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without resort to any judicial functions of probate court.

10. Constitutional law 56-Executors and administrators 37(1)-Trusts 169(1) -Statute providing for national bank's succession of state bank as trustee or executor or administrator on consolidation with state bank, without judicial determination of fitness, held void (12 USCA § 34a; Declaration of Rights, pt. 1, art. 30).

Act Cong. Feb. 25, 1927, § 1 (12 USCA § 34a), amending Act Cong. Nov. 7, 1918, by adding section 3, providing for consolidation of state banks with national banks and for right of succession of national bank as trustee or executor to fiduciary positions held by state bank, without judicial determination as to fitness of new corporation to perform duties of fiduciary, and providing that no consolidation shall be in contravention of law of state, held to contravene state law with regard to national bank's substitution as executor, as exercise by Legislature of judicial powers in violation of Declaration of Rights, pt. 1, art. 30.

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have exclusive jurisdiction of settlement of estates of deceased persons and appointment of fiduciaries to administer trusts (Const. U. S. art. 1, §§ 8, 10, and Amend. 10).

General subject of the settlement of estates of deceased persons and the appointment of fiduciaries to administer trusts is within the exclusive jurisdiction of the several states under Const. U. S. art. 1, §§ 8, 10, since power is not conferred on United States, and is not forbidden

to the states, but is reserved to the states under article 10 of the amendments.

13. Banks and banking 234-Provision In bank consolidation act for succession of national bank to position of state bank as executor or trustee without any judicial determination of successor's fitness held void as encroaching on powers of states (12 USCA § 34a; Const. U. S. art. 1, §§ 8, 10, and Amend. 10).

Act Cong. Feb. 25, 1927, § 1 (12 USCA § 34a), as amending Act Cong. Nov. 7, 1918, by adding section 3, which provides for consolidation of state and national banks, held unconstitutional as encroaching on powers of state, in violation of Const. U. S. art. 1, §§ 8, 10, and Amend. 10, in so far as it provides right of succession of national bank as trustee or executor to fiduciary positions held by state bank without provision for any judicial determination as to fitness of the national bank to perform the duties of a fiduciary.

14. Banks and banking 64(2), 234—Invalidity of provision for succession of national bank to state bank's position as executor held not to invalidate remainder of act providing for consolidation of state and national banks (12 USCA § 34a).

Act Cong. Feb. 25, 1927, § 1 (12 USCA § 34a), amending Act Cong. Nov. 7, 1918, by adding section 3, which provides for consolidation of state and national banks, though void as to provision permitting succession of national bank to state bank's position as executor or trustee without any judicial determination of fitness, held valid as to remaining part, since void clause is separable and distinct, excluding view that Congress would not have executed the valid part without the other.

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15. Executors and administrators
tional bank, with which trust company hold-
ing position as executor was consolidated,
held not entitled to render account, except as
executor de son tort (12 USCA §§ 30, 34a;
G. L. c. 172, § 44, as amended by St. 1922, c.
292).

National banking association, with which
trust company
was consolidated under Act
Cong. Feb. 25, 1927, § 1 (12 USCA § 34a),
amending Act Cong. Nov. 7, 1918, by adding sec-
tion 3, and Act Cong. May 1, 1886, § 2 (12
USCA § 30), held not entitled to render account
as executor after the consolidation, since provi-
sion in Federal statute for succession to state
bank's right as executor without any judicial
determination is void and in contravention of
state law, G. L. c. 172, § 44, as amended by St.
1922, c. 292, which makes the charter of a con-
solidated trust company void; and national bank
was entitled to account only as executor de son
tort.

Case Reserved and Report from Probate Court, Worcester County; Frederick H. Chamberlain, Judge.

Petition by the Worcester County National Bank of Worcester for leave to render account as executor of the estate of Julia A.

Legnard. On reservation and report from the probate court. Question reported answered. William T. Forbes, of Worcester, for petitioner.

