                                                i


                             OFFICE       OP

              THE ATTORNEY                 GENERAL
                           AUSTIN.TEXAS
        nn                                      Ovarruled by O;k587-a
                                                /(.>, : i:fd I'

                Lockhsrt, Chsirrlan
Ronorsble CI.;:;.
Rosrd of Insurance Commlsnioners
Austin, Texas
                          Opinion No. O-4587
Deer 7lr:                Ile: Incorporationof title insur-
                               ance companies under Article
                               1302a, as emended; powers and
                               duties of the Board of Znsur-
                               anca Commisaionarsto prescribe
                              rates and policy forms for title
                               insurancarisks outside of Texas;
                               deposits and reserves required
                               of suoh oompanles;their liabil-
                               ity for franohise taxes; filing
                              fees required; ellgibllltyof
                               property to be reodved  in psy-
                              ment of oapltal stock and sur-
                               plus.
          We have your letter of recant date requesting the
opinion of this department on the above subjects,whioh let-
ter sets out eight separate questions. We also have your
supplementalrequest maklng certainadditions and explana-
tions in oonneotionwith question 7 and adding a ninth ques-
tion, whioh question No. 9 is divided into twelve subheads.
             Your original opinion request reads in part as fol-
lows:
         W!i%isis the first title insurance oompsny
    attempted to be formed under Artiole 1302a a8
    amended (Acts 1929, Alet Leg., Reg. Sess. p.
    77, Ch. I+0as amended by Acts 1931, l&d Leg.,
    Rag. Sess. Ch. 269 and by Acte 1933, l&d Lag.,
    Reg. Sess. p. 750, Ch. 222). For our guidance
    in the incorporetion,licensing,.examlnation   and
    regulation of this company, es wbll as similar
    ones which may be incorporatedin the future end
    companies which came utier the new legislation
    above cited upon its enactment,we request yolrr
    opinion upon the following points in oonnectfon
    with the constructionof Artiole 13028 as it
    now stands: n
         Your questions are hereinafterstated and answered
individually.
             Question No. 1 reads as follows:
Hon. 0. B. Lockhart,      page 2

            nDoee thle Board have the legal power and
      duty ot prsearlblng    polloy form5 for ~150lo
      writlag titla   insuranae outalde the State of
      Texas by oompanles operating under Article
      1302aV
          We assume that your phrase “title       Insurance outside
the state” means title  insurance oontraots      medo outside the
state on property outside the stete.
             Seotloua   Nos. 3, 4 end 5 of Artiole   13020 reed em
r ollowB t
             *Sue. 3. Corporations      80 formed, au ml1
      ea foreign oorporatlons      en8 those oreated under
      Subdivision    57, Artiole   1302, Qr tha Revised stat-
      utes of 1925, or under Chapter 18, Title 78, Be-
      vised Statutes of 1925, or any otheo law in 60
      2ar as the buolne5s cd either may be a tltla ln-
      suranae bualneso, eholl operate in Tex%s, under             *
      the oontrol and sunsrvielon       and under suoh nnl-
      form rules and regi&tlone       srS to ioraw of poll-
      ales end underwriting oontraotti~ and premlume there-
      for, ae may be from time to time.prascrlbe4         b the
      Board of Znauranoe Comdsslonere         of Texas aJJ
      no Texas or foreign     oorporat ion, whether &or-
      peroted. under this eat or any other law ab the
      State of Texan, shall be permitted to Issue my
      title   polioy ar mertg8go oertliloate       or under-
      OrrLting oontraot on Texas mepertz        other thus
      under thla sot ana under euoh rules and rewtla-
      t1ons.    X0 policy of title     lnsuranae af guGfmtiee
      of any oheraoter on Texue titles        shall be lseued
      or valld unless mitten       by a oorporstion    oaarply-
      log with all provisions      oi and authariaed m:
      quellfled    under this aot.     Before an rate we-
      vfded for herein shall be fixed or o L          ed, roe-
      sonable netloe shall lsaue~, and c hearing atford-
      ed to the oompanles ai’feoted by this aot.         Every
      oampuny doing business under thls act shall tile
      with the Board or Insurance Odseioners            the
      form rb guarantee, oertlfloate,       mortgage polloy
      ar any polloy of title      lnsuranos before the same
      shall be Issued, and the form must ba apwoved
      by tho Board, and be unlfara as to all compaaiee.
      Under no cironmstenoes map asp oa1~0n~ use aBy
      ?orm until the same shall have been ausrivved bf
        he Boar&
            *The Board of Insurance Comailssionere &all
      have the right and It shall be its duty to fix
      ati promulgate the rotas to be oharged by MI?
      poratlons created or opereting      hereunder ir
      premiums on polloles   or certliloates    and under-
      wrftlng oontraote,   .The rate Zixed by the Board
Eon. 0. P. Leekhart,    page 3

     shall be reaaohable tothe     publle aad. non-eonfle-
     oatory sa to the oaq~ny.     For the purpose af
     aol.l.eotIng data on yhhh to datemIne the proper
     rates to be iixeb,   the Boar& ahall have the
     right to require the ooqanies      oporsting   Iu
     Texas to sa&$t.suah    lnfomatlon    In suah form
     as it may d6iPl proper, all Ihfomation       as to
     loss expsrIenoo,   expense oi operation,     and other
     material matter for Its oonslderation.
            “Ratea when once fixed shell not be changed
     until after a publIo heaxIng shall be had by tha
     Board, after proper not100 sent aih0t       to all
     oompaniea interested    In writing this buslnera;
     and after public hotloe in such manueras to
     give fair   publioity  thereto for two weeks In ad-
     vanoe.    The Board must oall suoh heaxIng to oon-
     e$der rate ehmgee at the re uest of a oompany
     writing tit10 lnauranoe,~or     i!r the Board thinks
     thst a ohango In rates may be roper.        zany ecm-
     pany or other pcmeon Lntoreeto ii , reeling InJured
     by ang aotlon of the Roard with regard to rates,
     ahall hare the right to tile a,suIt In the DIa-
     trlot Court of Travis ~Gounty, wIthin thhfrty’diya
     after the Roard hae made such order, to review
     the oatIon, In which auIt the oourt meg entor a
      udgment correcting    the Rosrb’s order and ilx-
     3,ry euoh rntes ae may be proper, OF atfIrmIng
     the eotion o? the Board,      Under no ciroumstanaea
     shall any rate of premium be oharged for ,polI-
     ales or underwritIng oontraots bi.frew         fkola
     those iI@     lina promulgated by the Board, or
     those fixed In a final judgment of the court
     ae herdn provide&
          "Sea. 4. Gorporations organIze,b under the
     lawo of any other State ahell,be permitted to
     do business In this State on exaotly the a~’
     bssis end. subjeot to the sams rules, regula-
     tions adil priosa and supenlefon   a8 fIxed for
     Texas oorporationa.
           “980.   5.   Any foreign or Uomestio oorpora-
     tion issuing enr form of pollog or u&erwrlt-
     lng oontreota or chargingany prtnniumrate8 to
     the publIo am either ownern' or mortgageo*s
     oertiilcateaor underwrItingoontracta on Texe8
                    other than forms and rates ~mfi
                    d of Xnsursnee Gommlsaiormrs here-
                    1 remit   St8  right to 40 b&Iiluaa
     In Temaa; but l&&e &all not be ooaatrued a8
     t;;;;~g;g,g”~g               ~~~~~t~?&~~I~
     neem under this aot anA*doIng a genoral tI$l*      *
     Insurance busllnees ror the publIo In this Stat+
Eon. 0. P. Lookhart,     pega 4

