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## THF, ATSXBFCNEY GENERAL OF TEXAS

Honorable Clay Cotten Opinion No. M-43 Commissionerof Insurance State Board of Insurance Re: Whether Article 1546a, Austin, Texas V.P.C,, encompassesthe fraudulentissuance of title insurancefor the purpose of Inducinga bank Dear Mr. Cotten: to make a loan on property. We have receivedyour letter of March 9, 1967, in which you make the following request:

"I requestyour official opinion as to whether or not an employee of a title insurance company or title Insuranceagent would be guilty of a violationof Penal Code 1546a if he participatedin the following transactionto the extent set out: "If a builder'buysa tract of one hundred (100) acres for subdivision purposes and executes a lien of $200,000.00 which contains a partial release clause providing for release of each lot upon payment of $2500.00,and the builder seeks to borrow construction money from a' bank to build on various lots and Induces an employee of a title insurancecompany to issue a policy of title insuranceor binder for the construction

money mortgage without securing a partial release of the vendors lien for the particular lot." Article 1546a, Vernon's Penal Code, provides as follows: "Art. 1546a. False written statementof financialcondition "Section 2. Any person who shall, with intent to defraud, either "(i) substituteone instrumentin writing for another and by this means cause the making of a loan or the extension of credit, or

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' ii) induce by any fraudulentlnstruc( ment in writing the making of a loan or the extensionof credit as a part of a transaction whereby either the title to real property is transferredor valuable improvements are placed on real property in this State, whether for the benefit of himself or another, shall be deemed guilty of a misdemeanorand upon conviction thereof shall be punished **hv conflwmmt**  **in** the county jail not exceeding six monthe, or by a fine not exceeding $1,000, or by both such fine and confinement. Any person who has been convicted of the misdemeanoroffenseprescribed in this Section shall, for each subsequentviolation of this Section,be guilty of a felony and upon convictionshall be punishedby a fine of not less than $1,000,nor more than $5,000 or by confinementin the state penitentiaryfor not more than five years or by both such fine and confinement." It is the opinion of this office that Article 1546a is sufficiently

broad to encompassoffenses of the type outlined in your question,and upon proof of the necessary elements of the crime convictioncould be had thereunder. SUMMARY Article 1546aFv.PPC., encompassesthe fraudulentissuance of title insurance for the purpose of inducinga bank to make a loan on the property describedand upon proof of the necessary elemen,ts of such offense convictionmay be had thereunder. Y#s very truly, 

# J2iji%sfm*

A orney G&era1 of Texas RLL/dt Preparedby R. L. (Bob) Lattimore AssistantAttorney General

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APPROVED: OPINION COMMITTEE Hawthorne Phillips,Chairman W. V. Gappert, Co-Chairman Lonny Zwiener Alan Minter Sam Kelley Harold Kennedy STAFF LMiAL ASSISTANT A. J. Carubbl, Jr.

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