUIS ST. al., Appellees, et BANK NA- COMPANY TRUST
MERCANTILE E. and James ASSOCIATION
TIONAL
Smith, Comptroller States, Appellants. 76-1603, 76-1709.
Nos.
United States
Eighth Circuit. Sept. 1976.
Submitted Dec.
Decided
Rehearing Denied Jan. Guerri, Louis, Mo., and
William G. Justice, Glancz, R. Atty., Dept. Ronald Div., Sec., Washington, D. Appellate Civil C., appellants. Hamel, Mo., H. for St.
Albert County Nat. Bank. Friedhoff, Finance, L. Jef- Irven Div. Mo., City, appellee R. William ferson Kostman.
717 Louis, Mo., spring of 1970 until Schlafly, ton office. From the F. St. Robert Clayton Trust Co. of 1973the overall administration of appellee March living testamentary and approximately MARKEY, Judge,* and Chief Before trusts, managing agency safekeeping and HENLEY, and Circuit STEPHENSON were handled a trust adminis- accounts Judges. trust office. During officer at the trative paid, money no checks were no period STEPHENSON, Judge. Circuit lent, deposits and no were received at was Company National As- Mercantile Trust The Clayton Clayton trust office. of- (Mercantile) appeals from the dis- sociation corporation separate was not a but fice enjoined judgment trict court’s1 operated by office Mercantile as rather an further Mercantile organization. part of its Clayton, Missouri. The its trust office n This action was commenced St. (1) appeal are: raised on this two issues declaratory County National Bank for a trust office is a Mercantile’s whether Clayton Mercantile’s trust judgment meaning of 12 within the U.S.C. injunction was also illegal. was An office (2) Mercantile’s trust whether § against Mercantile’s continued use sought a violation of 12 U.S.C. office constitutes Smith, James E. Clayton of the office. We affirm. § then-Comptroller of the of the banking associa- is a national Mercantile States, joined with Mercantile United office is located in principal whose Company Trust as a defendant. engaged in Louis, Mercantile is Missouri. Kostman, William R. Director of the operates a banking business and for the state of Missou- Division of Finance February of 1970 Mercan- department. ri, plaintiffs. were to intervene as office in Mis- opened a trust tile souri, open- Louis. Prior to suburb of a 18, 1976,the district court One June en- received Mercantile ing joined and restrained Mercantile from fur- Comptroller of the Curren- notice from operating office. its branch trust On ther approving the es- cy of the United States 2, 1976, August granted our court Mercan- long as of the trust office as tablishment application suspend injunction to tile’s made, or accepted, were not loans deposits order of the appeal until further pending According Comptroller, to the paid. checks 5, 1976, August hearing After a court. made, accepted, were loans if injunction be court ordered that our paid, then the trust office would fall until further order of the court. stayed set definition within the 36(f) and a certificate forth in U.S.C. § Appellant first conten Mercantile’s Comptroller’s from the office approval Clayton trust office does tion is that its be needed. would by 12 constitute a branch as defined U.S.C. 36(f). concerning whether opened Mercantile the date that On important is the trust office is a branch press Mercantile issued a re- office since be established a branch trust office stating that would lease when, where, law would au and how state existing convenience for added oper customers. Five full-time thorize a state bank to establish as future well 36(c);2 Clay- of Mercantile staffed the ate such branch. U.S.C. employees * may, Markey, (c) Judge, A association Howard T. Chief The Honorable approval of Customs and Patent with the States Court sitting by designation. Currency, new branch- establish and city, (1) town or limits of the Within the es: situated, if Regan, village is association K. United States in which said John Honorable operation are at the Judge Eastern District of Mis- establishment such District expressly State banks authorized time souri. (2) question; and of the State the law part: any point in which said the State 36(c) provides within in relevant Dickinson, referring The mechanism of state law v. U.S. Nat’l First designed (1969); simply implement one L.Ed.2d 312 130, 90 S.Ct. intent and Logan congressional Walker Bank build into the Bank of provision Co., self-executing federal statute & changes regu- clear (1966). In this case to accommodate L.Ed.2d *3 un- bank would be lation. a state chartered tioned, however, Supreme Court that: cases or checks stated Appellant Mercantile’s able U.S.C. § Louis Union S.W.2d ty.” gress has has cy intended by tions which state over national banking [W]hile paid, or Chief Justice tion shall ness located branch The term implement its Congress to ****** incorporated by reference the limita- interpreting section is that since * * * branch office, 36(f), deposits paid, or 36(c). Congress has absolute a too restrictive activities money lent. Mercantile’s deliberately be held to Clayton trust office. (Mo.App.1973). office to foster “branch” it or defines Burger has observed for in office, is not a branch. banks, the about State law money would be any are any no same legislative policy. Co. by law deposits branch branch giving “competitive equali- received, a branch as follows: settled as used in this lent argument type certain places branch under has been utilized 36(f) have cau- illegal Pemberton, meaning. the definition place of busi- Therefore, agency, addi- banks. are upon poli- * * * any on branch guidelines or checks facility as authority received, statute Recent branch simply Con- sec- at if concerned.’ sideration ute ed “It ple equality is the nized that which, omitted), equality” insofar U.S. at Independent Banking, Inc. v. Bank, lation, L.Ed.2d those competition for customers. In vant might give maintain bilities created gressional plain In of McFadden Act.” Nebraskans here, Because the state banks 36(f) this circuit short, Nat’l Bank v. [******] merely [******] 530 F.2d is settled that the McFadden 131, 133, 134, 136-37, in in Walker aspects of (citations vacated and remanded amended, was ‘intended to must construing “The ” Driscoll v. Northwestern competitive equality, (1976). Further, light intent this Court found the contractual pervasive underlying princi F.2d preservation not be on definition of “branch” in by bank an would frustrate the con- Bank, supra. and footnote a basis of is the 173, 175(8th subsequent Dickinson, supra, 396 the transaction “branch” have likewise transaction, (8th Cir.) advantage controlling stat 90 S.Ct. place rights and we have stat banking Omaha “competitive a restrictive statute is to competitive for recon it 2616, 48 omitted). consider, (citation but at recog legis 1973) to be Nat’l rele- Act, lia- all omitted). (citations con- congressional Act reflects the [The] advantages system cern that have neither Similarly, the Tenth Circuit stated: bank- over the other in the use of branch 36(f)] declares that the term [Section ing. place any shall include “branch” [******] business where are received or merely affirmatively situated, authority and not if such association is such establishment subject recognition, implication are the time authorized to imposed as to location State banks the statute law of the State the restrictions question by language specifically granting banks. law of the State money deposits, cash paid, or lent. In this re- lend money, any in Dickinson transact gard generally business carried as follows: at the main office. commented Although the definition not be a Independent Bankers Ass’n of America v. part precision, due to its model Smith, (D.C. 1976) 931-32 aspect, it minimum defines the circular (footnote omitted). “branch”; by of the term use content legislative history of the definition of the word “include” 36(f) and interpretation recent case a calculated indefiniteness suggests section, of that we conclude that the three respect to the outer limits of the routine functions delineated in sec However, term term. “branch are not the indicia of branch very includes bank” at the least banking. In our view each case must be receiving deposits paying considered on its own facts to determine if *4 lending money apart or from a branch exists. North Davis Bank v. First premises; may the chartered (10th 457 F.2d Cir. more. 1972). foregoing, then, In line with the ac- Turning to the record before deposits, checks, or us we cepting paying note that Mercantile’s main office in lending money only are not the indicia of Louis conducts a substantial amount of banking. typical bank of the trust business.3 performed The activities present provides many time other serv- by Mercantile at office are sum ices. 540 F.2d Board v. First Nat’l Bank of Fort follows: the statute. After Record Likewise, the District of Columbia Circuit of this act. legally established under at the main deposits, bank carries on its away from the main office where the “branch.” [Section recently [******] scope transacting the Act’s Colorado of section section-by-section paying observed: placed 36(f)] defines In this analysis he described Any place (10th passage, Representative any business carried on ex rel. in the business of 36(f)’s is a branch if it is McFadden’s own analysis lending money, State outside of or 1976). Congressional definition as analysis provisions receiving Banking Collins, term the time of its ex rel. definition as declared Bank and Trust cantile’s carried office. This alone and their and discusses such reviews wills on file for present which named Mercantile as fiduciary; place ficiaries posed customers and discusses accounts with principals and bene tomers and marized as follows: (6) these enumerated activities are also services researches estate and trust problems Lignoul persons representatives. existing routinely prospective instruments; offered adoption. their Co., to execute wills and trusts v. Continental office within the branch would problems trusts; (1) at Mercantile’s main 536 F.2d representatives customers about the by Representative consults with cus clearly bring of section (3) Mercantile; (4) provides with customers It reviews with customers; Ill. Nat’l apparent 178-79 of Ill. Mer pro (5) (2) Clearly, Congress 1976). Furthermore, intended to include perma within its only definition not the typical nent staff’s duties are to obtain new cus brick-and-mortar branch but also department tomers for the trust of Mercan agencies lesser bank tile. The service offered increase the con some of the services available at a tradi- venience to Mercantile’s customers. branch, e., agencies i. accept factors, light of these we hold that nearly fiduciary
3. Mercantile held two billion dollars of assets as of December clear that a state bank in Missouri would be permanent of such a establishment operating more than one prohibited from by Mercantile is a as undertaken business for the exercise fiduci- 36(f). place of business It contemplated by section as ary 362.105subd. powers. §§ Mo.Ann.Stat. holding is emphasized should be 2(5) (Vernon); 1(1) 362.107 subd. interpretation language on our based Pemberton, supra. Union Trust Co. v. by its own explained as of section Therefore, allow to Mercantile to accom- given by its construction analysis, author’s state bank could not plish would courts, purpose for its Con- other of section 92a. frustrate rely We do not enactment. gressional definition of branch state of Missouri’s Circuit, construing section determining of branch in content 92a, stated: 36(f). power proscribe state’s Implicit in the executors, acting as national banks holding is reinforced Our think, power permit them to we 92a(a) reads fol U.S.C. § them, precluding while as executors act lows: way, nondiscriminatory from adver- in.a (a) The tising that fact. empowered shall be authorized Nelson, Hampshire special permit to national banks Bankers Ass’n grant by New therefor, Similarly, not in con- supra, when contraven- applying law, right power local act to nondiscrimi- clude the state’s of State administrator, executor, trustee, fiduciary regis- nately limit the location where *5 bonds, guardian powers may implicit and of exercised is in the of stocks be trar receiver, estates, assignee, power proscribe committee of national banks state’s lunatics, any acting or in fiduci- follows that estates of other from as executors. It banks, fiduciary powers in which ary capacity State Mercantile’s exercise of corporations companies, or other which its trust office is in contravention competition meaning with national within the of come into of state law permitted act the laws banks are which the national bank is of the State in Affirmed.
