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 me whether 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 OS less 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Article 13028, V.C.S,, was originally enacted as H.B. 153, Acts blst Leg., R, S,, 1929, Chapter 80, 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 company 
Hon. 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 Andy sell 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) Make and 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? 

n 0 0 ,* regulating the amount of paid 

fn capital of all corporations operating 

under thfs Act, n oN 
Hon. 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. D 0” 

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 p 0 

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 One Htidred 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 plants 
Eon, 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 may be 

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 -9 on 

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 policy. 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 &mend the 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 mn abstract 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 nmake and 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, George B, Butler, Page 6, V-636. 

This language is cited in Tide Water oil Co. v. Bean, 

148 3. W, (2d) 184, 191 decided by the Court of Civil 

Appeals at Dallas in 1941, which also cites the text 

of Frix vq State, 148 Tenn. 478, 256 3. W. 449, 451, 

where the Court said: 

"The rule of construction being t&t 

s proviso must be limited to its appllcatlon in the particular section of the statute in which It is found, unless a contrary 

intent clearly appears9 certainly it should 

be held that the effect of a proviso in an 

amendatory statute should be limited in its 

application to the statute in which it is 

found, and not extended to the original statute of which the statute containing the proviso fs an amendment." 

You are therefore advised that 8 title insurmnce corporatfon orgrnlzed under Article 13028 may acquire an abstract plant in a county of less than 90,000 

populrtion if anch will not ef’fect the investment of 

more than 5O$ of its capital stock in an abstract plant 

or plants. 

A title fnsurmncr corporation organized under Article 13028, V, C, S., may 

rcqufre mn rbstract plrnt fn 8 county havin less than 90,000 population, ff such 

wi f 1 not result in the investment of more 

than 50s of its c&pita1 stock in an rbstrrct plrnt or plants. 

Yeu~a wry truly 

A??RWED~ ATTORNEY GENERAL OF TEXAS 

$&2i5&d& 

BY Idd I&Denial 

Assistant