**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* muatbe 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&e2

*U your answer to the nbcvs queatlon ts lo ttw uegtitive, doas atl:icc6 cm611 of the atteahed Pcrxmof certifiostee **qUalip;r** a8 e ‘?eoth benefit oertirlocts’ for the purpose OPdrterxlning the mmber **of** embers **of** a **friiteraol** benefit society? note partloularfy Purt ‘2in the twored-bordered oertifloatas an.1Paxt (I) In the blue-bordered oortir ieatr.
***If your**  **anmfer to**  **th*,Plrsh** **queatioa** In in 

### the **affirmatite,** ,113 an3fraBrraa1 bermfit soolety, **bxobpt** one operathg under the **protfrdons of**  Arts810 483Sa, **pe?dttWl GO** **imOUe a**  4ceth benefit oertlfioate providing fcr PaYQIOnt Oflcra than $l,OOO.OO aa a tloath **bunaflt?***

Chaptqr 8, Title 78, Vornon*s rdm0tdbea Ofril Statutes oontulne the tnmtutory prorimionr, 6efiting andspaolfloally **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 benefit sooietiea OnYlikited barnis; providing **re qufremrnts**  to be **met** before a paneit 18 **hued to**  auoh soolcty by the larurenee departmentOfthe State. It hambeen broadly said **by** tne **supreme** Court that **the** riuhtr, power@, andobllgatlonn of beAefit l ooiettier 8FOdotemined **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 or**ganizations** oommwoialin ptuvose. (Xlrtz v. Soreraign Oeap, if.o.8 ’

. 248 8.W. 436) WIhave tails4 to find anyoourt deolsion **paaslng** on **question8** similar **to the**  **quO8tfOne aubrlttO&**  byyou. 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 haaless 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 icrmatisfiftd thet anydoaertio society !iaasfail& to oonply rltn say provlsioti of Wi:3 ohapter, OTis ax00061~ 1Gapowere, **or Se**  **not** osrrylq **aut** its **oon** traate in 6oo4 faith, or it traxmotlng buefnesa.~__ _---*- -, yulj‘z ,

P~UdUIb~tlyi OI WbOIWVSr unydOL?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 maypresent the irate relating thereto to the Attorney SOnera]., whoshell, lr he 4eea tha oiroumetanoee warrant, oo~m~e ane&ion In quowezrento in a oourt OP

### oomprtrnt ~urIe4iatlon, an4If It shall then 

### appsvr apon the trial that euoh eooiety ml~ouldbe eloced, eald eaalety shall **be** en~olned rlvra carrying on nay further buelnese andeomoperson ehell be eppolntad **r404lr4r** 0r luohsociety and ehnll **pro4444** at onoe to tab poeeeeeIon 0r the bOok4, papers, **mozA4~8,*****nu other**  **re44te** of the 

### l

oolety, an4shall iorthwlth, **undoi** the dimatlon oPthe oourt, **pme44d to**  **aloe4** 

### the orralre oPthe 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.nar **the eo**  **olety** rrt4a reeeonabls opportwllty given 

### to 10, on a 48% neuub41x1said notice, to showoeuse why e-uohprooeedlng should **not be**  **oo1sm4riowl.***
**ArtI 4838**  **euthorfzee a**  **eo4i.oty wh4n**  **lt has**  **neoived** Yprslimlnary oertlrlo~&~e m authorlee b? said **etatuto to**  l olloit **&4mbsre** ror **tti6** yUrpO44 or **oompl4ting its**  

### organl44titm,4nil such **eooi48y** eh&:l **collbot** Prom6eoi1 applioant the amountOPnot **lees** than 01%re(ruLr no&W&ppeyment, 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>uoheoolety shnll **inour** any liability **other** then for woh aI**vnn04** yaymenE8, nor Ieeue anybenePlt o4rtlPIomte nor pay **or** sllow, **or** 0fr4r or pxwsri44 **to** pay **or** 4llow, 

### to anypbrcanany 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** aniittnt saohapplloetlon **must** beior st laaet one tho,usakd &lien for death benePlte **berors the**  **sooiety** otmoompleta its or(ganleatIon an4 **begln** buelneaa. Ttlia **statute furthor**  provides that whenany eooisty has les8 than **four** Dunllr64 me~bera Its, chtrrter eke11 beoom null an4 7914. UowOIvbr,this ettatute does not provide for the amountor 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 oPthe type required uncier Seation 4 **0P**ArtI 4838 Por qu4llPylng membmr8In 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 oPthe 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~4be eMwere In the negatlre, an4 it 18 so **anawend.** YouPurthsr **state** in 4rr44t that it OUTanswer **to your**  rht **queetion 18**  **in** the negative, **do48** any one or all 

### oPthe l tteoheQ

form8 

### oP **oer** titloetes quelliy as a *death 

### benwilt oertlPloate* for the purpose or 4etemInlng the number ot **msmber8** 

### ot the Pnteruel bonePit soaisty. Ouroplalon MO.O-6092, **rererred** to In your inquiry, ho148 among other thIag8, that the termwPou.rhundred memberew u8e4 InArt1014 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**x4nln** ing the toram of oertliloatee l noloeed with your Inquiry, It I8 our opinion that all oPeel4 Porme quallry as a “644th 

### benerlt eertiPloate* 

### ror the purpose or 

### betsralnlne the 

### number or members or tha Preternal **b684tit** eoai4ty.

dlsam returning herewith the Porn eertiflo.sts8 **eub mltted**  with your request. Yours very truly ’, ATTORtnrV

QMRRN.**OF**TEXAS