Court Opinion

ID: 4132341
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:25:34.803729+00
Date Added: 2024-06-11T14:33:54.012719
License: Public Domain

JOEN   IA. BILL
.a--       CIENERAL              August 10, 1977

         Honorable Tom O'Connell              Opinion No. H-1039
         District Attorney
         McKinney, Texas 75069                Re: Whether a bank's
                                              service as county deposi-
                                              tory constitutes branch
                                              banking when the bank is
                                              located outside the county
                                              seat.

         Dear Mr. O'Connell:

              You have requested our opinion regarding the constitu-
         tionality of article 2553, V.T.C.S. That statute provides:

                        If any depository selected by the Commis-
                      sioners Court be not located at the seat of
                      such county, said Commissioners Court may
                      in its discretion require said depository
                      to file with the county treasurer of such
                      county a statement designating~ the place
                      at said county seat where, and the person
                      by whom, all deposits may be received from
                      the treasurer for such depository, and
                      where and by whom all checks will be paid,
                      said person to be approved by the Commis-
                      sioners Court; and such depository shall
                      cause every check to be paid upon presen-
                      tation or upon presentation at the expira-
                      tion of the period of notice in the case
                      of "time deposits" at the place so desig-
                      nated so long as the said depository has
                      sufficient funds to the credit of said
                      county applicable to its payment.

         It has been suggested that the designation of such a place
         where "deposits may be received" and "all checks will be paid"
         may contravene the constitutional prohibition against branch
         banking.  Article 16, section 16 of the Texas Constitution
         provides, in pertinent part:

                                        p. 4279
.      .

    Honorable Tom O'Connell       - Page   2   w-1039)

                The Legislature shall by general laws,
              authorize the incorporation of corporate
              bodies with banking and discounting priv-
              ileges, and shall provide for a system of
              State supervision, regulation and control
              of such bodies which will adequately pro-
              tect and secure the depositors and credi-
              tors thereof.

              .   .   .

              Such body corporate shall not be autho-
              rized to engage in business at more than
              one place which shall be designated in
              its charter.

    See also article 342-903, V.T.C.S., which implements the con-
    stitutional provision.  By virtue of these provisions branch
    banking is illegal in Texas.

         In Great Plains Life Insurance Co. v. First National Bank
    of Lubbock, 316 S.W.Zd 98 (Tex. Civ. App. -- Amarillo 1958, writ
    ref'd n.r.,e.), the court held that a bank may provide drive-in
    window service without running afoul of the constitutional
    prohibition:

              [A] branch bank . . . is a separate
              entity and deposits made in a branch bank
              are payable there and only there unless
              the branch bank be closed on demand for
              the payment by the depositor be refused,
              then the demand for payment will be against
              the mother bank. Branch banks are not
              mere teller's windows.

    Id. at 104. The court concluded that drive-in teller's
    Gdows   are "a part of [the] bank and are not branch banks. . . ."
    Id. Likewise, in Letter Advisory No. 96 (19751, we held that
    drive-in facilities might be connected to the main bank by
    means of closed circuit television.   In such an instance, the
    bank's business continues to be conducted in "'one place'
    within the meaning of section 16, so long as the drive-in
    facility is limited to teller services."   Id. at 3.
                                               _

         In our opinion, article 2553 does not authorize a bank
    to engage in any activity beyond that approved in Great Plains,
    supra. The statute requires only that the bank's facility
    at the county seat receive deposits and pay checks -- services
    generally available at a teller's window.

                              p. 4280
Honorable Tom O'Connell         -   Page   3   (H-1039)

     Furthermore, it may be questioned whether the activities
described in article 2553 require a bank to "engage in busi-
ness," within the meaning of the constitutional prohibition.
The services authorized by the statute are limited to county
fiscal matters and are not available to the general public.

     Finally, it is well established that every statute carries
a strong presumption of constitutionality and that all rea-
sonable doubts are to be resolved in favor of its validity.
Smith v. Davis, 426 S.W.2d 827, 831 (Tex. 1968); Ex parte
Smith, 441 S.W.Zd 544, 547 (Tex. Crim. App. 1969). A statute
should not be declared unconstitutional unless it is olainlv
invalid. Maud v. Terrell, 200 S.W. 375, 376 (Tex. 1918). We
believe'that the courts would harmonize the provisions of article
2553 with the requirements of article 16, section 16. Accord-
ingly, it is our opinion that a bank located outside a county
seat may designate a facility for receipt and payment of county
funds at the county seat, pursuant to article 2553, without
thereby violating the constitutional prohibition against branch
banking.

                          SUMMARY

            A bank located outside a county seat may
            designate a facility for receipt and payment
            of county funds at the county seat, pursuant
            to article 2553, V.T.C.S., without thereby
            violating the constitutional prohibition
            against branch banking.

                               "Attorney General of Texas

APPROVED:

C. ROBERT HEATH, Chairman
Opinion Committee

jst

                              p. 4281