Court Opinion

ID: 4139997
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:53:58.080856+00
Date Added: 2024-06-11T09:36:38.647304
License: Public Domain

Honorable  Sidney Latham
Secretary  of State
Austin, Texas

Attention:   Horace   B. Sessions

Dear Sir:                             Opinion No. O-63 16

                                      Re:   Functions   of the Administrator
                                            of the Securities    Division of of-
                                            fice Secretary    of State with
                                            reference   to applications    for
                                            real estate dealer’s     or sales-
                                            man’s licenses.

          We are in receipt of your letter of recent date requesting the
opinion of this department on the above stated matter.   Your letter, in
part, reads as follows:

            “We have recently been presented with the question
        as to whether or not the Administrator         of the Securities
        Division is authorized or required to investigate         each
        applicant for a Real Estate License to determine such
        applicant’s   competency.      It has been the policy of this
        Department in compliance         with Section 9 of the Act to
        issue licenses    upon the filing of a sworn application
        accompanied     by three affidavits of recommendation,
        unless information     as contained in the face of the appli-
        cation or in our files relating to the question of the ap-
        plicant’s   good business    repute and business     practices
        necessitates    an investigation    before acting to grant or
        refuse the license.

           “We should appreciate an opinion from your office
        on the question of whether or not the Administrator     of
        the Securities   Division is authorized or required under
        the provisions   of either Section 8 or Section 9 to make
        an investigation   of each applicant’s  competency  upon
        the filing of an application in this office, and make a
Honorable    Sidney Latham,     Page 2 (OP~~~OSIN~. o-6316)

       finding that the applicant is competent to carry on
       business as a Real E,statn Dealer or Salesman before
       granting such applicant a Real Estate License,

           *Should it be your opinion that the Administrator
       is authorinad or required to make an iavestigatiua as
       to each applicant’s competency before acting on his
       application, we should appreciate being advised as to
       what standard or yard stick may be used by the
       Administrator    under the authority ,of the Act to deter-
       mine competency in passing upon applications for
       Real E&tats Dealers License.

           Under the provisions of the Real Estate Dealer,‘8 Act (Article
6573a, V.A.C.S.),  it is contemplated that the public interest will be served
by the issuaxkce of caal estate dealer’s or real estate salesman’s licenses
to only those applicants who are of good business repute and will conduct
their business in an honest, fair, just and equitable manner. For the pur-
posse of achieving tkat objective, the Legislature     has prescribed   in Sec. 6,
Article 6573a, that the applicant shall fiIe his application for said license
with the Administrator    of the Securities Division of the office of the Secre-
tary of State, and thst certain minimum information and proof shall be in-
cluded in said application.    Section 7 of said Article   prescribes  the
residence requirements      a6 we11 as certain eIigibility  requirements    appli-
cable to non-resident applicants.     Sec. 8, Article 6573s, provides:

            “Application for a ~a1 estate dealer’s or real estate
       salesman’s license shall contain such other information
       AS to the applicant,  in addition to the above dorcribsd,
       as the Administrator    of tkr Securities Divfsfon of the
       office of the Sacrotary of State &al1 require. The Admin-
       irtrator of the Socrrrities Division of tha office of the
       Socretsry of Stat. may reqnire such other proof through
       the application 01: akhorwise as its officers shall deem
       desirable with due regard to the paramount inkrrst of
       the public as to thr honesty, truthfulness,‘intogrity,   and
       competrncy of ths l   pp1icbnt.e

            Sec. 9s, Article   6573r, provides:

            “If ths Admiaistrator   of the Securities Division of the
       offica ,af thhrgrcrokry    of Stsk is satisfied, that ths appli-
       cant for rnal o&ate doalar’s or r o dlstak srlem~a’s
       lfconse is of good businar~~npah       and that the ,buainrss
       will beg conducted in an honest, fair, just, and equitable
   .     -

Honorable      Sidney Latham,    Page   3   (Opinion   No. O-6316)

       manner, and upon complying with all other provisions
       of law and conditions of this Act, a license shall there-
       upon be granted by the Administrator        of the Securities
       Division of the office of the Secretary     of State to the
       successful   applicant therefor as a real estate dealer
       or real estate salesman,      and the applicant, upon receiv-
       ing possession    of license,  is authorized to conduct the
       business   of a rear estate dealer or real estate salesman
       in this State.*

