Untitled Texas Attorney General Opinion ( 1958 )

Hon. Zollle Stealcley Opinion No. WW-511 Secretary of State Austin, Texas Re: Should the Secretary of State accept and file the pending application of the Bank of New York for certificate of authority to transact business in this Dear Sir: State, and related questions. We are in receipt of an opinion request from your office wherein you state that a foreign corporation with bank’ In its name, organized under the laws of the State of New York, has made application for the certificate of authority to transact busines.8 in Texas by qualify- ing under Article I5Ua. With regard to this appIicatIon~you:havb made the fotlowingf~tir:~(4).inquiries. “1. Should the Secretary of State accept and file the pending application of the Bank of New York for a Certificate of Authority to transact business in this State for the purpose stated above? “2. Should the Secretary of State accept and file an application for a Certificate of Authority under the provisions of Article 1513s for a purpose which, is not identical in language and does not include the en- tire purpose clause authorized by said statute 7 “3. I feel we should re-examine the policy of the office, above described, hence were the Certifi- cates of Atithority issued by this office under Article 1513a to the above named foreign corporations whose corporate acmes included the word ‘trust’ 1bWfUll~ granted in view of the prohibttlon contained in Article 342-902 7 “4. If question No, 3 is bnswered in the ae#bttve, what aCttOll, if bny, should be taken by this office? This oplnlon deals with &rsttoas 1, 3 and 4. Question 2 willbe the subject of a subsequent oplhlon. The first question pre- sented 1s whether or not a foreign corporbtlon whose name includes the word “bbnk” should be granted a certlficste of authorl’ty to do a Hon. Zollie Steaklsy, page 2 (WW-511) trust business in this State. Two statutes are drawn into focus by this inquiry. First, Senate Bill No. 165, Acts 55th Leg., R.S. 1957, ch. 388, p. 1162. codified as Article 1513a, V.C.S.. authorizing the creation of corporations and the issuance of certificates of authority to foreign corporations to do business in Texas for the following purpose: “To act as trustee, executor, administrator, or guardian when designated by any person, corporation, or c~ourt to do so, and as agent for the performance of any lawful act, including the right to receive &posits made by agencies of the United States of America for the authorized account of sny individual; to act as attorney- in-fact for reciprocal or inter-insurance exchange.” The second statute here relevant is Article 342-902 as amended by the 55th Leg. in R.S., 1957. It reads. in pertinent parts: “It shall be unlawful for any person, corporation, firm, partnersh~ip, association or common law trust: ‘(1) To conduct a banking or trust business or to hold out to the public that it is conducting a banking or trust busihessz or 0 use in lts name, stationery or advertising, the teri(‘ia&“’ , ‘burlr bad trust’, ‘SbVb%~E bank’, ‘crrtif- icato of deposit’, ‘trust’ or bay othsr term or word ebb culbtod to dscoivo the ~publfc late tho bollsf thbt such parson, COrpOr8tiO& firm, pbrtaorship, bsSOCibtiOn~ CO!mXm 1bW trust, or othor group pi porsOt%s agbpd l hi tho bbaklng or trust buslaoss. “Provldsd, howovor thbt MS Article shbll not bpply to (1) abtiOl& bmksr It) StbtO bbako; (3) othor corporstioas horotoforo or horrrltqr orpbalood uador the laws of this SW0 or of tho Ualtod 8tbtss to tbs. ox- tont that such corporrtloas bra buthorlood undor thotr chartor or the lbws of this stbto or Of the Ualtod 6tbtoS to conduct ruch business or to uso such term; bad (4) privbte bbaks which wors bctublly uad lbwtully coaduct- lag b bbnkla# bustnoss on tho sffoctivo dbto of this Act so loas bs tho ownozs of such bbk, thotr succoosor~ or bSfi+, shbll contla;uously conduct a bbakia# burlasrs la the city or town whsrs such prlvbto brak WbS domlcllod On the sffoctivo dbt0 Of thh Act,.,,* It is b sottlod rulo Of statutory iakrprobtlon thbt stbkr which dobl with tho Ibmo goaorbl rubjoct, hsvo tho SbmO psnord purpose, or rolbto to the sbmo poison or thhg or clbrs of psrroas oi thlaps, bro Hon. Zollie Steakley, page 3 (WW-511) considered as “in par1 materia” , although they COntbhi no reference to one another, and although they were passed at different times or at different sessions of the Legislature. The purpose of the “in part materia” rule of construction is to carry out the full:- legislative intent, by giving effect to all laws and provisions bearing upon the same subject. It proceeds ~upon the supposition that several