### * OFTEXAS

Han, J, ha. F8lk?st& Opinion No. V-1046, Commissioner Department of BarM8g **Re: The**  leg#ity of a bank’s, mainAustin, Texas taining deposit facilities in a garage building attached to a bank buildirq by a tunnel beDear Hr. l?aIknax: low the street.

In your letter re*werting our opinion retative to the cqtioned matter yau state that

**“ A**  **bak** poeertly operating **ia a**  **bank house**  owned by It desires to construct an appropx’iate garage buildin on another lot directly acrass the street from its preseat h&ins house 

### and the kra@e building is to **be psrmano#ly**  UJ rtxucturally rttached to the preeeti **kdr buitdi** 
s **by**

### a Ural suitable 

### fur peraa@ **back** 

### and farth, **aad** w windowd. l

’ 11c*n&ia ti*&c-in J4p&it win&w 4r
You have igluired whethtr thi4 plan contrrvenee AMel* XVI, Section 16, of the Texas Constitution, or Chapter IX, **Article** 3, of **the** Texas Banking Code of 1943.

. “The **l,@nlature still**  **by pnsv,pl**  **Irrro net&mire**  t&t incovpaa;rtioa d csrgrrate Mtes with banking rnd dbWOUfltio& pliVi!XaO4, I , .

. Chapter ZX, ATtG~tca3, 6f the Scns krnlt%ng Ctdt d 1*)3.

emWed ~a Article 343-7@3, **V.C.S,,,** 

### prouidsa:

264 tPtat4, tmtiona1 u p&8&t bank shell engay#e in **bueir#tm in**  **18ec** than me Ma, nraiaitafn any bran& 

### office, or wh checks 

### m receive depesits excspt 

### in#B own t+nkitq hause. ”Ho,n. J, M. FaJkner, Page 2 (V-1046)

it it The exact purpose of the foregoing Article is to ptohibbranch banking, This ie clearly indicated in its caption, where is provided that it is:

““An act to accomplish the constitutional directive enpressed inArticle XVI, Section 16,

. ~~. This Act

**~ ~;** **‘**

**... .**  **prohibits** branch banking, ~o*” It is said in Banks and Baokiq, Zollman, Pcrmawnt Ed&i&, .volume 2, tictie* 1275, that:

7 “‘Branch banks are not mere ‘teller’s windows,’ hmtmxc SQmany integral parts or office6 * sgencies *f d+count belonging to the metker corporation. ” We do nat &ink what is proposed te be done by tht b~rdt fo quest&a comes wait&a the conaCihutiona1 oz s&atutorp inbibitians 

## l pplicabh to **branch** bankin&

Three excellent annotations en the constituent elements ,of brarich,b~nking art found in 30A.L.R. 927, 50A.L.R. 1340,and 136A.L.R. 491. **A** Kentucky **cbst,** which goes even further than we **ecuAd** attcmprt or need lo do lo lYASWí OT this question, is Marvin ~$I, cky Title, Tsust Co., 218 Ky* 133, 291 S.W. 17(Ky. Ct. App. ; In Kantuclay; branch.balJrina had been held unauthoriwd WI-

. dar their dpplicabk statute.’ In t&cast cited, the question arode

(10tcthe **authority of** **a** licensed **bank to**  **open a**  **stpratc** offict **to** receive depoeits SUMI cash checks, and nothing more, for customers d **tht** principal bank. The Court siid:

**“We** bavt held that a bank organietd under the ,:@w$ & this State has no rigki to establish a branch bank. 5zuner Y. Citizens’ I3ank, 134 Ky. 283, 120 S.W. ~345. B&h parties conctde the MPding fwrce of this opioioa, the centroverted question 

### being OS**to**

### whether app61166

’6 plan to open office6 **fclr the**  **receipt of**  depesit6 ad pplnrnt of checks will **corwtitute** the estrblish- .mirrt’Bd branch kahltr, POthat tbt case may ba said to **hart3 uw**  **the dd&diirn**  **wf knki?A&**  **e 6** **e**

I! e * 0 ‘We think **the e** **o**
**.**dtfinition **from** Warrtn vr s-k, 6uprai pecu~iiarly apt; ‘Hsving a p&ace 

