Untitled Texas Attorney General Opinion ( 1967 )

- . 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. . -207-