                            Ausnnr     11.   -x%?&xs

                               February 11, 1964

Honorable H. I,. Bengtson
DefiUty Banking Commissioner
Depzirttient of Banking
John Hi Reagan State Office          Bldg.
Austin, Texas
                                         Opinion No. C-215
                                         Re:      Reconsideration     of c-187,
                                                  concernitig tihether~‘& ceme-
                                                  t~ry’~a;ti~dclatlon may make
                                                  prepayments Into lta per-
Dear Mr. Bengtson:                                petual care truet fund.
          Your request   fdr   an opinion        aeka the following   quee-
tions :
                 “1. 1May the stockholders     df      a ceme-
          tetip’aadoci&tIon   .ptiepay ‘funds into      Star
          Perpetual F&i+&Tz+uet.‘Fufid, either         in ad-
          vatice~‘of bales’dr   dtiring the life       of a
          tini&-pa#nent ‘oontraot rather than          at the
          time final payment Is made?
                 “2.’ If your answer to the foregoing
          Qi6ation is ‘Yea’;: then Where ‘&oh a’
          atirplua ~to”ti PerpetuaI C&tie Fund exieta
          f%m’auch payments, may credit be taken
          againtit’sudh.iiurplue   frdm~the aalee of
          ptiopert‘jl antStled#,to perpetual oar8 until
          the surplus haa been depleted?
                 I‘
                   3. Are aontributione’~ofi   donations re-
          ceived from the etdokholdere       oi a oemetery
          dad&iation    over and above legal require-
          menta to be ooneidered in the same light
          aa oontrlbutione    or donationa from third
          F;t$e;,,tmder    the provieiona    of 912a-18,
            . * .
        In response to these    ueations. it was held in At-
torney General’s   Opinion C-l 87 that prepayments into the
perpetual care trust fund provided by the provielone    of

                                      -1032-
Hon. Ii. L. Bengtaon,          page 2 (C-215)


Article  912a-15, Vernon’s Civil Statutes, could        not be made.
On reconsideration,  we have concluded that this        holding is
erroneous.
         The pertinent   portions of Article 912a-15, Vernon’s
Civil   Statutes,  prior to Senate Bill 121, are as Sol~lows:
                “Every cemetery association      . . :whloh
        has established      and Ta now~malntalnlng, oper-
        ating and/or conducting a perpetual care ceme-
        tery, and every atisoclation       which shall here-
        after establish,      maintain, operate and/or con-
        duct,~ a perpetual care cemetery wlthln this
        State pursuant to this Act, shall establish
         . . . an endowment fund . . . . The principal
        of auch’fund So? perpetual care shall never
        be voluntarily      reduoed, but shall maintain
                    InvlolabIe    and shall forever be maln-
        ci;emaiJ
          ained separate and dlatlnot       by the trustee or
        trustees from all other funds.                And the
        net Income arising therefrom shail’b;!        used
        solely for the general care and malntenande of
        the property entitled       to perpetualjoare   In the
        oelileterj for whlch’the fund 1s established,
                 but shall never be uaed for the lmprove-
        ietk’or    embellleliment af’uneold    property to be
        offered for sale.        . , .
              II
                   .   .   .


              “A oemetery ,.aaeooiatlon   whioh had establlsh-
        ed a perpetual oare fund may also take, reoeive,
        and hold therefor    &nd as ‘a ‘part thereof OF baa an
        Incident thereto’any    property,    real; pereonal or
        mixed; bequeathed; devised,      grAnted,  given or
        otherwise contributed    to it therkfor.
               “The perpetual oare fund authorized by this
        Section arWal1 sums paid ‘therein or contributed
        thereto are, and ekch’thereof   la hereby, expressly
        perniltted and shall be and be deemed to‘bh for
        charitable   and eleemosynary purposes.   .. . .
               “Bach perpetual oare oemetery shall deposit
        in its perpetual care fund an amount e uivalent
        to . . . a minimum of twenty cents (20 $ ) per
        square Soot of ground area sold or disposed of
        as perpetual care property . . .        A minimum
        of fifteen   dollars  ($15.00) per each crypt

                                       -1033-
.,   .




