June 2, 1975

Dear Mr. ________:

This is in reference to your letter of May 13, 1975 and in confirmation of your telephone conversation with Mr. Edward Peterson of this office.

You have requested our opinion as to the propriety of a foreign banking corporation, authorized by its articles of incorporation to exercise trust powers, acting as trustee for the purpose of managing commerce property located in California, without first qualifying to do a trust business in this State.

As we understand the facts, ________ (“Bank”) is a Texas corporation authorized to conduct a trust business in that State and acts as trustee under a trust agreement executed in Texas, where the settlors also reside. Further, the only contact the State of California has with the trust is that a portion of the corpus consists of commerce property located here. You also state that this commerce property is the only California property which the Bank holds as trustee under any of the trusts which it administers.

Based on these facts, we are of the current opinion that the Bank’s activity of holding title to and management of the commerce property, without more, in this single, isolated case, does not constitute the doing of a trust business in California.

We trust this answers your inquiry. If we can be of further assistance, please do not hesitate to contact us.

Very truly yours,

Chief Deputy
Superintendent of Banks




cc: State Banking Department, S.F.

May 13, 1975

Jack Fried, Esq.
Counsel, State Banking Department
600 South Commonwealth Avenue
Suite 1501
Los Angeles, California 90007

Subject: _______ Trust

Dear Mr. Fried:

We represent the ________, Texas, (“Bank”), in its capacity as trustee under the Trust Agreement (“Trust”), dated July 23, 1968, between ________, joined by his wife ________, as trustor, and the Bank and ________ as co-trustees. ________ is now deceased and the Bank is sole successor trustee under the Trust. The Bank does not do business in California and does not maintain any branch or other office in this State.

Included in the Trust assets is a three-fourths undivided interest in a certain parcel of improved industrial real estate in Los Angeles County, containing approximately five acres, located at ________, Commerce, California. This real estate constitutes the only California property in the Trust, the only other California property originally included – a lot in Orange County – having been disposed of earlier. The Commerce property comprises but a minor part of the Trust assets, which include substantial holdings of securities and of real property located in other states.

It is also our understanding that the Commerce property is the only California property which the Bank holds as trustee under any of the trusts which it administers.

Last week I spoke by telephone with Chief Banking Examiner, Edward Peterson, regarding what steps the Bank should take in order to comply with the relevant provisions of California banking law in its management of the Commerce real estate (including in such management collecting and receiving rents, leasing and/or selling the property, securing necessary maintenance and repair services and otherwise performing those duties usually required in managing industrial rental property). Mr. Peterson said that in the view of your Department management of the Commerce property, under circumstances like those here, would not constitute doing trust business in California.

Mr. Peterson also told me that if I were to write to you, setting forth our situation, you would be kind enough to confirm in writing the view of’ the Department that the Bank could undertake, as trustee of the Trust, to manage the Commerce property in the manner described above, without being required to qualify itself to do trust business in California. We would greatly appreciate your confirming this to us, at your earliest convenience.

If you require any further information, please call me.






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