Opinion

Untitled Texas Attorney General Opinion

Court
Texas Attorney General Reports
Filed
Jul 2, 1939
Status
Published
On the bench
Gerald Mann
Cited by
0 cases
Authority
More cited than 3.6%

The opinion

NO. 3072

ARTICLE 1&15a, REVISED CIVIL STATUTES, HELD

UNCONSTITUTIONAL

Opinion construing Article 1415a, Revised Civil Sta-

tutes, and holding:

Art. 1415a, R.C.S., which requires commer-

cial colleges organized after its passage

in 1929 to give a bond, and exempting from

Its provisions all commercial colleges then

in existence, is unconstitutional.

OFFICE OF THE ATTORNEY GENERAL

July 13, 1939

Hon. Tom L. Beauchamp

Secretary of State

Austin, Texas

Dear Sir: Opinion No. O-912

Re: Art. 1415a, R.C.S., which re-

quires commercial colleges or-

ganized after its passage in 1929

to give a bond, and exempting from

its provisions all commercial col-

leges then in existence, is uncon-

stitutional.

Your letter of June 1, 1939 received. You submit the fol-

lowing question:

"Is that portion of Article 1415a unconstitu-

tional in requiring a surety bond.to be executed by

business colleges formed after the passage of said

Act and exempting business colleges alreadg doing

business from giving of such bond?"

In order to properly construe said provision of the sta-

tute, we deem it wise to s!:atethe effect of the entire article

from which the above provision is taken.

Article 1415a of the Revised Statutes was passed in 1929.

. .

Hon. Tom L. Beauchamp, July 13, 1939, Page 2.

Section 1 thereof provides that any person, partnership, asso-

ciation or corporation which may desire to open a Commercial

College, or to establish a branch college or school in this

State for the purpose of teaching bookkeeping, stenography,

typing, telegraphy, and other courses which are usually taught

in Commercial Colleges, shall first apply to the Secretary of

State for a permit.

Section 2 of said Article provides that before the Secre-

tary of State shall issue such permit, he shall require a bond

in the sum of ten thousand dollars, signed by a solvent guaranty

company, payable to the County Judge of the County in which the

college is to be opened, 'conditioned that the principal In said

bond will carry out and comply with each and all contracts,

either verbal or written, made and entered into by said college,

or branch college or school, acting by and through its officers

or agents, with any student who desires to enter such college

and to take any course in commercial training, and to pay back

to such student all amounts collected for tuition and fees in

case of failure on the part of the parties obtaining a permit

from the Secretary of State to open and conduct a Commercial

College or branch college or school, to comply with Its con-

tracts to give the instruction contracted for, and for the full

period evidenced by such contract."

Section 3 of said Article provides that in any and all

cases where the party receiving the permit fails to comply

with any contract made with any student, parents or guardian

of such student, such student or his parents or guardian shall

have a cause of action against the sureties on the bond for

the full amount of the payments made to such person, with 109

interest from the date of the payment, and for reasonable at-

torney's fees for instituting and prosecuting such suit.

Section 5 of said Article provid.esthat the provisions of

this Act shall not apply to any University, College or regular

High School which has heretofore adopted or which may hereafter

adopt one or more commercial courses nor to any Commercial Col-

lege heretofore establIshed.

From a careful reading of said statute as a whole, it ap-

pears that a commercial college that was In existence at the

time the law Iaras

passed is exempt from executing any bond;

while a commercial college organizedthereafter must execute

the bond.

The Constitution provides that all persons have equal

privileges and rights. No law can be passed whfch gives one

class of persons an advantage over a similar class. Our courts

have universally held that where the Legislature attenrgtsto

discriminate and exclude any class from the provisions of a

law, there must be a reasonable basis therefor.

The only basis for the discrimination in the statute in

Hon. Tom L..Beauchamp, July 13, 1939, Page 3.

question Is one of time. A commercial college in existence at

the time the law went into.effect could contlntie in business

for sn indefinite period of time and violate any and all of

its contracts that it saw fit. The only penalty that it would

suffer would be a suit at the hands of the Injured party;and

upon a recovery it would be required to pay the judgment and

6s interest thereon. Under Article 1&15a, all those who engaged

in the commercial college business after Its enactment were re-

quired to execute a ten thousand dollar bond, and In the event

they failed to comply with their contract, the injured party

could recoverhis damage, plus 10% interest, plus reasonable at-

torney's fees.

The commercial college In each instance would be perform-

ing Identically the same class-of education, using the same

grade of teachers, with the same qualifications and having the

same financial standing or backing, time alone being the factor

on which the classification was built. No reason could be as-

signed why a commercial college that was existing in 1929 should

be immune from a law which required those established after said

date to execute a bond requiring the contracts made with their

students to be complied with.

In crder for the courts to sustain the constitutionality

of any law, there must be such a reasonable basis for the classl-

ficatlon,that it will not violate the constitutional provisiti

against granting exclusive privileges and immunities.

The question of class legislation has been a source of much

litigation in the United States. Generally speaking, the con-

stitutionality of a law must be governed by the peculiar facts,

conditions, and circumstances surrounding the purpose to be ac-

complished or the evil to be remedied. It would be useless, we

think, to enter into an extended discussion of the various Acts

by the legislative bodies and cite the various authorities, and

attempt to reconcile same.

