Worcester County National Bank

263 Mass. 394 | Mass. | 1928

Rugg, C. J.

This case is reported on a finding of material facts for determination by the full court-of the question of law whether the petitioner is entitled to render the account. The relevant facts are that the Merchants National Bank of Worcester, located at Worcester in the county of Worcester in this Commonwealth, a national bank organized under the laws of the United States, was appointed in October, 1924, administrator of the estate of the decedent and qualified by giving bond. No change in the administration is disclosed on the records of the appointing court. By certificate of the comptroller of the currency dated June 27, 1927, it appears that the directors and shareholders of the Merchants National Bank of Worcester and the directors and shareholders of Fitchburg Bank and Trust Company, a corporation organized under the laws of this Commonwealth and doing business at Fitchburg in said county of Worcester, were consolidated under the charter of the Merchants National Bank of Worcester and under the corporate title of Worcester County National Bank of Worcester, and that the consolidation was approved, all in compliance with an Act of Congress entitled, “An Act to provide for the consolidation of national banking associations,” approved November 7, 1918, c. 209, § 2, 40 U. S. Sts. at Large, 1044, as amended by the addition of a new § 3 by an Act of Congress approved on February 25, 1927, c. 191, § 1, 44 U. S. Sts. at Large, Part 2, 1224, 1225. A State bank is authorized by said § 3 to be consolidated with a national banking association under the charter of such national banking association upon specified terms. It is provided by said § 3 in substance that all the rights, franchises and interests of such State bank, so consolidated, in and to every species of property, shall be deemed to be vested in the national banking association into which it is consolidated, and that such consolidated national banking association shall hold and enjoy the same.

The original appointment of the national bank as administrator was authorized by law. It was valid when made. It is provided by G. L. c. 172, § 52, that a trust company organized under the laws of this Commonwealth may be appointed an administrator of the estate of a deceased person and to other fiduciary positions. By Act of Congress approved September 26, 1918, c. 177, § 2,40 U. S. Sts. at Large, 968, amending the Federal reserve act of December 23, 1913, c. 6, § 11 (k), 38 U. S. Sts. at Large, 262, as interpreted by First National Bank of Bay City v. Fellows, 244 U. S. 416, and Burnes National Bank of St. Joseph v. Duncan, 265 U. S. 17, the courts of this Commonwealth are required to appoint national banks to such fiduciary positions upon the same conditions as they would appoint trust companies organized under the laws of this Commonwealth, although no authority to make such appointment is found in the statutes enacted by the General Court of this Commonwealth. Of course we recognize the binding force of these decisions of the Supreme Court of the United States.

It is unnecessary for the decision of this case to determine whether the trust company lawfully could consolidate with the national bank, because we are of opinion that the legal obligation of the national bank appointed by the court to administer this estate is not in any respect impaired by what has taken place with respect to consolidation with the trust company under said § 3. The national bank has not been extinguished, dissolved or essentially altered by the form of consolidation under said § 3, whether that consolidation be treated as lawful and effective or as unauthorized and futile. Plainly, if it be the latter, the obligation of the national bank to administer the estate remains in full force. That obligation, lawful at its inception, has not been diminished, enhanced or changed thereby any more than it would be by any other ultra vires act of the national bank. If the consolidation be treated as lawful and effective, the national bank is the corporation now existing and operative. By the terms of said § 3 the consolidation was “under the charter” of the national bank. That bank has continued to exercise all its functions without modification, under the same charter, in the same manner and under the same legal sanctions and authorization since the consolidation as before. No new charter has been issued to it. The certificate of approval of the consolidation by the comptroller of the currency is in no sense a new or modified charter. It is no more than a formal expression by the comptroller of the currency of his approval of the consolidation. The corporate identity of the national bank has continued unaffected by anything in connection with the consolidation. Its corporate existence under the same charter, subject to the same laws, and owing fealty to the same jurisdiction, has persisted without change. Its financial resources may have been increased or diminished by the addition of the assets of the trust company and the assumption of its debts, but its obligations and duties, not arising out of the consolidation, abide in full force and effect as if there had been no consolidation. Among the duties and obligations which endure undisturbed by the consolidation is the trust to continue and finish the administration of the estate of the decedent.

The simple change of name of the national bank did not disturb its corporate identity or continuity of existence, which has remained uninterrupted. See Act of Congress of May 1, 1886, c. 73, § 2, 24 U. S. Sts. at Large, 18.

The case at bar is distinguishable from Commonwealth-Atlantic National Bank of Boston, petitioner, 249 Mass. 440 (certiorari denied, 266 U. S. 617), where it was held that the right to be appointed executor under a will, wherein a trust company organized under our laws was named as executor, did not pass to a consolidated national bank consisting of two national banks consolidated under said c. 209, 40 U. S. Sts. at Large, 1043, into one of the constituent national banks in which consolidation the trust company so named as executor had been converted under U. S. Rev. Sts. § 5154. It is also distinguishable from Commonwealth-Atlantic National Bank of Boston, petitioner, 261 Mass. 217, where, with reference to the same conversion of trust company and consolidation of national banks, it was held that such consolidated national bank was not entitled to account in the court of probate as a trustee under an appointment of the trust company as trustee. In those decisions there was full recognition of the requirement of the Act of Congress of September 26, 1918, c. 177, § 2, 40 U. S. Sts. at Large, 968, as interpreted by First National Bank of Bay City v. Fellows, 244 U. S. 416, and Burnes National Bank of St. Joseph v. Duncan, 265 U. S. 17, to the effect that courts of this Commonwealth must appoint national banks to certain fiduciary positions upon the same conditions as they would appoint local trust companies; but it was determined that the courts in the particular circumstances disclosed had a right to adjudicate and determine upon a new petition, whether the particular national bank conformed to the general standards demanded by the laws and established practice of this Commonwealth for the appointment of executors and similar fiduciaries, and that such a trust did not pass as of right from the State trust company to the consolidated national bank without the approval of the court. That principle is not applicable to the case at bar, where the national bank originally appointed to the trust has maintained an unbroken and unchanged identity of corporate existence in the administration of the trust reposed in it to administer the estate of the decedent.

It is not necessary to discuss the validity, force or effect of the provision of said § 3 that the consolidated national bank shall hold and enjoy “the right of succession as trustee, executor, or in any other fiduciary capacity in the same manner and to the same extent as was held and enjoyed by such State . . . bank so consolidated with such national banking association.” That question is not involved in the narrow issue here presented. If that provision should be held to be invalid, we are of opinion that it is capable of separation from the other portions of the act, which may be enforced independently. That provision is not so connected with and dependent upon other clauses of the act as to constitute an essential factor of the whole. The apparent intent of the Congress as expressed in other parts of the act may be effectuated without impairment even if this provision be stricken down. The dominant purpose of the act was to permit the direct consolidation of a State bank or a bank of the District of Columbia with a national bank, something not theretofore permitted. That main design would not be affected in a vital aspect even if this purely incidental provision were held nugatory. Huntington v. Worthen, 120 U. S. 97. International Text Book Co. v. Pigg, 217 U. S. 91, 113. Warren v. Mayor & Aldermen of Charlestown, 2 Gray, 84, 98, 99. Lawton Spinning Co. v. Commonwealth, 232 Mass. 28, 32.

Our conclusion is that the petitioner is entitled to render the account. It has been found that the account is in proper form and should be allowed if the Worcester County National Bank of Worcester is entitled to render the account. It follows that decree should be entered allowing the account.

Ordered accordingly.