OFFICE OF ‘THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

Attmatioa: 0. P, Saadorr 

Aaal~t-3oouriti.r Dirlaion 

DOW Sir1 

addreeeed to the 

nre lrrw alnoe 1934 

'iootag~~sold prior 

MOM 0r yoour queibtloa ha8 resulted in a 

al OS the entire law goreanl~ the organization and opem$lon or oometery aasooiatioas In the state 

of Teaaa, am well an the publie p01i0p that proffipted the Legislature to armnd Title 26, Vernon’e Annotated Xatutes in Aots 

1934, 43rd Lsgialature, 2nd Called ~esslon, Chapter 6i. 
&tiolo 925, Yunon'a Amotet. 3tatut.r 61 2~x.w 

prorid. t&t 

mhuy o o wtuy l rroolatton whloh ha, l atab- 

~laJ$ and ir nm mbtabdag, operating an4 eona oowtuy an4 wrry araoolationrhloh 

mho.llLmttu rrlablieh smlataln opuato sad/or 

oolrbuot a owok 

3' 

rid thla stai. urdt to 

thin Ao8, 18 hue y wthoriud to orta & ish . . . 

aa lmdaolblo fund for the geneal porprtual oan 

TM8 Artlole rllrtlwr pro+lu*8 t&t thla trurt fund 

Vmll forovor remain lrrrduoiblo end lntiolablo", and ahall 

.bo ia vo r l tooordlrq o d to law the not boom fmrn raid law&0 

moat to %a omd rololr for cha gonoral oan, mlntmmoo, 

and abelli~t or the ouwtuy*. 

Art1010 925a roqulrou that 

“A pupotorl oar@ aaamtery 16 on0 mhhh 6h8ll 

hueatkr depotit in it& 

r 

rpetuel oar0 funa M 

provided aadu the prorim ona of Art1010 5 an 

wo ma l tqplralont to a mlnlmtu or Two&y 7 20) ooatr 

par rqm foot ai ground of %ntermsnt right l oU 

OE dlrporod ot am pupdaml oare property for o8rtlb 

latemoat, uatll woh tund naohw a mlnimm .oO Oao 

RUE&~& Thoumad Dollar8 ($lOO,OOO.OO~, and the 

mlaimum thonafkr ehallbr Tea (10) Coat8 

rqoaro rwtj a mlaimm or Ffftwa Dollarr ( % &O) 

p a r l aah oryp% latonaent rlsht 8old or dlepo8ad ab 

as perpetual oar0 property for mrosalouu latumnt, 

aaa a ainlmw of Fite’Dollare (#WO) par *ash 

aiohe informoat ri t #old or dia oroU of a0 

potwlauo proper eh yfor oolumba r! orlatorm&n. rAll other oaoterlrr huetotorb’ opmatlfu l 8 norpotrul oar0 oewtuler r&all, with%8 one mar froa 

the l ffeatfre data of thlr Aot, wtahllrh their 

trust ftantla la oaah or legal rwiirltloo in ooaforaity with the protirlonr thoruof and In th* Waat 

or rame w to do, ahall not thuraftu oxmate 

a8 a porp4tual aarr or in0 aaro rmotuy until the 

pro~lrlona hereoS:are wapllod with." 

Artlolo 929 roquirrr l aoh perpetual ouo oaatuy 

to ii10 ia ltr offloe l r-wall a8 the off100 or ,%hthr Sooretu7 
. _.. 

‘701 

Honorable Wa. t. L8wWn~ Pae* 3 

o? Stata, a statomant o? the amount of prinol 

potwl oars Sand, the nabaro of tha ln~ortwa 

olpal ?und, the nunbor of 8quuo rooti of gram spoo aad 

the auubu OS arf911, u8d a aumbsr of nlehea dlspor& o? 

wdu perpetual oan, prior to snd subsoqrunt to the l naotwnt of thl8 Artlolo, oaoh srwntoly rot forth, 

Artlols 916 states that 

-0 to m8 lowmtuy l swolatlon’ and *a8wolatlon’ are hour&~ tued Iatrroh 

mean say w oration mm or 

or 8ay a8.wo % tlon not opemted $0~ a 

1s or shall be authorltod by it0 l rUoles to’oo~l.. 