RUGG, C. J. This case is reported on a finding of material facts for determination whether the petitioner is entitled to render the account. The pertinent facts are that the Fitchburg Bank & Trust Company, a corporation organized under the laws of this commonwealth, was appointed on April 21, 1926, by the appropriate court of probate executor of the will of Julia A. Legnard and qualified by giving bond. No change in the administration of this estate appears on the court records. The said Fitchburg Bank & Trust Company, located within our county of Worcester, consolidated with the Merchants' National Bank of Worcester, a national banking association organized under the laws of the Unit

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(162 N.E.)

ed States and also located within our county of Worcester, under the corporate title, Worcester County National Bank of Worcester, pursuant to the provisions of the Act of Congress approved on February 25, 1927, c. 191, § 1, 44 U. S. Stat. at Large, part 2, pp. 1224, 1225 (12 USCA § 34a), amending an Act approved November 7, 1918, c. 209, 40 U. S. Stat. at Large, 1044, by adding at the end of said chapter 209 a new section, being section 3 thereof. For convenience this will be referred to hereafter in this opinion as said section 3. See Act of Congress of May 1, 1886, c. 73, § 2 (24 U. S. Stat. at Large, 18 [12 USCA § 30]). The certificate approving the consolidation is dated June 27, 1927. It is assumed that the consolidation took effect on that date.

The first statute purporting to authorize a trust company organized under the laws of a state to consolidate directly with a national banking association was said section 3. Its provisions, so far as material to the grounds of this decision, are that any bank, defined to include a trust company, incorporated under the laws of any state, "may be consolidated with a national banking association located in the same county * • under the charter of such national banking association on such terms and conditions as may be lawfully agreed upon" in the manner specified; "and all the rights, franchises, and interests of such state * * bank so consolidated with a national banking association in and to every species of property, real, personal, and mixed, and choses in action thereto be longing, shall be deemed to be transferred to and vested in such national banking association into which it is consolidated without any deed or other transfer, and the said consolidated national banking association shall hold and enjoy the same and all rights of property, franchises, and interests including 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. * No such consolidation shall be in contravention of the law of the state under which such bank is incorporated."

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[1] First. The first question to be decided is whether consolidation of a Massachusetts trust company with a national banking association is permissible and valid, as provided for in said section 3. On this aspect of the case we shall deal only with consolidation in its general features and leave for later consideration the meaning and effect, as declared in said section 3 of such consolidation on the Massachusetts corporation and its fiduciary appointment by the court of probate, and whether these provisions are in contravention of the law of this commonwealth.

There is no statute of this commonwealth prohibiting in terms the consolidation of a trust company organized under the authority

of Massachusetts laws with a national bank. We are of opinion that there is no policy of the commonwealth declared in any statutes on the subject of such consolidation. It is provided by G. L. c. 172, § 44, as amended by St. 1922, c. 292, that "no trust company shall be merged in or consolidated with another trust company except" upon the terms and in the manner there specified. These statutory words in their context and by the express terms of G. L. c. 172, § 1, refer exclusively to trust companies organized under the laws of this commonwealth. These statutory words, although they do not authorize, do not prohibit a consolidation of a Massachusetts trust company with a national bank. Further provisions of said section 44 as amended touching "the sale or exchange of all the property and assets, including the good will and corporate franchise, of a trust company" have no relevancy to the facts disclosed on this record because a consolidation such as here is in issue is not "a sale or exchange" of the property and assets of the trust company. The final sentence of said section 44 as amended is this:

"The charter of a trust company the business of which shall, on or after July first, nineteen hundred and twenty-two, be consolidated or merged with, or absorbed by, another bank or trust company, shall be void except for the purpose of discharging existing obligations and liabilities."

It is to be observed that here for the first time occur the words "another bank" coupled with the words "trust company."- The use of the word "bank" in this connection, in a chapter devoted solely to the subject of trust companies, bears some indication of legislative recognition of the fact that a consolidation or merger of a trust company with a "bank" was contemplated. By said chapter 172 and by G. L. c. 167, a bank is a different institution from a trust company. So far as we are aware or have been able to discover, there is nó statute of this commonwealth authorizing any state bank, as distinguished from a trust company, to consolidate with a trust company; and there is no statute, except said section 44 as amended, authorizing a trust company to consolidate with another institution transacting any branch of the business of banking. The use of the word "bank" in the context shown in said section 44 as amended renders it impracticable to hold rightly that consolidation of a trust company with a national bank, subject to the limitation expressed in the final sentence of said section 44 as amended, is contrary to declared legislative policy even though at the time of the enactment of St. 1922, c. 292, no such direct consolidation was permissible under any act of Congress. An indirect and roundabout method of consolidation theretofore was possible by means (1) of the conversion of a trust company into a national bank under U. S. Rev. St. § 5154 (12 USCA § 35), and (2) of the

consolidation of the national bank thus established with another national bank under the charter of such other national bank under

Act of Congress of November 7, 1918, c. 209, 40 U. S. Stat. at Large, 1043. That method has been followed in some instances, as shown by the record in Petition of Commonwealth-Atlantic National Bank of Boston, 249 Mass. 440, 144 N. E. 443. The Legislature may have had that method of accomplishing the result in mind in phrasing the final sentence of said chapter 292. It would have been simple for the Legislature to have de clared that such consolidation or merger was in contravention of the policy of the commonwealth if such had been its purpose.