           In Reagan v. Guardian Life Insurance C,o., 166 S. W. (2d) 909.
the Texas Supreme Court held that under a statute (Sec. 1, Art. 506813)
authorizing   the Board of Insurance Commissioners    to determine whether
licenses  should be granted to life insurance agents, the power to make
such determination    carried with it the power to mahe investigations. In
Sec. 1, Art. 5068b, we find the following language:

          “Hereafter   whenever any person shall desire to
       become an agent for a life insurance     company, . . . ,
       he shall, in such form and giving such information     as
       may be required,   make application    to the Board of In-
       surance Commissionera      for a license to act as such
       agent. After the Board of Insurance Commissioners
       shaI1 determine that such person is of good character
       and reputation, it shall issue the license to such per-
                 *
       son . . .

              With reference   to the authority   of the Board of Insurance    Com-
missioners,       under the foregoing section,    the Court said:

           “Section 1 of Article     506Eb, Vernon’s   CiviI Statutes,
       provides for the licensing,       among others, of life insurance
       agents.    The licenses    are issued by the Board of Insurance
       Commissioners,      and the statutes clothe the Board with
       power to determine      if the applicant for license is of good
       character    and reputation.     Of course, the very power to
       make such determination         carries with it the
                                                       -E!)--- ower to malce
       allcGG&y
       -                investigatioffZ                ours

            It is our opinion that the purpose and meaning of Sections 8 and
9, Article    6573a, which confer authority upon the Administrator        of the
Securities    Division of the office of the Secretary    of State with respect to
the determination      of the fitness of an applicant for a real estate dealer’s
or salesman’s      license is similar in meaning and purpose to Section 1,
Article   5068b, which confers authority upon the Board of Insurance Com-
missioners      with respect to the determination    of an applicant’s  fitness for
                                                                          -. ._ . .

Honorable     Sidney Latham,    Page 4      (Opinion No. 016316)

a life insurance   agent’s license.   In each instance, wide discretion is
given to the respective    officers in the matter of determining whether
a license shall be issued, and the power to make such determination
cariies   with it the power to conduct iuvestigatioas.    (Reagan v. Guardian
Life Ins. Co., Supra).

            In view of the foregoing,   it is our opinion that the Administrator
of the Securities    Division of the office of the Semetary     of State is author-
ized to make such investigation,      if he deems it desirable,    ..“ikith due re-
gard to the paramount interest of the public as to the honesty, truthfuIness,
integrity,   and competency    of the applicant.”   However, we find no provi-
sion in Article    6573a requiring the Administrator      to conduct such an
investigation.

           With reference     to the standard or “yard stick’ which may be
used by the Administrator       to determine competency        in passing upon
applications   for real estate dealer’s    or salesman’s     licenses,     we quote :~
the following language of Sec. 9a, Article 6573a:         “If the Administrator
of the Securities    Division of the office of the Secretary      of State is satis-
fied that the applicant for real estate dealer’s       or real estate saGm=
license is of good business      repute and that the business      wiII be conducted
in an honest, fair, just and equitable manner . . . a license shall there-
upon be granted by the Administrator         of the Securities    Division   of the
office of Secretary    of State to the successful    appIicant therefot . . .” The
Administrator     is to satisfy himself from all the information          and proof re-
quired in the application,     or otherwise,   as to whether the applicant is *of
good business     repute and that the business will be conducted in an.honest,
fair, just and equitable manner.”

            Trusting   that the foregoing    fully answers    your inquiry,   we are

                                            Yours   very   truly

                                            ATTORNE,Y      GE,NERAL    OF TE-S

JAE,:ddt-rn                                 BY      s/ J. A. E,llis
                                                    J. A. E,llis
                                                    Assistant
APPR0VE.D    DEjC. 15, 1944
s/Grover  Sellers
ATT0RNE.Y    GENERAL    OF TE,XAS
                                              APPROVED       Opinion Committee
                                              By G.W.B.,     Chairman