     far  rd.nauringor  underqltlng allor   anypart
      0r the buaInaa8 o? an+her auah oompany to be
      the same as the ahare to the pabllo.*  ?l#QhaaIa ours)
             ‘In the oase a? Hew York Title k Mortgega Company Y.
Tarver,     51 Fed. (2d) 584, a three judge Federal oourt in oon-
atruing     Artiole 1302a held as iollowsr
             ‘That said Title Inauramta Aot 1s held to
      only relate to and iiieot     ?ona o? polloles and
      prsmlum rates oi auah inauran0o, eto wIth3.n
      the state o? Texas, the 60Ing oi bus~n~sa with-
      in tha atate o? Taaaa; m&to be oxtra-terrl-
      torlal   In Its erreat, lrnd aamo oannot artrot tha
      form o? polIolee    in use br oomplalnantr In other
      states than the state o? Texas fztrrates at pre-
      mium ohargea on polioles     wrItton outside tha
      atdt0 o? Texas not to be PSriOWed within this
      state.    The atato of Teas hss the power to say
      what kind 0? title    Inspran00 bualneas shall k
      pss-formpd in the state of Texas.     Bothwoll et
      al. I, Buokbee, &Tears Go., 275 u. S. 2 74, M 8.
      0% 124, 72 Ly .EQ. 277.”
             This opinion was wr/tten on a motion Sor an inter-
  lwutorp   Injunction,  and the oourt*a order was auatalmed by
, the Supreme hurt of the Unltod States in a memora8dat8 opln-
  Ion reported   in 76 L. Ed. 922~.
           The laat sentonoe In the ?Irat paragraph at 8aotIon
 3 above emphasized I? atanaing 8lona sight be bjord ewxgh
 to oover polIap rorma wed outsldo a? this Stato in oonneo-
 tlon wfth out o? state property,   But tho atatiute 8hould %a
 oonstrued from Its tour oornera,   In the 0as0 o? G~erolal
 Standard Insuranoo Campany v. Board o? Inmraoo     CammlsaIem-
 em, 34 9. WI, (26) 343 (error refused),  the court raid:
            *The &ard,aan axerolse on4 th0 authority
      oonferred upon It by law an ollar and unmiatak-
      able terms and will not be deeps to ba given
      by implloat%on nor can It be extond0d by Inter-
      enca but must be strlotlp  ~onstruad.*
              Your questIon   No, 1 Is amswerod In the nagative.
              Tour question   No, 2 reads aa ?ollowar
            VfDoes this Boerd have the legal power and
      dut   o? presoi+bing premlsm rates at wl&h oom-
      pani ee operating under artlole  13Q2a shall write
      title  Insuraa0e rlakn outside o? Toxaa?*
           Wa assume that your pa0    *tit18 Inauranee rlaka
 outside o? Texaa*‘maana title  MuraM     (10Ptraota mado out-
 side the State on property outside @ the Stat+~:
Elm. 0. P. Lookhaxt, pago 5

           You will note that Saotlon 5 of Axtlele 1302a pm-
video a penalty (fertelture of right to do bWI~a8    in Tens)
f w any oorparatlon  ahar&ag  rates other thak those praaexlb-
od by tha Board on polIoIea on Tams picOpextlq It pmVIde8
no penalty for oharglng rates not 80 approved on property
outside or Texas.   Fox t&la reason and for the raa8ona sot
out under question Ro. 1 your seaond question Is answered in
the negative.
             Your question No. 3 with subdIr2sIon     (0) thereof
omitted    reads as r0u0wsr
              “With reapsot to the QepOsIt or oaah os
        aeouxltles,   regulxed by Seotlon 6 of the Aat
        equal to one-fourth    of tho authorized aapltai
        at the oorporatlon:     (a) Should this deposit k
        oonaidered a part of, or required In addltlon
        to, the aepltal steak of the Company? (b) In
        Saotlon 6 the daposlt la roqulred to be kept
        ‘with the Stab’Ea“rd~~~s~hs~~~~~~~~~~~~
        tory as arrr a nsme
        prorod br the Soard M Inaaranee &vmlsaiwera*,
        whexoas in SootIon 2 as anmadadtha aglpp(luiea
        axe granted   osrtain prlvllagee    with respaot to
        Inveataiant of portions of their oapltal atosk
        In abstraot plants in exowa of 50$ of the oap%-
        tal @took, provided that the7 maintain *with
                                          ’ the ala%Iam de-
                                           a as rot&&d .Sn
                                            OODrPlot be met
        by keepping tha deposit under the joint oantrol
        at tha State Treasurer and of thla Board?. . .
        (6) Can the seourltlea     In this deposit IawfulLy
        aonaist of real estate,     or notas or other obll-
        gationa aaoured by lten upon raal aatats        In Tmaa
        or other states where the ocmpany la ad&tad         to
        operate, or bath In Texw and &bar states?*
             Subaaotion (e) of this question la not a.nswm&,
sinoe    your auppltiantal letter dlraote that it bo mItted.
             seotian   6 of &dole   1302a reads as ~o~ows:
               “All oorporations,  QometIo and roroign     rrit-
        Ing title   or mortgagoo polioias  or uud*rw&ng
        eontracts must at all times have and ke.ep on 6s.
        posit with the State heaaury air mah other da-
        posltory   aa may be namedby ,auoh oorporatlon    and
        approved by the Boar% at ~Inaurenoa Comm,l8ai~nera,
        either oash or first mortgsga notes or ~auoh&ho
        aaourltiaa   as ara now admieslbla for lmes~~
        bp lIte Insuranoe aolspanlea under the iswe af
        this 3tate    to an smeuut eqtil ts ona-iomth     @
        the authorized oapltsl    0r auah ooxpmatlos;   pa+
        rided,   however, that auoh doposit *all    in na
        evoat rxow4 the sum ef ~lOQ,~@CC&&*
        Hon. 0. P. Lookhart,     page 6                  .


                   suoh reotion aoes not cay that the doposit e&U.
        be made out of ae8eta separate from and in adaition to thoao
        asaeta used in payment of oapital steak.   You will notie*
        that Section 10 requires the aoatnntiation of aertala rssarv.8
        separately and apart from the oapital oS the a-any.      That
        the Legislature  railed to meke suoh a requirement es to the
        deposit under Section 6 is signlfioant.
                   Neither does Seation 6 roqulre apeaifioallp that
        the deposit be msae out of ospital  asseta.  It merely meaaurea
        the amount of the deposit by the'smount of the authorimed aapital.
                   In answer to subdivision (a) of question No. 3, wu
        are advised that the deposit may be mede out ai any asset8
        available  whioh otherwise meet the requirements of sald Seo-
        tion 6 of Artiole 1302s.
                    In   eonneetion tith subdivision  (b) & pueation 3
        we aall pour     attention  to the rule that separate prolrlsi8ollcl
        ~of a statute    will not be aonstrued as eonfliqtlng  if auah
        construction     aen be rraaoansbly   avoided.

