Case Information
*1 /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- a. E: This officer contends that his corpor- ation is subject by the Banking Department and bases his contention upon the fact opinion No. 0-6947 so states. that Attorney General’s
“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 opinion No. o-5858. General’s “ite invite our attention to Attorney General’s opinion No. 0-69 7 t and to the antepenultimate para- graph thereof, wherein you will observe that is stated that all corporations, domestic and foreign, 48, 49 and 50 of 1302 R.C.S. 1925 and Article 1303b V.A.C.S. 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.” *2 --
Hon. I. S, Johnson, page 2 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: ,of Texas shall exam-
“The Banking Commissioner 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 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 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. * . .( *3 Hon. De S. Johnson, page 3
‘IBy the terms of the foregoing legislative en- actments and particularly the 1945 amendment to Ar- supra, both domestic and fore1 n cor- 6165a, porations 4 8 and 50, Article 1302, R.C.S., 1925, and Article !303b, V.A.C.S., 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, 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 of the Banking Commission.-
as such corooration o aaniz d under the laws of TexG. We i:ve seen that by thatSte$ theze 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 ATTORNEY GENERAL OF TEXAS By /s/ Ocie Speer Ocie Speer, Assistant APPROVED NOV 1, 1946
/s/ Grover Sellers
ATTORNEY GENERAL OF TEXAS
@PROVED: OPINION COMMITTEE
BY: BWB, CHAIRMAN
OS-MR:wb