statutes relating to, one subject are governed by one spirit and policy, and are intended to be consistent and harmonious in their ’ several parts’and provisions. The rub applies where one statute deals i with a subject in comprehensive terms and another deals with a;,portion J of the same subject in a more definite way. 39 Texas Juris., 253-256, : Section 135 (note authorities quoted ,therein). The sole ,question is the effect of Senate Bill 165. Unquestion- ably, with reference to companies qualifying unde~r S.B. 165, its operates to’override or repeal by. LmplScation that portion of 342-902 which would prohibit foreign companies from doing a trust ~business in Texas. Senate Bill 165 is slient b.8 to whether Section 2 of Article 342-902 prohibiting the use of the, name “trust* shou’Id be applied to foreign corporations otherwise quailfylng under Senate Bill 165; however, we are of the opinion that by implication Senate Bill 165 also repeals that portion of 342-902 which prohibfts the use of the name “trust“, insofar as such foreign corporations are concerned. We cbii attention to the language in Section 2 that it is~unibwfuI for any person, etc., “to use in its name...the term...’ trust’ or any other torm or word calculated to deceive the public into the belief that such porkion (etc.)...iS engaged in the....trust business.” We further call attention to the language of the emergancy clause in Senate Bill 343 of the 1957 Leglsibturo amondfng’342-902 bs foliows: “The fact that under existing law the people of this state are subject to mlsloadlng advortislng and other deceitful practices CbkUlbted to do~colvo the public into the beliof thbt cortain unbuthorlzod persons or groups of persons are under the strict ~supervlslon of the State Bbnking Departinont, when in fbct the protection bffordod by strict supervision does not oxlst, croatos an omorgency...” It is appsront that tho prohlbltlon bgbinst ueln~ tho abmo “trust” is dlroctly tlod in with bad b pbrt of the prohlbltlon bgbinSt conduct@” or to “hold out...that it is conducting” b trurt bustaoss. .Tho 0~11 ~oglslbtod agslast la Soctlon 2 of Article 342-902 was tho docoptloa to tbo public which occurrod when b company usod tho abmo “trust” in its title whoa ta fact it was not ontltlod to ong8go in the trud buslaasr. That 0~11 will not occur in the cbso of a foroign corporbtlon obtainlag b permit under tho terms of Senste Bill 165 bs such b COrpOrbtiOU would bo suthorhod to ongbgo in the . Hon. Zollie Steakley. page 4 (7Kfll-311) trust business and would not be deceiving the public by using the name *trust” in its title. Senate Bill I65 should~ be limited in its ovsrridlng effect to the subject matter above,‘there being no provision ln Senate Bill 165 which would allow b fore&n corporation to come into the State and do a banking business. The use of the term .%a&* in the title of such a corpo- ration would be deceptive and would violate Article 342-902. In answer to your flrst question we hold that a foreign corporation with the name ‘Banh” ln its title may not obtain a permit to transact business in this State. The third question presented for consideration in this opinion is as follows: *I feel we should re-oxamlno the policy of the office, above described, hence wore tbo certif- icates of authority fssued by this office under Article 15~13bto the above nbmed forolgn corporbtioxm whose corporato names include the word trust, lawfully granted ln view of ‘Iho prohibition contained in Arftlo 342-9027 ” If foroign corporations reforrod to above hbve been grbnted a certificate of authority under the provlslons of 1513b sad thoroby complied ~with the purposos b6 thoreln roqulrod, than little robson bppobrs for the csndellation of their COrtffiCbbo of bUthOrib. Thus, the discussion under question No. 1 of this oplnlon 1s SppIkbbIo thereto. If they hbvo not chosen to utiliee 1513b, then the robson for “tn pari materlb*‘construction does not exist and 342,-902 tahen by ‘ltsolf would buthorine revocation. In vlow of’bo bnswer fo,No. 3, thenquestion rbisod bs No. 4 in your letter becomos moot, Ths rffoat of Ilrmb Bill 168 L to rapd by knpkbtiloa thbt pOX-tbS Of u&-@o2~ W&kh proh$blb forolpn corpordhm from doh ,a trust buriaoss. Llkowiro by ~mpll~atioP It ropoals that pc+lon of 342-902 which prohibits Hon. Zollie Steakiey, page 5 (WW-511) the use of the name “trust”. The prohibition against the use of the word “bank” is not there- by overriden. Very truly yours, WILL WILSON C. Dean Davis Assistant CDD:ph APPROVED: OPINION COMMITTEE: Gee. P. Blackburn. Chairman John Reeves J. Arthur Sandlin REV~IEWED FOR THE ATTORNEY GENERAL BY: W. V. Geppert