The opinion
Mr. John Mason Lankford, Jr., Chairman
Texas Board of Private Detectives, Private
Investigators, Private Patrolmen, Private
Guards, and Managers
P. 0. Box 12577, Capitol Station
Austin, Texas 78711
Attention: Thomas W. Brown, Opinion No. M-727
Director
Re: Whether a corporation doing
business as a detective agency
must file a surety bond under
both Articles 1302-3.04 and
4413 (29bb), Vernon's Civil
Statutes.
Dear Mr. Lankford:
Your opinion request concerns whether a corporation
planning to do business in Texas as a detective agency is re-
quired to file two separate surety bonds in view of the require-
ments in Articles 1302-3.04 and 4413 (29bb), Vernon's Civil
Statutes.
Article 1302-3.04 makes as a prerequisite to the is-
suance of a certificate of incorporation or a certificate of
authority to transact business in this State of a corporation
organized or seeking to be organized for any purpose or purposes
which include the operation of a detective agency, that such
corporations, or its officers, as the case may be, have executed
a good and sufficient surety bond or insurance policy, in the
sum of $lO,OOO.OO as stated therein, and deliver the same to the
Secretary of State.
Article 1302-3.04 reads as follows:
"A . Before a certificate of incorporation
or a certificate of authority to transact busi-
ness in this State shall be issued to any
corporation organized or sought to be organized
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Mr. John Mason Lankford, Jr., page 2 (M-727)
for any purpose or purposes which include the
operation of a detective agency, its in-
corporators or its officer, as the case may
be, shall have executed a good and suffi-
cient surety bond or insurance policy (in
the event of a bond to be signed by some
good solvent bonding company authorized to
do business in this State, and In the event
of an insurance policy to be executed by
some good solvent insurance company authorized
to do business in this State) and deliver
the same to the Secretary of State. Said
surety bond or insurance policy shall be in
the sum of Ten Thousand Dollars ($10,000)
and shall be conditioned that the obligor
therein will pay to the extent of the face
amount of such surety bond or insurance
policy all judgments which may be recovered
against said detective agency by reason of
the wrongful or illegal acts of its servants,
officers, agents, or employees, committed by
them in the course of their employment. Said
surety bond or insurance policy shall further
be conditioned that such person so injured
shall have the right to sue directly upon such
surety bond or insurance policy in their own
name, and the same shall be subject to suc-
cessive suits for recovery until a complete
exhaustion of the face amount thereof. Each
such detective agency shall on or before the
date of the expiration of the terms of any
surety bond or insurance policy so filed by
such agency file a renewal thereof, or a new
surety bond or insurance policy containing
the same terms or obligations of the preced-
ing surety bond or policy, and shall each
year thereafter, on or before the expiration
date of the existing surety bond or insurance
policy, file such renewal surety bond or
insurance policy so as to provide continuous
security to persons so injured, and in the
event any such detective agency fails to
execute any surety bond or insurance policy
in the first instance, or to execute any
renewal surety bond or insurance policy, or
to file the same with the Secretary of State
as provided herein, it shall constitute
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Mr. John Mason Lankford, Jr., page 3 (M-727)
grounds for the forfeiture of the articles
of incorporation of a domestic corporation
and of the certificate of authority of a
foreign corporation in a suit to be instl-
tuted at the instance of the Attorney General.
Nothing herein shall be construed to authorize
the agents, servants, officers, or employees
of such corporation to have the power of peace
officers in this State unless such powers be
conferred thereon under the provisions of
some other law of this State."
The above Article is a general law which applies to
any corporation organized or seeking to be organized for any
purpose or purposes which includes the operation of a detective
agency and makes the execution of said bond or insurance policy
a prerequisite to incorporation.
Article 4413 (29bb), the Private Detectives Act, makes
as a prerequisite to the issuance of a license by the Board to
an applicant, which include persons or corporations, that a
surety bond or a cash deposit of $10,000 be filed with the Board.
Said Article in Sections 41, 42 and 43 reads as
follows:
"Sec. 41. No license shall be issued under
this Act unless the applicant files with the
board a surety bond executed by a surety com-
pany authorized to do business in this state
in the sum of Ten Thousand Dollars ($lO,OOO.OO)
conditioned to recover against the principal,
its servants, officers, agents and employees by
reason of its wrongful or illegal acts in con-
ducting such business licensed under this Act.
"Sec. 42. The bond required by this Act
shall be made payable to the State of Texas,
and anyone so injured by the principal, its
servants, officers, agents and employees,
shall have the right and be permitted to sue
directly upon this obligation shall be subject
to successive suits for recovery until com-
plete exhaustion of the face amount hereof.
"Sec. 43. (a) Every licensee shall at all
times maintain on file with the board the surety
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Mr. John Mason Lankford, Jr., page 4 (M-727)
bond required by this Act in full force and
effect and upon failure to do so, the license
of such licensee shall be forthwith suspended
and shall not be reinstated until an applica-
tion therefor, in the form prescribed by the
board, is filed together with a proper bond.
"(b) The board may deny the application
notwithstanding the applicant's compliance
with this section:
"(1) for any reason which would justify
refusal to issue or a suspension or revoca-
tion of a license; or
"(2) for the performance by applicant of
any practice while under suspension for failure
to keep his bond in force, for which a license
under this Act is required.
"(c) Bonds executed and flied with the board
pursuant to this Act shall remain in force and
effect until the surety has terminated future
liability by a 30-day notice to the Board.'
The Private Detectives Act became law on September 1,
1969, and therefore is the more recent legislation. There is
nothing in said Act which shows a legislative intent to in any
way change or amend the surety bond requirements of Article
1302-3.04 or to Intermingle the requirements of the two acts in
regard to financial responsibility.
Therefore, we must answer your question to the effect
that a corporation doing business as a detective agency must file
a surety bond or insurance policy with the Secretary of State to
meet the requirements of the Miscellaneous Corporation Laws Act
(Article 1302-3.04) and must file a separate surety bond or cash
with the Board of Private Detectives to meet the licensing re-
quirement of the Private Detectives Act (Article 4413 (29bb)).
SUMMARY
A corporation doing business as a detective
agency must file a surety bond or insurance policy
with the Secretary of State to meet the requirements
of the Miscellaneous Corporation Laws Act (Article
1302-3.04) and must file a separate surety bond or
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,
Mr. John Mason Lankford, Jr., page 5 (M-727)
cash with the Board of Private Detectives to meet
the licensing requirement of the Private Detectives
Act (Article 4413 (29bb)). 4
y General of Texas
Prepared by Sam Jones
Assistant Attorney General
APPROVED:
OPINION COMMITTED
Kerns Taylor, Chairman
W. E. Allen, Co-Chairman
John Reese
Jim Broadhurst
Rex White
Earl Hines
MEADE F. GRIFFIN
Staff Legal Assistant
ALFRED WALKER
Executive Assistant
NOLA WHITE
First Assistant
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