duot amy one or mom or all of ths bwlaosrrr of 

a oeaetuy.w 

T&a qlwrtlon you prosent ir whether oaeto 

7 

aagooIatloas, msanlng wrporatloa8 e non-profit uwolrt oas 

opuatlng ar pupotwl oar8 aaumterlrs, must l stabllsh a 

trust deposit, as 8ot forth In ArtIolr 925a oaloulatod upon sales o? psrppetual oarr lntumont prop&y ooounIng bafore the parrago a? Artlolr 925a In 1934, or marely u on 

all emlo8 or suoh lntermont rl&htr ooaurring a?trr 19 P bV 

Perpetual oars awotuy oontraotr ~IWOSO upon the 

ornmtsry aswolatlon t& l ndur idutg r r g of foruu 8mhg for 

and propsrly maintaining the owmtery as a plaoo o? kautlfled sepuloher . Those who buy puptual oare omotrry rights 

often do w in their hour o? beroatemat thlnkfrq onl 

sultable nmorlal to their dseeasod kinwta, 86d an 

susooptiblo to the promlsos of a promotor. ml8 ww 

traot to be po#?mod by the aswalatlon parprtually, aad 

the peoullar position or thorn who aoquire ths rpstual oars 

interment right*, not only jostf?lo8 but no0088 r %atM a $orous oontrol ot perpWul oar@ oamoterles by the Stat& 

those endr), the Lsglslaturo has oaaoted Artlolrs 9% 925% 

925b, dertgnod to ?ul?lll the oontraot obllgatlon of o-tory 

assoolatlons, to protrot thorn who purahaso Oh80 rbhtr, 

and to l aforob sultable malntenanae o? the buIldi 8 Upa 

gm.md~ ?or thm knrrit or the wmualty in gem l-2. 

I 

r 

Suoh loglslatloa, without doubt, 18 r0MtltutlOlul 

md propem Vho State la the uarslao of ltr polioa Dowor 

1 haa t&0 rlght~ to proride ?or the l stabllshesnt 8ad dlroontlaI ~00 or oerartuho ud t0 rqmlate ttmir us*.” 14 aor. fur* 

i 

sea, 63, sootlon 2.~ 
Eonoesblo Wm. t. L8nab Pago b 

Fa+@oraorr ~thow l aotory 88m818tiaa.~ tgmrrtlng 

under the prlvIlogo or l l or ?8to l h8rt.r 8Zo 8Pb sot to 

ahUUIII# roplatlons and dut r 08, for th8y t8ko t&u ir 

4 

o r 8k l h8rt.r dtb *o rl t l xprossly roseno(.to tKt.to 

0 *altar, rofom, or smsn f *. &tlolo 1310, YornoS'1 Ammotat.6 %Bt\ltW. %OBO n@BtiOBS Of l M OtO?~ SOlp Olí8~iOli8 

wd l S8.4~4tiOS8 OBB k s~&WtOd, th.Wforo, ..d.; the go1100 porr oi tbo St8t.j or under th8 rosonod penor l ? the 

St8te mar 4orpor8tlons lmofrr l s three rogulrtlonr por8ala 

to oomotsry 4orporstloao. 

mc, qUOSt:W 10, thU.?aPO, rhsll th.8. rO~8tlO.s 

bo applied to $ho8. tTS.BoOtiOSS , wnt8aplstod la Artlolo 925, 

whIQ mruma betore the l n88tmSat of this Artiolo 8s well 

48 thO8e OOOUtin~ l ubS.qU.nt th0r.t.‘) ‘fh.3’. 18 1pO h~)S6. 

within thrso strtutos, ~otornlng porpotusl 041~ o8motorlos, 

lnflI4*tIag 811 IStontloS Of the k#iBttUrO t. wosrifno tb appliO4tiOa O? thO8O’~4@..~8tiOBS t0 84148 O? lOtI OOOUMill(r 

situ t&4 rnrotmsnt in 1934. PO the 4ontrsry. homovor, Art1010 925s ,nr.rldos, 

"All other 04mOtOri48 horototoro OllU8tim( 88 

porprturl 04ro ooaotorIos shall, within one you 

fro. t88 .itastiTr dSt. d thi8 AOt, l st4bl1sR their 

trust fund8 in oash or legal 8orurltIrs la ooniarnity 81th tt. proTidon8 tbuoof, and in thr 8V.a 

Ot f8ii~O SO t0 de, l hBll rPOt t&S,rOBftB? OpWBtO 

8s 8 ~a~atrrslosr4 or fro* oar4 oemotory ontll tho 

~r OTiSiOXIS hOr OOf l ?O BtS4p11.6 8itka 

n0 deem it slgniflosnt th8O A?t:s1e 9258 &WtBinily 

to the oslsulstlons of the trust doposIts is aou8hod in laa- 

&3lB@ Ot th8 DBSt tOllSO, t0 Wit1 

.A pupoto8l Bars soWtOry is one rhloh shrll 

hero8tt.r 6OpOBlt la Its porpotusl 4uo faad . l . 

