Untitled Texas Attorney General Opinion ( 1944 )

Honorable Sidney Latham
Secretary of State
Austin, Texas
Attention: Horace B. Sessions
Dear Sir: Opinion No. O-63 16
Re: Functions of the Administrator
of the Securities Division of of-
fice Secretary of State with
reference to applications for
real estate dealer’s or sales-
man’s licenses.
We are in receipt of your letter of recent date requesting the
opinion of this department on the above stated matter. Your letter, in
part, reads as follows:
“We have recently been presented with the question
as to whether or not the Administrator of the Securities
Division is authorized or required to investigate each
applicant for a Real Estate License to determine such
applicant’s competency. It has been the policy of this
Department in compliance with Section 9 of the Act to
issue licenses upon the filing of a sworn application
accompanied by three affidavits of recommendation,
unless information as contained in the face of the appli-
cation or in our files relating to the question of the ap-
plicant’s good business repute and business practices
necessitates an investigation before acting to grant or
refuse the license.
“We should appreciate an opinion from your office
on the question of whether or not the Administrator of
the Securities Division is authorized or required under
the provisions of either Section 8 or Section 9 to make
an investigation of each applicant’s competency upon
the filing of an application in this office, and make a
Honorable Sidney Latham, Page 2 (OP~~~OSIN~. o-6316)
finding that the applicant is competent to carry on
business as a Real E,statn Dealer or Salesman before
granting such applicant a Real Estate License,
*Should it be your opinion that the Administrator
is authorinad or required to make an iavestigatiua as
to each applicant’s competency before acting on his
application, we should appreciate being advised as to
what standard or yard stick may be used by the
Administrator under the authority ,of the Act to deter-
mine competency in passing upon applications for
Real E&tats Dealers License.
Under the provisions of the Real Estate Dealer,‘8 Act (Article
6573a, V.A.C.S.), it is contemplated that the public interest will be served
by the issuaxkce of caal estate dealer’s or real estate salesman’s licenses
to only those applicants who are of good business repute and will conduct
their business in an honest, fair, just and equitable manner. For the pur-
posse of achieving tkat objective, the Legislature has prescribed in Sec. 6,
Article 6573a, that the applicant shall fiIe his application for said license
with the Administrator of the Securities Division of the office of the Secre-
tary of State, and thst certain minimum information and proof shall be in-
cluded in said application. Section 7 of said Article prescribes the
residence requirements a6 we11 as certain eIigibility requirements appli-
cable to non-resident applicants. Sec. 8, Article 6573s, provides:
“Application for a ~a1 estate dealer’s or real estate
salesman’s license shall contain such other information
AS to the applicant, in addition to the above dorcribsd,
as the Administrator of tkr Securities Divfsfon of the
office of the Sacrotary of State &al1 require. The Admin-
irtrator of the Socrrrities Division of tha office of the
Socretsry of Stat. may reqnire such other proof through
the application 01: akhorwise as its officers shall deem
desirable with due regard to the paramount inkrrst of
the public as to thr honesty, truthfulness,‘intogrity, and
competrncy of ths l pp1icbnt.e
Sec. 9s, Article 6573r, provides:
“If ths Admiaistrator of the Securities Division of the
offica ,af thhrgrcrokry of Stsk is satisfied, that ths appli-
cant for rnal o&ate doalar’s or r o dlstak srlem~a’s
lfconse is of good businar~~npah and that the ,buainrss
will beg conducted in an honest, fair, just, and equitable
. -
Honorable Sidney Latham, Page 3 (Opinion No. O-6316)
manner, and upon complying with all other provisions
of law and conditions of this Act, a license shall there-
upon be granted by the Administrator of the Securities
Division of the office of the Secretary of State to the
successful applicant therefor as a real estate dealer
or real estate salesman, and the applicant, upon receiv-
ing possession of license, is authorized to conduct the
business of a rear estate dealer or real estate salesman
in this State.*
In Reagan v. Guardian Life Insurance C,o., 166 S. W. (2d) 909.
the Texas Supreme Court held that under a statute (Sec. 1, Art. 506813)
authorizing the Board of Insurance Commissioners to determine whether
licenses should be granted to life insurance agents, the power to make
such determination carried with it the power to mahe investigations. In
Sec. 1, Art. 5068b, we find the following language:
“Hereafter whenever any person shall desire to
become an agent for a life insurance company, . . . ,
he shall, in such form and giving such information as
may be required, make application to the Board of In-
surance Commissionera for a license to act as such
agent. After the Board of Insurance Commissioners
shaI1 determine that such person is of good character
and reputation, it shall issue the license to such per-
*
son . . .
With reference to the authority of the Board of Insurance Com-
missioners, under the foregoing section, the Court said:
“Section 1 of Article 506Eb, Vernon’s CiviI Statutes,
provides for the licensing, among others, of life insurance
agents. The licenses are issued by the Board of Insurance
Commissioners, and the statutes clothe the Board with
power to determine if the applicant for license is of good
character and reputation. Of course, the very power to
make such determination carries with it the
-E!)--- ower to malce
allcGG&y
- investigatioffZ ours
It is our opinion that the purpose and meaning of Sections 8 and
9, Article 6573a, which confer authority upon the Administrator of the
Securities Division of the office of the Secretary of State with respect to
the determination of the fitness of an applicant for a real estate dealer’s
or salesman’s license is similar in meaning and purpose to Section 1,
Article 5068b, which confers authority upon the Board of Insurance Com-
missioners with respect to the determination of an applicant’s fitness for
-. ._ . .
Honorable Sidney Latham, Page 4 (Opinion No. 016316)
a life insurance agent’s license. In each instance, wide discretion is
given to the respective officers in the matter of determining whether
a license shall be issued, and the power to make such determination
cariies with it the power to conduct iuvestigatioas. (Reagan v. Guardian
Life Ins. Co., Supra).
In view of the foregoing, it is our opinion that the Administrator
of the Securities Division of the office of the Semetary of State is author-
ized to make such investigation, if he deems it desirable, ..“ikith due re-
gard to the paramount interest of the public as to the honesty, truthfuIness,
integrity, and competency of the applicant.” However, we find no provi-
sion in Article 6573a requiring the Administrator to conduct such an
investigation.
With reference to the standard or “yard stick’ which may be
used by the Administrator to determine competency in passing upon
applications for real estate dealer’s or salesman’s licenses, we quote :~
the following language of Sec. 9a, Article 6573a: “If the Administrator
of the Securities Division of the office of the Secretary of State is satis-
fied that the applicant for real estate dealer’s or real estate saGm=
license is of good business repute and that the business wiII be conducted
in an honest, fair, just and equitable manner . . . a license shall there-
upon be granted by the Administrator of the Securities Division of the
office of Secretary of State to the successful appIicant therefot . . .” The
Administrator is to satisfy himself from all the information and proof re-
quired in the application, or otherwise, as to whether the applicant is *of
good business repute and that the business will be conducted in an.honest,
fair, just and equitable manner.”
Trusting that the foregoing fully answers your inquiry, we are
Yours very truly
ATTORNE,Y GE,NERAL OF TE-S
JAE,:ddt-rn BY s/ J. A. E,llis
J. A. E,llis
Assistant
APPR0VE.D DEjC. 15, 1944
s/Grover Sellers
ATT0RNE.Y GENERAL OF TE,XAS
APPROVED Opinion Committee
By G.W.B., Chairman