144 Mo. 562 | Mo. | 1898
Lead Opinion
This is a quo toarranto proceeding begun by the Attorney-General against The Lincoln Trust Company, Union Trust Company of St. Louis, St. Louis Trust Company, and the Mississippi Valley Trust Company, all of the city of St. Louis to oust them of their franchises, because of the exercise of powers and privileges not conferred upon them by law.
The trust companies were organized and have been doing business in this State by virtue of article XI, chapter 42, Revised Statutes 1889, and acts amendatory thereof. The Lincoln Trust Company was organized and incorporated on the twelfth day of April, 1894; the St. Louis Trust Company on the ninth day of October, 1889; the Union Trust Company on the seventh day of June, 1890, and the Mississippi Valley Trust Company on the - day of October, 1890. The informations against all the companies are substantially the same, and being practically the same
The unauthorized and unlawful acts complained of are receiving upon deposit, subject to check and draft at sight, sums of money ranging in amounts from $1 and upwards, and through their officers and agents, opening regular bank accounts, according to the custom and usuages of regularly incorporated banks in this State, with whomsoever of the public that desired to do a banking business with them; and the buying. and selling exchange on other banks and bankers in this and other States, and otherwise by checks and drafts and other kinds of negotiable paper usually dealt in and handled by regularly incorporated banks and banking institutions under the laws of the State of Missouri, carrying on through channels of commercial business such a general and regular business, as is carried on under and by virtue of the laws of this State by the banks incorporated under the banking laws of Missouri.
The respondents in their answers aver that they were duly and regularly organized and incorporated as trust companies under and in pursuance of the statutes of the State of Missouri relating to trust companies, to wit, article XI, of chapter 42, of the Revised Statutes 1889, and the act amendatory thereof, approved April 18, 1891, contained in the session acts of 1891, at page ninety-nine thereof; and that being so organized and incorporated, they thereby became, by virtue of -the said statutes, invested, and have ever since been and are now invested, with all the powers, privileges, rights and franchises conferred by the said statutes, and all subsequent statutes amendatory thereof and supplementary thereto. The answers then admit that sixice their respective organizations they
The answers then aver that in 1887 the legislature amended the trust company statute by adding paragraphs eight and nine to the enumeration of the powers of such companies. That at the same session it had under consideration an act concerning mutual savings societies, which was passed and approved March 31,1887. That section 12 of this act.provided that mutual savings societies might keep on hand an available cash fund, not exceeding twenty-five per cent of their total assets. That it further provided that this cash fund, together with the current receipts over the payments, might be kept on deposit with any trust company organized under the laws of Missouri. That this act of the legislature recognized, construed, and affirmed the right of trust companies under the laws of this State to receive deposits of money, and to hold them subject to the check of the depositors.
The answers again contend that the legislature conceded, and recognized, the right of trust companies under the powers granted by the' statutes of this State to receive deposits of money subject to check or sight or time draft when by an amendment to sections 2760 and 2761, Revised Statutes 1889, it ordained that: “No president, director, manager, cashier or other officer or agent of any.......trust company....... organized and doing business under.......any laws of this State shall receive or assent to the reception of deposits.......by'such trust company.......after he shall have knowledge of the fact that it is insolvent or in failing circumstances,” and providing that: “In all suits brought for the recovery of the amount of any deposits received or debts so created all officers, agents or managers of any such.......trust company....... charged with having so assented to the reception of such deposit.......may be joined as defendants or pro
The answer further contends that the legislature construed and recognized the statutes of this State as having conferred upon trust companies the right to accept deposits of money and hold them subject to the order of the depositor, on such terms- as might be mutually agreeable, and confirmed this right by repealing section 3581, Revised Statutes 1889, and enacting in lieu thereof a new section (Acts 1895, p. 158), which provided that: “If the president, vice-president, secretary, treasurer, director, or other agent, of any....... trust company or institution doing business in this State, shall receive or assent to the reception of any deposit of money or other valuable thing, in such trust company or institution . . . after he shall have had knowledge of the fact that such.......trust company or institution is insolvent or in failing circumstances, he shall be deemed guilty of larceny.”
