.THE A~OHXEY GENERAL
OF %%CXAS
AUUTIN .I. TEXAW
‘(YILIA WILBON
ATTORNW GssI!xsAx.
WY 29, 1958
Hon. Zollie Steakley opinion No. w-438
Secretaryof State
CapitolStation Re: The authorityof the Secretary
Austin,Texas of State to approvea charter
for corporationshaving as
their purposethe issuance
Dear Mr. Steakley: of bail bonds.
In your letter you requestan opinionof this office "concera-
ing the authorityof this officeto accept,file and approvethe pro-
posed charters"which have purposeclausesthat would authorizecorpo-
rationsto carry on the businessof all types of criminalbail bonds.
At the time the Legislatureenactedthe Texas BusinessCor-
porationAct in 1955, corporationsengagingin the businessof surety
on bail bonds had long been requiredto obtain certificatesof authority
from the Board of InsuranceCommissioners.These corporationsreceived
their certificatesof authorityunder Article 8.01 of the Insurance
Code as casualtycompanies,or under prior Chapter7 of the Insurance
Code as fidelity,guaranty,and suretycompanies. These corporations
were furtherregulatedby the Board of InsuranceCommissioners by Arti-
cle 5.13, concerningregulationof rates, and Article21.10, concern-
ing the requirementof an affidavitof non-violationof the agency pro-
visions. Casualtyinsurancecomuanieshad long been authorizedto act
as surety for the-executionof bail bonds. CfT Ex Parte Osborne,127
Tex. Grim. 453, 77 S.W.2d 537.
Article271-a, Vernon'sCode of CriminalProcedure,provides
that:
n. . . any bail bond or recognizance. . . may be
given or executedby such principaland any corporation
authorizedby law to act as surety . . ."
The only corporationsthat had been authorizedby law to act as surety
were under the supervisionof the Board of lnsurance Commissionersor
Banking Commissioner.Article 271-a was enacted in 1929 as an apparent
codificationof EX Parte Cook, 62 Tex. Grim. 22, 136 S.W. 67 (1911).
In 1955, the Legislatureauthorizedthe Secretaryof State
to approve charterswhich containedpurpose clausesof the widest va-
riety with certainenumeratedexceptions. Article 2.01-B(4)of the
Hon. Zollia Steakley,page 2 (Hl-438)
Texas Burine.ssCorporationAct enumeratesas one of the exclurlonr,
“(d) insurancecompaniesof everytype and characterthat operateun-
der the insurancelaws or this state . . .” At the time or the enact-
lDentof this cxclurlonthe only corporationsauthoriscdto act as sure-
which were regulated ua&r
ties on ball bonds vere those corporations
the insuranceor banking laws, such as Chapter7A, Chapter8, or Chap-
ter 7B of the InsuranceCode, _
Thun, your questionnarrowsto whether or not subsequentleg-
irlatlonin 1957 bar.amnded the intentionand languageof the Texas
Buolneoo CorporationAct an it wao enactedin 1955.
In your opinionrequestyou noted that Article271-c of the
Code of CriminalProcedure,which was enactedas H. B. 11, 55th Leg.,
(R.S. lgfl), Ch. 420, p. 1259,and amendedin the First Called Session
ao 8. B. 25, Ch. 24, p. 51, referredto corporationsas well as persona
in the bail bond burinerr. Not only is the 4ct by its terme regulatory
rather than grantingadditionalpowersto the Secretaryof State,but
recentlythe Supreme Court of Texas in Smith v. Decker,go. A-6663,
decided on April 30, 1958, that the entire statute is unconstitutional.
The only corporations“authorized by lav to act as surety”in accord-
ance with Article 271-a, C.C.P., were regulatedunder Chapter7 and
Chapter 8 of the InsuranceCode. The repeal of Chapter7 of the Insur-
ance Code, S. B. 165, 55th Leg., (R.S. 1957), Ch. 388, p. 1162, had
the effect of limiting the doing of a corporate surety businesssolely
to insurancecompaniesregulatedunder Chapter8 by the Board of Insur-
ante.
It Is thus our opinionthat the recent legislationreferred
to above has not altend or repealedthe former requirementof a cer-
tificate of authorityfrolathe Board of Insurancefor a corporation
to engage in the businessof actingas surety on bail bonds for a pre-
mium. Therefore, it is our opinionthat the Secretaryof State does
not have the authorityto approvechartersstatingthe doing of a bail
bond business as a corporatepurpose.
Article 2.01-B(4)(d)of the Texar,Business
Corporation Act; the Code of CriminalPro-
cedure,Article271-a;and Article 8.01 of
the InsuranceCods restrictthe corporate
business of insuranceof bail bonds to those
corporationrwhich have a certificateof au-
thority from the Board of Insurance. There-
fore, the Secretaryof State does not have
Eon. Zollie Steakley,page 3 (WW-438)
authorityto approveapplicationsfor cor-
porate charterswhich state the business
of surety on criminalball bonds as a pur-
pose.
Very truly yours,
WILL WILsOn
AttorneyGeneralof Texas
Mac0 stevart
Assistant
MS:lSl
APPROVED:
OPINION COMMITTEE:
Geo. P. Blackburn,Chairman
Wallace P. Finfrock
Riley Eugene Fletcher
Tom I. McFarling
PJZVIEWEDFORTHE!ATTORNEYGENERAL
BY:
W. V. Geppert