Court Opinion

ID: 4133941
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:43:59.75456+00
Date Added: 2024-06-11T09:34:20.243829
License: Public Domain

Mr. John Mason Lankford, Jr., Chairman
Texas Board of Private Detectives, Private
   Investigators, Private Patrolmen, Private
   Guards, and Managers
P. 0. Box 12577, Capitol Station
Austin, Texas 78711

Attention:    Thomas W. Brown,     Opinion No. M-727
              Director
                                   Re:    Whether a corporation doing
                                          business as a detective agency
                                          must file a surety bond under
                                          both Articles 1302-3.04 and
                                          4413 (29bb), Vernon's Civil
                                          Statutes.

Dear Mr. Lankford:

          Your opinion request concerns whether a corporation
planning to do business in Texas as a detective agency is re-
quired to file two separate surety bonds in view of the require-
ments in Articles 1302-3.04 and 4413 (29bb), Vernon's Civil
Statutes.

          Article 1302-3.04 makes as a prerequisite to the is-
suance of a certificate of incorporation or a certificate of
authority to transact business in this State of a corporation
organized or seeking to be organized for any purpose or purposes
which include the operation of a detective agency, that such
corporations, or its officers, as the case may be, have executed
a good and sufficient surety bond or insurance policy, in the
sum of $lO,OOO.OO as stated therein, and deliver the same to the
Secretary of State.

             Article 1302-3.04 reads as follows:

          "A . Before a certificate of incorporation
     or a certificate of authority to transact busi-
     ness in this State shall be issued to any
     corporation organized or sought to be organized

                                 -3523-
Mr. John Mason Lankford, Jr., page 2        (M-727)

     for any purpose or purposes which include the
     operation of a detective agency, its in-
     corporators or its officer, as the case may
     be, shall have executed a good and suffi-
     cient surety bond or insurance policy (in
     the event of a bond to be signed by some
     good solvent bonding company authorized to
     do business in this State, and In the event
     of an insurance policy to be executed by
     some good solvent insurance company authorized
     to do business in this State) and deliver
     the same to the Secretary of State. Said
     surety bond or insurance policy shall be in
     the sum of Ten Thousand Dollars ($10,000)
     and shall be conditioned that the obligor
     therein will pay to the extent of the face
     amount of such surety bond or insurance
     policy all judgments which may be recovered
     against said detective agency by reason of
     the wrongful or illegal acts of its servants,
     officers, agents, or employees, committed by
     them in the course of their employment.   Said
     surety bond or insurance policy shall further
     be conditioned that such person so injured
     shall have the right to sue directly upon such
     surety bond or insurance policy in their own
     name, and the same shall be subject to suc-
     cessive suits for recovery until a complete
     exhaustion of the face amount thereof. Each
     such detective agency shall on or before the
     date of the expiration of the terms of any
     surety bond or insurance policy so filed by
     such agency file a renewal thereof, or a new
     surety bond or insurance policy containing
     the same terms or obligations of the preced-
     ing surety bond or policy, and shall each
     year thereafter, on or before the expiration
     date of the existing surety bond or insurance
     policy, file such renewal surety bond or
     insurance policy so as to provide continuous
     security to persons so injured, and in the
     event any such detective agency fails to
     execute any surety bond or insurance policy
     in the first instance, or to execute any
     renewal surety bond or insurance policy, or
     to file the same with the Secretary of State
     as provided herein, it shall constitute

                           -3524-
Mr. John Mason Lankford, Jr., page 3         (M-727)

     grounds for the forfeiture of the articles
     of incorporation of a domestic corporation
     and of the certificate of authority of a
     foreign corporation in a suit to be instl-
     tuted at the instance of the Attorney General.
     Nothing herein shall be construed to authorize
     the agents, servants, officers, or employees
     of such corporation to have the power of peace
     officers in this State unless such powers be
     conferred thereon under the provisions of
     some other law of this State."

          The above Article is a general law which applies to
any corporation organized or seeking to be organized for any
purpose or purposes which includes the operation of a detective
agency and makes the execution of said bond or insurance policy
a prerequisite to incorporation.

          Article 4413 (29bb), the Private Detectives Act, makes
as a prerequisite to the issuance of a license by the Board to
an applicant, which include persons or corporations, that a
surety bond or a cash deposit of $10,000 be filed with the Board.

           Said Article in Sections 41, 42 and 43 reads as
follows:

          "Sec. 41. No license shall be issued under
     this Act unless the applicant files with the
     board a surety bond executed by a surety com-
     pany authorized to do business in this state
     in the sum of Ten Thousand Dollars ($lO,OOO.OO)
     conditioned to recover against the principal,
     its servants, officers, agents and employees by
     reason of its wrongful or illegal acts in con-
     ducting such business licensed under this Act.

          "Sec. 42. The bond required by this Act
     shall be made payable to the State of Texas,
     and anyone so injured by the principal, its
     servants, officers, agents and employees,
     shall have the right and be permitted to sue
     directly upon this obligation shall be subject
     to successive suits for recovery until com-
     plete exhaustion of the face amount hereof.

          "Sec. 43. (a) Every licensee shall at all
     times maintain on file with the board the surety

                            -3525-
Mr. John Mason Lankford, Jr., page 4         (M-727)

    bond required by this Act in full force and
    effect and upon failure to do so, the license
    of such licensee shall be forthwith suspended
    and shall not be reinstated until an applica-
    tion therefor, in the form prescribed by the
    board, is filed together with a proper bond.

          "(b) The board may deny the application
     notwithstanding the applicant's compliance
     with this section:

          "(1) for any reason which would justify
     refusal to issue or a suspension or revoca-
     tion of a license; or

          "(2) for the performance by applicant of
     any practice while under suspension for failure
     to keep his bond in force, for which a license
     under this Act is required.

          "(c) Bonds executed and flied with the board
     pursuant to this Act shall remain in force and
     effect until the surety has terminated future
     liability by a 30-day notice to the Board.'

          The Private Detectives Act became law on September 1,
1969, and therefore is the more recent legislation.  There is
nothing in said Act which shows a legislative intent to in any
way change or amend the surety bond requirements of Article
1302-3.04 or to Intermingle the requirements of the two acts in
regard to financial responsibility.

          Therefore, we must answer your question to the effect
that a corporation doing business as a detective agency must file
a surety bond or insurance policy with the Secretary of State to
meet the requirements of the Miscellaneous Corporation Laws Act
(Article 1302-3.04) and must file a separate surety bond or cash
with the Board of Private Detectives to meet the licensing re-
quirement of the Private Detectives Act (Article 4413 (29bb)).

                       SUMMARY

          A corporation doing business as a detective
     agency must file a surety bond or insurance policy
     with the Secretary of State to meet the requirements
     of the Miscellaneous Corporation Laws Act (Article
     1302-3.04) and must file a separate surety bond or

                            -3526-
   ,

Mr. John Mason Lankford, Jr., page 5           (M-727)

       cash with the Board of Private Detectives to meet
       the licensing requirement of the Private Detectives
       Act (Article 4413 (29bb)).      4

                                         y General of Texas

Prepared by Sam Jones
Assistant Attorney General

APPROVED:
OPINION COMMITTED

Kerns Taylor, Chairman
W. E. Allen, Co-Chairman
John Reese
Jim Broadhurst
Rex White
Earl Hines

MEADE F. GRIFFIN
Staff Legal Assistant

ALFRED WALKER
Executive Assistant

NOLA WHITE
First Assistant

                              -3527-