The answers further represent that the legislature, by an act passed in March, 1895 (Acts 1895, p. 97), recognized the right of trust companies to receive deposits of money upon such terms, and subject to such conditions as the depositors and trust companies might agree, and so construed the Statute by providing that the Secretary of State shall annually inspect “every .......trust company organized under the law of the State of Missouri which receives deposits; provided, however, that such trust companies as are under the supervision of the Superintendent of the Insurance Department, make to him an annual report, and who file a copy of such annual report with the Secretary of
And the trust companies aver that since the date of their organization, and from thence hitherto, they have taken and received deposits of money subject to sight or time drafts from individuals, banks, and others, upon such terms and rates of interest as were agreed upon, as was the custom and practice of trust companies at and prior to the time of their organization ; and that since the passage of the act of the General Assembly entitled, “An act to repeal section 2842, of the Revised Statutes of 1889, and - to enact a new section in lieu thereof,” approved March 17, 1893, and under and by virtue of the terms of said act, as well as the act before quoted, and also under the act approved March 15, 1897, they have taken and received deposits subject to sight or time draft from individuals, and others upon agreed terms, and have so reported, as required by said acts, to the officer to whom such reports are required to be made. The answers further aver that the General Assembly, by an act approved March 15,1897, providing for the examination of banks, fund and trust companies, in subjecting such trust companies as receive deposits, to the provisions of said
The answers further admit that the respondents relying upon the letter of the statute pursuant to which they were organized and the construction put upon it by the legislature, by the several acts hereinbefore referred to, both before and subsequent to their organization and upon the common and universal practice of trust companies not only in this State, but elsewhere, endowed with the same'powers as are invested in trust companies under the laws of this State and upon the construction of the laws of this State made by the communities in which trust companies are located and doing business,' and by the officers charged with the supervision of the affairs of such companies, have accepted and received, and do now accept and receive, deposits of money as hereinbefore stated. The answers of the defendants further specifically traverse the several allegations of the information chaining that they are willfully, intentionally and unlawfully violating their charters and usurping rights and privileges not granted to them by law in receiving deposits of money subject to check and sight draft, and by buying and selling exchange and by other conduct, all according to the habits and customs of regularly incorporated banks and bankers, doing business under the laws of this State.
In regard to the right to accept deposits of money, the answers affirmatively allege that power to take deposits is expressly given by the statute in the parts already mentioned, and in the general words of the
As to the allegation that they buy and sell exchange in manner as charged in the information, the answers, in addition to the traverse of this allegation, set up, affirmatively, that the trust companies are authorized under the statute to buy and sell bills of exchange, draw and negotiate drafts, and deal in all kinds of negotiable and non-negotiable paper. Such dealing in commercial paper is admitted, but they aver that this manner of dealing does not constitute buying and selling exchange according to the custom of banks. The general averment in the information, to wit, that the defendants have, by checks and drafts or other kinds of negotiable paper usually dealt in and handled by regularly incorporated banks and banking institutions, carried on a general and regular banking business as is carried on by banks incorporated under the laws of this State, is expressly denied.
The respondents also plead in abatement of these several actions, that under the law of 1897 (Acts 1897, page 83) concerning the examination of banks, fund and trust companies, they are exempt from this proceeding until after the Secretary of State, upon an examination or other information, shall discover some irregularity, misconduct or excess of powers and admonish them to desist, and they shall have refused obedience to such monition; and not till then, and not until a certificate to that effect shall be made to the Attorney-General, shall they be subject to a pro
To these several answers the Attorney-General filed replications generally denying the facts stated in the answers.
The evidence shows that the respondents are engaged in the same general business, and with respect to the issues involved in this case in the same business, that is, buying and selling exchange and receiving moneys on deposit, which is paid out on demand, upon the check of the depositor. These facts are admitted by the respective answers of the several respondents, and the evidence adduced only tended to sustain their admissions and to distinguish in a practical way the manner of conducting the business of a purely banking institution from those of a trust company.
The vital question in this case is as to whether trust companies may receive moneys by way of general deposit, thereby establishing the relation of debtor and creditor between such companies and depositors.
