No. WW-0031 (1957).

• Case Date: March 04, 1957
• Court: Texas

Texas Attorney General Opinions 1957. No. WW-0031 (1957). 1March 4, 1957Hon. Wade Spilman, ChairmanHouse Judiciary CommitteeHouse of RepresentativesAustin, TexasOpinion No. WW-31Re: Constitutionality of House Bill No. 13, 55th Legislature, relating to charges that may be assessed on small loans.Dear Mr. Spilman:Upon initially perusing the above captioned Bill several items were noted that appeared to be typographical errors. Your attention was directed to them in a letter to you of January 29, 1957, a copy of which is attached to this opinion. Subsequently, the Honorable Tony Korioth on behalf of the committee advised this department in writing that the assumptions were correct, and that our opinion as to the constitutionality should be based upon the language set out in our letter to you. Accordingly this opinion will be based upon the Bill as so modified. The basic subject matter of the proposed Bill has been the subject of several prior Attorney General's opinions.(fn1) The Bill fixes a maximum rate or ceiling upon all charges that may be received, except by such persons as are exempt from the Act, on all loans which have an original loan principal of $500.00 or less. The proposed Bill does not authorize any charges whatsoever, but merely places a limitation upon all charges that may be assessed by persons subject to the Act.(fn2) In short, it is a limitation and not an authorization Bill. Some of the prior rulings of this office have been based upon Bills that authorized certain charges in addition2to the constitutional rate of interest.(fn3) Several of these bills have been held to be unconstitutional. See Attorney General's Opinion No. MS-187 where it was held that the substantially identical feature set forth in House Bill 573 of the 54th Legislature was constitutional. The Act is not without its unconstitutional vices. Article III, Section 35 of the Texas Constitution requires that all subjects included within the Act be expressed in the title thereof. "The purpose of the constitutional requirement is to reasonably apprise the Legislature of the contents of the Act."(fn4) The caption of the Bill in question enumerates a number of specific provisions, which do not logically include other provisions of the Act,(fn5) while it does not fairly apprise the Legislature of the presence of the provisions enumerated in footnote 5. These provisions are therefore of doubtful constitutionality. Section 36, Article III of the Texas Constitution provides, "No law shall be revived or amended by reference to its title when in such case the Act revived or the section or sections amended shall be re-enacted and published at length." Section 1(e) of the proposed enactment attempts to amend a mumber of statutes therein recited. The attempted amendment comes within the proscription of Article 36 and is void.3The loan business as a class may be regulated.(fn6) Section 1(d) of the proposed Bill, though, exempts certain businesses from the purview of the Bill.(fn7) If the proposed legislation, by such exemptions, discriminates against persons of the same class who are similarly situated, then the legislation is invalid.(fn8) Regulatory statutes in other states almost invariably exempt from their provisions not only State and Federal banks, but also trust companies and building and loan companies, and such Acts have been upheld.(fn9) The Bill, however, while exempting trust companies doing business under the Texas Banking Code of 1943, under Chapter 7 of the Insurance Code and under Article 1513, Vernon's Civil Statutes, leaves trust companies doing business under Article 1303b subject to the purview of the Act. Article 1303b companies are trust companies in the same sense as Chapter 7 and Article 1513 trust companies.(fn10) Therefore the Act unjustly discriminates against persons of the same class similarly situated, and the trust exemptions are void. Noting the absence of a severability clause, it is doubtful that it is the legislative intent to enact the bill without exempting trust companies, since trust companies belong to the same class of lending institutions as the exempted businesses. The Act therefore falls in its entirety.4Since this vice can be easily remedied by amendment, and since a fair answer to the questions propounded requires examination of further sections, other items raising substantial questions will be discussed. There are a number of problems presented by reason of the fact that Section 21 makes every violation of the proposed Act a misdemeanor. Each provision of the Act must be carefully examined to see whether it meets the stringent requirements of the due process clauses of the Fourteenth Amendment of the United States Constitution and of Article 1, Section 19 of the Texas Constitution, and the provisions of Section 10, Article I of the Texas Constitution, wherein it is stated:

"In all criminal prosecutions the accused shall have speedy public trial by an impartial jury. He shall have the right to demand the nature and cause of the accusation against him, and to have a copy thereof. ..."

These two provisions set out certain criteria regarding the certainty in definition of an offense which any enactment must meet which purports to be a penal enactment. Such criteria would not necessarily be applicable were the violations not denounced as criminal. Several of the provisions are unconstitutional for failure to meet such requirements. The familiar rule is:

"A statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must guess as to its meaning and differ as to its application lacks the first essential of due process of law."(fn11)

Article 6 of the Penal Code provides:

"Whenever it appears that a provision of the penal law is so indefinitely framed or of such doubtful construction that it cannot be understood, either from the language in which it is expressed, or from some other written law of the State, such penal law shall be regarded as wholly inoperative."

Article 3 provides:

"In order that the system of penal law in force in this State may be complete within itself,

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and that no system of foreign laws, written or unwritten, may be appealed to, it is declared that no person shall be

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