OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN



### "Our prlnoipal

objootloaa to t&e 

### olauae me Do rollwr: * 1) A&iok 50s. O&.8., ana P.C.Arti

### oh **57** Q d s rln D

0D rt a n

l 

### otiom OS oorutitutlq

### flomroblo 0. **P.** 

### Liokhort,

MO 0

forbidden

### dirorl8lMtlw cad r&at hots 

### uo the offer, ule, or other%! , uong~~ 

### l pooltlon

of l t uk, or other ri&to 

### u&d roolPrltloo



# n o t l xpryd la the 

### polloy a0 u induoement to 

### lnouraneo. 

### ~umo to. IO that thv 0lame, hero u&r oonol&ra

### tioa, primrilfviol&e* 

### tho l pirlt and oamoo

rlthirr tha watiin( lf 

### a0 

### a P. 

### c. ArrtLolo **57** 

## Qth l&tar of 

### Artiolo 5053 in 

## that it p&o00

thepollop holder uponaboolllto

them rutsa& 

### 81ththe **ounu** 0r **uhatevu** 

### nu% **r** 

### of oharoo of *took 

### uw h8Ut.d **In** th. **b-1 oI&d**  thd **the** @iO)ho~U'O l t at uo 

### l o n o t s a p4that 

### Q r

80- n l

tw kh o l du, **but** thst of **a proforrod**  

### l **toakholdor, ownimg**  **tho** EWU 0 rr hu 00

**thuah** l

**0t** rorthj md tht~ tb 

### poUo*oldor boo 

### &ll the bonofito of l 

### oamoa or poforrod 

### l

tookholdor,

rithout of 

### the burdono 

### of l 

### wh a stoakholbr, uid rlthou won the mmlnal 

### “I QYn u~p or a O zJ l g lO t uk o hu oin 

### the o w p ul y. (8) The l&uoo

w r bo r 

### ullrrly

8loloadLng to the 

### r ooppot%vo 

### polio older, 

### aadpoullrr1J l PoOoptl

lo to 

### 8l8roproooat8tloA to 

### hlB, + to 

### ~$uamt 

### of **dlvfdendo to**  

### bo ro8lisod **under** l 

### uoh Aeouw, 

### SW hotmoe, 

### thatin 

### ordu to 

# r o ll l *&OOO Ufo polloy

theagent offrro tha !z 

### oopeot

l 

### wtlolg4tirlf

rldu lathlr form **filled** in l w h uar

a8 o l 

### a it10 him to dividend8 

### equal to thooo 08 rive 

### or tu ehwor or OS orproforrod l



### took. This s o w d~ like l 

### bonuoa. ma agent

~mpbuiaooth8t 

### thloontitles tho@lop holder to dlvldondm wm.l 

### to tho(u 011 

### fir003 ton ohavorulrhDmMdtho8,ulthoucovuhav **2** 

### to **bw or**  **p4** for **or** l **oouno the**  **omuship, ri**  **, burdono,**  **8ad bother**  **ot the**  **ohwoo. Tha**  

### bgont then 

### pUnto 8 roe7 ploturo 

### as to put 

### l walngs orthooapMy,wdprw p” tit0 ratura 0 and mDko0 it round like br dlvldeudo 

### IOM tbm par for the polloy~ ulwrou, in truth, if the o hue o



### of l took **be nan-gu,**  

### value or even '0"value,

withomll value r -*, lWh .ë 

### 10, or even In ml7 00noa1v8 

### lo olttrutlon, the rotwl dAvldMdo r y beO uuu t han ~~ylt p an d l 

### roller th8n thaw mdlmrll7 putioi lo boo P thqg 

### poll0100,md thor t 

### r

vod 

### 8nd mloled 

### to his polloJbofd@r **urlous 4urr.** 

### Hoaoroble 0. P. 

### Lookhut, pIge 3

~OUV 

### lottor 0r hbrwr~ r0iim01 

## 15,lg4,, lo ln put 

## a0

98 0 rm t h8t tb r u tt a l

i r r uu t u 000 

### on vhfoh wo deoi~ th0 reweoted opinion to k rp
pdloetea may l ppeu with @oator uaet1twA., 

### allovuo to4Boadando lonoat 

### ear or- roig4Y irr

ther0u08ia(r**roo-**


### "The putloulu 

### partlol#tloa okuoo quoted fn th0 00008d paugraph 0r 0~0 **origial** &ttu is not now peadirrp orl&bl8l o ur tip &hu t under Ar tio l 4749, but hu alrow T-l @IIdrr- br 

