Jcacuary lZth, 1939 

non. 2. coasatt, BanIdng Corlmlsaion8r Depnrtlent of IkInking 

Austin, Texas 

Dear sir: 

Opinion No. O-52 - 

Ras Artiole 350 & Utiole 352 

Is there nny discretion permissible 

to the 3lmlcln& c~issloner in nab 

ing publlo the ,e.xazsiner*s reports 

on rinanoicll inotitutions? 

Your letter of Jammry 0, 1939, In whioh you ask 

an opinion as to oertaln quentions, has been r6feIT8d to the 

writer for nttctntim. Your questions are: 

1. Goes til0 r?Jla or ;~rilr~lo~s pertaining to 

oxminors* reports obtuin :Jit!i rsspeot to instltutions that nre 01033a and not actively oni;aged in 

their oor2orata b*zsiuess nt the tlm the report is 

called for or SIXI arivilage invoked? 

2. Does tho rule of ;~rivil.cge in any evcat a~- 

ply to Loan i: Erokern~e Companies $8 sazie as to 

bmki.zg institutions? 

3. IS tllere'any Giscreticn pfirrzissiblo to the 

Banking Comissloner in tho matter of naking publlo 

exa.nioere* reports by 6ivi.5g COpioS thereof or pernitting the inspeotlon %he,eroof And If so, just what 

are the linits of, or the rJle5 goverain&, the excld.38 or tklt discratiGn? 

Artlclo 350 or the Revised Civil Stntutes a5 amended by the 41st X&;islatura, Hurst Called Session, Uzts of 1929 

provictes ror the anpointzent of the bank axminers. ilrticle 

333 of the :!eviscd civil Satutos prescribes 3s c?ualirlcation 

.shile.hrticle 352 of tha iiovisod civil 3atutos ?rovldes for 

t;lo bond and oath of :m curtminor, a5d nolong othsr things, pm7id8~s,tncit 118 3ilnll take oath, thnt - 
Eon. z. Goasett, January 12th. 1939 3aga no. 2 

"He will not reveal the oonditlon of any 

bank or ban&&q trust oo~?pany, exruninod by bin or 

a.13~ lniOX3BStl~ ~80~8% in the OOuP50 Or nnY BIt%lzinotiun 0r any bank or btxlking trust oonpany, 

to any one exocpt the C&ssioner." 

Artiole 551 0r tha Penn1 Code providelJ ror the penalty to be inrllotod Upon a bank mminar for the violation 

ot the oath provtded for in ArtA. 352 of the Revised Civil 

3tlltute6m 

Chlot Juntlce Cureton or the Suprem court, -Aen 

c-3 rirst assizltrrnt attornay general 0r this Sate, wrote m 

exiiustive opinion undm date of Zarah 4, lQW, adCrossed to 

the Honorable John 3. Z?xtterson on questions maewhat relnted to those asked by you with respest to the above statutes 

:i!:loh have sin08 been renumbered Judge Cur&on said: 

qf8 think tho .sw&~&rz~ of these two ~o~lsiont3 

;d:w aonnicioreci to.gether is, th%t 5 bank 8Xadnfz 

cannot voluntnrlly raveal the condition of any bank 

ms!:.tinod by him or Yoluntnrlly qivo any 0118 any inlxxM.on oanccrnlng the oondition oi any suoh bank, 

IS suoh informtlon was SeOIAl-cd olfioially. These 

provisions, howevsr , do not prohibit euoh ZxazAner 

from siving his testizony in Q judioiol proaeedlng, 

ns the lnnqw~e of the provisions oloarly aeok only 

to 2rohlbi.t voluntary disolo~~ree on the psrt Or 

the axminer and do not atteibpt to prohibit s oourt 

from requirlnE; the examiner to disolone such roots, 

cm the oourt nay havs P right to roqtira to be die01030ii. Tha question thererove, finally reduaee 

itself to one or priy&e oonwsmioations~ The mime 

rulea ~0~1% r~o~ern an oxaainer in this rsapest 5s 

g0vt-m the C~soloner 0r Banking hlR58if, us ah 

~sV~h8r in a gublio 0rri00r who reproaents the Dep~tzaxlt. or the COy8rw2eht whioh SUpOFVi38tl tllld 

oontmln the b.mka. Dri8rly, hle buslnoss io to 

mke,exwimtlon of State banks and to trensmit t0 

the Comii53iomr 0r Insurnnoe iUld Bmking a rcvort 

or the condition of b%&i exanined by bin, iuld it 

IS upon the bmls 0r tk.080 r'oim-ts tht t:ie Codf3- 

sionor deterxihes ;rhether the bank shell OontiXIU8 
c _. 