                    We also   oall to pour attention      the fact that at tha
        tfma .of the amendment to Seotion 2 (Aotr of 19331 43rd Leg.,
        p, 750) whioh reit4rO to the Wmmlssioner 0r Zn8u.ranoe thqre
        was oo.offlosr    in Texas by that title.       The otatute referring
        to auah oi'ifoe was rep8aled by the Acts of 1927; 40th Leg.,
        p. 329, which oreated the Board of Insurance QtisdoMr8.
        All powera, duties,     exu'prerogatlrea    oi the QaP8intioner of
        Inauranae had prior to 1933 been transferred          to the Board of
        Insurance Oamn.lsslcmere by Artialo 4862r, Revlard Civil Stat-
        utaa.   It seems reasonable therafdre       that the reference In
        Scotion 2 to the Commlseioner of Insurance was intended to
        ba to the Board of Insurance So+uv&seioners.          This isot,  in
        eonneotlon vdth the reference to So&ion 6 of the dot, idi-
        oats8 thst all suoh deposits should be kept a8 provided ln
        aaid Seation 6. We see no oompelllng reason'for            keeping the
        individual    deposits in alfferent     nmmer&      We Bee nothing to
        require that the aeposlts be kept under olnt ~control of the
        State Treasurer and the Board.         Subdivie t on (b) of question
        3 Is answered in the negativs.
                   In subcivision    (d) of QUek3tiOn 3 the phraSS "OT
        othsr obligstlons*   is too indefinite   to fOTm a basis upon
        whiah this ofriae can formulate an opinion and this opinion
        will attempt to answer suoh question by disregarding      auah
        phrase ana oonslaering    the quemtion with suuohphrase omitted.
                   Se&ion 6 of Artiale 1302a provides that the da-
        posit shall be “either oeah, or first mortgage notea or arueh
        other securltles  aa are now adsd&Mble for Investment by life
        insuranoe companies under the laws of this state."
                     The referenae to securities   which twe admiesible
    \   for   Investment by'llfe   insuranoe  eompaniea rofora in our

I
                                                                        800 I
Hon. 0. P. Lopkhart,        pa60 7
                   .
                                                        /
opinicui to Artiole 4725 of the Berlaed Olvil Statutes whlah
apealriea the seouritiea  in whlah luah eomp~ea    aa9 fm,eat.
Suoh atatuto begina as iolbtat
              "A life laauranae aompany organlard &a
        the laws oi this atate may invest In or loan up-
        on the iollowlng   securities and none ethera.*
           It is true that Artiole 4726 sets out oertaln uan-
dltlona under which such oompanlaa may hold Lana coavey real
estate   but auoh artlolee does not refer to auoh real estate
aa an i nvestment.
          It is therefore         0ur opitthtt that We muat look ta
Article I+725 to determine        the “other seouritieaw  reierreb
to In Section 6 at Artiols         1302a.
             said drtiele 4725 autheriaea          the iztvestmant in
rirst    mortgage loana aa followat
              "St may aleo mclke loane u on first    llana
        on'Tsa1 estate the title    to whiYoh,Pa valid and
        the value of which le &9$ mare than the amount
        laeneh thereon.*'
           l!bero are other reqitlruaente as to inauranee ,on
buildings aonatftutiag   a,part of the value el'suah real ea-
tats.   %ham is no repulrement that the aeaurit9 for auah
real estate loana be loaated.in     Texas,
           While Artlole 4724 math,orlzrs~i~vwHment    in real
aatete lcena it dose net aufhoriee   the pur0haae of reel l*
tat0 at4 an imestment.   In this sonueotlw     you are rdarmd
to our opinion No. O-4556 addressed to you aad holding that
real estate IS not a *aeaurityn *bthln th6 maetint of A&.iale
4720,
           In aahaeotion pdth aubaivialon   (a) af'questloll 3
YOUewe advised that the depmit     required In Seatlon 6 M
Art3.cle 1302a may lawfully oonalat ai notes atieured by first
llena on rael estate,   and it ia lmatarial   fm the purpoa)
Q? auoh deposit whether suah reel eatate ia Moated ln Texea
OT in aoae other state in whloh tha aompanp ia permitted to
operate,
           It is further out opinion that auah deposit -9
not lawfully aauaist of the Teal estate itself  Tegardlaarr
of the loaatlon of suoh real eatate.
             Your quaRtionHo, 4 reads           a8 ioldowat
             *IS   th. 5%   Tt8tTVt   Oi   f&&t &WONS       &UWhUI
        preaoribsd     in Station 10 cxt the Aat, appl%oabie
        to pTdltSl8      UpCm bualnaaa e&&dde of Toxaat
        AR& %f stop    and ii you should hold that the aam-
        patties may    lswWll9 charge, 01p that t&U Bear&
Hon. 0. P. Lockhart,   pa&o 8

     may lawfully preeorlbe,   pramlum rat06 ior tibia
     lnsuranoa risk written on property outside or
     Texas different   from prmiuza rates so preaorikd
     or charged in Temr, then 1s rruah 5$ pramlum re-
     same on premium from business outside of Toxa8
     to be computed upon the premiums actually    charged
     and received upon suah foreign business or upon
     the different   rates as presodbed   by this Corn-
    ,.&vslon and chtirged upon/Was     business, whathar
    .hlgher m lower than the foreign rates?n
           Said Section   10 of Artiole    1302a read8 in part 1111
s0110ws:
           Wvery oompany doing’s title   lhsuranee buai-
     naas under the provisions   of this act ehall ret
     aside annually as a reserve 5% of its gcoae prr-
     mlums so oollected,  bafore any dividends M
     paid, the .totals of such reserve shall 111)var
     beeiegrired   $0 sxowd a totaL rasarva oi #lOO,-
         . . . . . lt
          Suoh provisioh    roqtires  tha loaumulatlon of a fund
for the protsotion   cd pollopholdere   ard should be oonstrued
so as to beat aooampliah that purpose.      The latter part oi
Section 10 provides;                                             .