The law authorizing the incorporation of trust companies in this State was first enacted in 1885. Session Acts of 1885, page 103. By section 4 of that act corporations created under it are given power: “First, to receive moneys in trust, and accumulate the same at such rate of interest as may be obtained or agreed on, or to allow such interest thereon as may be agreed, not exceeding in either case the legal rate; second, to accept and execute all such trusts, and perform such duties of every description as may be committed to them by any person or persons whatsoever, or any coi’poration, or may be committed or transferred to them by order of any of the courts of record
In 1887 (Sess. Acts 1887, p. 116) said section 4 was amended by adding to the then existing powers that might be exercised by trust companies incorporated under said act the following: “Eighth, to loan money upon real estate and collateral security, and execute and issue its* notes and debentures, payable .at a future date, and to pledge its mortgages on real
This section 2839 was again amended in 1891 (See Acts of April 18,1891, p. 99) so as to read as follows: “Section 2839. Corporations may be created under this article for any one or more of the following purposes: First, to receive money in trust, and to accumulate the same at such rate of interest as may be obtained, or agreed upon,- or to allow such interest thereon as may be agreed, not exceeding in either case the legal rate (and the payment to them or their order of deposits made by minors shall be binding on them; to receive upon deposit for safe keeping personal property of every description; to guarantee special deposits and to own or control a safety vault and rent the boxes therein). Second, to accept and execute all such trusts and perform such duties of every description as may be committed to them by any person or persons whatsoever, or any corporation (and act as assignee, receiver, trustee and depositary, and to accept and execute all such trusts and perform such duties of every description) as may be committed or transferred to them by order, judgment or decree of any of the courts of record of this State or other State, or of the United States. Third, to take, accept (and hold, by the order, judgment or decree of any court of this State, or of any other State, or of the United States, or by gift, grant, assignment, transfer, devise or bequest of any person or corporation) any real or personal property in trust, and to execute and perform any and all such legal and lawful trusts in regard to the same, upon the terms, conditions, limitations ahd restrictions which may be declared, imposed, established or agreed upon in and
It is the contention of respondents that by the letter of the statutes they are empowered to receive money in exchange for their credit, thereby establishing the relation of debtor and creditor.
People v. Binghamton Trust Co., 139 N. Y. 185, was an action by the people of the State by their Attorney-General to recover judgment in their favor, declaring that the defendant was then exercising franchises not conferred upon it by law, and for the amount of the penalty prescribed by statute for carrying on business in violation of section 283, chapter 409, of the Laws of 1882, known as the Banking Law. The Attorney-General conceded that trust companies might receive.
But the question here is, are trust companies authorized by statute to receive money on general deposit, and pay it out on check at sight or on demand?
The only words in the statute which have any tendency whatever to sustain respondents’ position, are those in the first clause of said section 4 which authorize trust companies to receive moneys and “to allow such interest thereon as may be agreed, not exceeding the legal rate,” and those in the fifth clause which authorize them “generally to have and exercise such powers as are usually had and exercised by trust companies.” It is quite clear that no express power is conferred upon trust companies by said section to
Moreover, the powers conferred upon respondents are expressly enumerated, which implies the exclusion of all others not enumerated. In Thomas v. Railroad, 101 U. S. 71, the court observed: “We take the general doctrine to be in this country, though there may be exceptional cases and some authorities to the
It can not, be implied from the fact that trust companies have the power to receive moneys and to allow such interest thereon as may be agreed not exceeding the legal rate, that they have the power to receive moneys on general deposit, and pay it out on demand. They can go no further than the statute expressly permits. The clause under consideration grants the right to accept money and allow interest upon the same. This necessarily authorizes them to create the relation of debtor and creditor as to funds so deposited, but only to that extent. If they cam receive money and agree to pay interest thereon, this money may be payable on demand, as well as at such times as may be fixed by agreement, and upon checks or written orders or otherwise as may be most convenient.. This is as far as they can go. They have no authority to operate a general deposit account and receive money in any sums whatever upon which no interest is “allowed” and pay out such funds upon the depositor’s checks. It is enough to say that the legislature has not given such power.
Nor do we think any such power is granted, or that it can be implied from the fact that the statute provides that trust companies are “generally to have and exercise such powers as are usually had and exercised by trust companies.” The enumeration of the powers conferred upon trust companies by the statute must be held to exclude all others. Thomas v. Railroad,
Moreover, the general power attempted to be conferred is too indefinite and uncertain to confer any special power upon such companies.
In Railroad v. Canal Comm’rs, 21 Pa. St. 9, it was said by Black, C. J.: “But corporate powers can never be created by implication nor extended by construction. No privilege is granted unless it be expressed in plain and unequivocal words, testifying the intention of the legislature in a manner too plain to be misunderstood. When the State means to clothe a corporate body with a portion of her own sovereignty, and to disarm herself to that extent of the powers which belong to her, it is so easy to say so that we will never believe it to be meant when it is not said; and words of equivocal import are so easily inserted by mistake or fraud, that every consideration of justice and policy requires that they should be treated as nugatory, when they do find their way in the enactments of the legislature. In the construction of a charter, to be in doubt is to be resolved; and every resolution which springs from doubt is against the corporation.”