### ofbusiIDIWS rbe~e de-sits 

### am received 6nd paid out onchecks, l culwhtke monty is 1tPsnedupon recurity, is t&e sub- @t@aCt od the bUBinW66 Ot 6 bWhk6r. “#Cfrlkws that tht proposed plan does not fall viMa the itikibition ef tke **Bruaer Case,**  **au#a, (LS** to **t&e**totablirhment of branch baak6, nm d-6 it conflictr . . i
Hoa. Jo.M. Falkner, Page 3 (V-1040)

with th8t 0piAon tn any other paoticular, Baaks are the depositor l&eof moe t of the funds of the country, end the above decision is base.& on the prix%ciptWthat they axe quasi public institutions established and regulated by statate. The safety of the funds is caseflilly guarded, and this calls far the exercise of discretion and direct control upon the part of the d&rectors and chief ofhors in the matter of Ibone, discounts, investmoats, sad other like duties. Branch be&s in effect carsy aa the s&me bueinees as that conducted by the parent inetitalioa wi,thout being subject to the safe**pwsds** thrown arolrmd the establishment and administration of tb# I&t&c, and therefore such brenches are oat mly unauthorized by the statate but impliedly inhib**tted**by it. That opiaion, however, s~pressly recognices cbc r&g&tof a bnk to ‘have, as many duly 

### l ppcrinted a- ~#ents*S dtr neds require;~end theBe qents, bmong othm tblngs, may xeceive amt forward to it at its place of 

### bunhers **tha** money d parsons who desire w deposit w+$bit. ’ ,

“In principle t&e same rule would apply to agents who **merely** receive deposits and pay out cheeks on demmd, dutisc that am incidental to the business, but which do net require special disctetion and business wzumen. Tfm peyling tdller et a bbnk should have a tech- **~%rwled#e of**  h&ndwriting and be able to detect forgeries and identify 

### l imtrPtsr6, and both he and tho recafvfng teller should be eccur&Le in their calculations. But:wither of these apots, COI\loan money ‘or invest **Fhe banktng** **funds, and**  **the**fact that these <minor duttes are carl’ied on at mbre than one place in tiewise affects **For** ill~uatr*tion: Ifa bank occuIrlt, can it- doubted&at it can qstablioh en office for the receipt ment 81 c#ecks at each caner of i separate books at e&h place? ClearIy the installation of such ofl’lces in the bwl8iZg is incidetital to that busi- &~%a,an# such ah etran(ament wmino injurious effect up3 the fiMnCk1 m*mpment 0LDd contra1 of the bank’s bwinas~, a& the officials char@ with these duties da not **devote** their etne to the drtaitc of Lhereceipt ef deposit c pyment of ehedm.~ o.‘I &mphsis supplied.) ##&hr.iep#i& that the propo8eil plan would not constitute a ‘%aWuch bsnk. ”

Article 342-9Q3,, V.C.S., in.additian to prohibiting b?&nch boeks, provides :. .

Han, J, h4, Falkner, Page 4 (V-1046)

‘Al0state, nationat or private bank sfbsll pI

. c.ash checks or ‘receive’ deposits except in ite own bank- 

### ,ing house, ” If the new structure, wheubuilt, becqmes a part of the ,,.Bujk’s ‘“banking house” tti the proposed pLn will not viblate the ;I@ovieions- of aaid Article. ;

T&a contamplatad new structure, although to be erected across the 8~~4 from the original ‘@banking house,” will be physically joined thereto by a tunnel under the street, which you sfate will be suitable for, passage back and forth,, It is evident that besides being;‘

joinad physically, the new structure, including the passageway,~~iII be in &ore proximity to the present’building. It will be used in oeamction with the ori&nal building and as a unit _L wilI be devoted to one general, common purpose. It is OUBopinion **&+t** tlae two **,@=ucturss will**  in seallty **be one**  **and** when used in the .:inner pxoposed,wiLl constituttr the bnk’s “banki~ houee. ” To h$Stlthat said Article Pequices **deposits to** be **axade**in **a** bank’s origipl banking building, and not in an addition thereto would sacrifice fRe’~real spirit of the law to pure IitecalLm.

This opinion is 

### macessarilp **Etmited to**  the factual eitoation presented. SUMMARY

A uew ‘dtmchure erected acros~s the steeet Srom a~baakPs .?mWag base” sad connected therewith by a tubiml ‘s&able S&T passage back and forth and used-to receive depoits does not conlmavenc the provisions of ArtMa XVI, Section 16, of thtrTexas Constitution, nor ofArtkc~ 341-903;V.C,S., relative to **bsaacb bank&g**  or t*e mceiviag of depoeitr by a bank at 

### a place other olmo~uq 

### LenbkiIag rwuse, Yours VeEy tmly, PRICE DANIEL Attorney Ctnwal

APPROVEIT: Joe Greenhill First Assistant PrLe Daniel Attorney Genesal 

## -’ w. v,.Gepperi

. Assistnut ._

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WVG/mwb