            “Funds aooumulated undsr this provision
     shall never be wed ior the payment ot any ob-
     ligation   other than those oonneoted with title’
     lnauranoe,   and, la the event of the insolvency
     of .a ompany, the fuud hereby provided,&all bo
     uaed to protect title    insuranoa polloyholderr
     even though there be no acorued title     lhsuranoo
     claims and even though there be unpaid obliga-
     tloxp 0r other sorts.”
            You will note that the latter   quotation does not,
cay that ths funds shall be used to protect Texas title          In-   .
mranoe policyholders,     but merely says *title    Insuraaco
po3.10yholders.H    sr the rund  is r0r the proteotion    or all
pollayholders    it oould conoelvably  bs very inadequate for
that purpose if the oompany did a large business outside of
the State and the reserve was acoumulatcd from Texas bueinass
only.   The statute does not say that the reserve 8haU be set
aside from pxemiume on Texas business only.
           St la our opinion that the 5% reserve provided In
said Seotioh 10 of hvtiole 1302e should be sot as168 frgn
all premiums rotually  oolleoted.
           Your Question hT0, 5 reads a8 r0u0net

           “Are oompanlea Bperating       under Artlola
     1302a properly    taxable   undar Artlole   7084 or
            0. P. Lookhart,     pg.   /9


            70647 It has been the oonotruotl~n    si this Ds-
            partment 00 far that 13020 osmpanies are all
            taable   umler Astiole 7084 and that Uhapta 18
            oaauolty oampanieo doing e title   lnouranos
            busl.orso are taxable under Art1010 7064. 10
            this construction   oorroot?*
.
                 Seotion   7 of Article    lgOZa, reads   as tollowst
                   Vhe general levm applioable    to paymant OS
            filing   fees and trenchlee   taxes of oarporaticmo
            having a oapltal stosk are hereby mods ap lloa-
            ~e;;oo~m~satlono       ocuulag uadar the pr Qvi OiOUO
                            Domestio oorporatlons   operatirrg
            under this iaw shall not be required to pay pm-
            shun taxes. n
                 Arjilole -7064 of the Revised    Civil   Statutes   ppo-
    video    in part as followor
                  *Every Lnsuranoe oorpomtion,       Llmyd’o, Qc
            sodproealo,     and eny other srgaaisstien    ar o(poI
            sarn tranoaotlng    the business of fir.,    matins,
            smdne inland, aooldent,       orsdit, title,  livs-
            otosk, fidelity,    guaranty, sursty, oaoualty,      ce
            nny other kind or oharaotcts of lnaeranoe busi-
            naoo othar than the business of life lnOPan0m,
            and other than rratemal bansfit lsormletlms,
            within tbio state at the tlmo cd riuag lta an-
            nual otatawnt,     oimll report to the Bcasd oi I*
            ourance Oommlodonoro the groem amount of premiums
            reoelvad upon propert      loaatod in this Ststs cm
            on risks lasated in tL o Stoto dmlng ths prs-
            Sam .j+axeO.”
                  mlole       7064 or ths Revised Civil   Statutso      pro-
    vides    In pnrt aa iollswo       a
                  %very tnsuranoe 0erporation,      LloyB~o, 0s
            reoiprooala,    and any other orgonisatlsn    Br oea-
            aern tranoaotlng    the busloass of fire,   maurino,
            marina l&ml,      aaoldant,  oradlt, title,   llrs-
            otosk, rldelltg,    guaranty, mrety,    Oaauelty,    QI
            any other kind or aharaoter ai i~uraneo         buoi-
            neoo other than the businaso oi lit0 isauxaass,
            and other than fraternal     bsaei%t aooooirtb5o,
            wlthln this State at the time of filing       its a&-
            nual statement, shall repart to the Board or In-
            ourenoe Goomls~ldnar8 the groao QaoupLtisf preriUi0
            received upon prbperty looat*d,in      this Stat@ or
            on rlekm loaatsd in this State during the pm
            oedlng year, and cash of auoh insuranse oerrloro
            shall my an annual tqx upon auoh @ass praaf\gl
            reosipts   aa r0xmst     . , .*
Hon. 0. P.   Lookhart,   page 10

          you wll,l note that this statute   levies  e tax on ln-
auranue aarrlers generally with oertaln    axoeptlono whlah tar
$8 based on gross premium recai ta.    He are of the opinion
that the tax ievled by Artlole s 064 Is the premium tax re-
ferred to in Sectim '2 oi Art1010 1302a and that domeetlo oor-
porations operating under Artiole 1302s are not requlred to
pay the tax levied by Artiole  7064.
            It is true thst Artiole   7064 baa been re-enaoted
with certain anendmenta sirroe the passsge of Artlelo 1302e,
but In our opinion subh aotion did not affect       the spaoial pro-
vision or Seotion '7 of Article    13020 regarding pnymant of pre-
mium taxes.    In this oomeotlon    It Is slgnirIoant   that at the
tlme or the orlgl~l     eneotmant or Article   13020 (erraoti+e
date, February 29, 1929) Inoludlhg said Section 7, the pre-
mium tax statute than In foroe,     (Aota 19111 32nd Leg., ah.
108, H. B. 292) provided ror suoh a tax on lnaurenoe aompanlea
doing a title    lmuranoa bualness.
          It lo rurther    ux opinion and you aro so advised
that In aooordanoe wlth $ otlon 7 ad Article  1302a, all om-
poratlona oomlng under the provldo~    of &t$ole  1302a are
taxable under Artlqle 7084 whleh provldeo tar general fran-
ehlse tnxes on ocxporatlona.
           Are Chapter lg oaaualty aompanlea doing a tltla
Insurance bua$ness'taxabla   undar Artlole 70640 The answer
to aueh question depends upon whether or not such crampties
are *operatlr& under* Article   13028 80 so to be exeegtad‘trom
the premium taxes by tha~tsma of eald Seotlon 7.
           It is true that suoh qaaualty eompanlea opernta
under the supervIsIon of the Board of Insuranoe %mnnIaolon-
ers as provided in Artlole   U02a 80 far en the rates and
policy f'orm used In their tltlo   lnsurenoe bualneas Ia odn-
oerned.   But under the provisiona   ab Artiole 4989 the ISSDL
anoe of title   Insurema lo only one of the numerous'purposes
ror which suoh oaapenloo xay be lmmrporeted.      Suoh oaoualty
oompsnieo are subjaot to the numerous statutory    provlololu
of Chtpter 18 of the Ravlsed Civil Ststutes entitled      General
Casualty Gompanlesl~ and therefore  .opsrate under Artlole 1302e
only to a lImIted exteat.
           It lo our opinion and you are so advised that,%&+
tlon 7 of Article  13020 does not exempt general casualty oom-
panics organized under the prwla$ons   of oa$d Chapter 18
from the taxes Imposed by Art1ol.e 7064 even though auoh aox-
panles are authorized to write title  Insureme as wall as
general -casualty lnsuranoa.
             Your question   Ho, 6 reeds no followa:
           wSeotlon 7 of Art&ala 13G2a refers to and
     adopts the *general laws appllaablo   to payment
I