### boonrikd,vltho~ 

### lmpllod 

## QIpr0~1,aadi@be Lo g used l urrent1.J

la oonusrtlonvlth 

## l pg~oved r0ru Or ~OUO~OS. 

### In bddition to 

### the qu0t.d 0h00, u hat0 4u0* u ru0 0th0r rm 0r 

### gut101pating



## l leuoeo, *ub*tMtUll~ ldentloal vlththoquoted form, **but porhapa** 

### withrll@tly dirru0nt 

### ~0rdbg,kt00d br 0th~ 00mpa0~.

8ubotuMmlly 

### ldontlcirl jwovlolono

*lo&to any
or th0 tow Or mi0i00 4709, 

## 4755, 5036 md l o p e o lauy

* s> wodo o lro 0-t JOU had tb8t th0 

## Qur glJdo n ai00 I a QUO ti r0n rioht00’uy t l r a0 gr0ti0i~ 0r or 

### u to *h&her *e UvoFL l ~ah 0it04 0ei0a00, 

### powor end duty in the s t a t ed

l l r ou ot Mooo to 

### WltMuw O UT

T O 

### th0 l

tWt that thr firOt pWg?aph Of OU? 

### ori&laal letter mar have 

### ofhnvoyed the 

### l8prooolon thattherm ir, qwotionuoookrltt0dorlgi- ~~~uOAOWJM~O~QW~~Q.F ti fL?Ot tL#, 

### tho ol@nol inquiry lo 

### huebr amended.

%I th 0~0 

### or the 008pny W* the proOiOe 

### fOPNI

qUQtOd 

### %I&

w l 0008 d 

### ~8gFaph 0f 0~ orlglnal 

### Ytor, it 

### lo rbprooutod to aa the stook

### boldare bwo **by** 

## l

pproprlek 

### wrltton

reoartlOOQ

### rented that divldoMeto 

### polloyholdoso lzI l

### ooordan08rlthl



### uahquoted 

## proviolm

ehoul&

**be** paid

### mner8blo 0. P. 

### -t,P4@4

b0ro39 or 

### 8t tho em 

### tlmo divibud, @hall be 

### paid 0 11 t h r l t0ok 0r th6 0 ion a&so u 

### to vhet&or wo doolro your epln
### Ee opa b.uLal; th0 k6uit rmu009p 

### EL Vlththo 

### I op iu080utl or 

### our utloko above 

### 0lt.d. The rouQ0 we "@"~ro~~~~~@ rdditldpointlo tbtln 

### ~00~~i ry l

ob0t00tiu4 th0 l m ru8 0~ put;- 

### 01 tiogol8a8o,aoPenyru aothvobeen M 

### P iw, taken or t000rd bf the 0

### I oekholdoro

or 

### th0 ‘YIP lnvolvod, ooeuntin#

to the **pa-at Of**  dft 

### OAdOt0 po~O~b%V?S iA 8OOOHblOO 

### Ufth the putloalar pmtiolpating oleuao ievolvod~ Md IIS, thWfoCI, do8f.W t0 knOtI Ub6thOT SUSh

0r u&t0 ur~00mpmOt0Oth0 -toi ltoJ

### hoMore lo ma popor l 

### rltulm r= 

### dotorriw oonrormlt~ 

### or Mn~wfQomlty to 

### tha statoto~ pov~olonr oitoddr
m l . . . .

nb0 p0a0ip0t* 0~ w 00mri00t0 to b0 Ottw0 d t0 xii0 p o u0f0~ 0r l h00Oti0 0t00k iii0 s.00~0000 

