Court Opinion

ID: 4136950
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:19:20.684509+00
Date Added: 2024-06-11T14:21:46.052848
License: Public Domain

.   .

        Hon. Wade Soilman, Chairman
        House Judiciary Committee
        House of Repre~sentatives
        Austin, Texas
                               Opinion No. W-31
                               Re:   Constitutionality   of House Bill No.
                                     13, 55th Legislature,   relating  to
                                     charges that may be assessed on
                                     small loans.
        Dear Mr. Spilman:
                     Upon initially    perusing the above captioned Bill
        several items were noted that appeared to be typographical
        errors.     Your ‘attention was directed to them in a letter     to
        you of January 29, 1957, a copy of which is attached to this
        opinion.     Subsequently,    the Honorable Tony Korioth on behalf
        of the committee advised this department in writing that the
        assumptions were correct,        and that our opinion as to the con-
        stitutionality     should be based upon the language set out in
        our letter to you.        Accordingly this opinion will be based
        upon the Bill as so modified.
                     The basic subject matter of the proposed Bill has
        been he subject of several prior Attorney General’s opin-
        ions. 1 The Bill fixes a maximumrate or ceiling          upon all
        charges that may be received,      except by such persons as are
        exempt from the Act, on all loans which have an original           loan
        principal    of $500.00 or less.    The  proposed  Bill  does  not   au-
        thorize    any charges whatsoever,   but  merely  places  a limitation
        ;;inA;;l    charges that may be assessed by persons subject to
                  .2 In short, it is a limitation      and not an authorisa-
        tion Bill.     Some of the prior rulings of this office       have been
        based upon Bills     that authorized certain charges in addition

           L/ Opinions 16187, dated March 15, 1955; V-804,dated April
        7, 1949; ~-2283, dated January 31, 1951; O-5384,dated August
        4. 194~3: 0-3206 and O-726.
         ‘u-s-’ -
        Bill;
               ee Sections 3(a), 3(b), 3(c) and 3(d) of the proposed
               the term “charges I’ is defined in Section 3(d) (1).
Hon. Wade Spilman,     page 2    (WW-31)

to the constitutional     rate of interest.3    Several of these
bills  have been held to be unconstitutional.       See Attorney
General’s Opinion No. MS-187 where it was held that the
substantially   identical    feature set forth in House Bill 573
of the 54th Legislature     was constitutional.
            The Act is not without its unconstitutional      vices.
Article III, Section 3.5 of the Texas Constitution      requires
that all subjects included within the Act be expressed in the
title  thereof.   “The purpose of the constitutional      require-
ment is to reasonably apprise the Legislature       of the contents
of the Act.”     The caption of the Bill in question enumerates
a number of specific     provisions,  w ich do not logically    in-
clude other provisions      of the Qct, 5 while it does not fairly
apprise the Legislature      of the presence of the provisions
enumerated in footnote      5. These provisions   are therefore    of
doubtful constitutionality.
           Section 36, Article III of the Texas Constitution
provides , “No law shall be revived or amended by reference    to
its title  when in such case the Act revived or the section or
sections amended shall be re-enacted    and published at length.”
Section l(e) of the proposed enactment attempts to amend a
number of statutes therein recited.     The at tempted amendment
comes within the proscription   of Article 36 and is void.

  1/ See Opinion O-726, 0-3206, R-2283, and O-5384, for a full
discussion of these enactments.
  4/ State v. Rodrw,     213 S.W.2d 877 (Tex.Civ.App.  1948).
   9 Section 11 (relating         to the making, obtaining,       and intro-
duction in evidence of certified            copies of official    documents);
Section 12(a) and (b) (relating            to advertising    and posting a
schedule of charges by the licensee.licensed              pursuant to the
Act)j    Section 13(a) (relating         to other businesses     in the same
office) * Subsection 13(b)          (relating    to pawnbrokers);   Subsec-
tion 13fc)      ( requiring the licensee        to confine his business to
the place stated in the license);            Subsection 13(d) (forbidding
the licensee      to take a lien upon real estate as security for
the loan); Subsection 14(a) (relating             to the requirements for
making and payments of loans) j Subsection 14(b) (relating               to
confession    of judgment and incomplete instruments) j Subsection-
14(c)    (relating     to installment      payments)
                                                   j    Section 17 (relat-
ing to the requirements for a valid assignment of wages); and
Section 20 (relating       to collection      methods).
Hon. Wade Spilman,     page 3    (Ww-31)