.i 

Xon. 2. Gossett, January lzth, 1939, Tage X0. 3 

as a goiug inrtitutian or vðer it shall olose 

ita GW~S snd ooase to exist; llkewi.oe, ns to 

&at remireeents shall be mde of the bank by 

the Commissioner of In:aU%llCO and .BankinG. The 

bankexadner is r%quiicd to tnke'tan oath of otflos, Give bond, possase oertain qmlifloatlons 

and his gosition has all the characterfstlus of 

ahd is a pzblio offlao." 

h suonort of the shove, Judg Cureton oitedthb 

statutes horeinajove referrod to by the writer, as WJU aa 

the foll0vfin6; authorities: 

Liitche on Banks, Vol. 3, p. 17i3C, 

Sitters vs. Soxers, 43 ir'od. 763. 

Article 3722 F&vised Civil Statutea proviba that 

t,C;o &mkihg Cohmissioner, alow ,aith other nazmd Govornmtmt 

orrlcials, shall: 

n+ 7 * -?. =Purhish auy person ap?lyih:: FOP 

t11a 9am, a copy of .xny ?aper, iocumht or record 

in ti;cir offices, md xith oortificate uuder seal 

cortir;rin~; to my ‘Lank oontained ih the gapora, 

docur.vmts or rwordo of their offloos; and the 

same shall be received in ovldfmoe in all casm 

in which the oriGlnals rrould be evidanoe." 

Th;:s statute 13 not mandatory that Covernnent otficialo prodiioo and furnish copies of a11 instrummt% that 

ni:;ht by o&nco be in their hands. It oannot extend to nor 

ticlude such doauments as might oontain InSor.wtion prejudicial to the publio interest rooeivad by (1 Government offiOio1 

in an orflcial capaoity. i7hothor or Rot suoh inrormtioti or 

doomtmt, aim be renuirod or any oriicinlrsujt be rjovmmd 

by the general rules which r~ovcrn grivilqod cmmaniontlone 

to aublio os'r'loers. JudGo Wraton, 3.n the +ove referred to 

opinion, states: 

"It xay ‘00 atnted as a @naral principal 

tht g~blic ~olioy forbids the naintenanoe of any 

s:.it in il Court or Ju&lco, tho trial of' which 

xo'uld i3ovltably lead to the di301osure or mtters 

:;>ioh tta laz ro:;amis as conilcontialsnd in regard 

of which it All aot allo;r the conridenco to be 

viol<lted." 
mIl. St. Cossott, Jnnuory 12th‘ 1939 PxyI x0. 4 

The President of the United States, the Oovernors 

of several state0 and thelr Cabinet ofiioera are not bound 

to produce papers or to discloss lnfoncction committed to 

thtn in 8 judicial inquiry, when, in their ~MPI jurtvt the 

dfsalosum would, on publao erouhda, be ihexpedlcht. This 

prlnoipal is reoogniztnl and supported in the following cases: 

Trotttm vs. United States, 92 U.S. 105 

Enrtrahf't*s Appeal, 27 Au. Rep., 667 

Thompson vs. Geman Valley R.R. Co., 22 R.J. 74.111 

TX3 principal applies with enualtorce and erroat to the 

hea& oi E!ational sad .Stato Oovornmcmtsr 

'i70rtSington vs. Scrlb:ler, Au. Rep. 730 

In ro IIuitxm, 7 YQd. 699. 

In re ~~:ee~, 82 Bad. 729 

hske vs. Cordngce, 177 U.S. 459. 

The &prom Court of bkxvachusetts in I!urtrahft*s 

.;?>eal , 8up?a, said: 

‘?!hus the nuestlon of tho 0XDtXldiMOy Or the 

prodxctioc or tbc reqilired evido:~ce lu rercrrcd, 

Ilot to the judgmmt or the court berore waloh the 

action is trying, but or the ofrloer who INS that 

cvidcnoe ih his p03903aien." 

Aftor a oarorul exaxinatim or the autiloritles it 

is a;?parent that the Ranking Cormissioner oan avail h5mseli 

or the privlleqe or rofuslag to testify about, or to furnish 

co~ioe of any oxminors report lo his ~o~~sesaion, ii he feels 

that such disolosuro vould be prejudicial to 3ubld.o interest. 