### oagmt, 

### lnoorpomted udu Cha @ n0tmdatii 8t0tut00, IO OS r0 

### u I, Tltla 

### 78, Yernw~o Isl- ,~llt 

### %mh0d t0 urd go.



### lw Vhlo 

### poli0~

o&l1 partlolpato ln thm l

### uvLord l 

### arniqp oftho Q-u l 

### p of Dfreotom, born no: c **r$madadb~~ ‘**  **k$e**

rod 0r tho 

### l

00Ond polio~ ym end maually 

### thuo

### ubruhllo thi@&U~~~irlntuU rO?Oo. 

### suoh**Eonoreble 0.**  P. Lookhort, **page 3** 



### dividend0



### oholl

l

### oortm tra JlortaUty 

### &via(lo, Rc l o r v oo 

### roloa8od

on lapsod

poU0100 a0001 lntereot oumf~6~ utd **other** 

### peoslto on t&a bompukpe pti

### l lpatln# lmruroo u prNtkd b;r the Iawe of t& 

### 8tOt0 0r w00. 

### l A EX 8UCE A UUU AL DIYIo Ql D

A P Pa t TI Og HD

TO TBu8
POLIOX n A%Y CALUDU? mAit, 8uLL La Rrn xma rBA8 

### ~~sBDIB~DDIIQ~H)DXTB1BoIBD~DpIR~~ AHDPAIDTOfiiB8TOCZlCOLDER8 Oi'fB.E8OUT5AU8TAXS8 LIPSX8TmAxCPQalPANx II 8lJcH XluRoil 8HARm OP5CWoI 8TQQIQPTHH80- STA~LIFPi x8uRAJlcR

OQNPANT. l m 00 u t ed

h i s t h o 194 dy of

8t th0 OffiOO 0f ~OU#UA stotO0 uf0 IAs~o CapMy, Eouston, Tox80."


### I, 8eood

W 8 ‘WtiOiwta PliOr, ’ br *L?tU0 0s thO PO

### vloiono of rhiohtho l.noupod lo 

### entitled

to sham 

### int h 0 s u r p l u s l n f r q 0

0r 

### t he o o m p a ey i a propor - tion t0 tbo prri- p8id 0 th0 mm 0r hi0

r lloy. 

### Phiomharobt&our@rum8ybe~~blo 0 him, at the O~tiM Of the O-, 8t 8 **OOrt&** 

### flxod period 0.v u divldmdo. In tb aboonro of 8 

### l t&t8t0Pr 

### ~povlola~, the tine 

### Of distribution o f l 

### l

UV~hO t0 gOl.lO~ 

### holdoro mlido OB t& die

### orotlon of tho **dlrootaro oi**  **the** 

### l **-n** 

### l

xeopt 00 

### fO8 80 it **U, b.**  **btO88fAOd by**  **th. ObUtOr,**  **Of** 

### the ooqa~,o, v0lldb~lm(8oth0hlldv~ llrr 

### Xorkure IAO. co., 97 Ill. App. 547). 

### Wader 8

r 

### Uoy l ntltllJlg

theLprarod

to pertioipdo

la & diotrlbutlo a or the 

### ourplaooo l ooordlq to 

### owh prlnol~oo80 ml@& **bo rd**  

### pony,

the 

### iaourod

hoeno title

? 

### ‘ted by tbo**oom** 

### o Way ouoh se

### pluouetll

a Uotrlbutlon

10 8o4oby the 0rri00ro 

### o f t he o o m p wy,

udu & w l

uehprrorlolont&

OQ**pcuy ’** 

### lo **not roqtired**  **t0 distr$buto**  **t&** 0At&O SUPpiU0 (c&00f V. EpUitAbiO uf0 diO@UP. 800.1 tdo



### 51 1.x. 7l@, 46 t.R.A. 

### L88 73 Aa. 8t. 

### ). **rovuolng** 

### 57 

### H.X. 8upp. 8$1 40A If **the arght**  0r 8 

### polio7 koldrr T 0Honor&lo 0. P. 

### Leokhut,gmgo **6**



### fUUd1 0 l OAt a OAt

a hi0

l OAtiw

### Until th0 

### l

XJ?iUtiOA

o i t he 0.r .
M rf@t t0 SW 

### fC 8 OhUO Qf

l . . . l

%Zm ru le 

### that



### t;g;yot l



### wh l r i g h t 

### ao ontitlod hl8 to on

. . . . 0 l . , .

