Court Opinion

ID: 4139082
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:43:38.039821+00
Date Added: 2024-06-11T14:31:13.598806
License: Public Domain

/I   -

         Hon. L. S. Johnson               opinion   N6~.‘O-7232
         Commissioner                     Ret    Construction    of Article    152&a,
         State Department of              Vernon’s    Cod.Rev ;Civ.Stat   . , with
         Banking                          respect   to corporations     subject    to
         Austin 14, Texas                 supervision     by the Banking Commis-
                                          sioner   and those subject     to super-
         Dear Mr. Johnson:                vision   and examination.

                      We beg to acknowledge  receipt    of your        letter      request-
         ing   an opinion  from this department    as follows:

                      We have recently     been approached     by the execu-
                tive officer    of a loan and brokerage      company, which
                company o erates    by law under the provisions       of Ar-
                ticle  152 E:a. This officer     contends  that his corpor-
                ation is subject    to examination     by the Banking
                Department and bases his contention        upon the fact
                that Attorney    General’s   opinion   No. 0-6947 so states.

                        “This corporation       is one whose year-end     finan-
                cial    statement     does not reflect    any liability     that
                would be classifiable          as the type which automati-
                cally     places   themsubject    to annual visitation      for
                examination       purposes   by this Department,      as such
                liabilities       are defined    by and treated    in Attorney
                General’s      opinion    No. o-5858.

                        “ite invite     our attention   to Attorney    General’s
                opinion     No. 0-69 t 7 and to the antepenultimate       para-
                graph thereof,       wherein you will     observe  that it is
                stated that all corporations,          domestic   and foreign,
                incorporated       under subdivisions     48, 49 and 50 of
                Article     1302 R.C.S.    1925 and Article     1303b V.A.C.S.
                1925 are subject        to examination    by the Department of
                Banking of the State of Texas.

                         “In view of the provisions      of Section.2   ,of Arti-
                 cle 1524a, V.B.C.S.        1925 upon which Att0rne.y General’s
                 opinion No. O-5858 was in part based, we request            a
                 clarification     of the above quoted expression        in Opin-
                 ion No. o-6947 which apparently         does not differentiate
                 between corporations        subject to supervision    and those
               ; subject     to supervision    and examination.”
                                                                                -   --

Hon. I.   S,   Johnson,   page 2     (O-7232)

            Article   1524a of Vernon’s  Codification     of the Revised
Civil  Statutes,    commonly known as the “Loan and Brokerage       Com-
panies’ Act”‘, specifically    dealing with the question       of examlna-
tion by your department of such corporations,         provides   in Sec-
tion 2 as follows:

             “The Banking Commissioner ,of Texas shall exam-
      ine or cause to be examined such corporations                an-
      nually    or oftener   if he deems it necessary.            Said
      corporation     shall pay the actual      traveling      expenses,
      hotel bills,     and all other actual       expense incident
      to’ such examinati,on and a fee not exceeding             Twenty-
      five Dollars     ($25) per day per person engaged in
      such examination.        If such corporation       had not sold
      in Texas its bonds, notes,       certificates,         debentures,
      or other obligations       and does not offer        for sale 07
      sell   in Texas its bonds, notes,        certificates,       deben-
      tures or other obligations,        the Banking Commissioner
      of Texas,    in lieu of an examination         shall    accept   a
      financial    statement made on such form, containing
      such information      as he desires.     * * *‘I

           It will      be observed     that such a corporation,        which has
“not sold in Texas its bonds, notes,             certificates,      debentures,     or
other obligations,        and does not offer      for sale or sell       in Texas
its bonds, notes,       certificates,      debentures,      or other obligations”,
is not subject     to examination       by the Banking Commissioner.            All
such corporations       in a general way are subject           to the supervision
of the Banking Commissioner,           but only the class having sold or of-
fered for sale,      the instruments      mentioned above in Texas is sub-
ject to actual     visitation       or examination-

           Our Opinion No. O-6947 referred             to by you does not an-
nounce any different   rule. The language             referred to by you in
that opinion  is as follows:

            “‘Sec.  10.   The provisions       of this Act shall
      apply to foreign     corporations     who have heretofore
      been granted permission       to do business       in Texas and
      who may hereafter     be granted permission         to do busi-
      ness in Texas and having as their           purpose or purposes
      any part of the provisions         set out in Section      One of
      this Act.    Every foreign      corporation     having such a
      permit to do business       in this State shall be subject
      to the examination      of the Banking Commissioner         of Texas
      in the same manner and under the same terms and condi-
      tions   as examination    of domestic      corporations.      * . .(
Hon. De S.       Johnson,    page 3     (O-7232)

                 ‘IBy the terms of the foregoing         legislative       en-
          actments and particularly          the 1945 amendment to Ar-
          ticle    6165a,   supra, both domestic       and fore1 n cor-
          porations     incorporated    under subdivisions        4 8 49 and
          50, Article      1302, R.C.S.,     1925, and Article       !303b,
          V.A.C.S.,     1925    are subject    to examination       by the
          Department of 6anking of the State of Texas                  and
          hence do not come within         the definition      of ioan
          broker as defined        In Article   6165a,   V.A.C.S.,      1925.”

              When the entire   quotation   i.s considered,    it is clear
the writer     of the opinion was not d.ealing with the narrow field
 of examination    by the Commissioner,     as contradistinguished       from
 supervi.sion   of such concerns,    but on the contrary      he meant mere-
ly to assert     that such corporations     doing business     in Texas un-,
der permit were subject       to examination    of the Banking Commission.-
     as such corooration      o aaniz d under the laws of TexG.          We
i:ve   seen that by thatSte$      theze corporations      are all subject
to suuervision,      but not all of them are subject        to examination.

               It follows from what we have            said   that   the   executive
officer      mentioned by you is In error.

                                          Very truly     yours

                                          ATTORNEYGENERALOF TEXAS

                                          By /s/ Ocie     Speer
                                          Ocie Speer,     Assistant

APPROVEDNOV 1, 1946
/s/ Grover Sellers
ATTORNEYGENERALOF TEXAS

@PROVED: OPINION COMMITTEE
BY:      BWB, CHAIRMAN

OS-MR:wb