    Eon. 0. P. Le&hart,        p*   11

           0t rimg    rw   arsd rren0hie0 tdma 0r 00rp0m-
           time   having a aapitel etook.’    Thla is tha pre-
           rioion on whioh wa base our oonolusion,     mbodlad
           in question 5 abwa, that the rrtitt0hm tarn8
           am to be applied ae provided b9 Artlole 7084
           rather than 7064.. Insafar as riling    is08 are
           oomerned, howavar , t¶oes thle prwlaion     rerer
           to aa8 adopt Artlole    394 or does it adopt Arti-
           cle 3920 as applioebla    to these oompanlas?*
              Artlole  394 or the Revised Civil Statutes  aete           at
    eortafn taoa whiah tha Seoratarg of State la authorlzed‘and
    raqafrad to oharga, among whioh ia the tollowlngl
                 Tlpon tiling  each ehertar, amendment or
           supplement thereto,   of a private oorpmatioz
           oraatad for a09 purpoao lntaadad. for mutual pro-         ’
           rit      or benarit,,
                               I rung    r0a or Firty (I50.00)
           Dollara,  providod that ii the authorized oa lkl
           atook 0r raid otlrparation ahall axoead Tan Bho&=
           *ana ($l0,000*00)   Dollara It shall be requika
           to pay an additlozal    rib0 of Tan ( 0.00) Dzllam
           rar~~woh additional   Tan ThauaWd P~10,000.00)
           Dollar8 of ita oapital steak or fraiWona1      pgt
           tharaor arter the rim.*
               Artlolo 3920 of the Revised Glvll Statutes rata out
    oertaiz fare to ba ahergrrd and noairad  by the Board of xn-
    euraneo eoplaia8ion0rs whhh reeaindluda the roiiOa&r
                Tar flllng   aaoh daolaratlonor oartlflsd
           oopy of the ohrrtsr oi an in8urenee oompany -
           Sa5.oo.r
                    Roth of the above quoted provialozs   war0 in erre0t
    when &tlola        1302s baeama offeotire.
              Ssotltm 7 of Artlola 1302a is eat out In the aza-
    WeP to your question No. 5. Beotlon 8 of suah artiou road8
    ae   r0iiOw3n

                 The ohsrtter of oarrporatlozs inoorporstad
           hereunder, and the smendmsnte thereto,     ahall ba
           filed with the F3oard of Ineuranga %amisaionara,
           whlah asid Board shall oollaot     from the a@%&
           ocaapanies riusg   roe8 and rranahiae tams ra-
           quirod by law. *
               It ;s cle’ar that tha riling   ibaa, by wkatovar etat-
    uts datermlzsd,  are to be oollaoted    by th? Board ai Ineuramao
    Commlealon6ws~ Oz riret oousldaratiaz       it w&d aeem log&ml
    that the roes to be aOllaatad b9 the Board should k datawioab
    by Artlale 3920 whloh amimarat.8 end set8 out the teea to ba
    sollsotad  by suoh Roard.   It la alao trua that our Supram Oourt         1
    in the aaaa or Daniel ‘(1. me1     & Garth Invaatlarnt Qampanp, 93
    S. W. (26) 372. srpraaaly saitr
‘lion.   0. P. Lookhart,    pa60 12

           , "Title insurenoa Is a kind or type of ln-
         murenee.*
                              .
              Rut we are faoed with Sbotion. 7 whioh apeolrlea:
                 wbenerar laws applioable   to riling reea end
         i,fi;r;yse   taxes or oorporetions   having a oepital

             Artlale 3914 above quoted aete out the riling reea
 r0r oorporatiana generally.      Certainly Artlole    3920, ao rer
 aa the riung     raei or oorporationa   are oomeeraad, la not a0
 general as Artlole 394,. beoauae Artlole 3920 rlxes the ril-
 $2mzees of lnauranoa oompauiea and no other kind of oorpara-
        . The Legislature    has thus IQEmireSt8d its Intention
 thet the oompanies inoorporatsd      under Artiole 13026 ahall pa9
 the larger riling rees rixed by mials        39%      The reason rer
 euoh intention    ia apparent from the nature of oompanlee in-
 oorporated uuder Artlole     1302a.   Such oorperatioua   map ba
 oreete(lror a number of purposes In addition to the lnaurlng
 0r titles.    lhe9 ma9 engage la au abatraot bualnea8, aaoumu-
 leta end lend azoney, and aot as a truateo.       The epeoitio   pur-
 paaea ror which they atap be inoarperalred are eet out in Seotlon
 1 Of Artlole 13026.     Sines euoh oorparationa ma9 be luoor-
   orated for auoh purposer;l in addltlon to the iseuanoe of title
 La uranoe, it is reasonable thtat the9 ahould be required to
 pa9 the larger iillng    fees raqu5xed of oorporatione     geuerally.
             You era adtlsed thmt the amount or the rlling   reea
 of oompanles incorporated    under Artlole 1302a should be de-
 termined ‘by the apptioation   Or drtiola  3914 or the RSViBed
 Olril  Statutss  or Texas.
                Pour queatlon     No. 7-read8    es rollowar
               "Sinea by the 1929 lot (Art. 13026)      these
         cmpanloe have been rsoognlasd 88 lnsuranoe oom-
         penles and removed rrom oontrol or the EIeoretery
         of State end put under the Jurlsdlctlon       of this
         Board, is our conatrnctiofi   oorreot that this makea
         ma provisions   0r Artio1a 4705 applicable      as to
         requirements far alQ,.lb~lity   or seaurities    In
         whM~ the caDite1 Stock Or 13026 o0nwanies
                                                -         map
         be inveatad?"

            Ee also set out herein the portion
 mental request which deals with question NO.
 is a8 follows;
               "In oouueotion with qumtjlon No. 7, 8ha at-
         torney ror the Cornpang earnestly  eontends that
         because or. *the peculiar wording or Section8 6,
         7,   and 10 of Artiole     1302A,   Artiole   4705    hoe   n0
         applioatlon~  to end doem uot goorernthe allgibil-
         fty of' the types of eeouritlas in whkoh this tkm-
Hon. 0. P, Lo&hart,         PW     13

        paakmmm&vast       or InItIall9     a Its 8apital
                         Ho, tharaOme, Uea        tha positian
        that al.1 of’tha   aoourItioa   lietad Ia tha aahadula
        aooompa Sng.the arrIdavIt       of the Inoorpamtore
        are eligY bla under Article     13OU and lep eo ia lly
        Sections 6, 7, and 10 theraoi.        drtlolo     4706
        governs the investment ai fuuda 41 atook Inaur-
        enoo ocmpanies other than llra,       health and aool-
        dent cempenlaa, over and abwe the5.r oapltal stook
        rids;     and, of aourfba, whether mtlole        4706 Ie
        a plAoabla, to this Gaiapany~wlll depend upon
        w1 ether Artlole   4705 Is 6pplIaeble     to It.     ThIr
        Department la going to require the Dompa4 to
          ay in WtIally      a surplw rund of at laaat
          5,OOO.OG (whloh will probably result in
              Ita oapltal stock to #lO0,000)
        oorporatlng    aud lfoaCaIng It; aAd,
        will hare diraotly     Iwolled    also the question
        or whether Artiola 4796 Is applIoebla to au&
        Sarplll8.    We, tharetorm, desire to au~glcmant
        quaation X?o. 7 by 1nquIrW        whather 4 6 Is up-
        plioabla    aa to t&L CUpany In the imeebaent
        of Its surplus runda over and abwe ita autha-
        lead oapItal stook ftmd.*
            AB we underetend your question No. 7 a8 oupplrment-
rd it    ma9 bc,ra-stated  aa followag   Does Article  4705, Reriso$
GldlStatutea       govern the 0UglbtUty     of preparty tha
Initially   reodvad   in parent    of the @apIta% a,toak fir
oorpemtlon    and doea Artiola 476, Revised .Givil Statutea,
govern the eligiMlity      af property in Milti its aurplua ftmd8
map be ixmestad?         .
          That title  Inf3mutaa la a type af Issuranao la no
longer an open question ainoa t&e oaaa or Daniel. t. !Pymll 0
Garth ln~sstment Gmpany, supa.
               A~%iol$ i+7Q&:of the Revised     Givfl   St@$utaa wMah
reads 118r0mm3t             ,:‘r
              “Tba oapltal atouk uf any auoh iaauraana oma-
         panp, axoept any writing Life, Health, and Aaol-
         dent Ixiauranoe, Bhal.1 oonsistr
               "1.   fnlaniul    money   cif the United Statoa;
         OT                                                       ,

