**OFFICE OF**  **THE ATTORNkY**  **GENERAL OF**  **TEXAS AUSTIN** 
**’ GROVER**  **SELLERS ArrORNEY** **GLNLlllrL** :; 

## 764

Penor8ble II.A. **Juisea** cemiSdOXWe ~jW@IIOXIt Or m~khg **Au**attn **- 14**  **0 ’**  **%x8S**

**De8r Yr.**  Julsm: **opinion Ro.**  **04lwT**

Iour lottor i. 88 ?0110*8:

rit todo **bu**

018, 4.88ppF48Oboplnioa regwdiag **d w**  OIlI'

OpOOi81

pomtlon ~hosa home oft300 la ia lQwin,@ield, vhioh time OlaOnt 08ll80SOUr inqUiW lVll8tiVO to expenses tobe 00p0ooi8lYf pertinent.

Smhe qUeStiOXl tb8t OOllO8l'llS 11s18Wheth4l Or not our ropreSsnktltos BI8rbe reimbnrmd totbe extent of expames 8otu8lly inourred **by** permitting the OOr~F8tiOllS inVOlV@d t4is-0 **their UpenW** 

- .-EonOt8ble A.A. J8misOll-p8ge a

**W8ttMfS** direotly to **the teprWWdc8tiVO**  **Ot** tOptOsenktires, Or does it fOllOW tb8t 8bill for lRlOb
erpenaeo mst be diteoted to the ootpot8tlons involved 8nd 

### obeok mode pal8blO t0 this dOp8ttaent rifb the 8meunt dOpO8ited in the 88mO m8nnet 88 eS8mfn8tiOn fee8, pell81tie8 8nd other tetWUeo oolleoted by 

### fhi8 drpatbent with tbe ex8minotm

or tepresent8tl.ter bein toqaltsd 

### to 1-t **the** 8mOU?Itof theit 0181~8 4ortelmbutnl to M.00 pet d8ye 

### ph#, O? OOPtMs 8OtU81 

### eXpeIJ8Ominautted te tt8lls~tk~iOll Oh8tge8. In Chic 

### oonnsotiim your 8ttenfion is invited to iMotIon Bof the 8?otem8Pid Attiole.

sYou ate further 8dvised **th8f it**  **h8s** been 8 pt8OtiOe of this Deprttment topermit itm tepteSeXltPtiVeS to8OOept 8 oheok from the OOt~t8tiOns involved made p8y8blo tothornin **an** 8mOUnt tepteSenting 8otu81 expenses lnoutted tot many years. This plrotioe peth8ps b8sed upon opinion No. 551 8s written by **the** then oifioe oounssl, the lionot8ble Oole spoet. We h8Te tOd8y tete8d th8t opinion and 8s indlO8bd To feel **the** need Of 8 018tifJing exptessio?I te the subjeot in 8drMoo Of 8 speoial 8ssignment foexaminers of this deprttatent glbt8Oing the 81u1~81teTieT 8s t0 the~8OnditiOn Of the k0 cotpot8tions involved. It follows, of course, th8t in tespeat to the pt8otiOe hetein8bove mentioned no 0181~1for expenses h8s been filed rlth the State b7 the ex8mlnet8 lnvolvad **in** aonneotion **with** euamina-
**<** tions rde, oinse 88 stated the OOtpOt8t+iOns h8te p8id the full 8mount of theexpenses ineutted 

# diteot
to the ex8mlnets eng8ged In the 8nnu81 terievs.

'YOU 8te further 8dVised fh8t this subjeot

# m8ttat 18 Of ~peOi81 oonoetn t0us by te8aOn Of the f8Ot th8t We h8Ve 8OtU81 knowledge Ot the eXtt8Otdinot7 expanses rhioh 8te involved in 8 tripbeyond tbe borders of out St8te of the n8tute **hatein** desotibed. Thus Ii it should be bold th8t suah ex8minets will bo limited to8x1expense 8006un1ntO? M.00 Pot d8y - OOtoting me8ls, 8OOOm!EOd8tiOns 8nd other items, We sh8ll foe1 disposed to @TO spOCi81 OOUddet8tion to Efeotion10 ofAtffole 15248 which **h8s** to do **with the**  **8OOeptinOe on**  **out p8tf**  **Of eX8ldn8t.iOn**  tepotfs 8snnde by other qenoles. **This, We**  **think,** would be neoess8ty in aonsidet8tion of the thougbtionOt8blO Il.A. **Judson -**  **p8ge 8** 