         Hon. H. L. Bengtaon,       page 3 (C- 215)


                  Interment right sold or disposed of as per-
                  petual care propert             and a mlnlmum of
                  five dollars   ($5.00 7 per'each niche Interment
                  right 'sold or'diapoaed   of as perpetual care
                  pronerty . '. .       Such minimum requlremehta
                  shall apply to ail property III whldh the ex-
                  tiIuslve right of 'sepulture has been sold or
                  paid for, whether used for lnteiment. purposes
                  or not.
                        "The deposit oSsuch funds in the per-
                  petual care fund shall be made within thirty
                  (30) days after the receipt   ofthe    final pur-
                  dhaae price .of each lot; grave, crypt, or
                  nidhe a6ld as property entitled     to perpetual
                  care.   . . .'
                      Under the'provlalona      of 'Artidle 912a-15, the perpetual
         care trust fund provided for therein tionatltutea                 a trustfund
         "for the benefit         and protectionof       the pub116 by preserving
         and keeping cemeteries          from be0omSng places of disorder,          re-
         proach, and desolation          In the oommunitles in 'which they are
         SitUatedc?.;      .Artia‘Le 912a-l5re'quire,s     certtilntml.nlmiium dep;o$.lta?
         to. be made.cJinto.the' perpetual caretrust            Sun&; The& provislohs
         mm@ .a$ fr%l>ows~:
                        "Each ,perpetual care cemetery shall de-
                  pbslt In ~lta perpetual care truat.Sund an
                  amount equivalent ~to'sudh amount aa may have
                  been"atlpulated    in any oontraot under which
                  pex+tual    oare.progerty  was sold prior ,to
                  March 15, 1934, plus a minimum of twenty
                  cents (208) per square foot of ground area
                  sold or disposed of as perpetual oare prop-
                  erty after Maroh 15, 1934, until auah fund
                  reaohea a minimum ofOne Hundred Thousand
                  Dollars ($lCiO,~OQO~OO),after~whloh .eabh such
                  oembt@r$ ahall deposit an amount~equivalent
                  to a minimum of ten cents (104) per square
                  Soot of ground area sold or diapoaed of aa
                  perpetual care property after Maroh 15, 1934,
                  until September 3, 1945.     Eaoh auoh cemetery
                  shall deposit In Its perpetual care trust
                 'fund an amount e ulvalent~to     a minimum of
                  twenty cents (20 B) per square foot of ground
                  area aold or disposed of as perpetual oare
                  property after September 3, 1945, until July
                  1, 1963.    A mlnlmum of Fifteen Dollars ($15.00)
                  per each orypt interment right for mausoleum


                                               -1034-
Hon. H. L:Bengtaon,,    page 4 (C-215)


        interment sold br disposed of as'perpetual
        care property atid a mlniniumsd Five Dollars
        ($5.00) per each niche internient right for
        columbarlum lnterment'sold,or       diePosed of
        as etipetual care property between March 15,
       ,193 & and July 1, 1963, ah&l1 alao'be placid
        in such perpetual care trust fund.         From and
        after July 1, 1963, each Budh ceinetery'ahaS1
        deposit In Its gerpetual care trust fund ati
        amount equlvtilent to's minimum of Tlfty cents
        (504) per square foot of &o+d:ai%&          sold or
        dbapoaed~of as perpetual care property afte?
        said date.    A minimum df Forty Dollars ($40.00)
        per each crypt interment right for mausoleum
        interment sold or disposed of as perpetual
        care groperty,    except that on crypts ticceaal-
        ble only through another crypt the minimum re-
        quirement ahall'be     !Pwenty Dollars ($20.00) per
        each'auoh crypt, and a minimum oS'Ten Dollars
        ($10.00) -per Cach niche IntWment~right         for
        colu&artv     Interment aold or disposed of 'aub-
        sequent to Jul$,l,     1963, shall al&o be'plaodd
        in such ,perpetual care trmat fund.        such niltil-
        mumrequirements shall Bp$ly to all prop'erty
        In which the exolualve     right of aepulture has
        been sold and paid for, whether used for in-
        terment purpoeea or'not.
             "After July 1, 1963, each agreement for
       the sale of burial apace in a perpetual aare
       cemetery shall eet out separately the-part
       of the'aggregate   amount agreed to be,paid by
       the~purohaaer which la to be deposited In the
       perpitual ~oare trust fund.     If the aggregate
       amount agreed to be paid bJr the purohaaer ie
       payable In lnatallmenta,     a&l amounta paid there-
       on ah811 be applied,   first*   to the part thereof
       not required to be deposited in the perpetual
       care trust fund, to t#he extent thereof,     and the
       remainder ah&U, when received by the Belier,
       be deposited   in the perpetiual oare trust $und+
       Any funds required to be 'deposited In Its pen-
       petual care trust Sund,by a aeller of bull181
       apace shall be so deposited not later than ten
       (10) days after the end of the 'calendar month
       during which they are received.       . . ."
        It will   be noted by the foregoing provlalona        that each
perpetual care    cemetery is required to make certain        minimum