             The loan business as a class may be regulated.6
Section l.(d) of the proposed Bill,         thoug       exempts certain
businesses     from the purview of the Bill. 97 If the proposed
legislation,      by such exemptions, discriminates          against per-
sons of the same class          ho are similarly     situated,    then the
legislation      is invalid. 8 Regulatory statutesin other
statesalmostinvariably           exempt from their provisions        not
only State and Federal banks, but also trust companies and
build     g and loan companies, and such Acts have been up-
held. $” The Bill,      however, while exempting trust companies
doing business under the Texas Banking Code of 1943, under
Chapter 7 of the Insurance Code and under Article                1513,
Vernon’s Civil Statutes,         leaves trust companies doing busi-
ness under Article       1303b subject to the purview of the Act.
Article    1303b companies are trust companies in the same
sense as Chapter 7 and Article          1513 trust companies.10 There-
fore the Act unjustly discriminates          against persons of the
same class similarly        situated,   and the trust exemptions are
void.     Noting the absence of a severability           clause,   it is
doubtful that it is the legislative          intent to enact the bill
without exempting trust companies, since trust companies be-
long to the same class of lending institutions               as the ex-
empted businesses.        The Act therefore     falls    in its entirety.

  &/ Juhan v. State,     216 S.W. 873 (Tex.Crim.App.        1918) .
   z/ Exempted institutions     are State banks, rural credit un-
ions, agricultural    and livestock   pools, mutual loan companies,
co-op credit associations,     farmers co-ops, trust companies
incorporated   under Article    1513, agricultural    finance corpor-
ations,   marketing and warehouse corporations,       building and
loan associations,    and surety and trust companies organized
under Chapter 7 of the Insurance Code.         (A Bill is now pend-
ing in the Senate which would divest Chapter 7 of the Insur-
ance Code of the surety and trust company features.)
        x carte Georse, 215 S.u’.2d 170; Ex oarte Smvth, 28 S.W.
2d?6!?-163.
  w See annotation 69 K.L.R. 582, and annotation 125 A.L.R.
holding that such statutes do cot violate      the due process and
equal protection    of the law clause of the Federal Constitution
or the following    provisions of the State Constitution:     the due
process clause, uniform operation of laws of general nature,
prohibition   against local and special   laws, prohibition   against
a special law attempting to regulate interest,      and prohibitions
against the granting of special privileges      and immunities.
 w    Carney v. Sam Houston Underwriters,    272 S.W.2d 942 (Tex.
Civ.App. 1954, writ ref. n.r.e.1
                                                                    .     .

Hon. Wade Spilman,        page 4    (WW-31)

Since this vice can be easily remedied by amendment, and since
a fair answer to the questions propounded requires   examination
of further sections, other items raising substantial   questions
will be discussed.
          There are a number of problems presented by reason of
the fact that Section 21 makes every violation     ‘of the proposed
Act a misdemeanor.   Each provision   of the Act must be carefully
examined to see whether it meets the stringent requirements of
the due process clauses of the Fourteenth Amendment of the
United States Constitution  and of Article 1, Section 19 of the
Texas Constitution,  and the provisions   of Section 10, Article I
of the Texas Constitution,  wherein it is stated:
                “In all criminal prosecutions   the accused
          shall have speedy public trial by an impartial
          jury.   He shall have the right to demand the
          nature and cause of the accusation against him,
          and to have a copy thereof.   . . .‘I
These two provisions    set out certain criteria   regarding the cer-
tainty in definition    of an offense which any enactment must meet
which purports to be a penal enactment.       Such criteria   would not
necessarily   be applicable  were the violations   not denounced as
criminal.    Several of the provisions   are unconstitutional    for
failure   to meet such requirements.    The familiar rule is:
                ItA statute which either forbids or requires
          the doing of an act in terms so vague that men of
          common intelligence    must guess as to its meaning
          and differ    as to its application     cks the first
          essential    of due process of law.” ff
                Article   6 of the Penal Code provides:
                “Whenever it appears that a provision  of the
          penal law is so indefinitely   framed or of such
          doubtful construction   that it cannot be understood,
          either from the language in which it is expressed,
          or from some other written law of the State, such
          penal law shall be regarded as wholly inoperative.”
                Article   3 provides:
                 “In order that the system of penal law in
          force-in   this State may be complete within itself,

     +/       14 Am.Jur., Criminal Law, Section 22. Lone Star Gas CQ.
v.        ellv, 165 S.W.2d 446 (Tex.Comm.App. 1942, Opinion Adopted) .
.   .

