Untitled Texas Attorney General Opinion ( 1944 )

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Honorable Charles B. Theobald
County AttornsJr
Galwaton Coua~
Galveston, Texas
Dear ~rlr.
Thsolaldt opinion HO. o-5929
Re: Conatruetion 0r Artiolea 4992,
4986, 4201 and 4218, V.A.C.8.
Tour request for an opinion upon the above aubjeot matter prosoafs
th0 r0n0mg qu0atioas8
'Question 1. Are these statutee (Isfioles 4982 aad 4984) applicable to a
Xatimal Bank?
“Question 2. If the Probate Court has entered an order roquiring a bond in
a definite amount, and at a sulmequent date a bank canplies with Artialss
4982 and 4983, doea suoh complianoe supersede said previous order mde re-
quiring bond, and permit 6aid bauk to f%nation am atbinistrater or guardian
without riling the bond prwiowtly ordered?
"Articles 4201 and 4216 Vsrnon~s Annotated Civil Statdo provide that la
order for a guardian or adminirtrator to ~11 real wtate he must file a
speoial sale bond in double the amoauttfor rhish the ealo ia being made.
"Question 3. De theso statute8 relieve thoroomplying therewith frm fil-
ing suoh special nalo bond in the traumfor of real ostata?
"Question 4. Where a bank haa for a nmaher oi rears ban buly acting a#
gdministrator or guardian Bbd8r bonds fixed by the Court, tmd after having
&ted am suah aa administrator or guardian for a~number ot pus oomplie8
with the rtatutea herein mentioned, WUI it ba requirad to glro arrgfurtbr
bonds or do theme stat&e@ ~oliem3 such barn++ sf the aoemsi~ of filing
aw further bondr in said estate in wbioh they ha-~ previously qualiiiod
and haw been asting?"
m dull wuawir your quwtionr eateg;orisallyin *a order 0r par
enumeration.
1. Artioloa 4982, 498S, 4984, 4985, and 4988, aonatituting Subdhl-
rion 2. ¶RI%T COMPANIES, under Chapter Sixben of,Title,78 oi the Revised
civil Eltatutea,Vernon*e oodifiaation, dealing with uurety and truet oompan-
iea, are a8 fellomr
Hon. Charles H. Thoobald, pags 2 (O-5929)
(Bats8 Copying theso statutss is emitted her6 for brevity a6 *6y
6re availabl6 in Vernon*6 codifioation.)
Under r611-66tab116h6d rules of law, national bankkng assooiatlons
derim t&&r oorpwato parers iron Congrsss, and no State lmu rhioh thwarts
m impairs the exsroise of such oorponrt6 pew8r8 06n b6 v&lid. 8uoh natlone
al assooiations may thenfore lawfully exer6160 say of their authorised 66r-
porate funotionr vhm not la oontravmtioa of our &ate or local laws. ,Suoh
Is the dootrina of lrirstYational Bank of Bay Uty T. F611~, 244 U.S. 416,
disou666d and applied in Opinion Ho. 2541 b this dqutmmt, mrdw dat6 of
J6nuaq 11, 1924. (Opinions Attormy ffensral,1922-1924, p. SIX).
Our statutes from the 6arli66t Asf have authorl6ed tho inaorporatlon
of bmking lasti~tions with the fiduoia?y powers under oonsldrration. (S.
B. Hb. 6, oh. 10, b-era1 lars of 'hX66, 1905, 1st C.8. pp. 289-520, Vernon's
Clv. Stat,, 1926, a6 azwnded, Art. S96). The Legislatur6 has mwr attmpted,
of wur66, to prohibit the lik6 ererolse of such flduoluy poners w national
a66o6lation6. (k the oontrary the latsrt mprossion of the legislatlre dll
upon that subject la oontained in Artiola 8 of Cbapt6r IX of the Tans Bnk-
lag Code of lS43, rhioh daolarssr
*It is not the intention of the L6gislatarr in the 6naotmmt of this
Cod6 to disoriminat6 Between state banks and aationel pulks and, to the 6x-
tent that the Slat6 of Texas haa power to lagislato with retirene to aatien-
al banks, 6aoh prcnirion of the Cods shall apply alike to State banks and
national links dadoiled in this Stati."
Under the Code of 1943 (Art. 1, oh. III) banks my k organlmd with
p6wr *to a6t under the order or appoiatment of a8v oourt Of r6oord as guar-
dian, rooeiver,trustee, oxooutor OT addni8bater, md althouth rlthmtt gen-
eral depository p6wem, to a6t a8 depository for my moneys paid l8Woourts.*
Upon these oen6idsrati0ns, maticmal banks, alth0ugb not mntion6d in.
A&iele 4982, n6v6rth61666 baw p?oeois6lythe sass ptl~ilog~ and rigbt8 as
am tbero afforded to stafo hnking instltutlons, and your questi0n Ko. 1 is
theroforo thus an6wr6d.