                        In the bom¶@ oithis'mta          cw angoaunty
         OT inc~&atad        town or &by thar&f,        m In the
         atookof     alynatlanalbamk~    or

               "3. In riret  martgag    upm un5noumbarad
        raal   eatata in this State, the title    to WM.& ia
         talld, and the mwkat ralue of whlah $a neb lose                .
        'then rorty (40) per cat    mere than th*   apotw
1,   Hon. 0. P. Laakhart,     paSo l4

          loaned thbraon.   Ii any part of the raluo of luah
          real eatato 10 In bulldfnga,  mmh buIldInga ahall
          bp luaurod agalnat'losa  by Piro Sor not 10s~ than
          sixty (60) per 6-t at the value ther~~~i#~~~~~
          E;    gotme pyablo    7 au6h rompany,
                   0 pror slone of tai8 Artlalr,    with rem-'
          peat to the value af real eatato,  aomparad to
          the mount laaned tharoon, 8hal.l not apply to
          loana seaured by real e&ate whlah are lnmrad
          by the Federal Rousing AdmIniatrator.*
      la iotmd in Chapter 2 of .TItlc 78 of tha RavIse4 bit11 Stat-
      utos.    Chapter 2 1s entitle6   Rlnaorpcestlon   af Inauranae Colr
      panIaa.W The words *any aueh insurance aompuap aoatainbd.*
      Artialo 4705 rear     bak to aorpaaetlmm tormnd under Artlali
     ,4699, Revised Olvll Sta tutea , whiah 10 styled wParmatlon eb
      ~gtmlea*      end to Artiale  4700 etylad *Articles   ai Inaarpara-
            . w Artiaiea  4699 and 4705 -0 round with the uaeptioa
      of aertala    later amenbmenta not port&n&     Jmro la ttm Itch
      vised Statutes a? l&V a8 Axtlale8 3028 and 3Oj4 uabr tlu
      ahuptor elao styled thare aXnaorparatIon of Inauranae Cam-
      panls8."    Xn duaawmlag Artielr    3CZii @ the Ravlsed Statutes
      oS 1695: and the title    on IMuruPae themln oentaiad mar 13ap-
      ream aourt in tha aaae of State t. Burgess,109 S. W, glP,mXdt,
                 We ara thus lead to the aonaluslan that
          Artiale  3028 In Its ori    n~wa8, as I.a its laagw@
          it la, a genaral pror?.e 9 on applleable  to ali1 ln-
          mranaa    oarrporatlons
                               exoopt 8-h a# nny be 8x&a&
          ed by Axtlale     3996.w
     Xt Artlole    3028 (nm Astiola 46991 la a Sanaral cltatuto It
     reasonably rollows that Artialaa 4705 and.4706 in the sun
     title  are statutes of a abaU8r nature, Fro16 the abev* wo
     ara lead te aonafud% thet Artlala 4705 Is Intahclad aa a ga+
     era1 statute    gwernIn&z the aspIte    stark requixwaaata af In-
     suranoe corporatloh8    havi.aS a aapltal atoak unlara auah oe
     poratloru'ara    exampted from Ita reQuiremetes by Ita t$nn tams
     or the terms of acane'ather Artiali,
                 The attorney for the iuaorporatar6  aaam'to   oonae$a
     that Artiola 4705 aa8 Title 78, Chapter 2, are ep lIaablo to
     lxmmanoa oarporationa    generally but oonteads ~8 s ollowst
                "The Statutes applIoable      to the rormtion
          of aorPoratloni3 generally    (Saatlon 57, Art.
          1302, ol the Revised Statutes)        parn&ttad the in-
          oorparatlon   of gaaraaty title     oampau$an wlthaut
          aupervlalon ot. any ~kfnd ar aharaataT insafar aa .
          the Board of Insuraaoe ~QaP*donem           we8 oon-
          ssrned up until passage of ArUole 1gOZa In 1929.
          Caasaquantlr,    tha geuaral incorporation      statutea,
          luolpains   the .statuta govarnlag the aapital
          steek requiramante o$ all        Irate   mrparetlom,
          gweraec¶ and aoatrolled     tlr la SyiraatP aampauia8
    Hoa. a. P. Lookhut,               p8&a 15

          u until the tlaa' of thi pa88                *    Artlelo
          902..          Art1010 1302a ob*ngrb r h,.~QQU@atiioa
          of the general inoerpontioa ltatut*~eaW 'in .'
          the partloularathoralaset 06. Rb ilad BO
          referenaeof any klad or ohsraoter in Art. 1302a
          to Art. 4705 ur any othar artlole                of Title 78,
          Chapter 2 applloable to iosuruiee                aorperatlona
          generally.*
                One ai tho pmtloulera lq Artlole1302a. Rati&
    Civil Statutes,   whleh ohangee the 8p Uoatloa      ob tke g~~al
I   lnoorporatlon   atatutea   la the prwia fon la Cho$loa23 %hd a0
    furtheroorporatlonshellbe aharteroduader           aubdlvlmlon 57
    or Artiole 1302 whloh ia .thr general statute sot
    purpoeea for whiah rlvat~oorpcrratlom         may ,br aha
    provlelon   aeeme to boata      the iateatlon   @f not=!?                          .
    6roatlon or tit10 lnaru'enoe ampaalea ander th* 8aarml              ,q-
    parrtlon statutea,      Rhea the Legla~turo    wlahodtomko      tb,
    generallaws ragerdiag illlug ier# lppllaeblr.te         title  iuaur-
    en80 eorpavatioar, it illa80b lIgprea8 p r o vlmlo lb      St ia no t
    uureaaouablo to premium that t ho &glalaturo,       It ft wished to
    make the gonerallaowpomtloa atatufaa rdbr              thur bi18 ib
    atlr8aoo   In         arationatetote*,ap*lleaLleto aa humrum
    aerpor%tIoa~7         two&&d hate done 60 by oxp?oaa povi#len.
                    It   la trua that aorp~etloaa          iarm&      uatlar ArtleSe