Section 7, article XII, of the Constitution of this State, provides that: “No corporation shall engage in
Section 2743, Revised Statutes, 1889 chapter 42, article VII, entitled “Savings Bank and Fund Companies,” is as follows: “Sec. 2743. Who may be Incorcorporated. — Any five or more persons in any county of this State, who shall have associated themselves by articles of agreement, in writing, as provided by law, for the purpose of establishing a bank of deposit or discount, or of both deposit and discount, may be incorporated under any name or title designating such business.” Section 2836, Revised Statutes, 1889, chapter 42, article XI, entitled “Trust Companies,” provides, that “any three or more persons who shall have associated themselves by articles of agreement, in writing, as provided by law, for any of the purposes included under section 2839 of this article, may be incorporated under any name or title designating such business.” In State v. Reid, 125 Mo. 51, Gantt, P. J., in speaking of the
It thus seems clear that no corporation other than a bank organized according to the laws of this State has the power to receive moneys on general deposit and pay them out on demand, on check or otherwise. If, however, the power exists in respondents to receive moneys on general deposit and to pay them out on demand, then the implied power exists in them to adopt such methods as they may think best comports with the order of business as to the way it shall be paid out, whether that be upon check or otherwise, and this, too, notwithstanding a check strictly speaking must be drawn upon a bank or banker. 2 Daniels on Neg. Inst., sec. 1568, p. 598. “Corporations, when they are not restrained in any particular manner by their charters, may adopt all reasonable modes in the execution of their business which a natural person may adopt in the exercise of similar powers.” Henning v. U. S. Ins. Co., 47 Mo. 425; Morawetz on Corporations, sec. 336; Railroad v. Union Steamboat Co., 107 U. S. 98; Wendel v. State, 62 Wis. 304.
But it is contended by respondents that the various acts of the legislature passed since the adoption of the first trust company law of 1885, have not only construed that láw so as to include the right of such companies to take deposits payable at sight or on demand, but these subsequent acts in themselves amount to a grant of the right to receive such deposits irrespective of the terms of the original law on the subject. It is
An act concerning' “Mutual Savings Societies,” approved March 31, 1887 (see Acts 1887, p. 117), whereby these' financial institutions were authorized to deposit their available cash fund with any trust company incorporated under the laws of this State.
An act concerning “Trust Companies,” approved April 18, 1891 (see Acts 1891, p. 99), whereby trust companies were authorized to receive deposits from minors, and providing that payments made to them or their order of deposits made by minors should be binding on them.
An act concerning “Savings and Safe Deposit Institutions,” approved April 3, 1891 (see Acts 1891, p. 86), whereby these institutions were authorized to keep their cash funds in trust companies “on deposit payable on demand.”
An act concerning “Bank Inspection,” approved March 22, 1895 (see Acts 1895, p. 97), whereby trust companies “which receive deposits” were placed under the general bank inspection law, and whereby all the requirements concerning banks as to reports^ supervision, etc., were extended to trust companies.
An act concerning “Savings Banks and Fund Companies,” approved March 9, 1895 (see Acts 1895, p. 119), whereby the officers and directors of trust companies who “receive or assent to the reception of deposits” after they shall have knowledge of the fact that such trust company is insolvent or in failing ciiv cumstances, are made subject to individual liability “for such deposits so received” the same as is provided by section 2760, Revised Statutes 1889, in regard to officers of banks and banking institutions.
An act concerning “Offenses against Public and. Private Property,” approved April 11, 1895 (see Acts
An act concerning “Bills of Exchange and Promissory Notes,” approved March 18,1895 (see Acts 1895, p. 47), whereby it was made lawful “for banks, trust companies and other banking institutions” to close their doors for business at 12 o’clock, noon, on each and every Saturday in the year, and providing further that all bills, checks, drafts and notes presentable for acceptance or payment on Saturdays shall be deemed presentable on the business day next succeeding.
An act concerning “Industrial or Prudential Life Insurance Companies,” approved March 31, 1897 (see Acts 1897, p. 138), whereby it was provided that such insurance companies might deposit with trust companies a sum not less than $10,000 “to the credit of the general fund of such insurance company.”
An act concerning “Examination of Banks, Fund and Trust Companies,” approved March 15, 1897 (see Acts 1897, p. 83), whereby trust companies were placed under the new bank inspection law of Missouri with all the regulations provided for in said act, and whereby it was provided that “trust companies which receive deposits” should be included under the term bank as used in that law.
