            THEATTORNEY                       GENERAL
                            OF TEXAS
                           AUSTIN      11. TEXAS




The Hon. Zollie Steakley                      Opinion No. WW-860
Secretary  of State
Capitol Station                              Re: Whether the Secretary        of
Austin 11, Texas                             State should accept and file
                                             Articles  of Incorporation   with
                                             purposes directly connected
                                             with and related to the operation
                                             of a detective agency without
                                             requirin    compliance   with Sub-
                                             division 7 96)of Article   1302.

Dear Sir:

        This office   has considered    your opinion   request   which reads
in part as follows:

         “This is to request your opinion concerning proposed         Articles
of Incorporation  which include the following purpose clauses:

                 (a) To engage in a sales checking service
        for merchants,    proprietors,    and all other firms,
        persons,   or corporations     engaged in the sale or dis-
        tribution of goods, wares and merchandise         at retail
        or wholesale:   for the purpose of determining      and
        establishing  cash or inventory shortages       or both
        such sources,    and the cause and the amount of any
        such shortages    and the loss, if any, resulting there-
        from.

                 (b) Provide service to merchants,    proprietors
        and all others engaged in the wholesale   or retail sale
        or distribution  of goods, wares and merchandise,     to
        inspect, investigate   and determine cash or inventory
        shortages by said owners of businesses     and report
        findings to clientele;

                (c) To generally  conduct an investigation
        service to persons engaged in the retail or wholesale
        business as it relates to problems  of their personnel
        where these persons are suspected of being respon-
        sible for cash or inventory shortages   and detecting
        the cause or causes of said shortages.
The Hon. ZoPlie Steakley,       page 2     (WW-860)




        ‘“Article   9.15B of the Business     Corporation    Act provides in part
as follows:     1’0 D -any special limitations,   obligations,  liabilities, and
powers, applicable to a particular       kind of corporation     for which pro-
vision is made by the laws of this State. n .shall continue to be applicable
to any such corporation.       . .*‘*

        “‘It has been the departmental     construction  of this office since
the effective date of the Business     Corporation    Act (and prior to this ad-
ministration)    that corporations   organized for the purpose of operating
a general detective agency are “a particular kind of corporation”
within the purview of Article 9.15B, and hence must comply with Sub-
division (96) of Article    1302 of the Revised Statutes.**

         It is our understanding  that it is the position of the attorneys
representing    the proposed corporation    that the corporation  is not a
general detective agency within Art. 1302(96).

           There   are two questions     involved    in this opinion request:

          (1) Is the proposed     corporation       a general   detective     agency   within
Art.   1302(96).  The answer     is “yes”‘.

           (2) Has Art. 1302(96) been repealed           by the Texas       Business   Cor-
poration    Act?  The answer is “noon.

        Article 1302(96) authorines         the incorporation       of general     detec-
tive agencies and provides in part:

                    ““96. Private corporations       may be created
           under the General Laws of this State by the volun-
           tary association   of three (3) or more persons for
           the purpose of authorizing,     creating,    and operating
           a general detective agency to furnish detectives
           to make investigations    and reports of same to the
           proper persons,    to guard. watch and protect property
           of industrial plants, business     institutions and resi-
           dential properties   in this State; providing, however,
           no such corporation    shall be created with less than
           Ten Thousan,d Dollars     ($lO,OOO.OO) capital stock,
           and providing further that no such corporation         shall
           be inco:Ppora<ted as herein provided, nor shall any
           permit be issued to any foreign corporation         until
           such corporation    shall have executed a good and
           suffkien~ surety ‘bond or insurance policy (in the
           event of a bond to be signed by some good solvent
-   -




    The Hon. Zollie    Steakley,   page 3     (WW-860)




             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        olicy shall be in the
             sum of Ten Thousand Dollars       P$lO,OOO.OO) and shall
             be conditioned that the obliger therein will paytothe
             extent of the face amount of such surety bond or in-
             surance policy all judgments     which may be recovered
             against said detective agency by reason of the wrong-
             ful or illegal acts of its servants,     officers,   agents,
             or employees    comm’&ad by them in the course of
             their employment.    . -*’

             Basically,   the purpose of the proposed corporation         is to deter-
    mine the cause and amount of cash or inventory shortages,              and inves-
    tigate personnel    suspected of being responsible      for these shortages.
    Subsection (96) provides for the organization        of detective agencies
    “to make investigations      and reports of the same to proper persons,
    to guard, watch and protect properties       of. . . business   institutions
    . . . “. The function of the proposed corporation        is largely investiga-
    tive with the view of protecting the properties       (both cash and inventory)
    of various types of businesses.      These proposed activities        are within
    the scope of Subsection (96).     It is the conclusion    of this office that if
     1302(96) has not been repealed, then the proposed corporation            must com-
    ply with that article.