    Guard. Under aartaia ooadltioru      tha Roard r$ rowka auah
    oorperratleate  oertlfrl8.ate of authority.  The Aot~ovid0aoaaa
    gww1rs3 lntwbtlon to raxsvo title inmx8am oompd.ea frpr
    the ol8sa of private oorporatioaa      -ally    and plme thaa
    in the olaaa br statue o? lnsu~anor oorporatioa8.
                The mere faati.thit    Artlele 1302a appoere in Per--
    non*8 Annotated Civil Stetutee~uudor the tItl;;~p~va~
    oorporatlons   gene-rallg has ue aignltlaenoe.
    passed elnao the revision       of 192s ead the A6t do06 aot &or,
    lgnate in what chapter of The Revised OltIl Statutesit        8hWld
    be plapea.
               The fipplioatlon  of Artiulr            4705 and'4706        to tlblo
    -1nauranoe cmpeaiaa, will not nPil%fy              th4~prwlalona         of SW-
    tlon 2 @S Article    13028 whiah lhwa              lnvratmwdi of a sertala


    10 nmiatained         in   that    eaaditlon,   Tha toram of both Artlr1ea
    muat give way wheta ia oeailiot rlth the tema   ab Artiolo
    1302a whluh Is the more aooent 8nb mare partl6uZlar   atatulm,
Han. 0.P.    Imkhart,    pa@   16


            In answer to question Na. 7 it la the oplnlon ei            I
this departmat     and you a??8 so advleed that,Artlola     4703,‘.
Revised Qlvil Statutes,    la epplioable  to Aetiraiaa     the ini-
tial aapltel atoak requiramanta of a title      inaurea6e oarpore-
tion to be oraetab under Artiale 1302a RevlaeA Clvll Btat-
utas, and that &Mole      4706, Revised 0~~11 Statutes,      gwiraa
tha Investment of its funds over and above ita paid up aapltal
atook, Snd it la further our opinion that aueh artlolea          ara
eppliaable   only Insofar as they do not oonfllot      with einy pro-
visions   of Axtiols 13028, Revised 01~1~ Statutes.
          In aooorAenaa with the Aireatluna in your supple-
mental request, question No. 8 la omdtte4 from this oplaloa.
            Your question 19,. 9 aontalnwl in your aupplamantal
lotter   consists or twelve aubdlvlslona   and euoh queatloa   to-
gether   with tha exptination  in oonnaatIon tjhlsrewith, sea88 es
follows:
              "In atud~ng the aahaAule or easeta aa-
      oclqpan@g      the affidavit    of the l~oorporetara,
     ,whloh assets will be tendered in payme* ti
      aapltal atook end surplus (before eotual fib
      lng the obartor will probably be rewrlttra                ao
      as t o divide theae smote        u into a n&tlmum of
      $lOO,000,caplt~l       at&k and B5,000 aurplua) we
      observe ttist the assets are af?irmatlvaly             dia-
      olaaed ta ambraoe (6) ia? tltlee           to real
      (b) reel eetak       purahaa& ooatraota,,,Jrsd
      or other mouetarg obll@ttlom           &eau@#
      lion upon real aatate, acane of all~%bxoeaf
      whloh are located In the State at Rew &!!xiao'
      end some in the Utate of Texas.            Of oourae,ba-
      fore eitheraharterlng or Iioenalngthla                Cola,
      Q~IV this Departmsnt will 8laaharge its roe-
      pona~bllltg      of detemalnlngwhether        or not tkm
      eaaete aa llated in the eahadule to the e~rrlde-
      vlt @re aotuallp valid fee titles,            raal estate
      purchasecontraate and obligations             secured by
      rmit     liens upon Pea1 estate,       and tha laaatlon
      thereof     (whather in Toxas or lOen Maxlao)and the
      value thereof.       Eiut, r0r  the purpose of deter-
      mining the legal ellglblllty          of tha varloua
      olaeaee of aasata so tanderaA In payment of
      the authorized      aapltal stoak and tha aurplua
      funds whiah may be set up 1nitIelly             in lnoor-
      porati4j     this  C-pa  y ,  we  ask  you   to   anawar apa-
       oirioal    p tha r0im      ng queatlona in additfon
      to those propolinded heretofore,         regard&ass of
      whether you holed Artlalas        4705 and 4706 appll-
      aable, ar whether you hold Artlole            13OZA a? aaaia
       other extialo or artlolea        of the statutes eppll-
      oabla, with refaranae to the lnveetimant of the
       aapltal anA surplus rum30 of this Wspa~r
Boa.   0. P. Lookbart,       pa@ 17


              “A.   Are i6r     fltlse   to real estate sltwtr
       o dinTen8
               lllglblr              to be raooirad in paJnwn0
       ou the'eapltal       ‘atook funds of this Company?

            "B.  Oan iee.titlee to JnLl estata outal&
       ai Texas ba raerived in payment or oapital
       hook     OS t&e      Campany?




            q.   Otm fee titles   to rul                eetato otltride
       OS Tome bo rooepted    in payxmt                oi aurplue af
       this aon@myt
            “% Oanraal    estate purahaee oontrectr up-
       on real property in Taxas k aoaepted in pya#at
       of oapltalgtook  of this Ocmpanyt
             V.  Qan real estate purohase oaatraots Up-
       on real property situated oataide of~Tem8 ~ba
       looapted In paymat or oapital stock at this'
       -mw
                     Oan rati     lstata pur&aae ooatraets            up-
       on p(to&tf outside          or Ton6 be aacepted’ln
       payment 0r~8orplui~of              air   Gcmpaaj3




                                           othermonetary obllgatloa8
                                           apanraalestata   blkni
                                           cd aapltal ateak or thlm


       by first  lieno upon real a8tato 6ituated  oa,lt8ide
       of Texas ba rowlvad   in pafment tg aapital stook
       0r this  oampauyt
                     Can aota         a
                                    other obli    tlona mcrurod
       by iii% lima          upaa raala6tate s '5"
                                                 tuated 3.n Taxno
       ba raoaived       in payment of swplw     of thir Qcqaay?
                Caa notes artd other obli~ttone    aeeured
       bg ii%         ttptm real ssteto crituated cstttalda
                    lion8
       at Tmas ba no'*lY~d la payment or the SurpluB
       or thb ghmgaay?"
              We da mt       att&pt        to azwuer    aubdlvl&mu E,T,,O and
~Haslnw       the term "rmal      aetato        ptrrohasa wntraots"       dam sot
    No& 0. P* La&hart,             Pa#$a18

