             OFFICE   OF THE ATTORNEY GENERAL          OF TEXAS
                                AUSTIN




Honorable 0. P. Lockhart, Chalmtan
Board of Inaum.nce Comml~aloners
Austin 14, Texas

Dear 9lr:                           Opinion No. O-624
                                                                    benefit  cer-
                                                                    d ln opinion




              Your letter of Otto                  requesting  the opinion
of thlr     department on                         d therein,  Is a8 fol-
lOU8:

                                                     treated   to

                                             52, R. G. S., 1913,
                                             ding death benefit
                                              of any other per-
                                         red as to whether or
                                         rtIficates*   muat be of
                                         tion 4 0f Article    4835
                                         he organization    0P a
                             society,    which certificates    are
                                 'No suoh society shall Incur
                            or than for such advanced paymenta,
                          eflt certificate       nor pay nor allow,
                          lse to pay or allow, to any person
        any death or disability       benefit until actual bona
        Pide applications    for death benefit certiflaates
        have been secured upon at least 500 lives for s
        least $1.000.00 each, . . . , .* (Bsphfiria our8.)
:;nnoratie            ;;.   T;.   Luckhart,   pa&e 2


                *U your answer to the nbcvs queatlon ts lo
         ttw uegtitive, doas atl:i cc6 cm 611 of the atteahed
         Pcrxm of certifiostee     qUalip;r a8 e ‘?eoth  benefit
         oertirlocts’   for the purpose OP drterxlning     the
         mmber of embers of a friiteraol       benefit society?
         note partloularfy     Purt ‘2 in the two red-bordered
         oertifloatas   an.1 Paxt (I) In the blue-bordered
         oortir ieatr.
                    *If your anmfer to th*,Plrsh              queatioa    In in
             the   affirmatite, ,113an3 fraBrraa1             bermfit    soolety,
             bxobpt         one operathg      under the   protfrdons     of   Arts-
             810   483Sa,         pe?dttWl    GO imOUe a 4ceth  benefit  oer-
             tlfioate  providing fcr             PaYQIOntOf lcra than $l,OOO.OO
             aa a tloath bunaflt?*
           Chaptqr     8, Title 78, Vornon*s rdm0tdbea Ofril Statutes
oontulne the tnmtutory       prorimionr, 6efiting    and spaolfloally reg-
ulating fratamal       bonefib  sooletler.     Artlale d&38, VerBon’s A.+
notha    Cirlf Statuterr preroriber     la dotall the prooedure                       for
the organisatioa   of, froternel   benefit  rool*t~er.   ArGlolr                      4%38a,
Yernon’e Annotated Ctrll     Statute. permit* tha or~antaatlon       of
Praternnl           sooietiea
                      benefit    On Y likited    barnis; providing re-
qufremrnts   to be met before a paneit       18 hued    to auoh soolcty
by the larurenee department Of the State.          It ham been broadly
said by tne supreme Court that the riuhtr, power@, and obllga-
tlonn of beAefit looiettier 8FO dotemined by rulea of law paoul-
iar, if not exolualraly,      rpplloable  to   thm, aad the legality
of their aotlonr i8 not to be tested by rules which apply to or-
ganizations    oommwoial in ptuvose. (Xlrtz v. Soreraign Oeap,
if.o.8’. 248 8.W. 436)
                   WI have tails4             to find
                                     any oourt deolsion paaslng   on
question8          similar to the      aubrlttO& by you.
                                              quO8tfOne    Mtlole
14313,        Vernon’s   iinnotated
                            Cid1 Statutee pmvidsa in part that
r*i.$henany doawstio aoolsty #hell heTe lllrooatfnued   burriness for
the period   of one year’, or haa less then four hund,reb me~~ber#~,
its charter   shall beowe iwill an.3 VOid.*    Artiole 4852, Vernon’s
hnnototea Civil Statute8 provides In wt.:
                   “. . .Xhenaver after examiaatlon   the Comalsalonor
             icr matisfiftd thet any doaertio society !iaas fail&      to
             oonply rltn say provlsioti     of Wi:3 ohapter, OT is ax-
             00061~ 1Ga powere, or Se not osrrylq aut its oon-
             traate in 6oo4 faith,     or it traxmotlng   buefnesa
                     .~__   _---*-   -,   yulj‘z   ,




