THE ATTORNEY GENERAI. 

OF TEXAS 

March 27, 1989 

Mr. Kenneth W. Littlefield Opinion No. JM-1032 

Commissioner 

Texas Department of Banking Re: Appointments of foreign 

2601 North Lamar Blvd. trust company as trustee for 

Austin, Texas 78705-4294 Texas residents (RQ-1488) 

Dear Mr. Littlefield: 

On behalf of the Department of Banking you have asked 

about a foreign trust company accepting appointments to 

serve as trustee. your letter reads: 

The Department of Banking has received an inquiry as to the interpretation of § 105A of 

the Texas Probate Code. The inquiry was 

submitted on behalf of a Missouri trust 

company (referred to herein as the "Trust 

Company"). The Department therefore requests 

your opinion as to whether a foreign trust 

company, operating as described in this 

letter, can accept appointments by Texas 

residents to serve as trustee under living 

and testamentary trusts. 

Plan of Business 

The Trust Company is an affiliate of a brokerage firm which does business in Texas. 

The brokerage firm proposes to supply its 

brokers with information about the Trust 

Company which would be distributed to 

customers who inquire about the availability 

of trust services. 

Brokers may from time to time discuss with 

existing clients of the brokerage firm the 

advantages of professional trust services. 

The brokers would discuss the ability of the 

Trust Company to provide these services only 

in response to the client's inquiries as to 

the providers of such services. The brokers 

would have new account forms which would be 

made available to inquiring customers. The 

completed forms would be forwarded by the 

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Mr. Kenneth W. Littlefield - Page 2 (JM-1032) 

customer directly to the Trust Company's 

offices in Missouri. There would be no 

general advertising of any kind in Texas and 

no mailings to Texas residents other than 

statements and other correspondence regarding 

specific accounts. 

Upon opening an account, the Trust Company 

would serve as trustee under living and 

testamentary trusts created by Texas residents. The trusts would be administered in 

Missouri. All property other than real 

property would be held in Missouri and all 

trust records would be kept in Missouri. The 

Trust Company would not establish any branch 

office, agency or other place of business in 

Texas. The Trust Company has made the 

filings required by 5 105A(b) of the Probate 

Code. 

ADDliCable Law 

Article 342-1110 of the Texas Banking Code 

prohibits a foreign trust company from 

doing business as a trust company in 

Texas or exercising in Texas those powers 

referred to in Article 342-1101 of the 

Banking Code, except as provided by 5 105A 

of the Probate Code. Section 105A(a) of 

the Probate Code provides in part: 

Any bank or trust company organized under 

the laws of and having its principal 

office in, . . . any . . . state of the 

United States of America, other than the 

State of Texas, . . . having the corporate 

power to so act, may be appointed and may 

serve in the State of Texas as trustee 

(whether of a personal or a corporate 

trust), executor, administrator, guardian 

of the estate, or in any other fiduciary 

capacity, whether the appointment be by 

will, deed, agreement, declaration, 

indenture, court order or decree, or 

otherwise, when and to the extent 

that . . . [the] other state in which such 

foreign bank or trust company is organized 

and has its principal office grants 

authority to serve in like fiduciary 

capacity to a bank or trust company 

organized under the laws of, and having 

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Mr. Kenneth W. Littlefield - Page 3 (JM-1032) 

its principal office in, the State of 

Texas . . . . 

Missouri permits Texas trust companies to act 

in a fiduciary capacity in Missouri upon 

compliance with requirements similar to those 

set forth in 5 105[A](b) of the Texas Probate 

Code. See 5 362.600 MO. Rev. Stat.[l] 

Subsection (c) of 5 105A prohibits a foreign 

trust company from establishing a branch 

office, agency or other place of business 

within Texas and prohibits in any way the 

solicitation, directly or indirectly, of any 

fiduciary business in Texas of the types 

described in Subsection (a) of 5 105A. 

Subsection (e) of § 105A states that the 

provisions of g,l05A are in addition to and 

not a limitation on the provisions of Tex. 

Rev. Civ. Stat. Art. 1513a, 5 1, which in 

1987 was codified as Article 342-1101 of the 

Texas Banking Code. 

The term **solicitation** is defined by the Texas statutes in only one place, although it and its relatives appear 

in other statutes. In article 4582b, dealing with funeral 

directing and embalming, subsection 1M states: 

'solicitation' means a direct or indirect 

contact with [certain persons] for the 

1. The conclusion that Missouri permits Texas trust 

companies to act in a fiduciary capacity pursuant to section 

362.600 of the Missouri statutes is questionable. The 

Missouri statute defines "foreign corporation" to mean a 

bank or other corporation organized under the laws of "any 

state of the United States, which state adioins or next 

adioins the state of Missouri.*' (Emphasis added.) Texas 

does not adjoin Missouri, but does adjoin states that do. 

However, the phrase "next adjoins" is not defined or 

elsewhere used by Missouri statutes, and the only Missouri 

case using the phrase that we have found uses it in the 

same sense as "adjoins." See Wann v. Gruner, 251 S.W.Zd 57, 

58 (MO. 1952). See also Irons v. American Rv. Ex ress Co., 

300 S.W. 283 (MO. 1927) ("next adjoining circuit"). Cf. MO. 

Rev. Stat. 5 362.925-l(1) ("adjoining-state bank holding 

company" defined): Enoerlv v. Mercantile Trust and Savinas 

Bank of Ouincv. Ill., 457 S.W.2d 1 (MO. 1967) (Illinois 

corporation). 

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Mr. Kenneth W. Littlefield - Page 4 (JM-1032) 

purpose of securing the right to provide 

funeral services or merchandise . . . . 