**‘ mVideAd#**  MoPa On 8 PO1107 Of **iAOWMO0 mwt,**  **oi oouroo,**  **bo** 

### Mid aasqd to the **rontraoto** 

### undor 

### vhloh

the Co. v* **Jlomlo,** 

### 1 

### 9 **8oorw** 

### (CUtlsao Iat. I& l 

### Ino. **04 Ark.**  **288 118**  **S.Y.** 

### 1019 f

r ovlolon

**that** 

### thape110@&or ohall bo @aLtAm 0 dl*1d6Ado

d 0.0 n o t l oAtaplat0 that 

### t h o

l a - l ~0d 8a7 a0t0t0 th0 

### 880-t or atidOia th0t " 

### shall k duluod, or qwstloa 

### tlw rooult **aftor** 

### the dloorotien or the 

### mnagoro hao ken 

### oxorolo~d in thl~ behalf. The omtrmt lo that 

### tho 

### lziouod @hall &VO tbO **bOMfit** 

### Of l 

### POk ditidurdr W th0



### It10 stated lnCoaoh'o Oyilopodi* of Iaourmoo Law, 

### Volmo 6, p4o 647)IHonorbblr 0. P. WOkhUt, WA0 

### 7

'In Aetormlnlng tho 

### l urplu8 

### to b8 

### arodited a0 dftid~ndr t0 

### iir0 in0~rur00p0ii0iO0,p0ii0i00 may bo AirideA into oloooo8 oonoloting 

### of thooo h Or in g

8 OOBBOA **3:**

lU **Of** ~OOW AOO , l ge Of 8ppii0a, kin4 0r p0 ior, md mount 0r pr~airpsr **-id.** 

### But, 

### l lthoqh 

### 0rAlaarily iii0 ~~lloleo 

### a0 olaoood 

### l **ooording** 

### to theyearof loow, 

### or l ooordbg to % z :: EZGYrP~$0Z :?%:2b: 

### ti0t4 0r **• UPQ~W** ai4 **i0rit0** uloq 01~8000, the 

### plan 0r larluanoo se Peotod, rather thRa the &to of 

### loow and age of tho lnourod, d8tsrmlneo tho 

### proper olaoriflcatlon; othervioe, the 18v of aver8@0, 00 ~0DMt.i~ t0 life iWWOQO8, 18 1OOt OX' oarlouol7 ourtailed. And oluoiflootlon for pur300800 Of dirtribution of 8urplW or prOfit must **llmftod** to polloyholdOro vho hwe contributed thereto, l

nb A8'0000~117 1nOhdeo 811 vho hove 00 ooAtrlbuteA. yut'th8rmOF0,under l OOntr8Ot Of life lnouranco vhloh proVlde8 **that** the polloyholdrr till b8 ontitled to ohnre 

### in th8 Al8trfbutlou of the OCBpM,'O 

### l

**UPp1U8** 

### aooordlng **to the**  **88thO&8 Aad**  prlnolploo adoP**tod by**  **tho oompany**  

### Sor **tho** dlotrlbutlon of lurp u8, mad under vhlah only ruoh proportion Of the 

### l

urplu8 88 ogultrbly belongs to tho polla, lo to be orvdltOA to it ond po%A to the polloyhddu, 

### tha proportionAOrl&Mtvd must ba 

### @ooert~lned

and detOrmlnod **bofavo the**  polloyholdor OU UfAkiiJ M outlon et &V to reoover 4ulyportion of 

### the 8urp1uo. **And,** in la u a portlolpatlng pollo7 provlAe8 for m 'vwltable @hors of the Alviolble 

### surplus,* It vi11 

### AOt be cowl&rod thbt th0 OAtirO pFOfft0 VOX’0 iAtOndOd to b8 **dlvzd** ed amfq t&0 polloyholdero, bat ouoh a 0har8 0~07 80 tha mumgore of the company may, In the exoraloe 

### of their Alooretlon and good faith, declare a8 prOfit8, thO7 hovlng in ViOV 8 rv88onab1e urd ~oaoouy provision for tho safety of the ow."
We **oonrtrue said**  partiolpotlng clsuoO or oertifioote AOt l8 8 gu4rurtre by thr oompony that it vi11 ever dsalorv l dlVi&~~& **to** it8 OtOCkhOlder8, **but** If It should do SO, then it8 p6rtlalpoting polloyholdsro vi11 r008lVO on their pollOioo 

### UI Uowt not 

### lees than the aaoh dlvldaed dealered on tho 

### numbor of oharoo otat8A In the oortlfloate. The l**txwk** holders do **not** Auoruiteo my @took dividends ever to be **paid** the polloyboldero and no 