### that to 8m&g1 one of out exuinete to nuke the ax**uln8tione** dosotibed on 8b8eie Of 

### $4.00 pet d87 8110T8~Oe would be knt8mOUnt t0requiting th8t exmnlnet 

### ot'ox8minets to8bsotb 8n out OS **pocket** expense that would likely **inTOlT8** mote than $200.00.
sPtooeedlng, 

### theteiote, to outl eaond

Inquiry 8Ud In oOntempl8tiOn Of the thought **th8t itm8y**  

### be held Sh8f the $4.00 limitation 8ppliO~ rnd th8t the ootpotatione inTOlT8d must pay the department diteotly the raount of expenses InOutCddr is the 18~ gu8ge 

### of Seation 

### 10of fihe8fOteinWtiOned 8ttiole suS?ioientl~ bro8d in its 

### etlpulationsasto justify this orrioe inforegoing Its pt8otiae toex8mine the aotpot8tione inrolted and aooept in lieu theteOf Pn OTW-811 oXamin8tiOu topOtt 88 made by other 8genoiesb fe use the

### word 'otet-all' delibotrt,el~ for such reports donot gire speaial 8ttention to the position of an lndiridual St8te, but t8thet 8s iudio8tOd Ombt8Ce tb0 genetal 0Otpotat.s p0siti0~.

"Out om **examineto,** in teepeat to their examlna**tiOn Of**  **+h388 OOtpOtatiOnS,**  being **OOtpOt8tiOns** that **h8TO** issued 8nd sold t0Tex8S OitdZonS their inVest.- ment oettlfiaote8 **in** amounts 8ggtegrtlng several millions OS dOll8ts, OOnoOntt8ta p8ttiOUl8tly upon the **oonttols** that **8x-e** established 8s to the ootpot8to 118bilitJ t0TeX8s oreditors and eanII8tked 8ssots pledged Sot their ptoteotinn~ with 8 speaial TOtifying ptOOedut8 made 8p8rt Of 08Ch oxamin8t.ion. FUt**thermore,** 8sm8y beknOWn t0Your own Judge Bpest, the assets sopledged Sot **the** benefit **of Texas**  oteditote 8re held by **the St&9**  %'telrsWat or 8%X88 trustee. In respect to the 18tter it la the policy of our examiners toobtain listings from **the** trustee before le8Ting for **the** home offloe of **the** ootporation, **this** listing h8Ting to do **with** 8ssets pledged 8nd #f?iOiOntlj ooaplete 8s to enable thorough **Teri** Tio8tion **with the**  teootde m8int8inOd inui11Es8pOlis. We rarely mention tbie **pb8mOf** the ptoaedute toampb8dSS tb8f my report **which** wemight 8COept from 8nOtbOt 8gOUOr rould f813 f8t 8hOtt Of the OOmplOte**noes** outlined shore insOf8t 88 Texas creditors 8re oonoernod, and it ooaurtod tous th8t **this** referents to out exaain8tlon ptocedute might hare some besting in the oonsidetatlon of **the** question ia~olred **In Seo**  **tion** 10 **of the**  Aot.., 

## 767

Honot8ble A.

### A. J8StiSOn -page 4

Seotion 1ofArtlole 16248 defines the 0188s of oorporations embtaoed within theL68U rad Bioke+8ge COap8nles Aot.

Sootion ais 8s ?ollows:

vhe'68nklllg Cosmdedoaer OS teX8S eh811 oxamine or 08uie tobe exdnod suob eOtpotatdOn8 8nnu8lly or oftenet ifhe deems Ifneoee88ty. Said OOtpO+8tiOll ah811 p8I the 8OtU81 **tt8TSlin6** expe8eeer hotel bill's,and 811 other 

### lotu81 expense inoident to mch 

### exminatioa and 8 fee not oxoeedlng Twenty-five 

### Dollats~($25)pet 

### d8ypet person engaged in such examination. IS suob aotpotation hrd not sold In TeX8s its bonds, notes, 

### oottiSloites, debentures, et other oblig8tlons 8nd does IIOtOffot ?Ot s818 Ot 8811 

### inTOX8s its bonds, notes, oett1?1oates, debont.ures or other oblig8tione, the Banking Comnlesionet of Pex8er in lieu of an examination shall 8ooept 8Sin8n0181 

