Untitled Texas Attorney General Opinion ( 1946 )

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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.”
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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