It is insisted that these several enactments embody a legislative affirmation and recognition of the right of trust companies to receive money on deposit payable at sight or on demand, and that even if no such right had existed under the original law these enactments would in themselves operate to confer the power to receive such deposits.
But the question here is whether or not the legislature by it several subsequent acts before mentioned by which the power of trust companies to receive moneys on general deposit payable on demand or check is recognized, did thereby ingraft on the statute by implication merely, powers which did not theretofore exist in express terms or by implication. While a statute may be repealed by implication, it can not be amended otherwise than as provided by section 34, article IV, of the State Constitution, and the mere recognition of such powers, did not have the effect to create them.
It is well settled that the State can only be estopped by legislative enactment, resolution, grant, or by acts of its authorized agents, and we find nothing of that kind in this case. No additional express powers of a general character were conferred upon trust companies by either one of the several acts of the legislature to receive moneys on general deposit, which could only be done by an amendment to the law
Before the State can be estopped it must appear, not only that the provisions of the acts of the legislature, or some of them, are inconsistent with the right herein asserted by the State, but that the right of trust companies to receive moneys from individuals, corporations and business enterprises on general deposit is recognized by such legislation, .and that they acted upon such admissions, and in consequence thereof received moneys on general deposit subject to check at sight or on demand; and that it would be an injury to them to permit the State to assume an opposite position. Taylor and Mason v. Zepp, 14 Mo. 482; Dazell v. Odell, 3 Hill, 219; Newman v. Hook; 37 Mo. 207; Chouteau v. Goddin, 39 Mo. 250; Campbell v. Johnson, 44 Mo. 247; Bunce, Adm’r, v. Beck, 46 Mo. 327; Rice v. Bunce, 49 Mo. 231. The recognition of the power of respondents by the legislature to receive money on general deposit, even if such were the case, is not sufficient to create an estoppel in pais, unless respondents acted upon such recognition. Monks v. Belden, 80 Mo. 639; Acton v. Dooley, 74 Mo. 63; Spurlock v. Sproule, 72 Mo. 503. And it is impossible that respondents could have been mislead and induced to do otherwise than they did do by reason of all or either of said acts. And for these reasons. From the time of their organizations they received moneys on general deposit payable on demand, on check or sight draft, and the only act in question which was passed before that time, and upon which respondents could have possibly relied as conferring upon them the power to receive moneys on general deposit was that of 1887 (Acts 1887, p. 116) by which it is provided that mutual saving societies
In case of State v. Stebbins, and others, 1 Stewart, Rep. (Ala.), 299, the claim was made in behalf of a corporation having a special charter that subsequent legislative construction had given said corporation authority to carry on a banking business. But on this point, the court said: “But it is further contended that the act recited under which this indictment was preferred admits that the act of incorporation gave the power, ‘as it would seem by construction,’ to use banking privileges; and if so'the legislature can not abridge that power. It is admitted by the court that when any legal charter has conferred banking or other powers the legislature is incompetent to abridge or repeal them during the validity of the grant; but it is equally clear that an admission by the legislature that a corporation once had a power which was never granted and which
The record shows that at the time of the issuing the writ in this case respondents were, and have been ever since their organization under their respective charters, receiving moneys upon general deposit payable upon demand on check or sight draft upon which no interest was allowed by agreement, or otherwise, and our conclusion is that in so doing, and to that extent they exercised a franchise not conferred upon them by their charters. We do not think the State estopped.
By the ninth subdivision of section 2839, Revised Statutes 1889, trust companies are expressly authorized to buy and sell all kinds of government, state, .municipal and other bonds, and all kinds of negotiable and lion-negotiable paper, stocks and other investment securities. Which of course includes bills of exchange.
There can be no question we think as to the right of the Attorney-General to prosecute this proceeding.
Respondents seem to have been acting in good faith in the exercise of the franchise of receiving moneys on general deposits, upon which no interest was allowed by agreement or otherwise, and although without authority and in excess of their powers, under their charters, we are not disposed to enter judgment of ouster from such franchises as are legally possessed by them, but judgment of ouster from the exercise of the franchises not granted them as herein indicated will be entered.
Concurrence Opinion
I agree to much that is said in the foregoing opinion, but not to all that is said, nor do I agree that ouster should go. Hereafter, I may give fuller expression to my views.