There is no provision in the statutes of this commonwealth authorizing or recognizing the consolidation of a trust company or bank organized under such statutes with a national banking association. Formerly there were statutes respecting the conversion of a state bank into a national bank under Act of Congress of June 3, 1864, c. 106, § 44, 13 U. S. Stat. at Large, 112, now U. S. Rev. St. § 5154 (12 USCA § 35). See St. 1863, c. 244, St. 1864, c. 190. Of course these early statutes never were applicable to a consolidation of a state bank with a national bank, which appears first to have been authorized by said section 3 (44 U. S. Stat. at Large, part 2, pp. 1225, 1226). But those early statutes were repealed by Pub. St. c. 224. It is quite possible that that repeal came about because such statutes were thought to be unnecessary in view of the decision in Casey v. Galli, 94 U. S. 673, 24 L. Ed. 168, to the effect that no enabling state statute was required to accomplish such change and conversion.

This review of the statutes of this commonwealth shows that there has been no exercise of whatever power may reside in the state to declare a general policy against the consolidation of a state trust company with a national bank. Thereby in effect that field is left open to the exercise by Congress of whatever power it possesses over that subject. Commonwealth v. Nickerson, 236 Mass. 281, 292, 293, 128 N. E 273 (10 A. L. R. 1568). Such consolidation, however, must be subject to the limitation already quoted from the final sentence of St. 1922, c. 292, amending G. L. c. 172, § 44.

It follows that, speaking broadly, the consolidation of a Massachusetts trust company with a national banking association is not "in contravention of the law" of this commonwealth, subject to the limitation in St. 1922, c. 292, amending G. L. c. 172, § 44, and to the limitations hereinafter stated.

The question was directly raised in Casey v. Galli, 94 U. S. 673, 24 L. Ed. 168, whether a state bank could change its organization into that of a national banking association without any authority given by the state law in its charter or otherwise to make the change. It was said at page 678:

"No authority from the state was necessary to enable the bank so to change its organization. The option to do that was given by the fortyfourth section of the Banking Act of Congress. 13 Stat. 112 [U. S. Rev. St. § 5154]. The power there conferred was ample, and its validity cannot be doubted. The act is silent as to any assent or permission by the state. It was as competent for Congress to authorize the transmutation as to create such institutions originally."

We are unable to perceive any sound distinction between the power of Congress to authorize the conversion of a state bank into a national bank and its power to authorize the consolidation of a state bank with a national bank under the charter of the national bank. If no state legislation was necessary to accomplish such conversion, it seems to us that no state legislation is necessary to accomplish such consolidation. Relying upon the authority of Casey v. Galli, 94 U. S. 673, 24 L. Ed. 168, we are of opinion that in general consolidation of a Massachusetts trust company with a national banking association as prescribed in said section 3 is permissible and valid.

[2, 3] Second. The next question to be determined is what is the legal effect of such consolidation upon the trust company and upon the national bank. The words of said section 3 (44 U. S. Stat. at Large, pt. 2, pp. 1225, 1226), are explicit to the point that the consolidation shall be "under the charter of such national banking association." This of itself is clear indication of intent that the state trust company shall not continue as a corporation in combination with the national bank. The words of St. 1922, c. 292, amending G. L. c. 172, § 44, are equally explicit that upon any consolidation of a Massachusetts trust company, whether with a bank or another trust company, its charter "shall be void except for the purpose of discharging existing obligations and liabilities." The statutes of this commonwealth upon the subject of a trust company, owing its creation and existence exclusively to those statutes, must be valid and binding to this extent. The later provision of said section 3 that there shall be transferred to the national banking association and be held by it among other things the "franchise" of the state bank, cannot mean its right to be a corporation. The right to transfer franchise powers of a corporation organized under the laws of one sovereignty to a corporation organized under the laws of a different sovereignty is extraordinary. It cannot be implied in the absence of explicit statutory enactment to that end. There is no such provision in the statutes of this commonwealth. Any other conclusion would be in contravention of the laws of this commonwealth. It is manifest from the terms of said section 3 (44 U. S. Stat. at Large, pt. 2, pp. 1225, 1226), and from the terms of said St. 1922, c. 292, that the

(162 N.E.)

charter of the trust company here in question became void on the consolidation (except for ⚫purposes not here material), and that the only corporation now operative is the national bank. The trust company as a Massachusetts corporation has ceased to be an institution capable of transacting business. The national bank existing before the consolidation has continued to exercise all its functions without alteration or modification under the same charter since the consolidation as before. The consolidation contemplated by said section 3 is an absorption of the state bank with all its assets by the national banking association, which retains its corporate identity. Its provisions differ in this particular from many. statutes authorizing the consolidation of corporations, which effect the extinguishment of the constituent corporations and the establishment of a new corporation.