In Ex Parte Baker, 78 S.W. (2d) 610, the Court of Criminal

Appeals held unconsitutional an ordinance passed by the City of

Temple, which in effect prohibited a person from selling goods

upon the streets of Temple without first obtaining a license

therefor, and exempting from the provisions of said ord~inance

all those who had a permanent place of business within said City..

The court stated:

"An ordinance which attempts to distinguish

between persons engaged in the same or like bsiness

merely on the basis of their residence or the loca-

tion of their business house is in contravention of

Section 19, Article 1, of the Constitution, which

read.8, 'No citizen of this state shall be deprived

of life, liberty, property, privileges, or immuni-

ties, or in any manner disfranchised, except by the

due course of the law of the land."'

Hon. Tom L. Beauchamp, July 13, 1939, Page 4.

In Ex Parte Drelbelbls, 109 S.W. (2d) 476, the Court of

Criminal Appeals held Invalid, because it violated the Consti-

tution, an ordinance passed by the City of Glen Rose under the

terms of which said City levied a tax upon every temporary

merchant doing business In the City and exempting therefrom

all merchants who had been engaged in business for as much as

twelve months prior thereto. The court stated:

"That the ordinance in question Is dlscrlmlna-

tory Is clearly demonstrated by the fact that a per-

son who has been engaged In one of the designated

businesses in said City for a year or more is exempt

from the payment of the tax, while another person

who has not been so engaged for such length of time

Is subject to the payment of the tax, and for his

failure to d.oso, punishable by fine, although both

parties may be engaged In the same kind of business,

carrying the same kind and the ssme amount of merchan-

dise. If this is not discrimination, then what is it?

"An ordinance which attempts to distinguish

between persons engaged In the same or like busl-

nesses, merely on the basis of the length of time

each is engaged In the business, is In contravention

of Sections 3 and 19 of Article I of the Constltu-

tion."

In United States Automobile Service Club vs. Van Winkle,

274 Pac. 308, the Supreme Court of Oregon held unconstitutional

a statute which provided that no automobile service club could

obtain a license to transact business in that State without

posting's twenty-five thousand dollar cash bond, because it

exempted from the provisions thereof all automobile service

clubs that had been in operation in Oregon for a period of

more than five years and that had a paid membership of more

than five thousand within the state. The court stated:

"We can perceive no substantial distinction

between a corporation which has been engaged In bus-

iness for more than five years, and one which has

been engaged in business for four years or between

a corporation which_Jhascontracted with more than

five thousand persons and one which has contracted

with only three thousand five hundred persons. They

are all engaged in the same pursuit, and at the same

time and place and under identically similar condi-

tions. They enter Into a form of contract which

must first be approved by the State Insurance Com-

missioner, and they all engage to perform the same

kind of service. What basis, therefore, can there

be for any discrimination between them? The Act

does not attempt to regulate the fees they are to

charge, nor does it contain any reference to the ex-

tent of their obligations and liabilities. It recog-

nizes only the length of time they have been engaged

in business Andythe volume of business transacted.

. .

Hon. Tom L. Beauchamp, July 13, 1939, Page 5.

Neither of these things bears any relationship to

the objects and purposes of the statute. If any

distinction Is to be made, it would seem that the

necessity for requiring a bond from the corporation

doing the larger volume of business would be greater

than from one doing a less volume. It Is elementary

that persons engaged In the same pursuit at the same

time and place and under like conditions are entitled

to be governed by a general law applicable to all

who are so engaged.

II

... In order that a statute-be valid which

contains a classification of persona or things for

the purpose of legislation, such classification must

be a reasonable one and must be based on real dis-

tinctions in the subject matter which bears some

relationship to the objects sought to be accomplished

by the statute.

,I

... The classification provided for by the Act

is not founded upon any substantial difference be-

tween the two classes provided for. It denies the

plaintiff the equal protection of the law by impos-

ing upon plaintiff a burden which Is not Imposed

upon one of plaintiff's competitors which is engaged

in the same pursuit at the same time and under like

circumstances, and therefore violates the Fourteenth

Amendment of the Federal Constitution. It also con-

travenes Article I, Section 20, in that it grants to

others 'privileges or immunities which upon the same

terms, shall not equally belong to all citizens."

12 Am.Jur. 165 tersely states the correct rule as follows:

"A statute containing a classification which

attempts to give an economic advantage to those

engaged in a business at an arbitrary date as against

all those who enter the industry after that date is

not a regulation of a business in the interest of the

public, and unless otherwise shown to affect the public

welfare in a manner which will create some reasonable

basis for the distinction, is arbitrary and unreasonable."

Since the Article gives to those who were engaged in the

business of operating a commercial college at the time the law

was passed privileges and immunities that are not given to

those who establish a commercial college after the Act was

passed.,same is, in our opinion, unconst itu%ional.

Yours very truly

ATTORNEY GENERAL OF TEXAS

Hon. Tom L. Beauchamx July 13, 1939, Page 6.

George W. Barcus

Assistant

GWB:PBP

This opinion has been considered In conference, approved,

and ordered recorded.

W. F. Moore

First AsslrtszkAttorney

General of Texas

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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