Court Opinion

ID: 4134623
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:52:34.183032+00
Date Added: 2024-06-11T14:37:40.968880
License: Public Domain

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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
                                         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 in-
            surance company or title Insurance agent
            would be guilty of a violation of Penal Code
            1546a if he participatedin the following
            transactionto the extent set out:
               "If a builder'buysa tract of one hundred
            (100) acres for subdivisionpurposes and exe-
            cutes a lien of $200,000.00which contains a
            partial release clause providing for release of
            each lot upon payment of $2500.00, and the
            builder seeks to borrow constructionmoney 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
            constructionmoney mortgage without securing a
            partial release of the vendors lien for the
            particular lot."
            Article 1546a, Vernon's Penal Code, provides as fol-
    lows:
            "Art. 1546a. False written statement of
                         financial condition
               "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
                              - 205 -
Honorable clay Cotten,,Page2 (M-43)

          ' (ii) induce by any fraudulentlnstruc-
      ment 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
      transferredor valuable improvementsare 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 con-
      victed of the misdemeanor offense prescribed in
      this Section shall, for each subsequentviola-
      tion 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 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 sufficientlybroad to encompass offenses of the type out-
lined in your question, and upon proof of the necessary
elements of the crime conviction could be had thereunder.
                        SUMMARY
            Article 1546aFv.PPC., encompassesthe
         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,tsof such of-
         fense convictionmay 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

                       - 206 -
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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