Court Opinion

ID: 9576848
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:29:16.821434+00
Date Added: 2024-06-11T13:19:03.387535
License: Public Domain

On Motion for Rehearing.
Appellee First Bank urges that the denial of its motion for summary judgment should be reversed upon the basis that it lacks the legal authority to serve as a trustee. First Bank relies upon OCGA § 7-1-310 (c), which provides, in part: “Every bank . . . operating pursuant to this chapter shall possess all of the rights, privileges, powers, and responsibilities herein conferred upon trust companies; provided, however, that no such bank . . . shall exercise such powers and privileges without the prior written approval of the [Department [of Banking and Finance (Department)] after a careful consideration of the factors enumerated in Code Section 7-1-394, relating to the chartering of trust companies.” First Bank urges that, pursuant to OCGA § 7-1-310 (c), it has never sought nor received any official written ap*387proval from the Department regarding its operation of a trust department and has never operated such a department. Thus, according to First Bank, it is not authorized under the laws of this State to serve as a trustee and therefore cannot be held to be a trustee in this case.
Decided March 3, 1987
Rehearings denied March 31, 1987
Alex L. Zipperer III, James B. Ashby, for Smith.
Leamon R. Holliday III, for First Bank of Savannah.
Luhr G. C. Beckmann, Jr., Joseph H. Barrow, for Abbott.
Roland B. Williams, for Savannah Bank & Trust.
A. Martin Kent, for Hydraulics Supply.
H. Sanders Carter, Jr., for Thomas & Hutton.
Notwithstanding First Bank’s lack of an official trust department as such, OCGA § 7-1-310 (c) contains the further provision: “Any bank exercising or partially exercising trust powers prior to February 27, 1976, authorized by its articles may continue to exercise or partially to exercise those powers to the extent approved by the [Department without the necessity of obtaining a new approval. Such powers may be exercised only if authorized by the articles of incorporation of the financial institution.” (Emphasis supplied.) First Bank does not contend that its articles of incorporation do not authorize it to exercise trust powers. The evidence of record shows that First Bank was chartered for the purpose of conducting “a general trust and banking business. . . .” The evidence of record further shows that First Bank was exercising or partially exercising trust powers prior to February 27, 1976, and was doing so with the approval of the Department. In 1972, First Bank secured the Department’s approval to merge with Industrial Bank and Industrial Bank was at that time the valid trustee as to the title to the Corporation’s property. The effect of this merger with Industrial Bank was to confer the trusteeship upon First Bank by operation of law. See Former Ga. Code Ann. §§ 13-1406; 1407; OCGA § 7-1-536 (c), (e). Thus, the absence of authorization for a full-blown trust department is irrelevant under the circumstances of this case. Since First Bank was already exercising the trust power that is here in issue and was doing so with the prior approval of the Department on the date that OCGA § 7-1-310 (c) became effective, securing “new approval” to continue to exercise that power was unnecessary. Accordingly, we adhere to our ruling that First Bank has been the trustee of the title to the Corporation’s property since 1972 but, for the reasons discussed in Division 3 of the opinion, it was error to deny its motion for summary judgment.
*388Brent J. Savage, George L. Lewis, for appellees.