### l

t8t,ement.mode **on** suab form, containing **such** idorm8tion as **he** desires. Guch fess, together rith any other Sees, penalties or terenues oollooted by the Commissioner pursuant to **the** pto**lidons** of this Aot or pursuant toother lors of this State tel8tire to corpot8tione under the mpWTi8iOn of theBanking Dopattatont, ah811 be paid by the Commissioner to the State Tt08mWSt to the otedit of the &3net81 **ROToUuO** Lund. The / expenses of examin8tion and of the.Cormnissionet \ in enfotoing the **ptoTisiOus** of this Aot ah811 be p8id upon tho aettifioate of the Commissioner by r8ttPnt of the CompttOllOt upon the 6t8tO TtePs- 

# utj.*

Foreign corporations, such 8s those inTOlTOd in

### your per:- inquiry, orp;ani8ed under the laws of 8nOtbOt st8ter 8tO mitted ,,Odobusiness in Tez8s only 88proTided in Ch8ptet 19 of the BoTioOd CiTil St8tutOs of SeXas, 8nd **this** nee88Mtilf
means they 8tO to comduot suah business in Texrs in 8oootdanoe ritb and subject to the 18TS of TOX8a. 11 Tex. Jut., **Cotpora** tiOns, e178.

Such permitted ootpot8tions **h8To** been under the superTision of **the** B8nking Department for m8ny years, during 

### wbiah time they h8TO been tegulrrly examined by the Dop8ttznent'e ex-honorable II1A. Jamiaou- page 6

amlnsrs, where they bare ieeued and sold their bonds, **notea,** oertliloatesr debentures ,

### or other obligations in **Texas.** The
reason ianot **far** to **seek.** It Is the proteofion of the pur**ohaserx** in Texas of **the** oompanies' obligations sold bore. **The examination**  **is neoessar~**  **to the**  **proper** maintenanoe of the seourities put upby such companies, under IteotlonIof the Aot.

Sooh ferelgn oorporation 18 epeoially made arbjeot toexsmiaation of.**the** Banking Commissioner of **Texas,** under penalty of forieiture of its penslt by **the terms**  **o? seation**  10 of theAot.

As pointed out by y@u, Ithas been the praotloe of theBanking Denartment, under its aonstruotion of the pertinent statutes, **to** aolleot **from maOh**  out-of-&ate oorporation all **the** fees presoribed by statute ,and likerise the expenses such as travel, hotel, meals and the like, 

### from out-of-state aorporatloa, paying the

### fees into the State 

### Treasury asprescribed by Seotion 2of theAot,and applying the expenses to reimbursing the examiner 

### for **his** actual expendlturos In oonntation sitb such examination.

Opinion X0. 361by 

### your offloe counsel referred to by you, is as iallorsl

*In thematter of superVision ofBuilding Loan Associations and Loan d:Brokerage Companies, you are sometimes called **upon to**  **qo** beyond the borders of the State, incurring extraordinary axpenses and the question presents itself whether ' c or not such expenses may be paid directly toyou by the institution involved in **the examinatinn**  or investigation, as the ease may be, orwhether
ornot such matter iswithin the statute of fees 

### andexpenses0 Undoubtedly it Is 

### tha sound publie policy, and therefore the law, +hat the compensation, whether **salary** or fees, of public oPfiaers ismade matter of statute and the compensation there provided Is, of coarse, aonollr8ire of the compensation and exoluslre of any other.

"In other words, apub110 official is entitled only to such **salary** or oompensation 

### as is clearly provided for in the law creating **his** office and fixing **his** aompensation. Seemy Oplnion S2 to the Banking Commissioner of date Deoember 6,1923.Boporable 8.A.’Jamiwn -page g

**stbo item**  **of expenses**  **of aa** **ottiolal in**  ourred by him in hi8 offioial oapaoitr, is in
essenoe publie. An o?tlaial ordinarily oannot per?orm his official duties **oufslde** the limits of the Stata under whose authority he sots. ills**rots** beyond the territorial lim%ts, therefore, 

### beingextra o??ioial, 

### are

## not**gooterned**by the lar rith respeef teot?lolal duties. 

### s?he prinelple is illustrated in the la8 of reTardm* It im the

### generally l ooepted doo

### Wine that when apublle officer performs the servioes for mhieb 

### areward Is offered, by sots outdde the soope and line ofhis duty, there lano rule of publlo polioy whloh forbids his **olalming** the reward and henoe 

### he is entitled to it. Karling vs. Morris, (Tex.1 9 8. '1.T3S, Tobin **YS*****MaComb, 168**  **8. W.**  **267, 64** **C.** J. **IBE, Sea-**  **32.** The rule of publio polioy forbidding 

### extra oompeneattion from private wuroes topub110 ot?lolale for performing their ottialal duties, 

### l

ppYles generally torewards. Benoe the analog between rerards and expenses or oompensatlon is