See V.T.C.S. art. 2372p-3 ("soliciting*'); V.T.C.S. art. 

4495b, 5 3.07(c); V.T.C.S. art. 9023a (*~solicitations~~); 

Educ. Code § 4.21 (llsolicitql); Hum. Res. Code 5 12.001(b); 

Ins. Code art. 21.49-1, § 5 (l'solicitationl'). 

Coutlakis v. State, 268 S.W.2d 192 (Tex. Crim. App. 19% 

(*'solicitl'). 

The precise language of subsection (c) of section 105A 

of the Probate Code reads: 

(c) No foreign bank or trust company 

shall establish or maintain any branch 

office, agency or other place of business 

within this state, or shall in anv way 

solicit, directlv or indirectlv. any 

fiduciarv business in this state of the types 

embraced by subdivision (a) hereof. Except 

as authorized by the laws of this 

state, no foreign bank or trust company shall 

act in a fiduciary capacity in this state. 

Nothing in this Section shall be construed to 

authorize foreign banks and trust companies 

to issue or to sell or otherwise market or 

distribute in this state any investment 

certificates, trust certificates, or other 

types of securities (including without 

limiting the generality of the foregoing any 

securities of the types authorized by Chapter 

7 of the Insurance Code of 1951 prior to the 

repeal thereof), or to conduct any activities 

or exercise any powers of the type embraced 

and regulated by the Texas Banking Code of 

1943 other than those conducted and exercised 

in a fiduciary capacity under the terms and 

conditions hereof. (Emphasis added.) 

A violation is a misdemeanor. Prob. Code § l.O5A(f). 

Paae v. State, 492 S.W.Zd 573 (Tex. Crim. App. 19% 

(solicitation of drinks). 

We think both the language and the intent of subsection 

(c) of article 105A are plain. The foreign corporation 

solicits fiduciary business in violation of the statute, in 

our opinion, by furnishing "new account forms" to the 

brokers employed by an affiliated brokerage agency and by 

otherwise acting in concert with the brokerage firm with the 

expectation and intent that the forms will be completed on 

behalf of Texas residents -- especially, Texas residents 

prompted to inquire of the brokers about available providers 

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Mr. Kenneth W. Littlefield - Page 5 (JM-1032) 

of trust services. The statute prohibits not only a direct 

or indirect solicitation of such business from consumers: it 

also prohibits solicitations in this state of such business 

by the use of, or from, intermediaries, whether the 

intermediaries are technically agents of the soliciting 

trust company or not. The phrase, "in any way" means 

in anv way. m United States v. Thaver, 209 U.S. 39 

(1908). Cf. Murnhv v. Camnbell Sour, co., 40 F.2d 671 

(D.C.D. Mass. 1930) (activities on behalf of foreign corporation); Frazer v. McGowen, 502 A.2d 905, 909 (COnn. 1986) 

(**organizational network likely to prompt [business]"): && 

& Barton v. Walker, 21 S.W. 687 (Tex. Civ. App. 1893) 

(activities in other states). 

In United States v. Thaver, sunra, a case originating 

in Texas, the United States Supreme Court considered a 

federal statute forbidding any person to "solicit in any 

manner whatsoever" political contributions on government 

property. Mr. Justice Holmes, writing for the Court, held 

that letters sent to federal employees violated the statute. 

He wrote: 

Of course it is possible to solicit by 

letter as well as in person. It is equally 

clear that the person who writes the letter 

and intentionally puts it in the way of 

delivery solicits, whether the delivery is 

accomplished by agents of the writer, by 

agents of the person addressed, or by 

independent middlemen, if it takes place in 

the intended way. It appears to us no more 

open to doubt that the statute prohibits 

solicitation by writing as well as by spoken 

words. It, forbids all persons to solicit 'in 

any manner whatever.' 

209 U.S. at 42. 

There is a difference between lVsoliciting business" and 

-- without design -- merely "taking orders" for business 

from persons not prompted, asked or importuned directly or 

indirectly to place orders. See Sanderfur-Julian Co. v. 

State, 77 S.W. 596 (Ark. 1903). However, a general inquiry 

about the availability of trust services is not a request 

about the availability of trust services furnished by a 

particular company, and such an inquiry is not the attempted 

placement of an order with any company. 

A design to prompt inquiries, or to respond to general 

inquiries with a presentation of the benefits offered by the 

foreign trust company and its services, i,s a design to 

circumvent the statute, we believe. Accordingly, 

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Mr. Kenneth W. Littlefield - Page 6 (JM-1032) 

appointments of the foreign trust company as trustee obtained pursuant to a plan of business such as you describe 

would be violative of the Texas statute. &R Bittiker v. 

State Bd. of Reaistration for Healina Arts, 404 S.W.Zd 402 

(MO. App. 1966). Cf. Smallwood v. Pearl Brewina 

F.2d 579, 599 (5th G.), cert. denied, 

co., 489 

419 U.S. 873 (1974) 

(solicitation of proxies); B. C. Turf & Countrv Club, Ltd. 

v. Dauahertv, 210 P.2d 760 (Cal. APP. 1949) (corporate 

shares). 

SUMMARY 

The action of a foreign trust company in 

supplying information and forms to brokers 

employed by an affiliated Texas brokerage 

firm with the intention that they be 

distributed to customers of the brokerage 

firm who make general inquiries about the 

availability of trust services violates 

article 105A(c) of the Texas Probate Code. 

Appointments as trustee obtained by the 

foreign trust company pursuant to such a plan 

of business would be violative of the Texas 

statute. 

J I-M MATTOX 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

LOU MCCREARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Bruce Youngblood 

Assistant Attorney General 

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