- . 

THF, ATSXBFCNEY GENERAL 

OF TEXAS 

Honorable Clay Cotten Opinion No. M-43 

Commissioner of Insurance 

State Board of Insurance Re: Whether Article 1546a, 

Austin, Texas V.P.C,, encompasses the 

fraudulent issuance of 

title insurance for the 

purpose of Inducing a bank 

Dear Mr. Cotten: to make a loan on property. 

We have received your letter of March 9, 1967, in which 

you make the following request: 

"I request your official opinion as to 

whether or not an employee of a title insurance company or title Insurance agent 

would be guilty of a violation of Penal Code 

1546a if he participated in the following 

transaction to the extent set out: 

"If a builder'buys a 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 insurance company to issue 

a policy of title insurance or 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 statement of 

financial condition 

"Section 2. Any person who shall, with 

intent to defraud, either 

"(i) substitute one instrument in writing 

for another and by this means cause the making 

of a loan or the extension of credit, or 

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Honorable clay Cotten,,Page 2 (M-43) 

' ( ii) induce by any fraudulent lnstrucment in writing the making of a loan or the 

extension of credit as a part of a transaction 

whereby either the title to real property is 

transferred or valuable improvements are placed 

on real property in this State, whether for the 

benefit of himself or another, shall be deemed 

guilty of a misdemeanor and 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 misdemeanor offense prescribed in 

this Section shall, for each subsequent violation of this Section, be guilty of a felony and 

upon conviction shall be punished by a fine of 

not less than $1,000, nor more than $5,000 or 

by confinement in the state penitentiary for 

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 encompass offenses of the type outlined in your question, and upon proof of the necessary 

elements of the crime conviction could be had thereunder. 

SUMMARY 

Article 1546aFv.PPC., encompasses the 

fraudulent issuance of title insurance for 

the purpose of inducing a bank to make a 

loan on the property described and upon 

proof of the necessary elemen,ts of such offense conviction may be had thereunder. 

Y#s very truly, 

J2iji%sfm* 

A orney G&era1 of Texas 

RLL/dt 

Prepared by R. L. (Bob) Lattimore 

Assistant Attorney General 

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Honorable Clay Cotten, Page 3 (M-43) 

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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