NO. 3072 

ARTICLE 1&15a, REVISED CIVIL STATUTES, HELD 

UNCONSTITUTIONAL 

Opinion construing Article 1415a, Revised Civil Statutes, and holding: 

Art. 1415a, R.C.S., which requires commercial colleges organized after its passage 

in 1929 to give a bond, and exempting from 

Its provisions all commercial colleges then 

in existence, is unconstitutional. 

OFFICE OF THE ATTORNEY GENERAL 

July 13, 1939 

Hon. Tom L. Beauchamp 

Secretary of State 

Austin, Texas 

Dear Sir: Opinion No. O-912 

Re: Art. 1415a, R.C.S., which requires commercial colleges organized after its passage in 1929 

to give a bond, and exempting from 

its provisions all commercial colleges then in existence, is unconstitutional. 

Your letter of June 1, 1939 received. You submit the following question: 

"Is that portion of Article 1415a unconstitutional in requiring a surety bond. to be executed by 

business colleges formed after the passage of said 

Act and exempting business colleges alreadg doing 

business from giving of such bond?" 

In order to properly construe said provision of the statute, we deem it wise to s!:ate the effect of the entire article 

from which the above provision is taken. 

Article 1415a of the Revised Statutes was passed in 1929. 
. . 

Hon. Tom L. Beauchamp, July 13, 1939, Page 2. 

Section 1 thereof provides that any person, partnership, association or corporation which may desire to open a Commercial 

College, or to establish a branch college or school in this 

State for the purpose of teaching bookkeeping, stenography, 

typing, telegraphy, and other courses which are usually taught 

in Commercial Colleges, shall first apply to the Secretary of 

State for a permit. 

Section 2 of said Article provides that before the Secretary of State shall issue such permit, he shall require a bond 

in the sum of ten thousand dollars, signed by a solvent guaranty 

company, payable to the County Judge of the County in which the 

college is to be opened, 'conditioned that the principal In said 

bond will carry out and comply with each and all contracts, 

either verbal or written, made and entered into by said college, 

or branch college or school, acting by and through its officers 

or agents, with any student who desires to enter such college 

and to take any course in commercial training, and to pay back 

to such student all amounts collected for tuition and fees in 

case of failure on the part of the parties obtaining a permit 

from the Secretary of State to open and conduct a Commercial 

College or branch college or school, to comply with Its contracts to give the instruction contracted for, and for the full 

period evidenced by such contract." 

Section 3 of said Article provides that in any and all 

cases where the party receiving the permit fails to comply 

with any contract made with any student, parents or guardian 

of such student, such student or his parents or guardian shall 

have a cause of action against the sureties on the bond for 

the full amount of the payments made to such person, with 109 

interest from the date of the payment, and for reasonable attorney's fees for instituting and prosecuting such suit. 

Section 5 of said Article provid.es that the provisions of 

this Act shall not apply to any University, College or regular 

High School which has heretofore adopted or which may hereafter 

adopt one or more commercial courses nor to any Commercial College heretofore establIshed. 

From a careful reading of said statute as a whole, it appears that a commercial college that was In existence at the 

time the law Iaras passed is exempt from executing any bond; 

while a commercial college organizedthereafter must execute 

the bond. 

The Constitution provides that all persons have equal 

privileges and rights. No law can be passed whfch gives one 

class of persons an advantage over a similar class. Our courts 

have universally held that where the Legislature attenrgts to 

discriminate and exclude any class from the provisions of a 

law, there must be a reasonable basis therefor. 

The only basis for the discrimination in the statute in 
Hon. Tom L..Beauchamp, July 13, 1939, Page 3. 

question Is one of time. A commercial college in existence at 

the time the law went into.effect could contlntie in business 

for sn indefinite period of time and violate any and all of 

its contracts that it saw fit. The only penalty that it would 

suffer would be a suit at the hands of the Injured party;and 

upon a recovery it would be required to pay the judgment and 

6s interest thereon. Under Article 1&15a, all those who engaged 

in the commercial college business after Its enactment were required to execute a ten thousand dollar bond, and In the event 

they failed to comply with their contract, the injured party 

could recoverhis damage, plus 10% interest, plus reasonable attorney's fees. 

The commercial college In each instance would be performing Identically the same class-of education, using the same 

grade of teachers, with the same qualifications and having the 

same financial standing or backing, time alone being the factor 

on which the classification was built. No reason could be assigned why a commercial college that was existing in 1929 should 

be immune from a law which required those established after said 

date to execute a bond requiring the contracts made with their 

students to be complied with. 

In crder for the courts to sustain the constitutionality 

of any law, there must be such a reasonable basis for the classlficatlon,that it will not violate the constitutional provisiti 

against granting exclusive privileges and immunities. 

The question of class legislation has been a source of much 

litigation in the United States. Generally speaking, the constitutionality of a law must be governed by the peculiar facts, 

conditions, and circumstances surrounding the purpose to be accomplished or the evil to be remedied. It would be useless, we 

think, to enter into an extended discussion of the various Acts 

by the legislative bodies and cite the various authorities, and 

attempt to reconcile same. 

