- 

THEATTOEENEY GENERAL. 

~FTExA~, 

Honorable James 0. Qerst Opinion No. C-335 

Savings &Loan Commissioner 

1010 Lavaca Re: Whether the operation 

Austin, Texas of certain facilities 

of a savings and loan 

assoclatlon comes 

within the definition 

of an "agency" as that 

term Is defined in 

Rules and Regulations 

for Building and Loan 

Dear Mr. Gerst: Associations. 

Your request for an opinion asks whether the operation 

of certain facilities of an association, when considered 

in light of facts stated in an enclosed deposition, comes 

within the definition of "agency" as that term is defined 

in: (1) Section 3.1 of the Rules and Regulations for 

Building and Loan Associations adopted November 15, 1963; 

and (2) the Rules and Regulations for Building and Loan 

Associations adopted January 27, 1958, and amended November 5, 1960. 

"Agency" is defined in the Rules and Regulations 

adopted November 15, 1963, and in the Rules and Regulations adopted Jffnuary 29, 1958, and amended November 6, 

1960, as being . . .any lawful arrangement whereby 

any business of an assoclatlon is conducted other than 

by regularly employed personnel of the association." 

The facts, as stated in the deposition, show that 

the association has opened certain offices, contending 

that the personnel operating these offices are "agents" 

of the association within the meaning of that term as 

used in the Rules and Regulations. The personnel who 

work at the offices in question sign an employment contract with the assooiation in which they are designated 

as "agents" of the association. The facts, as stated 

in the deposition, indicate no substantial difference 

in the association's treatment of the personnel who 

are designated as "agents" and the association's treatment of the personnel designated as "employees." The 

association treats the "agents" and "employees" in a 

similar manner in the following instances: 

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Honorable James 0. Gerst, Page 2 (G-335) 

1. The “agents” receive regular monthly compensation. 

2. The “agents” are considered to be employees by 

the association for purposes of the association’s federal 

income tax returns. 

3. The “agents” are considered to be employees by 

the association for the purpose of the association’s unemployment insurance. 

4. The “agents” participate in the association’s 

group medictl plan, and there is no distinction between 

the ‘agents and the “employees” in the coverage extended 

to participants. 

5. The “agents” are protected under the association’s 

workman’s compensation insurance In the same manner that 

“employees” are protected. 

6. The “agents” are paid a year-end bonus based 

on the same criteria which are considered for the payment of a year-end bonus to “employees.” 

7. The “agents” do not have expenses In connection 

with the operation of the offices in question, as all 

overhead is paid by the association. 

8. The “agents” are reimbursed for expenses they 

incur while working for the association in the same 

manner that the “employees” are reimbursed. 

9. The association deducts wlthholdlng and social 

security taxes from the compensation paid the “agents” 

just as it does from the compensation of “employees.” 

10. The “agents” are required to turn time cards 

In to the association just as the “employees” are required to do. 

11. The “agents” have the same vacation benefits 

a8 “employees. ” 

12. The “agents” are under the direct control and 

supervision of the association In the performance of 

their duties, just as the “employees.” 

When the definition of “agency” as stated In the 

Rules and Regulations Is applied to these facts, the 

-1595- 
Honorable James 0. Gerst, Page 3 (c-335) 

question of whether the offices opened by the association 

are operating within the Rules and Regulations turns on 

whether the personnel operating the offices in question 

are "regular employees" of the association. If these 

personnel are "regular employees" of the association, 

the offices are not being operated within the framework 

of the Rules and Regulations. 

The only distinction between the "agents" and other 

employees of the asso$iation is the employment contract 

Figned b% the "agents in which the personnel are called 

agents. It is well settled that a party to a contract 

who is designated as an "agent" in the contract is not 

an "agent" merely because of such designation. The 

exact relationship Is determined by the legal effect 

of the provisions of the contract. 2 Tex.Jur.2d 446, 

Agency, Section 10. The contract in question is attached 

to the deposition as Exhibit 1, and it provides for regular compensation, payment of all operating costs by the 

association, and control of the "agents" by the association as to the procedures ,to follow in handling loans, 

office hoursEnd provisions for time and termination of 

the relationship. 

Further evidence showing that there is no material 

difference between the personnel designated as "agents" 

and those personnel designated as "employees" is found 

in testimony of the association's president on page 28 

of the enclosed deposition wherein the president of the 

association made the following statements in response 

to questioning: 

"Q. If the application for a loan office 

is granted, would there be anything required 

to be done to the records of the association 

to change these persons involved in the agencies 

to be carried as employees? 

"A ~ Yes 

“Q. What would have to be done? 

"A. These contracts would have to be redone, for one thing. 

“Q. Insofar as your books and records, payroll, medical, anything of that sort-- 

"A. No 

-1596- 
Honorable James 0. Gerst, page 4 (C-335) 

“Q. --is there anything that would have 

to be done? 

“A . No, not that I know of. 

'IQ. And the difference would simply be to 

dispose of the contract, because then, they 

would be an employee, as you would see it, is 

that right? - - 

"A . Assuming we retained them as 

When all of the facts concerning the 

the treatment of 'Iagents" and "employees" 

tion are considered, it is clear that the 

employees." 

similarity in 

by the associa- 

"agents" are 

actually regularly employed personnel of the association. 

Since, under the facts stated in the deposition furnished 

with your opinion request, there is no material distinction made by the association between "agents" and "regular employees," the operation of the facilities in question does not constitute the oueration of an "agencv" 

within the meaning of that term as defined in the Rules 

and Regulations. 

SUMMARY 

------- 

The operation of certain savings and loan 

facilities does not come within the meaning 

of "agency" as that term is defined in Section 3.1 of the Rules and Regulations for 

Savings and Loan Associations adopted November 

15, 1963, or The Rules and Regulations for 

EWildlng and Loan.Ass'ociations, adopted January 29, 1958, and amended November 6, 1960. 

Very truly yours, 

WAGGONER CARR 

Attorney General of Texas 

JWF:ced 

-1597- 
Honorable James 0. Gerst, Page 5 (C-335) 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Joe R. Long 

Paul Phy 

W. 0. Shultz 

Kerns Taylor 

APPROVED FOR THE ATTORNEY GENERAL 

BY: ROGER TYLER 

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