## TEIEATTORNEYGENERAL OF TEXAS

PRICE DANIEL ATTORNEY

GENERAL July 16, 1948

Hon. George B. Butler, Chairman Board of Insurance Commissioners Austin 14, Texas Attentioaz Mr. Will G, Knox

Legal Examfner

Oplnl.on No. V-636, Re: Authority of a title Insurance company under Article 1302a, v.c.s,, to acquire an abstract plant in a county of less than 90,000 populatioa. Dear Sfr: By letter dated June 10, 1948, you request advice as fellows~

“A @roup of citizens of Cherokee County have advised us that the7 will in due course submit Articles of Inc-orperatfon for a title corporatiQn te be erganfzed under Article 1302a and **h&v6** stated that they wish te purchase any abstract plant in Cherokee County.

“Please advise mewhether a title corporation orflhfied~~under Article 1302a, Vernon”s Annotated Cfvll Statutes, may purchase an abstract plant in the county of its domicile, having a pe~pulatlcn OSless than Ilinety Thousand according to the last preceding ~Foderal consus,” Article 13028, V.C.S,, was originally enacted as H.B. 153, Acts blst Leg., R, S,, 1929, Chapter 80, page 77Q Nowhere therain was a title insurance companyHon. George B, Butler, Page 2, V-676,

prohibited from acquiring an abstract plant fn any county of any size, On the contrary, it clearly contemplated the acqufsitfon of such’plants in any coun- .ty as a necessary incident bf the business authorized.

The caption of the original Act provided fn parts

“An Act authorfzfng the creation of corporatfons for the purpose of COQpiling and/or acquiring and owning abstract plants in this or any other state, and to compfle Andysell abstracts of tftles therefrom and to insure the title to lands and Interests therein and liens thereon, o 0 *” The Act then provided:

“Section 1. Private corporations may be created for the following named purposes 8

“(I.). To cempfle and own9 or to acquire and own records or abstracts of title to lands and interests in lands; and to insure titles to lands or interests therein, booth in Texas and other states of the United States; and fndemnffy the owners of such lands9 or the holders of fnterests fn or Ifens on such lands9 against loss or damage on account of encumbrances upon ,er’defects in’ the tftlo to such lands or fnteres tr therefn 0

“Such corporations ray also exercise the followfng powers by fncludfng.same in the charter when filed orfgfnally, or by amendment;

“(2) Makeand sell abstracts of tit;. fn any co-ties of Texas or other states. Section 2 of the orfgfnal Act was described in the caption as?

n0 0,*regulating the amount of paid fn capital of all corporations operating under thfs Act, n oNHon. George B. Butler, Page 

### 3,V-636,

It was then provided by Sectfon 2 that:

“All corporations created and/or operatfng.under the provisions of this law must have a paid-up capital of not less than One Hundred Thousand ($lOO,OOO,OO) Dollars D Any corporation organized hereunder having the right to do a title insurance business may invest as much as fifty per cent of its capital stock in an abstract plant or plants, provided the valuation to be placed upon such plants shall be approved by the Board of Indurante Commissioners of this State. D0” Thus, nothing in the caption or the provisions of Section 2 of the original Act indicated an intention to do more than to regulate the amount and character of permissible capital and to place a limltatlon on the proportion of capital which might be invested In abstract plants.

By amendment, Section 2 was changed by S.B. 283, Acts 43rd Leg,, R, S., 19339 Chapter 222, page 750, to Its present form. The caption of the amendatory Act provided:

“An Act to amend Section 2, of an Act passed by the Legislature of~Texas9 February 

### 26, 1929, House Bill No. 153, relatldg to tftle Insurance business and the capital stock of corporations doing such a business; regulating the amount of capital stock of companles.Whfch may be invested in abstragt plants; and declaring an emergent p0 Section 2 of the original Act as thus amended thareupon read:

“Sectfon 2. All corporations created and/or operating under the provisloas of this law must have paid up capital of n,;;l:;is than OneHtidred Thousand($10Q,OOQ,OO)

e Any corporation organized hereunder having the right to do a title insurance business may invest as much as fifty (50%) per cant, of Its capital stock in an abstract plant or plants, provided the valuation to be placed upon such plant or plantsEon, George B, Butler, Page 4, V-636.