### otouk ever p.ssrooto the pOliC~hOldU8. It i8 noted that the prrtiOi&Mlq **018U8e**Honor*ble 0. P. LQokhart, 98ge 8



### Or O~rtirlMte d~# not Ot8tIBth0 WBbW Or 8h~88 Of ths 

### omon @took 

### or the oarpug vhloh will bo ~8.d a8 a bar18 In detemlnlng the amount of dltldmdr to **be** paid. A8 VI under

### 8tMd foUr POQUO8t, it 18 foUr 908itiOll 

### tbt th. O=puV OO ul d diWMiMt0 l 8 t0 OilO~OidW8 bf iA8W tin gl di r r er - l 

### nt amber or rh8mr or tL OWOkI 8tOOk Or the 008LpU-U in the blank oontmmd la 

### the ~tlOlp8ting 0lm8e 

### or Orrtlrloat.. TO **illU8tr~t41** fh. OOiOw Bi&ht 8*11 **tW0** 901101*8 OS 8 thoauand **dOlhF8** eaoh and ln8Wt in **One 88rtiiiO~te**  iiT@ 8har.8 Or 8tWk and la the other ton rhuer Oi ItOak. Ir th0 OOIBpMy **rOiiOWd** thi8 pOliOy Md **In8OrtOd** d%rrWInt 8harOr 

### or thee 

### oommon 8tOOk to 

### be used a8 4 bar18 in deter8lnlng the uount oi dividend8 to be **paid** in ldmntlo81 pol101.8, then 8UOh an 8otlon would be in tlolatlon 0r 

### Art101e 509, Vemon’r 

### Annotated Clvll Statutar, and Artiole 578, Vernon'8 Annotated Penal Coda, 

### Bovevw, ior the purporsr Or thi8 O@liOn, We mU8t 888-e th8t the Oollouy Win 18@41- l~oOndUOtlt8bu8llu88 and th8t088hpO~O$aOldar Of the 88ma 

### ola88 ~111 bo treated llko over ln hi8 01888, and that 

### th oimpeny w I othar polla~ol&c 11 not rerort to any

. dl8OririlutiOn Vh&8WVbF. **fb 9088ibilitr**  **wt th8**  **OOOL** PenJ oould di8orimiMtr bdsveen it8 polio~holder8 dOe8 not **$Iltifl Y8**  **in OOIU3iUdirrg**  **tht the**  **OOHI~ Vi11**  d0 **80.**

**ktlOb8** 4753 and 5036, 

### Vernon'8 Annotated Civil **st8tUt88,** prorido r0r the arlaU.l4tlon0r 8Ur9xU8 rw dlvldond pur908e8 and forbid the p@Pwnt of dividend8 out of rU& Otbr thur 8t~91U8 prOrit8 a8 **dOriM ia**  **8ad** l **tiOi88.** Ta~;al r tlng elaure 

### or Oertliloate, above quoted, 

### must, 0 oonstrued 88. permlttlzigthe paymat **or** 

### dlvi**dendr onl;**  

### out **0r ruob**  i8uru.xrurplu888. 

### lstlole 4729, Vernon@8 Annotatad Cl+11 **St8tuter** 4180 fOrbid8 

### tha dividend8 OthW m fFGW **8UF9iU8 pOfit8**  and **iOr r**  pa 0r **id8 @l8FUr**  

### toed dlVldOd8 

### to goll@yhhalderrla 0x0088 Oi the amount of 

### the l xp enw **0r** 

### loalng in the promlum and pFOVid88 rurthw th8t in Oal* 0r papent 

### 0r dividend8 in 0X0.88 

### or the 8moUnt Or th0 8XpOIi88 bAdit& ~88WO8 8wi bt38d U9 t0 OOIW the deilolw&o~ ln net 

### premlum thereby 

### areated.
In flew0r the 

### foregoing, it 18 our opinion th8t 

### theputlolpatlng a$awbe or oerti.floete, **quoted above,**  doe8 

### not ViObtr UIJ prO~i8iCUk Or the b8UI?8ILOO hV8 Or thi8 **(Itate.** 

### Theretore, hwlng 

### awered your rir8t quertlon @I **tlWetOfOre rtated,**  it 18 JlOt**MO888M~ t0**  **di8OU88 tkW**  **9OVW8** 

### 0r the Board 0r xn8~ranao commi88iowr8 vlth rrteronee toBonorablr 0. **P. Lookhart,**  **page 9** 

the r1thdmwa1 

### 0r TOW &p~OYlhl 

### 0r 8UOh roru &Ad other uttoro rohtlng thweto a8 mentioned b yOUr lnpuiry.



### Tour8 very truly aTTaRaKP

OBIrnALOF TKXAS By M&L Ardell Y1111ABE8



### A88i8tmt