        Hon. Wade Spilman,   page 5   (WW-31)

             and that no sy~stem of foreign laws, written or
             unwritten, may be appealed to, it is declared
             that no person shall be punished for any act or
             omission, unless the same is made a penal of-
             fense, and a penalty is affixed  thereto by the
             written law of this State.”
                   While these Penal Code provisions      are not contained
        verbatim in the Constitution    of the State of Texas, the crimi-
        nal courts have frequently    invalidated   statutes which did not
        meet the requirements of Article 6 and Article       3; and in
        Williams v. State, 176 S.W.2d 177 (Tex.Crim.App.       1943) the
        Court, in discussing   the meaning of Article 3, stated that such
        was the meaning of due process as guaranteed under the State
        and Federal Constitutions’.    Other decisions    by the Court of
        Criminal Appeals indicate    that Article   3 and Article  6 have been
        regarded by the Court-as being declarative       of the constitutional
        requirements of due process.
                  In making applications   of these general rules your
        attention  is directed first  to Section 14(c) of the proposed Act
        in which it is provided:
                  “And all installments    shall be so arranged
             that no installment   is gubstantiallv  greater iq
             amount than any preceding installment.”      (Empha-
             sis added).
                   The case of Cogdell v. State, 193 S.W. 675 (Tex.Crim.
        KPP* 1917) involved almost identical       language to that in Sec-
        tion 14(c) of the proposed iict.      In that case the Court held
        that the phraseology “substantially       a larger percentage” was too
        indefinite  and too uncertain to proscribe       an offense for the
        reason that it left to the finders of fact the task of defining
        the term “substantially    larger percentage,”      which was an essen-
        tial element of the offense,     and thereby allowed the court or
        the jury to define and set out the limits of the crime.          The defi-
        nition of a crime is, of course, a purely legislative         function,
        and if the crime is not sufficiently       defined by statute the court
        cannot supply the defects     of statutory    construction  by extension
        of the statute,  for as previously     pointed out, each crime must
        be denounced in writing.     When the purported standard of criminal-
        ity is such that such standard will vary depending upon who is
        finding the facts,    then the statute sets forth no standard at all,
Hon. Wade Spilman,     page 6    (WW-31)

and the crime is not sufficiently    defined.12    To allow a court
and a jury to make an application    of a given set of facts to a
given and well defined standard of guilt is one thing; it is
quite another to allow a jury or court to set up the limits of
that standard of guilt. The latter procedure allows variance
of the law and is proscribed    by the Constitution,   and that is
exactly what would be done by this section when a court or a
jury would try a defendant for making a loan in which one in-
stallment is “substantially   greater in amount than any preceding
inst aliment .‘I
            What has been said concerning Section 14(c] is also
true of Section 14(d) (33 of the proposed Act in which it forbids
any licensee   to “induce any person to enter into any loan con-
tract which provides payments to be madera; Fch time and at
such period as will make it reasonablv D o a 1% that there will
be numerous defaults     in payments.” Furthermore, “In order to
constitute   a crime the act must be one which the p
to know in advance whether it is criminal or not.” YjY ;,s,;g-
able probability”    is a flexible   concept that means one thing
to one person and something else to another.        A licensee could
not ascertain   in advance what constituted    reasonable probability
of defaults,   particularly   in the marginal loan field which this
statute endeavors to regulate.       (Emphasis added).
            Section 10(a) requires each licensee   to keep and use
in his business “such books,    accounts and records  as will en-
able the Secretary to determine whether such licensee.,is     com-
plying with the provisions   of this Act and with the orders and
regulations   lawfully made by the Secretary hereunder.”     There

