                                                                ;,, :; ....




                     September 23, 1957                        ,, "

Hon. William A Harrison        Opinion No. WW-261
Commissioner of Insurance
International Life Building    Re: The amount of real estate
Austin, Texas                      necessary to secure a mort-
                                   gage loan made by a life
                                   insurance company under the
                                   provisions of Section 2.of
                                   Article 3.39 of the Insur-
Dear Mr. Harrison:                 ante Code.
          In your letter of July 8, 1957, you have requested.
our opinion as to the proper construction to be given Section
2 of Article 3.39 of the Insurance Code.
          You have stated in your letter that the departmental
practice hasbeen "to construe this language to mean that the
real'estate'securlng the loan must be of a value equal to one
hundred forty per cent (140$) of the amount of the loan, or
stated differently, that the loan may be of an amount equal to
71.42 per cent of the value of the real estate".
          Section 2 of Article 3.39 of the Texas Insurance
Code prescribes the authorized Investments for domestic life
Insurance companies. It reads in part as follows:
          "It may also make loans upon first liens
     upon real estate/the title to which Is valid
     anilthe value of which 1s forty per cent (40%)
     more than the amount loaned thereon, . . ."
          The question presented is whether such language should
be~construed literally thereby fixing the required value of the
i%al estate to be one hundredforty per cent (140%) of the
amownt of the loan or whether.lt should be construed as meaning
that the amount of the loan secured by such real estate must
not exceed sixty per cent (60%) of the value of such real estate.
          This question arises from the legislative history of
this particular enactment and from an earlier attorney general's
opinion issued by a~predecessor In this office.
         Prior to the enactment of the Insurance Code of 1951
the rovlslons of Section 2 of Article 3.39 were found In Artl-
de &25;  R. S. Prior to Senate Bill 218, Acts 42nd Legislature,
Hon. William A. Harrison, page 2 (w-261)


Regular Session, 1931, Chapter 153,   Page 256,   Article 4725 read
in part as follows:
          "(Domestic life insurance companies) may also
     make loans upon first liens upon real estate, the
     title to which is valid and the value of which is
     double the amount loaned thereon; . . ."
          Article 4725 was amended by Senate Bill 218, Acts
42nd Legislature, Regular Session, 1931, Chapter 153, Page 256,
so'that it was identical to the present provisions of Section.
2 of Article 3.39 here under consideration.
          In an opinion by Attorney General James V. Allred
dated August 18, 1931, addressed to the Honorable W. A. Tarver,
Chairman of the Board of Insurance Commissioners, it was held
that Article 4725 as amended, should be construed in the same
manner as the previous statute with the only change ,the in-
creasing of the maximum amount of a loan from fifty per cent
(50%) to sixty per cent (60%) of the value of the property.
This opinion was reasoned as follows:
          "That portion of the old Act above has al-
     ways been construed to mean that the real estate
     must be of a value at least fifty per cent (50s)
     in excess of the amountof the loan.~ The word
     'double', as used in the foregoing quotation, could
     have as well been 'fifty per cent (50%) more than'
     and the Section would have had the same meaning.
     It is apparent that the Legislature, by Senate Bill
     218, intended to raise the per cent which might be
     loaned on real estate from fifty (50%) to sixty
     per cent (60%). An examination of our statute,
     reference loans that might be made by various com-
     panies such as insurance, building and loan, etc.,
     clearly reflects that the Legislature has always
     based'the amount'of the loanpermitted on a percen-
     tage of the value of the real estate."
                          se of such opinion is



         ~~&    of the-loan was One Thousand Dollars ($1 OOO),-
double the amount loaned would be Two Thousand Dollars ,g$~"(JJ:
                                                        8
and if the amount loaned may not exceed fifty per cent I
the real estate, then the real estate must be equal to Two Thou-
sand Dollars ($2,000); "fifty per cent (50%) in excess of the
- ,   -.-




            Hon. William A. Harrison, page 3 (W-261)


            amount loaned" and "fifty per cent (50%) more than the amount
            loaned" would be One Thousand Five Hundred Dollars ($1,500).
                      It is fundamental to the interpretation of statutes
            that the intention and meaning of the Legislature must be prl-
            marily determined from the language of the statute itself.
            Qaddy v. First National Bank of Beaumont, 283 S.W. 277 (Civ.
            A$;; J.T;3),certified question answered, 115 Tex. 393, 283
             . .    .
                       The purpose of legislation and general policy of the
            law affords means for the discovery of legislative intent where
            the language of a statute is of doubtful, uncertain or ambiguous
            purport, but such expedient cannot be resorted to where the lan-
            guage is unambiguous, and its meaning is ciear. Board of Insur-
            ance Commissioners, et al, v. Guardian Life Insurance Company,
            142 Tex. 630 180 S.W.2d gob   (1944). The dominant rule control-
            lina the conitruction of a statute is to ascertain the intention
            of ihe Legislature expressed in the statute. Brazos River Con-
            servation & Reclamation District v. Costello, ‘135 Tex. 307, 143
             .W .2d 577, (19401.
                      The language we are concerned with, namely, "forty
            per cent (40%) more than the amount Yloanedthereon", admits to
            doubt only when it is read~with the old Act and similar enact-
            ments in the sense that it is a depart.urefrom the normal. Read
            by'itself,the Act furnishes a clear and concise formula of com-
            mon usage and experience by which the value of real estate neces-
            sary to secure a mortgage made by a life insurance company may
            be determined. We conclude that the legislative intent is clear-
            ly expressed in the Act and resort may not be had to extraneous
            matters. McCallum v. Associated Retal. Credit Men of Austin,
            (Corn.of App. 1931), 41 S.W.2d 45.
                    '.We overrule the previous opinion of August 18, 1931,
            (Book 324, Page 737). You are advised that under the provisions
            of Section 2 of'Article 3.39 of the Texas'Insurance Code the
            value of the real estate securing'such first lien loans must not
            be less than one hundred and forty per cent (140%) of the amount
            loaned thereon.




                      Prior opinion of August 18, 1931, re-
                      corded in Book 324 at Page 737 of the
                      Attorney General's Opinions, is over-
Hon. William A. Harrison, page 4 (w-261)


            ruled, The value of real estate securing
            first lien loans of life insurance com-
            panies under the provi,sionsof Section 2
            of Article 3.39 must be at least one hun-
            dred and forty per cent (1405) of the
            amount of the loan.
                                 Yours very truly,
                                 WILL WILSON
                                 ;o~~Q;e~~~

                                     Fred B. Werkenthin
                                         Assistant
FBw:pc
APPROVED:
OPINION COMMITTEE:
 George P. Blackburn,Chairman
 Mary K. Wall
,Wm. R. Hemphlll
 Roger I. Daily
REVIRWED FOR THE A'PYORRRYGRRRRAL
BY:
       James N. Ludlum
