Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1916-05-22
Advice as to Savings
Banks and Insurance

Hon. William r. Pattangall of -Au-
gusta, the attorney general, Saturday
rendered an important decision which
is of interest in banking circles in
which he rules that it is entirely legal
and proper for a savings bank to in
sure its property through trustee or
employ trustee as an attorney. The
matter was called to the attention of
Hon. Irving f. Vernon of Portland,
the State bank commissioner. who in
turn referred it to the attorney gener-
ais office.
Attorney General Pattansalls COM
munication to Bank Commissioner
Vernon bearing on the matter as fol-
lows:
Replying to yours of recent date,
relative to the construction of Section
40 of Chapter As of the Revised Stat
utes as applied to certain matters sub
mittcd in the various letters attached
to your communication which you have
received from different savings banks
in Maine.
"Section 40 provides that mo gift.
fee, commission or brokerage shall be
received by any officers of a savings
bank on account of any transfer to
which the bank is a party, etc"
Section Is of the same chapter pro-
vides that trustees may receive such
compensation for their services in
making examina tons and returns re-
quired by their by-l laws and the state
laws as may be fixed by the corpora
ton at any legal meeting thereof" and
further provides that the treasurer,
assistant treasurer and clerk shall re-
ceive compensation to be fixed by the
trustees
1t appears to be plain that under
the provisions of Section 16 it would be
improper for any of the officers of
savings bank to receive compensation
for their services except as defined by
that section. Hence it would seem
plain that it was improper for the
president of savings bank as such to
receive salary in accordance with the
arrangement existing in connection
with three at least of the banks with
which you have been in correspon-
dence.
THE letters of the Bangor Savings
Bank. Calais Savings Bank, Penobscot
Savings Bank and Peoples Savings
Bank Of Lewiston raise an entirely diff
ferent question. 1t appears that it has
| been the custom of the three first men
toned banks to employ one Of it's trus-
tees as an attorney and of the latter
| bank to permit one of it's trustees to
y,l.,
cannot see wherein there is any viola
| ton Of law in these matters. 1t seems
to me that the plain intent of Section
40 is that no trustee shall receive any
| thing in the way of bonus by reason
of any transaction between the bank
and third party but that section does
not forbid the bank contracting with
trustee in a legitimate way.
Il think savings bank should have
! the same right to purchase legal ad-
vice Of one of it's trustees or buy in
surance from one of it's trustees that
! it would have to purchase real estate
or stationery. coal or any other proper
! ty or commodity from one Of its trus-
| tees and it would be accepting an ex-
! tremely narrow construction OF Sec
| ton 40 that was evidently not contem-
! plated by the legislature to construe it
! in such a way as to make illegal any
/ business transaction between the bank
and a trustee.
/ Il should, therefore, advise, that it
was entirely legal and proper for a
! savings bank to insure its property
through trustee or employ trustee
as an attorney.
| There is a further provision in Sec
ton 40 to which you have called my
attention, namely: that nothing here
in contained applies to any expense Of
| examination of titles and making con-
veyances upon loans made by the saw
] ings bank Parties making a loan,
| from a savings bank shall pay all ex-
J penses incurred by reason thereof
Under that clause, l do not see any
| improperly in trustee charging for
his services and expense in connection
/ with viewing property before lending
money upon it. 1 suppose as a part of
| examining a title it is frequently he
cessary to visit the property and ident
/ ify it sufficiently so as to be able to
trace the title intelligently. and as this
section provides that the expense con-
nected with such transaction should
| be paid by the party making the loan,