[4] There is no requirement in said section 3 (44 U. S. Stats. at Large, pt. 2, pp. 1225, 1226), or elsewhere, so far as we can discover, that the comptroller of the currency must issue a certificate of consolidation, although there is an implication in the provision touching dissenting stockholders (not herein quoted) that he must approve such consolidation. The certificate printed in the record cannot be thought to be more than the signification of approval of the consolidation by the comptroller of the currency. It is in no sense a charter. By the very terms of said section 3 the consolidation is "under the charter of such national banking association," that is, its pre-existing charter, upon which said section 3 casts no invalidity, but which continues unimpaired, and is the only legal basis for the national bank after the consolidation. See U. S. Rev. St. 5169 (12 USCA § 27); Act of Congress of July 12, 1882, c. 290, § 2, 22 U. S. Stat. at Large, 162 (Comp. St. § 9666); Act of Congress of April 12, 1902, c. 503, 32 U. S. Stat. at Large, 102 (Comp. St. § 9673).

The result is that the trust company chartered by this commonwealth has gone out of existence; all its property of every name and nature has gone into the possession and has become the property of the national bank, and the national bank continues its existence and identity under its original charter. The trust company has lost its identity and its assets have become those of the national banking association. The latter is not a newly created organization but an enlargement of the continuously existing national bank. Tomlinson v. Branch, 15 Wall. 460, 21 L. Ed. 189; Central Railroad & Banking Co. v. Georgia, 92 U. S. 665, 23 L. Ed. 757; Yazoo & Mississippi Valley Railway v. Adams, 180 U. S. 1, 19-22, 21 S. Ct. 240 (45 L. Ed. 395); In re Parsons' Estate (Petition of Worcester Bank & Trust Co.) 260 Mass. 161 N. E. 797. [5-7] In view of this legal effect, in its general aspects, of the consolidation of the trust company with the national bank upon the trust company as a corporation, it must fol

low that its identity as a fiduciary appointed by the court of probate has not been continued in the national bank, but has been extinguished. Doubtless in many respects it may be said that the identity of corporations consolidated under the provisions of law is continued in the absorbing corporation. That is true commonly as to contract obligations. Proprietors of Locks and Canals on Merrimack River v. Boston & Maine Railroad, 245 Mass. 52, 59, 139 N. E. 839, and cases cited; Atlantic National Bank v. Harris, 118 Mass. 147; Iowa Light, Heat & Power Co. v. First National Bank of Boston, 250 Mass. 353, 354, 145 N. E. 433. In discussing questions of that nature broad language may be found in opinions of courts. In Michigan Insurance Bank v. Eldred, 143 U. S. 293, 300, 12 S. Ct. 450, 452 (36 L. Ed. 162), occur these words by Mr. Justice Gray:

"The plaintiff corporation, having been originally created by the laws of Michigan, had, in accordance with the National Banking Act, become a national bank, and its name been changed accordingly, without affecting its identity, or its right to sue upon obligations or liabilities incurred to it by its former name. Act of June 3, 1864, c. 106, § 44; 13 Stat. 112; Rev. Stat. § 5154; Metropolitan Bank v. Claggett, 141 U. S. 520 [12 S. Ct. 60, 35 L. Ed. 841]."