### agood 

### one.
'Undoubtedly, the law might Impose upon a state ot?lolal the speo%?lo Qu~tyM psr?omihC; eerrioe~~begond the State line, when of aourse, the rule prohibiting extra compensation rould acplr* The real test, therefore, lies In the nature of

### the services performed. It the serrioes pertermed be outside the scope and duty o? the offloer, 

### he

### mayacoept **prirate** Oompensation 

### orexpenses, but I? suoh services be rithin **the** scope ofhis ot?ioial duty, hemay not do w.
**.T ’** **bere is**  Involved in 

### euoh **matter** 

### a**possi** ble ethios that would forbid 

### apublic ottloial to

### l ooept oompensatlon or expenses in aonneotion
even with an aot 

### entirely beyond his offloial duty, if 

### moh aot im in **the** general nature o? his official **dutiesa** ldentioal **with** that of compensation and is governed by preoisely the same prinoiple. 

### l By **the General**  Appropriations Act of 1938 (General Laws 44th Leg. Reg. Sesa. page 1001)Honorable Ha **A.** Jar&son -page T



### your oompeneation **am**superrising examiner 18 definitely fixed and the same is to**be**paid only **from** tees or aeseamsents oolleoted from the institutions under supewIsion~ Snob tees and 

### assessments from xhiob **your** compensation la to **be** paid, 

### areOxpremslT appropriated **by** the **Aot. Therefore,**  your ooapensation, whether ul

### aryor expenees, I#payable threugb the ordinary ohannels provided 

### for the payment out ofpub110 ?undm.

.Tbe rule ofpub110 polioy would forbid, **therefore,** that you reoeire oompensation or tees **from** any person or **in** 

### anyother 

### ray,with respeot toyour official duties then that speoltioally provided in the statute. Itma7 happen and often does happen that you are oalled upon to perform an ottioial **aerrloe** for which there IS no speoiflc oompensatlon made In the law. Such
a eerrioe $8z o??iCio and is iaposed upon you aa 

### apublio officer, without compensation other than the general oompensation 

### l ttaohed to the offloe.

sTbe application of **these** principles would forbid your 

### l

ooepting any extra remuneration from any private institution for the pertormanoe of any otfloial duty* But this adrioe isTolunteered since you hare not asked me **any mch**  question.

sI amof the opinion, hoverer, that inso far
as is lnrolred **the** question of expenses inourred \ by you out&de the State of Texas, the statutes of compensation **hare** no application. **In** other words, the statute and rule of public policy deal with the performance of official duties, but this oonsideration ispurely, I think, one of ethlos and propriety involving tono extent rhaterer any quee**tlon** of regularity or legality. Personally, ICan
see no Impropriety in an ottlcial accepting remuneration to the extent o? aatual expenses inourred by him Inperiormlng 

### aserrloe entirely beyond his actual ottlolal duties, even though such servloe 

### be in tbe line o?him ordinary ottiolal duties when within his State..

It is theopinion of this Department that the praotioe and policy heretofore followed by your Department Is the proper I/

one.gonoable tl.**A.** Jamlwn -page **b**

Beation 2of theAot,alreadp quoted 

### herein, requiring feea, penalties and revenues oolleoted by **the** Coxanlsslon**or** tobe pald~

### to the Mate Treasurer tothe oredlt of the General Rer,snue Fund, ashas already been 

### stated, has

### atail times heretofore 

### been follored by your Department, 

### asWe understand tbe aituaticn, but the 

### l otual and neoesaary expensea inourred bV the examlnar, auoh aa

### hare heretofore been mentioned, hare 

### not been thus paid 

### into the Treamwy, but **hare** been applied 

### by the examiner to the llquldation of his olaim for expensemr and no olalm or olalms theretor **hate** at **any** time 

### bean made against the **Treasury** orbeen paid **by** t&e Treasnrer. 

### This, wethink, ia in l ooor&noe and perfeat keeping **with tbs**  **statutes** ,for emah aotual and neoeocarT expense8 are

### not *fees, penalties “orrelenues oolleoted bV the Gomissioner’, under the statutes.

The statutes, **provisions** of appropriation Aots, court dealsions and departaaental **opinions** with respeat toexpenses o? out-of-state trips upon State business **hate** nothing todo**with** the question under consideration, sinoe such expensea 

### arenot paid out of the Treasury. lo statute, approprlation rider, oourt opinion, departmental opinion, or

### publia policy whatsoever isviolated by the oourse of your Department **here** approred.
Very truly yours
ATTORHgY 

### G~NERALi$FTEXAd

BY o*$e&/+

Assistant /-.