Where stockholders of a national bank have the legal right to enforce inspection, the state court has authority to enforce the right by granting the proper relief in a judicial proceeding. Nothing in sec. 5211, Rev. Stat. requiring reports by, or in sec. 5240, Rev. Stat. providing for examination of, national banks cuts down the usual common law rights of shareholders in such corporations.

The term visitorial powers as used in sec. 5241 does not include the common law right of the shareholder to inspect the books of the corporation.

THE defendant in error was the owner of nearly one-fifth of the capital stock of the Commercial National Bank of Ogden, Utah. As such shareholder he applied for leave to inspect the books, accounts and loans of the bank, which was refused him. He alleges the reasons for seeking such inspection to be that he might ascertain the value of his stock in the bank and whether the business affairs of the same had been conducted according to law. He charges that loans had been made to patrons of the bank of more than one-tenth of the capital stock in violation of law, and that an inspection of the books, accounts and loans of the bank would reveal other irregularities. Upon the hearing in the District Court the following findings of fact were made:

"1. That the Commercial National Bank of Ogden, Utah, is a corporation organized and existing under and by virtue of the laws of the United States; that said corporation is doing a banking business in Ogden City, Weber County, State of Utah; that the capital stock of said bank is $100,000, divided into 1,000 shares of the par value of $100.00 per share.

"2. That the defendants are directors and have under their control and in their possession all books, papers, accounts and loans of said Commercial National Bank.

"3. That there is no acting cashier of said bank, and that there has been no such cashier since the first day of November, 1902; that J. W. Guthrie is president; A. R. Heywood, vice president, and R. T. Hume is assistant cashier of said bank.

"4. That on or about the first day of February, 1903, plaintiff made a demand upon said directors at the banking house of said bank and also upon J. W. Guthrie as president, A. R.

Argument for Plaintiffs in Error.

199 U.S.

Heywood as vice president and general manager of said bank, and upon R. T. Hume as assistant cashier of said bank, for permission to permit plaintiff to inspect all books, accounts and loans of the said bank, and plaintiff made demand for such inspection at such time or times as would not interfere with the proper conducting and operating of said bank.

"5. That each and all of said persons refused permission to plaintiff to inspect the said books, accounts and loans of said bank at any time or at all, and they still refuse to permit such inspection.

"6. That the plaintiff is the owner and has in his possession 183 shares of the capital stock of said bank of the par value of $18,333.33, and that said stock appears on the stock books of said bank in the name of the said plaintiff.

"7. That plaintiff sought and now seeks the inspection of the books, accounts and loans of said bank for the purpose of ascertaining the true financial condition of said bank and also for the purpose of ascertaining the value of his stock in said bank, and also for the purpose of ascertaining whether the business affairs of the said bank have been conducted according to law. "The court further finds that sufficient reason exists for the inspection of said books and accounts of said bank.”

Upon this finding the court entered a judgment requiring the defendants to permit the plaintiff to inspect the books, accounts and loans of the bank at such time or times as would not interfere with the business of the bank.

Mr. Abbot R. Heywood for plaintiffs in error:

A stockholder possesses no powers and rights of access to and inspection of all the books, loans and papers appertaining to the carrying on of the business. § 5241 Rev. Stat.

For provision of Utah laws applicable see § 329 R. S. Utah, and penal statute § 4415, as to refusal of inspection of corporate books.

The trial court held that neither of these Utah statutes was applicable to corporations organized for banking purposes

199 U. S.

Argument for Defendant in Error.

under the laws of Congress. Easton v. Iowa, 188 U. S. 220; S. C., in state court 85 N. W. Rep. 796; Davis v. Elmira Savings Bank, 161 U. S. 275; Prigg v. Pennsylvania, 16 Pet. 539; Farwers' &c. Bank v. Dearing, 91 U. S. 29.

All the cases used by counsel for respondent below were anterior to the Easton case, when the state courts went to extreme lengths as in Winter v. Baldwin, 89 Alabama, 483; Tuttle v. Iron National Bank, 170 N. Y. 9. See Webster's dictionary for definition of "visitorial."

In business there is no more confidential relation established than that between the bank and its customer.

The customer trusts the honor and secrecy of the bank no less implicitly than he does their honesty. And it is as important that the affairs disclosed by the bank records be kept a secret as it is that the money be returned. It is possible to do lasting harm by revealing a customer's private affairs.