                                -IO35-
Hon. H. L. Benitson',    page 5 (C- 215)


deposits-into   the trust fund and to maintain    a certain mlnl-
mumamount at all tlniea in the perpetual care trust fund.
mere IS no ptiovlslon tihlch prohibits     a cemetery aasoclatlon
from depositing    or malntalnlng'ln the trust Sund'amounts In
bxciss of th&~minimuin -ti@Quir@d; Furthermori,     there iti no pro-
vlaioti ivhlch either &preiasly or iriiglledly prohibits    requlr-
ed deposits from being made in advance.
        The construction  :placed on'tlie provleldna   of Article
9128-15 by Attorney Oeneral'a Oplnlon C-187 In'CIfSeot prohlblte
the demetery asaoclatlon    S&m nialntalnlng a'ptirfietual   trust -fund
in excess  6S the minimum required    to be mtilntalned by the,mak-
lng of ,prepayment&. It %a our opinion that'thls       conattitition
doea violence   to the purpose of the trust and such construction
is not atithorlzed.
       In Wood v. State, 133 Tex. 110, 126 S.W.2d 4 (1939), the
Supreme Court atated,the rule of'atatutory~oonatruotlon appll-
cable to gour questions as follows:
               "It la'the 'aettiCd law~that statuteti'
       should be'contittied      tie ati td carry out'the'
       L~glslatlve     intent,   and when aubh intent .la.
       ,oxic@ aaoertained,     It ahould'be glvefi effedt',
       &en thoUgK'th& literal          meaning of thb.tidedti
       used thereIn ta tiot~ SoSl&@di "Also,: statutes
       ah&Id nevdr be 'given'a'conetruction          that'       '*
       leads to tintiert&nty,       ltijutitioe, or oonftialbti,
       lS~lt,,la ,poaalble to construe them otherwise.
       . . .
        In view of the foregoing,  you are advised that the stook-
holders of a oemtitery association  may prepay funds into its  "'
perpetual care trust fund *ither ln'advance of sale8 or during
the life of the time-payment contract.
        In answer to yoursecond   question,  you are advlaed that
where a surplus exists in a perpetual bare fund from prepay-
ments, credit may be taken againat suah aurplua, providing the
minimum required is maintained at all times.     In detemihlng
whether a aurplua exists from prepaymenta, no part of the trust
fund reaulting'from   donations to the trust fund may be o'onalder-
ed.   Attorney General's  Opinion c-187 is modified to oonform
with, the holding herein.
                                  SUMMARY
            A~oemet~ry"aasociatlon  may make prdpay-
       ment of Sunda Into ita perpetual care trust

                                  -103.6-
.   .   -




            eon.    H. L. Bengtaon,   page 6 (c-      215)


                     fund, either in advance df sale8 or'during
                     the life df a titie-ptiyinent contract.. Iri
                     determlning whether a surplus exlats from
                     prepa$ment&, no p&tit of the trust fund
                     tieaultlng from dotiatlons to the t-at   fund
                     may be considered.
                                             Yours very truly,

                                             WAQCiONERCARR
                                             Attorney General



                                             ‘tie?’
                                                   Aeeletant
            JR:ms
            APPROVED:
            OPINIONcoMMITTlE$
            W; V; Geppert, Chairman
            J. C. Davle'
            Linward Shlvera
            Edward M@Y'ett
            APPROVEDFORTHEATTORNEYGENERAL
            By: .Stanton Stone




                                             -1037-