2. This question lmrolr66 l oonsideration of the offoot of our
stat&66 authmi6lag St6ts banking lmtltutioa6 to 6ot a6 fldnoiulo8 under
appointslentof the proper sourt, that is to SW, whothor or not such appoint-
M baggk, in virtao of suah oorporat6 pamr, 16 aufhorlrod to exuofse it
rith6ut glring the kmd or bonds reqmlrodbg law la the gotioralsktuks
governing the appoiatmmt and quallfioation of suoh fiduoiui6s.
If a bank appointed b th6 oourt to set an a fiduoiy by reason of
its 6orporato pewu thus to aot 16 absolved from the raquirmmr8t of bond,
the appbinting court would have no authority to r6quir6 a bond, aad thus to
dslrgthe statutory pomr of the lmnk t0 80t without 6uoh bond. If, under
the siatute of powems, suoh bank is not tiwn imunity iron tlm ordinary
mquirwnt of bond, thm, of aournes upon oompllano6 with Artiolas 4982
and 4985 B suoh bauk it acquires the oxpram right to function as admin-
fstrator or guardian %ithout giving bonds au suoh.'
Hon. Charles H. Tbsobold, page 3 (O-5929)
It Is a 0ardinaP ml6 of statutory sonstruotion that all acts,
articlea, and parts of aots 0r a~tiole6 in pari materia should Be rsad
and owstmed togsthsr so as to arriWJ at the intention of ths +iSla-
ture upon the partioular subjeot of inquiry.
.,.
t&m, ths varimm statutss regulating the fiduaiaries under cmsid-
eration uniformly require and prescribe fidelity bands of them, Tho bauk-
iBg stat&JO with PsSp60t t0 p0W0rS - as fiduciaries - do not Mpr666ly
~xemptdigible bank6 fromths rsqulrment of sush bonds. They are easily
oon6trusd to 0onfsr tho pomrtobe suoh fiduoiary under appointmsnt by a
court of competent jurisdiotiofi;-
under the statutory mquimment as to
qualifioation to examlao suah PQIOPP, that IS, the pmsr -- to do. They deal
with sligibillty - rather than qualifloatios.
The inswdiate question under oonsidoration has newr b6en before th.6
oourb6 BP thi8 Stat. fog aonsideration insofar as ws ha.rsbssn able to dls-
0oVaw. Reithsr has there been q dscision by ather courts 60 far a6 our
soaroh rswals~ This dspartmsnt rendwwd en opinion to the Csmais6ionsr ef
Fanking, under data of January 11, 1924, aonstrufng Artlols 6443,Revised
Ciril Statutes of 1911, which oorresponds to Artiolo 4982 of the present
statutes, advising "that the Camnissiowr of Bahkisg snd the State Treasuru
of Teaas should de and psrfum su0h dutlsa as ~6 pmaoribed in Arti 84O
fop 6nd on b6halP of national banking assoaiations desiring to comply thsre-
with.' (Opinions Attornsy Gsneral, X922-1924. p* SO9). The rslevauoy of
this opinion sill bs apparent f~0m+hs sfatmsent ma shall mks in the next
suooeeding paragraph.
W haw made faquirg of the State Troaauwr snd are advised by him
that 60 papson or corporation has wsr at any time made direotly to that
offi a deposit 0f #50,000.00 under Artiole 4983, although thsrs ham been
and urn exists dspmits ky banking institution6 0aadng through the Insuranoe
Dsparhasnt th& ~6sib.I.yWSP~ psquirsd by that d6partmnt under this Apti-
~16, butmhetherso us not, mu do net ef 60~~66 know.
BOW a national bank noald have no purpose to 60170 in MkiBg a
dsposit or &50,COOe00 forth.6 privilege of asting as a fidueiq if it had
that pmsr aud priVilsgs ky season of it6 6xisting corporate persr to aot
as Such fiduolary uithumt bond. 80 that, w6 am of the opinim your seoond
question should bs ansnorsd in the affimatiro, that i6, that rhers a stats
bask or a aatianal assooiatiom omaplis~ with the deposit rsquirsnssts of
~tiOl66 4962 and 4985, it has I66tthe full P8quiPsmeBtS Or lU, and 6~
fuuoticpnin such fiduoiary oapaaity without a bond. This was ruled in the.
bpiiridn'bfthi2 dspal%ssnt in 1924 already rofsrrsd to heroine
5. A&i~les 4201 and 4216, Vernon's Aunotatsd Civil Statutes, as
ausudsd k9 ths A&s of the 48th Legisletwe, are as follmss
(Sots8 plea66 666 veilings fop a rsoltation 0r the66 statutss, amittsd
h6re for bpsvlty in.tUa opini~).
