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 cerd ln opinion 

Your letter of Otto requesting the opinion 

of thlr department on d therein, Is a8 follOU8: 

treated to 

52, R. G. S., 1913, 

ding death benefit 

of any other perred 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, ,113 an3 fraBrraa1 bermfit soolety, 

bxobpt one operathg under the protfrdons of Arts810 483Sa, pe?dttWl GO imOUe a 4ceth benefit oertlfioate providing fcr PaYQIOnt Of 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 regulating 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 benefit sooietiea On Y likited barnis; providing requfremrnts 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 obllgatlonn of beAefit l ooiettier 8FO dotemined by rulea of law paouliar, if not exolualraly, rpplloable to thm, aad the legality 

of their aotlonr i8 not to be tested by rules which apply to organizations 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 quO8tfOne aubrlttO& by you. Mtlole 

14313, Vernon’s iinnotated Cid1 Statutee pmvidsa in part that 

r*i.$hen any 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 ax00061~ 1Ga powere, or Se not osrrylq aut its oontraate in 6oo4 faith, or it traxmotlng buefnesa 
.~__ _---*- -, yulj‘z , 

P~UdUIb~tlyi OI WbOIWVSr uny 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 thereto 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 

l uoh 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 l u4k p~004oQInge 

shall be oomeqO44 by the Attorn4y Oenerel against 

any euoh sooiety, until after notloe has bsen duly 

served on the ohlet cuemutlve ofP1e.n ar the eoolety 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 l olloit 

&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 l soomhnoe with its table of 

rates ee prorI444 by its Constitution an4 Lawe, en4 l ball 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 aIvnn04 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 oertliicatee 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 l ooiety. 

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 l tteo heform8 Q oP oertitloetes 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 l oolbent 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 dotormining whether or not the l oolety ha8 Pow humlreb aembers 

holding 4sath benefit oertltioatee. Arter oarePu.lly l x4nlning the toram of oertliloatee l noloeed 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 eubmltted with your request. 

Yours very truly’, 

ATTORtnrV QMRRN. OF TEXAS