Such knowledge as this, if it were revealed, would also decrease the confidence of the public. These secrets should be all buried in the heart of the banker.

Mr. Hiram H. Henderson, with whom Mr. Herbert R. Macmillan was on the brief, for defendant in error:

The state court has jurisdiction. See 4 of the act of March 3, 1887, 24 Stat. 552 as amended by act of August 13, 1888, 25 Stat. 433; Petri v. Commercial Bank, 142 U. S. 644; Whittemore v. Amoskeag Bank, 134 U. S. 527; McClellan v. Chipman, 164 U. S. 347.

Sec. 329 Rev. Stat. Utah does not give the right to examine the books of a national bank but the stockholder has a common law right to do so which has not been taken away or abridged by any act of Congress or otherwise. See opinion Vann, J., in Re Steinway, 159 N. Y. 250 and numerous cases cited therein; Tuttle v. Iron National Bank, 170 N. Y. 9; State v. Pacific Co., 58 Pac. Rep. 584; Winter v. Baldwin, 89 Alabama, 483. While there is no common law of the United States in the sense of a national customary law, yet where a point is decided

by the adjudged cases or laid down as settled in the books of acknowledged authority, the Supreme Court should act upon it as the common law, unless some act of Congress or local suit or decision of the Supreme Court prescribes another rule. Homes v. Jennison, 14 Pet., page 626; Smith v. Alabama, 124 U. S. 478; Bucher v. Chesshire R. R., 125 U. S. 582; United States v. Wong Kim Ark, 169 U. S. 660.

Sec. 5241 Rev. Stat. does not take away this right. As to what is meant by visitorial see Webster and Century dictionaries; First National Bank v. Hughes, 6 Fed. Rep. 737; Waite v. Dowley, 94 U. S. 527; and as to how this provision was inserted in § 5241 see Blaine's Twenty Years in Congress, Vol. 1, ch. 22.

The lower court had a right to exercise a reasonable discretion to what extent the defendant in error would be permitted to examine the books and accounts of the bank, and as its discretion was reasonable and just, with no showing to the contrary on part of the plaintiffs in error, this court will not permit the plaintiffs in error, for the first time, to find fault with that discretion.

Easton v. Iowa has no bearing upon the case.

MR. JUSTICE DAY, after making the foregoing statement, delivered the opinion of the court.

While the State has no power to enact legislation contravening the Federal laws for the control of national banks, Davis v. Savings Bank, 161 U. S. 275, Congress has provided that for actions against them at law or in equity they shall be deemed citizens of the State in which they are located, and that in such cases the Circuit and District Courts of the United States shall have such jurisdiction only as they would have in cases between individual citizens of the same State. 25 Stat. 433. If the stockholders had the legal right to enforce inspection there is no room to question the authority of the state courts to enforce the right granting the proper relief in a judi

cial proceeding. Petri v. Commercial Bank, 142 U. S. 644; Continental National Bank v. Buford, 191 U. S. 119, 123.

Upon review in the Supreme Court of Utah the judgment of the District Court was affirmed, it being held that it was the common law right of the shareholder to have the inspection demanded, and that the same had not been cut down by the act of Congress regulating the business of national banks. 27 Utah, 248.

There can be no question that the decisive weight of American authority recognizes the common law right of the shareholder, for proper purposes and under reasonable regulations as to place and time, to inspect the books of the corporation of which he is a member. Morawetz in his work on Corporations, section 473, says:

"However, in the United States the prevailing doctrine appears to be that the individual shareholders in a corporation have the same right as the members of an ordinary partnership to examine their company's books, although they have no power to interfere with the management."

In many of the States this right has been recognized in statutes which are generally held to be merely in affirmance of the common law. Nor do we find the authorities making an exception as to this right when a corporation which does a banking business is the subject of consideration. It is said to be customary for banking companies in England to insert in their constitutions a provision forbidding the inspection of customers' accounts by shareholders or creditors. Morgan's Case, L. R. 28 Ch. D. 620 (1885); Cook Corp. § 517 note. The subject appears to be now regulated by statute in England. Cook Corp. § 518. In Cockburn v. Union Bank of Louisiana, 13 La. Ann. 289, it was held that a stockholder in the Union Bank of Louisiana had the right to a writ of mandamus to compel the officers of the bank to allow him the privilege of inspecting the discount books of the bank within proper and reasonable hours, and in the course of the opinion it was said:

"A stockholder in a corporation possesses all his individual