.THE A~OHXEY GENERAL 

OF %%CXAS 

AUUTIN .I. TEXAW 

‘(YILIA WILBON 

ATTORNW GssI!xsAx. 

WY 29, 1958 

Hon. Zollie Steakley 

Secretary of State 

Capitol Station 

Austin, Texas 

Dear Mr. Steakley: 

opinion No. w-438 

Re: The authority of the Secretary 

of State to approve a charter 

for corporations having as 

their purpose the issuance 

of bail bonds. 

In your letter you request an opinion of this office "conceraing the authority of this office to accept, file and approve the proposed charters" which have purpose clauses that would authorize corporations to carry on the business of all types of criminal bail bonds. 

At the time the Legislature enacted the Texas Business Corporation Act in 1955, corporations engaging in the business of surety 

on bail bonds had long been required to obtain certificates of authority 

from the Board of Insurance Commissioners. These corporations received 

their certificates of authority under Article 8.01 of the Insurance 

Code as casualty companies, or under prior Chapter 7 of the Insurance 

Code as fidelity, guaranty, and surety companies. These corporations 

were further regulated by the Board of Insurance Commissioners by Article 5.13, concerning regulation of rates, and Article 21.10, concerning the requirement of an affidavit of non-violation of the agency provisions. Casualty insurance comuanies had long been authorized to act 

as surety for the-execution of bail bonds. CfT Ex Parte Osborne, 127 

Tex. Grim. 453, 77 S.W.2d 537. 

Article 271-a, Vernon's Code of Criminal Procedure, provides 

that: 

n . . . any bail bond or recognizance . . . may be 

given or executed by such principal and any corporation 

authorized by law to act as surety . . ." 

The only corporations that had been authorized by law to act as surety 

were under the supervision of the Board of lnsuran ce Commissioners or 

Banking Commissioner. Article 271-a was enacted in 1929 as an apparent 

codification of EX Parte Cook, 62 Tex. Grim. 22, 136 S.W. 67 (1911). 

In 1955, the Legislature authorized the Secretary of State 

to approve charters which contained purpose clauses of the widest variety with certain enumerated exceptions. Article 2.01-B(4) of the 
Hon. Zollia Steakley, page 2 (Hl-438) 

Texas Burine.ss Corporation Act enumerates as one of the exclurlonr, 

“(d) insurance companies of every type and character that operate under the insurance laws or this state . . .” At the time or the enactlDent of this cxclurlon the only corporations authoriscd to act as sureties on ball bonds vere those corporations which were regulated ua&r 

the insurance or banking laws, such as Chapter 7A, Chapter 8, or Chapter 7B of the Insurance Code, _ 

Thun, your question narrows to whether or not subsequent legirlatlon in 1957 bar.amnded the intention and language of the Texas 

Buolneoo Corporation Act an it wao enacted in 1955. 

In your opinion request you noted that Article 271-c of the 

Code of Criminal Procedure, which was enacted as H. B. 11, 55th Leg., 

(R.S. lgfl), Ch. 420, p. 1259, and amended in the First Called Session 

ao 8. B. 25, Ch. 24, p. 51, referred to corporations as well as persona 

in the bail bond burinerr. Not only is the 4ct by its terme regulatory 

rather than granting additional powers to the Secretary of State, but 

recently the Supreme Court of Texas in Smith v. Decker, go. A-6663, 

decided on April 30, 1958, that the entire statute is unconstitutional. 

The only corporations “authorized by lav to act as surety” in accordance with Article 271-a, C.C.P ., were regulated under Chapter 7 and 

Chapter 8 of the Insurance Code. The repeal of Chapter 7 of the Insurance Code, S. B. 165, 55th Leg., (R.S. 1957), Ch. 388, p. 1162, had 

the effect of limiting the doing of a corporate surety business solely 

to insurance companies regulated under Chapter 8 by the Board of Insurante . 

It Is thus our opinion that the recent legislation referred 

to above has not altend or repealed the former requirement of a certificate of authority frola the Board of Insurance for a corporation 

to engage in the business of acting as surety on bail bonds for a premium. Therefore, it is our opinion that the Secretary of State does 

not have the authority to approve charters stating the doing of a bail 

bond business as a corporate purpose. 

Article 2.01-B(4)(d) of the Texar, Business 

Corporation Act; the Code of Criminal Procedure, Article 271-a; and Article 8.01 of 

the Insurance Cods restrict the corporate 

business of insurance of bail bonds to those 

corporationr which have a certificate of authority from the Board of Insurance. Therefore, the Secretary of State does not have 
Eon. Zollie Steakley, page 3 (WW-438) 

authority to approve applications for corporate charters which state the business 

of surety on criminal ball bonds as a purpose. 

Very truly yours, 

WILL WILsOn 

Attorney General of Texas 

Mac0 stevart 

Assistant 

MS:lSl 

APPROVED: 

OPINION COMMITTEE: 

Geo. P. Blackburn, Chairman 

Wallace P. Finfrock 

Riley Eugene Fletcher 

Tom I. McFarling 

PJZVIEWEDFORTHE!ATTORNEYGENERAL 

BY: 

W. V. Geppert