shall be approved by the Board of Insuranca Commfssfoners of this State; provided, however, that ff such corporation is not doing a trust business as provided in Seetfon 1, Artfcle 4 of the Act hereby amended, and maintains with the Commissioner of. Insurance the deposft of One Hundred Thousand ($lOO,OOO,OO) Dollars, in securfties is pro- ,vfded in Section 6 of the Act hereby mended, such of ft.8 capital in excess of fifty (50%) per cent, as deemed necessary to fts business by its Board of Directors maybe fnveated in abstract plants; and provided further that no such corporation may herrafter acquire more than one abstract plant in any one county and shall not hereafter acquire any plant in any county in this State having a population. of less than ninety thousand (90,000) according to the last preceding Federal census.” It is to be noted that nothing in the ca - tion of the amending Act would indicate an intent on -9 to more than to regulate the investment of capital stock. Nothing is there present to indicate an intention to prohibit entirely the acquisition of abstract plants in smaller counties. In other word,s, the ca - Mona of both Acts as they relate to Section 2 dea -3 solely with security and soundness of invrstnent pol**icy.** This fs also borne out by the emergency clause of the &mandatory Act, which readsn

‘The fact that under the exlstFng law9 the people dealing with the aforementioned corporations have not had rdeqyte protection oruates an emergency. 0 0

‘pae taxt of Section 2 as orfg:inally enacted and as amended indicates an intention to leave the concorns free to invest in abstract plants provided not more than 502 of the capital is utilized for that purpose.

The amendment offered an exception to theme 502 limitation in the utilization of capital for iqvestment in abstract plants, where such a concern did not do a trust business and where it maintained $100,000.00 on deposit as security for its commitrents e Iti such event, it was allowed to Invest In- *

Hon. George B, Butler, Page 5, V-636 0

excess of 50% of its capital in abstract plants. But this concession carried a proviso or llmltatlon which the Legislature must have considered an appropriate security measure by preventing concentration of such excessive Investments of capital in one county and by preventing such excessive Investments In small counties o These provisions do not, then, prohibit any such “Investment” or “acquisition” in a county of less than 90,000 population where the concern will not have Invested more than 502 of its capital stock In abstract plants as a result of such “mcquisltfon”,

Such a construction is consistent with the validity of~Section 2 as amended as being germane to the cmptlon, and does not bring the statute Into conflict with the rule stated in 39 Tex. Jur., pp. 104, 105, Section 48, thmt:

“A title expressing r purpose to amend a statute in a certain particular is deceptive and rfslemding in so far as the body of the Act purports to &mendthe prior l&w in other partlculrrs s The amend&tory Act is void to the extent that its provisions go beyond express limitations or the scope of the title.” A construction that the amendment was intended to and does prohibit under all circumstances the acquisition of mnabstract plant in a county of less than 90,000 population would, in our opinion, effect an amendment and provide to not only Section 2, but also to Section 1 of the original Act, authorizing such concerns to require abstract facilities and to nmakeand sell abstracts of title in an T-E ceunties of Texas.’ supplied) (Empha5is

This woul e a broader amendment than appears to have been intended,

That the last “proviso ” in Section 2 Is a limitation only on the next preceding “proviso ” is supported by the cases cited to the text of 39 Tex. ,Jur. 193, Section 102, to the effect that:

“Ordinarily a proviso is limited to the clause which next precedes it and to which ft Is rttached. So where there are successive provisos, the qualifying terms of the lrst will be understood is referring to the one next preceding,

### Hon,GeorgeB,Butler, Page 6, V-636.

This languageis cited inTideWater oilCo. v.Bean, 1483.W, (2d)184, 191 decidedby theCourt ofCivil Appealsat Dallas in 1941,whichalso cites the text ofFrix vq State, 148Tenn. 478, 256 3.W. 449, 451, where theCourt said:

"Therule of constructionbeing t&t s provisomustbe limitedto itsappllcatlon in 

### theparticularsectionof thestatute inwhich It is found,unlessa contrary intent clearlyappears9 certainlyit should beheld that theeffect ofa proviso inan amendatory statuteshouldbe limited in its application to the statute inwhich it is found,and not extended to theoriginalstatute ofwhich the statutecontainingtheproviso fsanamendment."
You are thereforeadvised that8 title insurmnce corporatfonorgrnlzedunderArticle 13028may acquireanabstractplant ina countyof less than90,000 populrtion ifanchwillnot ef’fectthe investmentof more than5O$ of its capitalstock inanabstractplant orplants.

A 

### title fnsurmncrcorporationorganizedunderArticle 13028,V, C, S.,may rcqufremn rbstractplrnt fn8 countyhavin less than90,000population,ffsuch wif1not result in the investmentofmore than50s of its c&pita1stock inanrb

### strrctplrnt orplants. Yeu~a wry truly A??RWED~ ATTORNEY 

### GENERALOFTEXAS
$&2i5&d& BY IddI&Denial

Assistant