Hon. Charles H. Thsobeld, pa@ 4(0-5929)
This departmegt held in Opiaios IIs.O-5674, addressed t@ Hono~eble
L. CI Boslell, County 4ttorney, 9&e huzty,TexerksMi, T&es, that under
House Bill 482, emending Articles 4201 snd 4216 of the statutes es above
quoted (&ted), "It is neaessary POP the guerdisn to file e special sale
bond in double the mount fop which the real estate is sold. ti other rords,
a special sale band must be filed in ~wmpliarms with said rbuse Bill 482,
regardless of the amount of the general bond filed when keel estate is sold
by the guerdisn.' It is true that no question was involved in that oese
specially of the epplioelxWity of House El1 482 to a sele Ly a bank sot-
ing as guardian, tnt it is also true that no exoeption or qualiffoation of the
rule mu8 snnounoed by us9
Morseve~, it has been held that this statute is mandatory, as it is
in terms (Simpson ve both, 165 S& (2) 1080, writ refused) in broad lan-
guage, vdth no qualifPoation 01 exosption.
& child v. Ogden State Bank (Utah) 20 Pea. (2) pe 607, it is sridn
"Until 1921, mmroial and savings banks had not been authorized to execute
tPuSts OP t0 act in ths WpeCities mmPat5d in LWVS Utah 1921, $ 981x,
c.24, p. 07. It read8x QComeroiel banks, having e paid up oapitel and SUP-
plus of not less then $POO,COOoOO upon tie issuance to the pwtioulrr bank
of e permit by the bnk oonmission, shall have authority and powers To act
es essigpeq agents, reoefvers, guardians of the estates of minors, and
incompetent persons, exeoutom snd administrators, registrar5 of stooks and
bonds, and to sxsoute trusts of every desoription not inooasistext with law.1
'9hr had they been restricted as to private t.~~stbP~
agenoies, or other smtte~s
not reletod to court appointments. At the same tim there was alpo passed
IAWB ut8k 1921, 8 981x1, o. 24, p. 8Ts ~enever auysuoh bank shell aooept
an eppointnumt as essignee, agent, receiver, guwdfan, executor or administra-
tar, or b directed to sxsoute erg trust, the oepital of the said tank shall
be held as seouritg for the faithful pe~fomenos ef suoh duties, and be held
liable for any default rhatever, and no bond shall be required of it for the
feithful perfomenas of r-c& trmtot
"Ey these provisions oo~erqial ad savings banks enter a field formerly held
by loan, trust, and guaranty associations. The lew at present do.8 not I.-
quite oomeraial and savings banks to keep their oapftal in money on deposit,
or in bonds or seoutit$es as speoified for loan, trust, ad gue~anty assooir-
tions. lieoessaryliquidity mekss it impreotical for suoh banks to withdraw
their oapital fmm business in whfoh they are engaged. It appears, however,
that the kn in express terms deohres that suoh oepital~shall bs held as
seowity for the faithful performauoe of the trusts to vhioh they sre appoint-
ed wad by them aoceptsd, and in such fiduciary oepaaitiss es they aocept and
agree to aoto These oppacitieecwe evidently intended to be related to
matters ovs~ which the court has jurisdfctio%b The lr relating to guePdians,
reoefverships, and when it beacmes necessery to appoint a trustee, exoept
private turstse byagreemsnt. the proceedings in relationg thereto, vo all
subject to the jurisdiotion and contiP of the oourt, and fiduciaries 19
Hon. Charles 11.Theobald, page 6 (C-5929)
suoh oeses must be appointed by the oourts~ Ponds, l xospt whea suoh oar..
porations es have quelifled under the statute are appointed,rre required
to be furnished. There seems to be no provision of law preventing comer-
olel end sevlngs banks from acting as trustees, or ia other fiduoiary oep-
acities, if the artlolos of incorporation so provide, upon furnishing
setisfeotory bond. Ekt If they desire to serve In suoh oapaoitieswlthout
bond, they must qualify as by the statute provided. . . .s
It is true in that oese the court had before lt for decision only
the s&ter of a private trust, nevertheless, the language ebovo quoted
constitutes e very persuasive argument by a stoatrespeotable authorlw
applicable to the question of oonstruotion before us.
Weare not oonoerned wlththe wisdom of this statutory requlrsmnt
for e sale bond, nor are we oonoernod the feot thAthe Legislature has not
plssorlbed similarly for a sale bond of real estate belonging to the
estate of a decedent. The fact remins the Legislature hs speoifioelly
made the requirement in cm80 of sales M the.guardien of land, and we see
no reason to doubt the validity of the act -- it Is merely a matter of
construction with ~8.
Upon mature conSidemtlm, it is the opinion of this deprtment
that these statutes do not require the execution of e sale bond under the
olroumtaucas stated by you, regardless of whether OP not the ?mnk had
eotually caooukd a bond, and ~egapdla6s of the fact whether or not a
ba& had made the required deposit, under theterm of Mole 4983.
4. v&at we heve aLreedy said oonstltutes sufficient answer to your
fourth question.
Trusting that what we have said setisfeotorlly solves your problsute,
we ar.
VSIy truly yours
KPTOI(BEJTGEXERALOFTEXAS
APPRCVED MAR 25, 1944 By
/s/Gee. P. Blaokbura Ooio Speer
(Irating)ATTORNEYGEEHAL OF TEK(LG Assistant
Os-lQbega
AWHOVEDs Opinion Comlttee
~g A.%, Chati