   W This rule is further sup orted by Ex ua te Sl uehte                92
Tex.Crim.App. 212, 243 S.W. 478 (19X?), involting           aastatuii
forbidding   any person to operate a motor vehicle on the public
highway “where the territory       contiguous thereto is closely       built
up, at a greater rate of speed than eighteen miles per hour.”
The phrase, “closely    built up” was held to be so vague and in-
definite   as to make it impossible      to establish    any standard of
guilt.    Every individual   could easily have a different        concept
as to what constituted     a territory    “closely   built up.” There-
fore the statute was void.
                                                             86 Tex. Crim.
v. United
Hon. Wade Spilman,     page 7     (WW-31)

is no way that a licensee       may in advance ascertain what records
will enable the Secretary t,o determine whether the licensee          is
complying with the Act.       The statute must contain its own stand-
ard of guilt and not be rn?Ge dependent, upon’subjective       factors
or limitations     of others.      The Secretary of State is, in ;t;tsh
and in fact, defining what nonfeasance shall be criminal.
is an unconstitutional      attempt to delegate to the Secretary of
State the legislative      prerogative    and duty to define a penal of-
fense.     Analogous cases are       t forth in the footnote which amply
illustrate    this rule of law. %

   I&/   In Anderson vi Stat< 21 S.W.?d 499 (Tex.Crim.App.               19291,
the Court was concerned witi the statute prohibiting              any person
who is “masked or disguised         in such a manner as to hide his or
her identity    or to render same difficult        to determine from going
into or near any private house.”          In considering     whether the
statute was too vague to define an of~fense the Court noted that
the act prohibited      is made to depend largely upon the peculiari-
ties that may affect       the vision of the person or persons offended,
and offends against Article 6 of the Penal Code and is therefore
inoperative.     Griffin v. State       218 S.W. 494 (Tex.Crim.App.         19201,
involved the validity       of a staiute prohibiting       any person to oper-
ate an automobile , motorcycle,        or bicycle   upon the public high-
ways of the State at night time whose front lamp shall project
forward a 1’        of           ar                                      1      -
terfere,with    themt        of or temoorarilv     blind the vision of the
driver of a vehicle       aooroachinp from an oooosite       direction.”     ‘The
Court pointed out that the determining factor of the guilt or
innocence of the accused in this ‘instance was to be determined by
the effect    of the light upon the vision of each individual              driver
of a vehicle    proceeding in the opposite        direction,    and not upon
any definite    legal standard.       The law requires a certain degree
of definiteness    ,in denouncing an act as criminal.           “Our statute
declares    that those penal laws that are of such doubtful construc-
tion that they cannot be understood,          either from the language in
which they are expressed or from some written law of the State,
are wholly inoperative .‘I Citing Penal Code, Article 6.
   w      Stephens vt Wood, 35 S.W.2d ‘794 (Tex.Civ.App.   1930).   Suit
to enjoin the members of the Game, Fish & Oyster Commission, and
all others charged with the administration      and enforcement of ;ir-
title    941 of the Penal Code, on the grounds that the statute was
invalid.     The, statute prohibited anyone to have in his posses-
sion any seine, net or trawl without a permit issued by the Game,
Fish and Oyster Commissioners or by their authorized deputy in
any or on any of the waters of certain designated bays, streams,
bayous or canals named in the Act.      The plaintiffs   insisted  that
this was an attempt on the part of the Legislature       to confer upon
Hon. Wade Spilman,    page 8   (W-31)

              Section 20 penalizes     the use or threat of use for the
purpose of compelling or inducing payment ‘fany means which the
licensee    is not legally    entitled   to use for such purpose.”     In
effect   this section makes it an offense to use any unauthorized
or unlawful means to compel or induce payment.           Nowhere in the
Act does it specify exactly what means aPEeprohibited,           but leaves
the definition      and scope of the prohibited    method to the general
law, including not only extraneous statutory          law but also the
common law.      The lender is unable to look to the statute itself
to find out what acts are prohibited,         but must be thoroughly ac-
quainted with a complex system of law about which even courts
are frequently      puzzled in order that he may ascertain whether an
act is criminal.       It is apparent that “men of common intelli’gence
must guess as to &he meaning and differ         as to the application     of
such a statute.“’         It therefore   lacks the first  essential   of due

