Request By:
Mr. John L. Williams, Jr.
Commissioner
Department of Banking & Securities
911 Leawood Drive
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
The Department of Banking has had the question presented as to whether or not state banks, through their trust departments (see KRS 287.040(3)), or state trust companies may engage in the activity of the general real estate business as a part of its activities under KRS 287.210. Subsection (2) provides that "Any trust company organized under the laws of this state may: Act as agent for the transaction of any business or the management of estates, the collection of rents, accounts, . . . ." (Emphasis added). The statute in the main describes various fiducial functions of such permitted trust activities. The earlier statute, Carroll's Kentucky Statutes, § 606 (1893 Acts, Ch. 171, p. 612, § 69), contains the provision that any trust company " May act as agent or attorney for the transaction of any business . . ." (Emphasis added). Thus from 1893 to the present in 1979, there has been no legislative change in the above underlined provision.
In OAG 63-827, we concluded that KRS 287.210 does not authorize trust departments of state banks or state trust companies to act as real estate brokers or salesmen as a regular business. That opinion did not, however, take into consideration the case of
Saufley v. Botts, 209 Ky. 137, 272 S.W. 408 (1925), which we think is dispositive of the issue you raise.
In Saufley v. Botts, L. W. Botts, who was an officer of the Fidelity & Columbia Trust Company, wrote insurance for the general public in his own name, but accounted to the trust company for all the commissions he received. The court held unequivocally that the trust company could, under the broad language of the statute, "Act as agent for the transaction of any business," act as an insurance agent in the general business of insurance, regardless of whether or not the insurance business was related to the fiducial function.
The court, in Saufley v. Botts, first dissected the earlier form of KRS 287.210 [Carroll's Statutes § 606] into three parts. The court said that the first part authorizes trust companies to act as a fiduciary in the instances named; "the second to act as agent generally;" the third to act as bailee in certain cases. The court wrote this at page 410: (Emphasis added).
"Naturally the second division extends its powers beyond the specific instances mentioned in the other two. The words, 'and may act as agent or attorney for the transaction of any business,' are comprehensive. While followed by the words, 'or the management of estates,' etc., their use indicates that it was intended to give such corporations general authority to act as agent or attorney in matters aside from those specifically mentioned.
"If instead of appearing at the beginning of that division the quoted words had appeared at the end, there could be no doubt that such was the legislative intent. As it is, the order of their appearance is immaterial, as it clearly appears that they were intended to enlarge the specific power granted. So considered, the language is sufficiently comprehensive to include the power to act as insurance agent. * * *
"However, the authority to act as agent is a mere delegation of power and may be conferred upon trust companies generally under the section quoted, and also upon other corporations organized under the general provisions of the act, and, when similar language is used in each, the same construction applies to both." (Emphasis added).
After Shepardizing Saufley v. Botts, we find the appellate courts of Kentucky have made no change in this holding. There is simply no Kentucky case overruling or modifying that holding outlined above.
It is our opinion that under KRS 287.210(2) a state bank, through its authorized trust department, and state trust companies may act as real estate brokers or salesmen in the general real estate business, regardless of whether it involves the institution's fiducial business or not.
Of course, in applying our conclusion, we would assume that the articles of incorporation of the affected institution would permit the fiducial activities and general business agency power, as described in KRS 287.210. The law is that powers of a corporation are only such as are expressly conferred by its charter and such as are necessarily incident thereto.
Wilson, Banking Commissioner v. Louisville Trust Co., 242 Ky. 432, 46 S.W.2d 767 (1932). In addition, we would assume that the affected institution complies with any pertinent regulatory statutes governing the aforementioned general real estate business.
Under the ruling in Saufley v. Botts, it appears that the court felt that the statutory intention was so apparent from the face of the statute as to leave no room for construction (Sands, Sutherland Statutory Construction, Vol. 2A, § 46.01, p. 48), and felt that the broad power of business agency would not lead to absurd consequences or thwart manifest purpose. Ibid., Vol. 4, p. 138.
A statute is to be viewed as a whole and according to its manifest purpose. Here KRS 287.210 was enacted, according to Saufley v. Botts, for the purpose of stating the powers of a trust company, not just the fiducial powers thereof. See Ibid., Vol. 2A, § 46.05, p. 57. Justice Cardoza wrote in
Panama Refining Co. v. Ryan, 293 U.S. 388 (1934), that "the meaning of a statute is to be looked for, not in any single section, but in all the parts together and in their relation to the end in view." This is the gestalt idea of seeing things as a single pattern.
The Court of Appeals in Saufley v. Botts interpreted the subject statute [the prototype]. Interpretation of a statute is a matter of law.
White v. McAllister, Ky., 443 S.W.2d 541 (1969) 542; and
Taylor v. Fidelity & Casualty Co. of New York, 246 Ky. 598, 55 S.W.2d 410 (1932) 413.
Finally, the doctrine of stare decisis requires that we do not depart from the court established rule.
Buchanan v. Watson, Ky., 290 S.W.2d 40 (1956) 44. The court wrote this in
Ballard County v. Kentucky Debt Commission, 290 Ky. 770, 162 S.W.2d 771 (1942) 773:
"The rule stare decisis, et non quieta movere (to stand by precedent, and not to disturb settled points) finds support in the principle that courts ought not to withdraw or overrule decisions which have been promulgated and published by them, and on the faith and credit of which individuals and the public have entered into contracts or acquired property rights."
OAG 63-827 is accordingly withdrawn.