located.
HENLEY,
Judge (dissenting).
Circuit
92a(b) reads as follows:
(b)
the laws of such State
Whenever
of
majority
holds that in view Mis-
permit
the exercise of
authorize
operations by
souri’s restrictions on branch
by
foregoing powers
the
State
all of
includ-
companies,
Missouri banks and trust
corpora-
banks,
companies, or other
companies,
ing “pure” trust
Mercantile
banks,
compete
national
prohib-
tions which
Company,
a national
1927,
to and the exercise of such
granting
the
the
Act of
by
ited
virtue of McFadden
by
not
powers
national banks shall
be
36,
September
12
and the Act
of
§
in contravention of State or 28, 1962,
668,
deemed
be
87-722,
12
P.L.
76 Stat.
meaning
the
of
sec- U.S.C.,
92a,
local law within
operating
Cum.Supp.,
§
Missouri,
tion.
which
the trust office in
in the record and
fully
office is
described
competitive equality
of
policy
respectfully
opinion
majority.
I
the
Blaney
section 92a.
incorporated into
disagree.
Bank,
27,
(5th
Florida Nat’l
30
1966); American Trust
v.Co. South Caroli
the fact
part
is based in
My dissent
Control,
of
determining
na
Board
381
that
it seems to me
that
313,
(D.S.C.1974);
F.Supp.
Hamp
323
New
is a
question
office in
that
the trust
Nelson,
12
F.Supp.
meaning
shire Bankers Ass’n v.
336
the
of U.S.C.
within
“branch”
1330,
(D.N.H.), aff’d,
the line
(1st
36(f) majority
following
deposits, given place a function at a is a form facility be said that a that it can not think law, although federal in this of of branch within is a context, others, may supply state law as in merely may perform it some func- because con governing federal law or be service, other than or furnish some of law. sidered as the source federal cashing checks mak- deposits, accepting in St. Louis v. State First Nat’l loans, customarily provide. ing which banks Missouri, supra, S.Ct. Act was passed Chipman, the McFadden v. 164 U.S. When and McClellan Congress (1896). it was well knov/n 347, 357, L.Ed. 461 operation departments and the But, Congress has a prescribed, unless so in- furnishing of trust services not an prohibited engag- national bank is banks, significant part of the business of activity particular a ing particular a had Congress I feel that if intended to a state or other place simply because bank in its of a “branch” a definition law cannot financial institution one involved in this office such as the activity same at the same engage in the case, just specifi- as it it would have said so the same circumstances. accepting deposits, cally mentioned the with dealing statutes2 Missouri cashing lending purport companies do not banks and trust money. 362.105(1) provides Following receipt that no bank 2. of the mandate of the Su- V.A.M.S. Court, company maintain a preme in Missouri shall remanded the case for or trust this court court, company de- or receive or trust the district branch bank further consideration except 1976). posits pay in its own F.2d 673 na- the activities of regulate or restrict could Nor Missouri banks as such. a national bank to do constitutionally forbid by governing to do it is happens that law. If something bank do
bank can do, it to the state to broaden open
cannot authority of its own institutions federal ones.3
match that of the sum, Mercantile and with agree I Mercantile’s trust of- branch,
fice not a and that its prohibited by is not
continued Act or FASHIONS, INC., a Minnesota
N&D Don, Inc., Nelly
Corporation and Appellees, Corporation,
Missouri INDUSTRIES, INC., a New York
DHJ Appellant.
Corporation,
No. 76-1037. States
Eighth Circuit. May 14, 1976.
Submitted Dec.
Decided
Rehearing Denied Feb. provided house legislature adopted may permit otherwise than 362.107. Ne- a bill permits The section last mentioned Missouri Na- braska state banks to do what the Omaha certain banks drive-in facilities with- legislation doing. It was tional Bank was cities in which the are banks domiciled. remand the Court to caused Section 362.107 is involved in this case. case for further consideration enactment. Indeed, while the Omaha Nat’l Bank case that pending, been mentioned was the Nebraska