   w    (continued)
the Commissioners authority to determine when and under what cir-
cumstances this possession      should constitute     a penal offense by
granting or refusing to grant the permission mentioned.             Ha:
The contention of the plaintiffs        should be sustained.      The Legis-
lature has no power to confer upon a commission, bureau or agent
of the State power to make a law.         Citing Article    III, Section 1
of the Texas Constitution,      and other authorities.       The portion of
the Act cited was then held to be unconstitutional           and void for
want of due process.
   &/    14 Am.Jur., Criminal Law, Section 22. Dockerv v. State, 247
S.W. 508 (Tex.Crim.App.     19231, requiring     the erection    of a fire
escape to be erected in accordance with the minimum specifications
promulgated by the State Fire Marshall.         H&&&s“If the Act under
discussion    be upheld, it would seem clear that the law requiring
fire escapes would be such as that an essential          part of it, i.e.,
the kind and character and specifications         necessary,    might be
changed, modified,     added to or taken from by a power other than
the Legislature     at the will, wish, or whim of such foreign power .‘I
It is an attempt to delegate to the State Fire Marshall power to
make or unmake the element necessary to make out an offense,             and
is obnoxious to the Constitution.         The conviction   was reversed
and prosecution     ordered dismissed.    Ex aarte Willmouth      67 S.W.2d
289 (Tex.Crim.App.     1933) involved the val?dity of a p&al ordi-
nance prohibiting     the operation of an automobile for hire unless
the same shall have attached thereto a taximeter of standard
size and design to be aaaroved bv the Chief of Police.             HA:     An
offense denounced by statute or ordinance must be plainly written
to be effective.      In other words, a completed law, if penal in
its effect,    must define the act or omission denounced as criminal
with some degree of certainty.        If the ordinance would be upheld
it is clear that the size and design of the taximeter might be
Hon. Wade Spilman,       page 9   (WW-31)

         .   The holding of Stated v. Gaster, 45 La.Ann. 636, 12
~~I)ce?$ (S.Ct .La. 1893) is applicable.       In that case a statute
penalizing    any judge, justice    of the peace, sheriff,    or any
other civil,officer      for committing a misdemeanor in the execu-
tion of their offices       was held to contravene the provisions     of
Article VIII of the Louisiana Constitution        which states that
“In all criminal prosecutions       the accused shall enjoy the right
to be informed of the nature and cause of the accusation.”            In
that case the court also held the statuteunconstitutional            on
the ground that it was an unlawful delegation         of legislative    au-
thority    to the judiciary.     Article XIV of the Louisiana Consti-
tution is, similar to Article II, Section 1 of our Constitution.          17
          Section 20 also provides that “any such action which,
under the laws and court decisions   of the State heretofore     or
hereafter made (which) amounts to an invasion of any leaalle
protected interest   of the borrower will also be a violation     of
this Act and shall subject the per98 n guilty of this violation
to the penalties   herein provided.”     The term “legally   protected

  w     (continued)
changed at the will, wish, or whim of the Chief of ?olice.      The
Constitution    forbids the delegation  of law-making power by the
Legislature.     The section in question attempts to Yelegate to
the Chief of Police law-making power, which is obnoxious to the
constitutional     requirement and is therefore invalid.
  12/ Article XIV of the Louisiana Constitution      divides the pow-
ers between the Executive,  Judicial,  and Legislative      branches,
and provides:   “No one of these departments shall exercise power
properly belonging to one of the others.”    iirticle    II, Section
1 of the Texas Constitution  provides:
             “‘The powers of the Government of the State of
       Texas shall be divided into three distinct       depart-
       merits, each of which shall be confided to a separ-
       ate body of magistracy,      to wit:  Those which are
       Legislative   to one; those which are Executive to
       another, and those which are Judicial       to another;
       and no person,   or collection    of persons,  being of
       one of these departments, shall exercise       any power
       properly attached to either of the others, except
       in the instances herein expressly permitted.”
  &/     Parenthetical     matter and emphasis supplied.
Hon. Wade Spilman,     page 10    thw-31)