In the latter case it was said at page 527 (12 S. Ct. 62): "The change or conversion" of a state bank into a national bank under U. S. Rev. St. § 5154, "did not 'close its business of banking' nor destroy its identity or its corporate existence, but simply resulted in a continuation of the same body with the same officers and stockholders, the same property, assets, and banking business under a changed jurisdiction; that it remained one and the same bank." It may be noted that scarcely any of the facts thus enumerated as decisive exist in the case at bar with reference to the trust company and the national bank. Plainly the conversion of a state bank into a national bank under consideration in the two cases last cited differs in essential particulars from a consolidation such as is disclosed on this record. The expressions just quoted were used in judgments touching contract litigation, and must be interpreted as applicable to the facts then before the court. Such expressions and decisions occurring in different connections and rendered upon different issues cannot rightly be stretched to include a situation like that here presented. Cohens v. Virginia, 6 Wheat. 264, 399 (5 L. Ed. 257); Swan v. Justices of Superior Court, 222 Mass. 542, 545, 111 N. E. 386, and cases collected. They are not applicable to the peculiar positions of trust like executor, administrator, and other fiduciaries, established under the law and practice of this commonwealth. It is the duty of a court under our jurisdiction, before appointing an executor, administrator, trustee or other fiduciary, to inquire carefully as to his character, integri

ty, soundness of judgment and general capacity, and to make the appointment only after a favorable finding on these points. That duty of inquiry is just as imperative with respect to a trust company or national bank as with respect to an individual.

The suggestion in the brief of the petitioner that, "strictly speaking, a court cannot appoint an executor," is without merit in this connection. Probate courts are required to find that a person named as executor "is legally competent and a suitable person" be fore issuing letters testamentary. G. L. c. 192, § 4. The form of letter testamentary in common use by probate courts and doubtless approved by this court under G. L. c. 215, § 30, begins with the assertion, after naming the person, "You are appointed executor." He has no legal authority as executor until so ap pointed. Manifestly the executor is appointed by the court as the result of a judicial decision.

It is quite possible that none of the officers of the Fitchburg Bank & Trust Company, in reliance upon whose character, sagacity and skill the original appointment as executor was made in the case at bar, continue as of ficers of the national banking association. The stockholders hardly can be the same. Its general policy of business and trust administration may have been entirely altered. Its reputation with respect to these matters may have changed radically as a consequence of the consolidation. The court has had no opportunity to pass upon these essential questions. The failure of several trust companies and at least one national banking association in this commonwealth within recent years accentuates the importance of such judicial examination of trust companies and national banks before appointing them to positions of trust of this nature in the administration of estates.

It is to be observed that there are no statutory words in said section 3 to the effect that the identity of the state bank as a fiduciary by appointment of a court is continued in the national bank with which it has been consolidated. The absence of express words in said section 3 declaring the preservation of the identity of the state bank perhaps may not be of decisive significance. If it be assumed that it was intended by said section 3 to preserve that identity, that result is not accomplished in view of what has of necessity happened in making the consolidation in compliance with said section and already described in detail. Identity with the trust company in the sense in which that word is used under our system of judicial appointments of fiduciaries cannot be attributed to the national bank into which the trust company has been consolidated. The identity of the trust company as such fiduciary cannot be regarded as so continued in view of the ex

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[8] The trust arising from appointments to such positions as executor, administrator and the like is highly personal. It is not commercial. It is not contractual. It is not a property right. It involves no pecuniary interest on the part of the fiduciary. Ensign v. Faxon, 224 Mass. 145, 112 N. E. 948; Petition of Commonwealth-Atlantic National Bank of Boston, 249 Mass. 440, 445, 144 N. E. 443; Wilkinson v. McIntyre, 254 Mass. 325, 330, 150 N. E. 228. A strictly confidential relationship of this nature cannot survive such a transmutation as is wrought by the consolidation of a state bank with a national banking association under the charter of the latter in accordance with the terms of said section 3. To treat the national banking association into which the state trust company has been consolidated as preserving the identity of the trust company in this particular would be contrary to the juridical conception and practice touching the appointment of such fiduciaries under the law of this commonwealth.

Third. The final question for determination is whether the provision of said section 3 (44 U. S. Stat. at Large, pt. 2, pp. 1225, 1226), that the national banking association 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," is valid and binding upon the courts of this commonwealth. This question divides itself into three parts: (1) What do these words mean? (2) Are they in contravention of the law of this commonwealth? (3) Do they violate any provision of the Constitution?

[9] (1) The words just quoted from said section 3 seem to us to carry the unmistakable import that in case of consolidation the national banking association shall possess and enjoy all appointments as executor, administrator, or other fiduciary held by the absorbed state bank by virtue of any decree of any court without further action by the appointing court, as fully and completely as if it were the state bank, or as if it had originally been appointed to these fiduciary positions by the court. As has already been shown, the trust company has gone out of existence and its charter has become void "except for the purpose of discharging existing obligations and liabilities." The national banking association is a different corporation from the trust company. But under the words of said section 3 resort to the judicial functions of the probate court for any purpose in these changed circumstances is

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