If, on the other hahd, ho should dooide that to produoe such 

lnforzatloa as ho &;ht ?ONJOOS would be to public iarerest, 

ha oaa do so. 

z~ticlo 1534a, Par. 2, R.C.J. as aaendcd by .',ota 

0r 1937, 45th hgi3Lut.a0 19 ~3 r0ib3: 

‘The ::~rikln~,~Co!amlsslonor or' Texas shall ex- 

:dao or cause LO '3~ OXaAaOd such cornorations 

mnually or 0Stonor If ho doew It neocosnry. .;ald 

. 
IIon. z. Gomltt, January Uth, 1939 ?llgs lie. 5 

corporation shall pay the actual traveU.zq ~eqenses, 

hotel bills, and all other ootual expense lnoldent to auoh examination and a foe not moeedlag 

one-oi&th or one per cant or Its aotual oald-in 

aapital. It auoh oor.soration had not sold In 

Texas its bonds, notes, oertitiontee, debenturea 

or other obligations and does not offer for sale 

or sell In Texas Its bonds, note8, oertlfloates, 

debentures or other obligations, the SRnking Cornmissioner of T~xns, in lieu of an oxaninatton, 

shall aooept a fintmial statemmt nado on such 

foru, containing such informatl.on as he deelres. 

Tho iPinking Co.m.lssloner of Tsxas is hereby authorized to appoint not to exoeed one ~aminer for 

every fifty (50) or suoh oor~oratlons. EElch axardner shall take,the oath and furnish a bond as 

required or State Sank &a;zfners, and shall reoelve on anuual salary as r0uOdvf3t* * * * **' 

By virtue of suoh artlole the I3ankla.q Comlssiouor 

13 ;:lvon po;rer to exanine or cause to be examined alloar- 

?ortitions mbraoed by the provisions of Article 1524a. it 

likewise, provides that eaoh examiner nholl take the oath and 

Punish :A bead as reqtilred of state bank axcuzlners. In taking tke sam oath as taken by a bank exmlmr, the loan and 

brokarago co::~gany oxatiiner ;rould be no nor0 privllcp,od to 

xake pub110 any inforxatlon conoerni~ tho oondltlon ot any 

conpcmy excmined by bin, it such infomatlon was rooeivcd by 

him in the course or his orrlclal duty es suah an examiner, 

thsn would a bank exaxinor be Driviloeed to make yabllo any 

inforzatloh he ml&t posoese under slinllsr oiroumstanoes and 

conditions. Jud.;e Cur&on ooncluded in the ognlon herelnabovo referred to that a bank exaninor has no authority to 

dl3olose any lniomatlon reoelved by hln during the oourse 

of Lis exaninatioa of a bank, if ouch lnfomatlon was reoelved by bin iu the courao of !:lo offlaial duty no suoh oxanlner, 

except and ;u?leaa he bo npoolfiaally dlreotod by the Banking 

Cor~i3sloner to do so. I!o authorities are found that will 

ju;tifg shy ckaago In this conoluolon. 

It 13 apparmt that the answers to the first and 

Lst ,uaotions oronounded bv YOU . mist be bnsed unon the sol9 

p~upoktlon of -~i?&bor or nbtvyo& aotlon in the ireulsee is 

uo G!S publlo intorest. 
It is, thmsfore, t!m o?lnion OP SM$ depu-tmnt 

t hat : 

(1) The xrle 02 prlvils-ga pertaining to 

exarrAners remrts obtains vait!l ros?eot to insttitutlons thnt m-3 closed and not aotlvoly oxqt(;ed 

in tbclr aoqorate bulnaas ?t the tint the report 

1s cnllod for or the privilege invoked. 

(2) 'If.8 rul.e of ?rivllece pertaining to oxminers report a.~?plies to loon and brokerage coinpanies, the aame as to banking institutions. 

(ii) Tho ikd4.n~ Cormlosioner hno $iscrction 

~SI fhe ;&t$ar of nakL~ public ex9iziners' reports 

by :ivlzg copiss tnoreor UT yeml%ting the l;:syecticn ~h32~Or, or iu %i?ntifyirq or p0mitti;q exminms to tcsti+"y under iris s;ipervFsion and express 

~cr::l3slon, Zirzlted only by his deoision and diecrntion of ?riMZmr or not thd :raki~~ wi~lio of such 

inforz&ion I.2 to the ?ublio intormt. 

Trwting'thla f2lly and satisfactorily 

your bqulry, I :m 

Your13 very 

, 

cm3w3rs~ 

truly