interest”    is nowhere defined in the Act, and does not have a
well-established      common law meaning.        It is a rather nebulous
concept.     It is evident that this does not meet the tests
previosly    cited by which men of common intelligence           would not
have to guess as to the meaning of the term ttlegally protected
interest,”     and differ    as to its application.-      Furthermore, a
criminal statute,      to be valid, must contain within it the defi-
nition of all essential         terms, or those te      s must be defined
elsewhere in the written law of the State. 55 The objectionable
language also attempts to authorize an enlargement of the term
“legally    protected    interest It by judicial    decisions   any time in
the future, thereby allowing the courts from time to time to
enlarge by definition        the proscribed    conduct.     This is nothing
more than judicial       legislation   and is prohibited.
             Section 6(c) requires licensees        to maintain at all
times “total    assets of at least $25,000.00,        either actually     on
loan or readily      available    for immediate loan.”     Failure to
maintain the required assets can cause two possible             results,
suspension or revocation         of license  and/or criminal penalties
set out in Section 21.          Should a licensee’s   assets be depleted
or placed beyond his control          so as not to be ??eadily     available
for immediate loan,” even without the licensee’s            fault or agency,
as in the case of a wrongful garnishment or a bank failure,               the
licensee   is criminally      liable.    He may not escape the conse-
quences by surrendering his license          immediately,   for Section 8(c)
provides that “such surrender shall not affect his civil               or crim-
inal liability     for acts committed prior thereto.”          The effect
of this Bill is to make it a crime for a licensee            to be so unfor-
tunate as to have his assets tied up by some circumstance beyond
his control.      This is palpablv “arbitrary       and unreasonable” and
contrary to the due process clause of the Fourteenth Amendment
to the Federal Constitution.
            Section 8 of the Act deals with revocation,     suspension,
and reinstatement    of licenses.   Subsection (b) provides ;;re ~2
three days notice of a hearing to suspend the license.
is to run from the day the notice is deposited in the mail.         It
is conceivable    under such a provision that the letter would be
deposited late Friday and received      on Tuesday, the day set for
the hearing . Does this constitute      procedural due process?   If the

  w    The well recognized   rule for construing a penal statute is,
“that if the statute is so indefinitely     drawn, or if it is of such
doubtful construction    that it cannot be understood,  either from
the language in which it is expressed or from some written law of
the State it is invalid and void."     Ex oarte Meadow%, 109 S.W.2d
261 (Tex.Crim. App. 1937).
,   .

        Hon. Wade Spilman,    page 11 (WW-31)

        Legislature      means to require rsBsonable notice,      such is not
        reasonable and not due process           for it fails  to meet the leg-
        islat ive, nlandate.     If the Legislature   does not intend reason-
        able notice,      the result differs,    for no notice is required to
        suspend the license.        The right to lend money at j&e est is a
        creature of statute        and is not an inherent right.       Jruhanv.
        StaQ,     suora, note b. Therefore the privilege        to loan money at
        the higher rate of charge provided by Section 3(b) is a privi-
        lege which the~Eegislature        grants to anyone licensed under the
        Act 9 The Legislature       has the power to compel all persons sub-
        ject to the .Act to charge the lower rate specified           in Section
        3(a) of the Ac,t. Suspension of the licensee’s          license    simply
        prohibits    him from making the charges at the higher rate as
        specified    undoer Section 3(b) D It does not prohibit him from
        loaning money. The license         is granted to him pursuant to a
        general gr~ant of police power to regulate the small loan busi-
        ness* ,If,      in the interest   of the enforcement of the police
        power vested in the Secretary by the Legislature,           the Secretary
        chooses to revoke the license by a long standing rule in the
        &ate, he may do so without notice.21           The licensee    is not en-
        titled    to notice except that which may be granted to him by the
        statute.      If the Legislature    did not intend to provide reason-
        able notices, it would~ be a matter of legislative         grace whether
        he received any notice at all, and compliance with the notice
        provided by the statute would be procedural due process.
                     Section 9(b) and (c) of the Bill gives sweeping in-
        vestigatory    powers to the Secretary of State, the Attorney Gen-
        eral, and to any District       Attorney or County Attorney, or to
        their respective     representatives    for the specific purpose of de-
        tecting   violations    (all of which are made criminal by Section
        21) or securing information required by the Act.         This authority
        is not limited to licensees        and persons engaging in the loan