      P~UdUIb~tlyi    OI WbOIWVSruny dOL?L4StiC        SOaiety,
      after thr sxistbnce      of 0116 year   or mor6,   ehall
      hew a &enb6rehl;, oP lass then Pour hu.ndz-64, or
      ehnll determine to 4Iecontinuo bueineee, said
      Coemleelon6r may present the irate relating            there-
      to to the Attorney SOnera]., who shell,          lr he 4eea
      tha oiroumetanoee warrant, oo~m~e            an e&ion In
      quo wezrento in a oourt OP oomprtrnt ~urIe4iatlon,
      an4 If It shall then appsvr apon the trial that
      euoh eooiety ml~ould be eloced,       eald eaalety shall
      be en~olned rlvra carrying      on nay further buelnese
      and eomo person ehell be eppolntad r404lr4r            0r
      luoh society   and ehnll pro4444 at onoe to tab
      poeeeeeIon 0r the bOok4, papers, mozA4~8, *nu other
      re44te of the l   oolety,   an4 shall iorthwlth,       undoi
      the dimatlon    oP the oourt, pme44d to aloe4 the
      orralre oP the soolety,      end to dletrlbuts      its rutads
      to those entitked thereto.        lo lu4k p~004oQInge
      shall be oomeqO44 by the Attorn4y Oenerel against
      any euoh sooiety, until after       notloe has bsen duly
      served  on the ohlet     cuemutlveofP1e.n ar the eo-
      olety rrt4 a reeeonabls     opportwllty    given to 10,
      on a 48% neuub4 1x1 said notice,        to show oeuse why
      e-uoh prooeedlng should not be oo1sm4riowl.*
            ArtI            4838 euthorfzee            a eo4i.oty   wh4n lt   has neoived
Y prslimlnary      oertlrlo~&~e           m authorlee         b? said etatuto     to lolloit
&4mbsre ror tti6 yUrpO44 or oompl4ting       its  organl44titm,4nil    such
eooi48y eh&:l collbot   Prom 6eoi1 applioant      the amount OP not lees
than 01% re(ruLr no&W&p peyment, fn lsoomhnoe with its table of
rates   ee prorI444 by its Constitution      an4 Lawe, en4 lball leeue
to haot eald 8pplloant a reoelpt r0r the am3mt 90 c?olleoteb.                No
e>uoh eoolety shnll inour any liability       other then for woh aI-
vnn04 yaymenE8, nor Ieeue any benePlt o4rtlPIomte           nor pay or sllow,
or 0fr4r or pxwsri44 to pay or 4llow, to any pbrcan any 4eath or
4leabllIty    benerit until ~aotual boaa PI46 applioet~oa6        ror death
bonollt cu~tifioete~    hare bee3 aeoured upm at least ilts hundre4
llres for at laaet cm thouemd 3ollere oaoh.             fell Rrtlol4 4838
presorlbse     ths KIUZ~BF
                         of applictmtr    for 4osth b6netit      oertiPicctte
or et least firs hundred anii ttnt saoh applloetlon          must be ior st
laaet one tho,usakd &lien     for death benePlte berors the sooiety
otm oompleta its or(ganleatIon an4 begln buelneaa.           Ttlia statute
furthor    provides that when any eooisty has les8 than four Dunllr64
me~bera Its, chtrrter eke11 beoom null an4 7914.           UowOIvbr, this
ettatute does not provide for the amount or the deeth bonatlt oer-
tliicatee    of salA Pour huadrei mambere,     aor  4044 +.rtIols    4852
Honorable     ‘3. P. Lookhart,       peg4   4




preeorlbe   my type of death benefit                   oertlP1oat.e     Per the Pour
hundred mmbber8.        In view or the POragolng etetutee,                     it 18
our opinion that the death benefit                   oertirIoete8,       8Pter the
completion   ot the organization            an4 the be&Inning of buelneee,
the slnimuin Pour hun4re4 member8               are     not neoemaarily        oP the
type required     uncier Seation 4 0P ArtI                    4838 Por qu4llPylng
membmr8 In the organization             of a fraternal          benefit    looiety.
Ii tha L4&8lature        hal intended          that four hundred mu&mre
holding death beneilt          oertltlaater          to the oxoluelon       or any
other pweon were to be ot the type roquind                          under Seotion        4
or hrtiale   l&S Por qu8llPylng             momben in the orgaslsatlon
oP the trrternal       beaeilt     soolety,       it    would hare me44 euoh
requlremont   ia pleln languege.              TherePorn,        It Is the opinion
or this department        that your rir8t question                8houl~4 be eMwere
In the negatlre,       an4 it 18 so anawend.                  You Purthsr state          in
4rr44t that    it OUT answer to your rht                    queetion     18 in     the
negative,   do48    any one or all oP the ltteo h e                  form8
                                                                       Q    oP oer-
titloetes   quelliy     as   a *death benwilt oertlPloate*                 for the
purpose or 4etemInlng           the number ot msmber8 ot the Pnteruel
bonePit soaisty.        Our oplalon MO. O-6092, rererred                   to In your
inquiry,   ho148 among other thIag8,                 that the term wPou.r hundred
memberew u8e4 In Art1014 U38, Saetioa 4, an4 Art1414 4852,
means Pour hundred &ember8 holding death benerlt oertlPloatee
to the exoluelon       ot any other person.                In other WOrdS, thl8
opleion holds that the Pour hundred aember                        muust hold      death
benrrit obrtiPIoatee         an4 that umber8 holding loolbent                      and
health pollolee      without death bemilt                are ozaludad,       that     18
to   8ay t&et holden       or eoolaent        end health pollci48           without
death b4norlte      are not oone14er44 rot the purpo84 0r dotor-
mining whether or not the loolety ha8 Pow humlreb aembers
holding 4sath benefit          oertltioatee.            Arter oarePu.lly lx4nln-
ing the toram of oertliloatee              lnoloeed with your Inquiry,                  It
I8 our opinion that all oP eel4 Porme quallry                        as a “644th
benerlt eertiPloate*         ror the purpose or betsralnlne                  the number
or members or tha Preternal             b684tit        eoai4ty.
              dls am    returning     herewith     the   Porn eertiflo.sts8        eub-
mltted    with your     request.
                                                    Yours very       truly’,
                                                    ATTORtnrVQMRRN. OF TEXAS