             The office of the Secretary  of State has construed Article 9.15B
    as requiring compliance    with 1302 Subsection (96) by proposed detective
    corporations.

            Art.   9.15B   of the Texas     Business   Corporation   Act provides     in
    part:
                      6.
                        . . .Any special limitations.       obligations,  liabil-
             ities, and powers, applicable to a particular           kind of
             corporation     for which special provision        is made by the
             Laws of this State, including, (but not excluding other cor-
             porations)    those corporations       subject to supervision    under
             Article   1524a of the Revised Civil Statutes of Texas, shall
             continue to be applicable to any such corporation,            and this
             Act is not intended to repeal and does not repeal the
             statutory provisions         providing for these special limitations,
             obligations,    liabilities,    and powers.”    (Emphasis    added)
                                                                                -      i



The Hon. Zollie     Steakley,    page 4     (WW-860)




Article   9.16A   of the Texas   Business     Corporation   Act provides:

                   ““Subject to the provisions     of the two last
          preceding Articles     of this Act and of Section C of
          Article 2.02 of this Act and Section B of this Article,
          and excluding any existing general act not inconsis-
          tent with any provision     of this Act, no law of this
          State pertaining to private corporations,       domestic
          or foreign    shall hereafter    apply to corporations
          organized under this Act, or which obtain authority
          to transact business     in this State under this Act,
          or to existing corporations      which adopt this Act.“”

          Article 9.15B. then, continues the applicability       of any special
limitations,    obligations,   liabilities, and powers, applicable to a par-
ticular kind of corporation        for which special provision is made by the
laws of this State. However,          9.16A provides that subject to Art. 9.15,
and others, no other law pertaining to private corporations           shall apply
to corporations      organized    under the Business   Corporation   Act.   The
question becomes,       then, whether or not the existing law under the
terms of 9.I5B remains applicable to the proposed corporation,              or
whether Article 9.16A has repealed the existing law. [ 1302(96)]

          It is the opinion of this office that 9.15B is applicable.       Article
9.16A explicitly provides that it is subject to the operation of Art. 9.15B.
Article 9.15B continues the applicability        of any speciaI limitations,
obligations,    Liabilities, and powers applicable to a particular kind of
corporation.      The existing law [ 1302(96)]    places certain obligations
and limitations     on detective corporations.      Each of such corporations
must have $ lO,OOO.OO capital stock before it can be chartered,            and also
it must place with the Secretary        of State a $10,000.00     surety bond
conditioned upon the acts of the employees          of the corporation.    This bond
provision was designed to protect the public against wrongful or illegal
acts of employees       of this type of corporation,    the nature of which is sus-
ceptil-zle to abuse.

         In writing thi.sopinion this office is not unmindful of comments
of the Bar Committee,    V.T.C.S..   ppO 428 wherein it is stated that in
the opinion of the Bar  Committee     1302(96) was repealed by the passage
of the new Corporation,   Act.  In the event that the meaning of a statute
is uncertain  or ambigu.ous, and in the absence of a judicial      determina-
tion, executive or departmental     construction   of that statute is persuasive.
See 39 TexJur,    Sec. I26. ppQ 235.   The Office of the Secretary      of State,
since the passage of ?he Texas Busmess         Corporation Act, has construed
that 1302(96) was not repealed by that Act,
The Hon. Zollie    Steakley,   page 5   (WW-860)



                                 SUMMARY

                   The proposed corporation    is a general
                  detective agency within Art. 1302(96),   and
                  Art. 1302(96) has not been repealed by the
                  Texas Business   Corporation Act.


                                              Very   truly yours,

                                              WILL WILSON
                                              Attorney General      of Texas




                                              BY

                                                     Assistant   Attorney   General

BES:lmc

APPROVED:

OPINION   COMMITTEE:

W. V. Geppert, Chairman
R. V. Loftin, Jr.
W. Ray Scruggs
Bob Rowland

REVIEWED   FOR THE ATTORNEY             GENERAL
BY:
     Leonard Passmore