          2Q/ Unless notice is given a reasonable time in advance of
        the hearing, it is insufficient.         1 Fed.Adm.Law § 295 (Van Baur
        1942).    See  also, Bellinsham    Bav &  BCR Co. V. Citv of New What,
        w.,      172 U.S. 31& 43 L.EdL. 460, 19 S. Ct. 205.
           2lJ Baldacchi v. Goodlet, 14~5S.W. 325 (Tex.Civ.App.           1912, er-
        ror den.) involving the suspension of a license granted by the
        City of Austin to sell milk in the city.          The ordinance did not
        provide for notification      prior to revocation    of the permit.    The
        court reasoned that when the city was justified          in regulating   the
        occupation    in the interest    of public health, morals, safety,     or
        welfare,   by requiring   a license,   the power to revoke the license
        whenever in the opinion -of the municipal authorities         the public
        interest   requires   it, is inherent,    and may be exercised without
        notice to the holder of the license,        or affording   him opportunity
        to be heard.
Hon. Wade Spllman,          page 12      (WW-31)

business,     ‘but may beeasserted            to Investigate      anyone whom the
investigating        officer      has reasonable        cause to believe         Is vio-
lating;     or event about to violate,             any provision       of this ,Act.
This sweeping authority~~contravenes                  the constitutional          provi-
dions against       unreasonable         search8      and seisures.         In the lead-
ing case of @ovd v; Ut@ed Statag j2 the Supreme Court of the
United State,s        in construing         the search and seleure provisions
of the Federa i Constitution,               which are substantially            identical
to Section 9, Article             I of the Texas Constitution,              held a Fed-
eral statute       requiring       production      of private     books and papers
of~a defendant        in a suit to forfeit            goods, unconstitutional             as
authorizing      an unreasonable           search and’seizure.           The Court
pointed out that the proceeding                 was quasi-criminal,          and that the
production      of such documents would be compulsory self-incrimina-
tion and therefore           unreasonable.         There is no distinction             be-
t,-ieen compelling the production               of incriminating         papers and
records,     as ins the Bpyrl case, m,                  and allowing      inspection       of
incriminating        documents as is here authorized.                 Both are unrea-
sonable searches          and seizures.         The distinct    ion should, however,
be drawn between what is here proposed and a statute                          which re-
quires the production             of records      and authorities      inspection
thereof     by an administrative            agency, but which does not impose
criminal     penalt es.         Such statutes       have on occasion,           been held
constitutional.       3 3 gllowlng administrative              officials       to exer-
cise such sweeping invest!@ory                    powers against       the persons
named in Sections          9(b) (3)         is of questionable         constitutional-
ity even if no criminal              penalties     were involved.         Our holding
does not make it necessary               to discuss that question            in this
opl.ni,on . Section 9(c) contains               the same vice as Section 9(b).
In addition      thereto,       it authorizes       the investigating          authority
to compel attendance            of witnesses       and to examine them under
oath, but does not provide for subpoena power or any pr,ocess to
implement the examination,                The witness has no way to knou of
the investigator’s           authority,      nor is he apprised          of the extent
thereof,     while at the same time he is asked to determine                         at his
peril whether he will testify                 and reveal the information             de-
manded .

         116 U.S. 616, 29 L.&d. 746, 6 S.Ct . 524, 29 L.R.A. -19
,(1226)
    a$ .E
    W    Culver v. Smith , 74 S.W.2d 754 (Tex.Clv.App.     1934, ,mit
ref .)
    w    ‘*Any person who the Secretary,   Attorney General,    or Dis-
 trict  or,County Attorney has reasonable     cause to believe   i‘s vio-
 lating  or is about to violate   any provision   of this Act, whether
 or not such person shall claim to be within the authority        ‘or be-
 yond the scope of this Act.U
.*   .

         Hon. Wade Spilman,   page 13   (WW-31)

                     It is doubtful that Sections 11, 12(a) and (b),
              13(a),    (b),~ (c) and (d), 14(a),     (b), and cc), and -
              17,and 20.are included-in       the.caption;   Amendments
              provided in Section l(e) are void; Sections 6(c),
              9(b) and cc), 10(a), 14(c) and 14(d)(3)         are void;
              Section 8(b) is of doubtful constitutionality;          Sec-
              tion l(d) (Exemptions) is unconstitutional          and can-
              not be severed, causing the entire Act to be uncon-
              stitutional;    Section 3,, fixing maximumrates of charges
              would be cunstitutional       if severable.
                                           Very truly    yours,

                                           WILL WILSON
                                           Attorney General

                                           By     @&
                                                Wallace P. Finfr
                                                Assistant

         WPF:wb
         APPROVED:
         OPINIONCOMMITTm
         H. Grady Chandler
                  Chairman