               AUO we dll              Ulaxegaxd the pJ&raae*or othw monetary
    obl&atlona”  oontriaed             lr~aubdivMbn8 I, J K, and L, koauao
    8u.h phxaa. la too          %n~.tiaLt.     to b. the bsaja   of an   oplnioa,
               Subdivlelous   4 and B of qareatlon No. 9 are anawarod
    In th. nsgatlve.     See Astio1. 4705, Rlav1s.d Civil statuttea,
    heretoftie  quoted.
                  Subalvlelow        c: snd D ai qwetion FID. 9 am not in
    our aginlon answered           by the terms o? Artiole 4706; aoh
    readsin parta8 followa:
                   m oompany, aoept any urltiag     life, health,
             ana aooident, lnsuraam;  organlaed und.r.tho
             vlaiow   of thl~ ehaptsr shsll invest its ruar
             war snd above lte paid up eapltal stook in inn
             otbx manner than as follows;    . . .*
    Ztlo    txui t&t ttixeot imsstmaut Inrealelrtatr           is not par-
I   dittad   by the tsnna of oath artlole,          But aa we aoaatrua yaaz
    lattax   allPquestion     the iwtl.rstate    ia  thlaeasefa te In
    ooavay8d to the ocaipaay       on iaeqxpox~tioa    a8 a glitor eea-
    lsibutlon,      ~fhe acioeptsaa. of aaah coatributlon     la aot an in-
    v.atm.at'dthin       the asauingat    Artlol.    4706 whfah la a pm+
    cf*e       statute.    Wobnter dttrirats the word wlmwt*      as iot




    Tharafa.     otw haZd5.ag a$idar qnastfon.Sa..'I    d..s nat mesa that
    ktlole     4706 is declalva   ,ai the altuatloa    maaentrd ln cub-
    dl~lalaar,   Oven& r) of quastiwL9.       Emover, Artidle   4715 un-
    der the t&tie on inauranc.       prwid.,a. that the 1~~8 fwez%lq
    eorporatione in gmnewl shall a ply to and g0vSz-n LSUXSM.
    sorporotlona    lnaorparated    la th ! s~atate laaufar as the aam
    8~. aot lmonslstent       with auah t&St&       In Cbir ooaaeotien wa
    direot year attention      to Article    U&I uUoh raada aa tollawat
                  *AU    ~lvato’eorpoxatlona         author-iaed
                                                              bay T
            the mm or mxae,.to       do bwlnesa   In this stat.,
            whoso satin pqou.    la not the a.qtisiUon    or
           ~ownsrahlp of lands, whloh hava or msy aaqu%ra
            by lowe, puwhaae or Nhsr*8sriWar8land thaa
           .is rrsoessary to srreblr them to olrrg on the@
            bwlnes~     shall, wl)$dn fltteea   earsgig
            date said land Bay b8 aaqUirOd, Ll
            isell and eonroy in $00 Illimptb alt landa,aa io*
             quired*hiahare.notneaesrary
                                       rw                 the txanaa4-
             tl* of their bual1#a6,*
    Aadtc      Artisle   l.j64?&iohrradaaa          r0lloat
     saw aubBjact to iarfalt\tre aad laehsat poe.wd-
    -65.    The Attornbr Ga&eml, a say distrlot or
     oounty attorna~, whm eitherOS tkamha8 reaa0a
     to b6U.m    that         oorporatlon la holding lands
     in vio Jb ttf0n  0r t@iIa la w,
                                   dullfa 5tltnte   lult
     In the mum ar the State or Toxaa, in TrWIS
     County, or in any oounty in Texas wheti aueh
     eorporatlon   MS hare an agent, ur ln sn~‘oouat~
     whwo anf part cd tha land ma ba sltuatad,
     agalaat owh aorporatlon,      as f a provided tar
     the esaheat or astatos Or dewased persons
     dyZn&wIthoutdevise thereofand having no hairs.*
           In the case of 0arnpb.U v. Hoodi   35 S.   W. (26)   93,
(Otau. App.1 Dec.) the oourt mldr
          “For many yeare it hss born tha astebllshad
     poziogor our statsto prohlblt   oorporatlona,    ’
     with eertala axaaptlons, from aaqulrlng l&l.”
l?he aourt .rlrrther
                  saldr
           qt 1s true, as ar$wd b the plaLntlii8
     lnerror,   thst ii tha oorpom i Ionhaa eon6umm9
     od the deal by aoqulring the lands no one omald
     hsve questioned its title   sxaapt the stata.*
           Wo aan rind no lsa raquirlng the wt&l      or a 00~1
poxate sharter beoause it la llk.lythatawh sorpontian
ma aoqulre by oontribution     lands rhieh it la not Ulmm4 to
hafd, tharerore the question Imlv.d.ln aubdlvl8lma0 and
R as to the corporation'6   right ps la& of r&&t to reaefn
and hold euah landa 1s new lar ely leabnle.      St should k
dstarmlmd when it aotually ar f:ses by proper preoaadiaga tm-
dex tha tarma or Brtlale   1364abw. quoted.
           Subdlvislon I af uestlon Xo. 9 1. anawexed la th.
arrimotlve   provided. suoh r f rst lleo note6 on Toxw raalta
mset the requirementsor Artleli       4705,Revlsad Olvll Ststutaa,
ee to the value of the seaurlty,      fire Iuaummee, et&
          SubdIvIsIon J of questi,on No. 9 is awwered in the
negative beoauae Artiale 4705,RsvlrmlCivil Etatutee,    npeol-
r1.arirst mortgsge notes on rosl estate In this Ststa.
           In anawar to aubdlvlslona   E cud L of qusatioa Iio. 9
you are sdvlsed that for the s-a ran110118   58t Outiabevoin th.
dlsouasion or subdivleloua    C and D we do not pass upon the
aorpoxatlon*s  rl&t.to   receive br o@ntrIbutlmka end there-
after hold suah first lien notes an a part of it8 aurplu8.
However, your attantlon 1s $lreoted to Se&ten (b) of ArtIole
4706authorizing invf3stm6as of aurplua rum3 a6 r0uOpILlt
            "1x3 bonds or rirat 3.l~~ ~n~unlmmbered
     real   estate In this State OR In any other BtSt8,
     oountry,or provlnoe  la.whio&suoh0-w     ry
     k dulyllaon6ed   to oondliot’4n
                                   iMur6noebu6ln860,
     ati prorUingin scloh  1tWanao ruohreal eat&o
     ahall be warth at leastferty(@) p&r oontmm-0
       than tho empunt lasnad thqmon:    '!ka relua'of
       suoh real estate shall be de&ermine6 by a ralua-
       tlon nade under oath by two (2) freeholdera     of
       the oouaty whore the roal ~eateto is looqted;    end
       it the bui.ldlnga are oonaidor6d a part of the
      value of the real aetato; thoy must be lmwrod
   ' against loss by firefor not lesa thau qixtr (60)
      ‘pekoent of the value theroof, *it& loaa-pa3abl.o
      ~olauee to suah mupang.*
               . .
            You are therefqe   advised that a tit&o Mmiranoo 00~
pany my lnveet its surploa funds in first lien note8 on an-'
tibarad      raal estate either &nthis Stst,e @r w        othar atat*
in which it is duly l%oelreed   to s&z&M (UQlaaaranoo       bus&near
protidod the other ~equlroinents oil.&1010     4706ire uMo$i&.
         .Tmitirq th%a -oplaloadll aid in tha detom&&
t&m of tho probLsm6 b6fare you, wo are

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