In Ex Parte Baker, 78 S.W. (2d) 610, the Court of Criminal 

Appeals held unconsitutional an ordinance passed by the City of 

Temple, which in effect prohibited a person from selling goods 

upon the streets of Temple without first obtaining a license 

therefor, and exempting from the provisions of said ord~inance 

all those who had a permanent place of business within said City.. 

The court stated: 

"An ordinance which attempts to distinguish 

between persons engaged in the same or like bsiness 

merely on the basis of their residence or the location of their business house is in contravention of 

Section 19, Article 1, of the Constitution, which 

read.8, 'No citizen of this state shall be deprived 

of life, liberty, property, privileges, or immunities, or in any manner disfranchised, except by the 

due course of the law of the land."' 
Hon. Tom L. Beauchamp, July 13, 1939, Page 4. 

In Ex Parte Drelbelbls, 109 S.W. (2d) 476, the Court of 

Criminal Appeals held Invalid, because it violated the Constitution, an ordinance passed by the City of Glen Rose under the 

terms of which said City levied a tax upon every temporary 

merchant doing business In the City and exempting therefrom 

all merchants who had been engaged in business for as much as 

twelve months prior thereto. The court stated: 

"That the ordinance in question Is dlscrlmlnatory Is clearly demonstrated by the fact that a person who has been engaged In one of the designated 

businesses in said City for a year or more is exempt 

from the payment of the tax, while another person 

who has not been so engaged for such length of time 

Is subject to the payment of the tax, and for his 

failure to d.o so, punishable by fine, although both 

parties may be engaged In the same kind of business, 

carrying the same kind and the ssme amount of merchandise. If this is not discrimination, then what is it? 

"An ordinance which attempts to distinguish 

between persons engaged In the same or like buslnesses, merely on the basis of the length of time 

each is engaged In the business, is In contravention 

of Sections 3 and 19 of Article I of the Constltution." 

In United States Automobile Service Club vs. Van Winkle, 

274 Pac. 308, the Supreme Court of Oregon held unconstitutional 

a statute which provided that no automobile service club could 

obtain a license to transact business in that State without 

posting's twenty-five thousand dollar cash bond, because it 

exempted from the provisions thereof all automobile service 

clubs that had been in operation in Oregon for a period of 

more than five years and that had a paid membership of more 

than five thousand within the state. The court stated: 

"We can perceive no substantial distinction 

between a corporation which has been engaged In business for more than five years, and one which has 

been engaged in business for four years or between 

a corporation which_Jhas contracted with more than 

five thousand persons and one which has contracted 

with only three thousand five hundred persons. They 

are all engaged in the same pursuit, and at the same 

time and place and under identically similar conditions. They enter Into a form of contract which 

must first be approved by the State Insurance Commissioner, and they all engage to perform the same 

kind of service. What basis, therefore, can there 

be for any discrimination between them? The Act 

does not attempt to regulate the fees they are to 

charge, nor does it contain any reference to the extent of their obligations and liabilities. It recognizes only the length of time they have been engaged 

in business Andy the volume of business transacted. 
. . 

Hon. Tom L. Beauchamp, July 13, 1939, Page 5. 

Neither of these things bears any relationship to 

the objects and purposes of the statute. If any 

distinction Is to be made, it would seem that the 

necessity for requiring a bond from the corporation 

doing the larger volume of business would be greater 

than from one doing a less volume. It Is elementary 

that persons engaged In the same pursuit at the same 

time and place and under like conditions are entitled 

to be governed by a general law applicable to all 

who are so engaged. 

II . . . In order that a statute-be valid which 

contains a classification of persona or things for 

the purpose of legislation, such classification must 

be a reasonable one and must be based on real distinctions in the subject matter which bears some 

relationship to the objects sought to be accomplished 

by the statute. 

,I . . . The classification provided for by the Act 

is not founded upon any substantial difference between the two classes provided for. It denies the 

plaintiff the equal protection of the law by imposing upon plaintiff a burden which Is not Imposed 

upon one of plaintiff's competitors which is engaged 

in the same pursuit at the same time and under like 

circumstances, and therefore violates the Fourteenth 

Amendment of the Federal Constitution. It also contravenes Article I, Section 20, in that it grants to 

others 'privileges or immunities which upon the same 

terms, shall not equally belong to all citizens." 

12 Am.Jur. 165 tersely states the correct rule as follows: 

"A statute containing a classification which 

attempts to give an economic advantage to those 

engaged in a business at an arbitrary date as against 

all those who enter the industry after that date is 

not a regulation of a business in the interest of the 

public, and unless otherwise shown to affect the public 

welfare in a manner which will create some reasonable 

basis for the distinction, is arbitrary and unreasonable." 

Since the Article gives to those who were engaged in the 

business of operating a commercial college at the time the law 

was passed privileges and immunities that are not given to 

those who establish a commercial college after the Act was 

passed., same is, in our opinion, unconst itu%ional. 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 
Hon. Tom L. Beauchamx July 13, 1939, Page 6. 

George W. Barcus 

Assistant 

GWB:PBP 

This opinion has been considered In conference, approved, 

and ordered recorded. 

W. F. Moore 

First Asslrtszk Attorney 

General of Texas