8n SElOUSt OttitBlOJXt t0 0 4llSi.S. & ?..Stf (20) 

Cents par squ8ro foot of g0ttfia of lntrrmont r-8 

S&d 0l'diBDOB.d Of SD pl'P.tuSl .Sr. fPOp.Fty f.r 

l grth iL¶tomO5t. . .; a dnlmm af Flitson Dollsn 

(315.00) per *sob rrypt Intorasnt right rold or 

&18p0844 or as pupotw8l omro poporty so MWOhum Intrrrarnt, and l ninImua oi Fits Dollus 

($5.00) par ecrsb niche lntomat &ht 80ia or 

dlrpoaed a? 88 perpetual earn nroporty to oolurlmriua intomoat. g (ufidr~i11dRg l Uppiid.) 
Honorable wm. J. Lam a, Pago 5 

‘703 

Rad tlu Lagialatura latando6 to lldt tha tnmt 

drpoalt to mu0 0010~ or porpatual ran 

la th. ruturo tonao 

propart 

I' 

languaga 

dlrpoaa or’, 

ror lxamplo, ‘whloh thy ml1 aall * 

01 loo i U hararrtor~, = uld hare km rpp?oprlata. 

Tha ngulatloa or parpatual oar0 ormatrriaa ooatan lmtoa that tho not lnooma or tha lnroatmd trut fund ir 

to !a uaad to aaiatafn th6 rntiro prrpatual oara oorwterr 

Ii the rund woo oraatad only out 0r thoaa prpotual tit.& 

moat rlghta rold sitar 1934 the burden on the.8 lOto, OrJpto, 

and nlohoa, aold ritor 1934 would bo onaroua, lnaawah aa 

the inO~66 Or thi0 rUnd WOPS~ b0 UOO~ 00 flMnO0 the tlpk0.p 

0r th0 ontlro porpotual oar0 propart 

010 tion. ‘-‘r think thla warn not th, ;r 

or th0 oaniotor~ ama 

l*tlU.. 

dantlon of tbr La@,.- 

Art1010 1, 

Toxaa poridaar 

z?ootion 16, constitution or tbr wt. or 

VO bill of attainder, ox post raoto law, 

r6troaotlra law, or any law impairing tho obllgatlon or ooatraota, aball be node.” 

Willa the Oonatltutlon or Toxaa olaarlf rorblaa 

the paaoago ot rotroaotlto lawa, it lo our opinion that the 

lam. in quratlon do not ooma within theso oonatltutlonal 

rohlbl tlona. 

% 

Thorn oan k no doubt thst th6 ~glrlrtloa 

quoatlon would ba oanatltutlonal ii It required all 

oomatarloa aalllng perpatual car0 rl&ta to naintaln a 

oartaln oapltal atook, or to oroato a truat fund or a oartaln amunt datom.lnod by tha alzo or tho oomatary bualnaaa, 

inannrruoh am thla tJp6 of ragulatlon baa bean uphold In 0th~ 

ri0id0 0r law aa ooaatltutlonal, notnithatanding tb oontantlon that euah ragulatloa lmpalra tha obligation oi a eontraot, mad warn unoonatltutlonal 60 a ratroaotlva law. In 

Jmrrrrson County Tit18 buaranty Company f. Tamor, 29 c, W. 

(2) 316, the 00d8810n Ot Appoala atatadt 

wo rurthor hold tht It la tha l ottlo6 b w 

0r this atat. and 0r thr untra .etatoa that a Qorc 

poration auah am thia ham co VoatOd rl&t in t&O 

pri~llogm or doingi a tit18 guaranty bualnoaa 00 a 

00rpOratlOn l fxl thgr8toro atirara no Los8 of an 

r.atod rlgbt or @m-rtr fn 6 oh*ne h the *to IutO law raqulrlng larger 0ap5.tOl ICoOk tO OOntiOw 

b ua lnaaa !n tho l tata.a 
Honoralla Wa. J. Lawaoo, Pap b 

Alao in Daaiel 7. Ttmll and Clarth Iraatmat 

Oonpr~, 93 @. W. (2) 372, tb LSuprmo Court or Taraa l tatod: 

“It Ir oontaadod by Trrrall and Oartb that 

the mloa mad n8ulr$Ionr 

(Iaauran80 C00daaionaraf 

r&mtad by the ~mr( 

Ii y authority or 0 law 

whlah kaaam l iirrtiva artor the aoatraat ktwara 

it and tha tltlr rompany woo l ntar*d into, l aaAot 

ba applIod 00 00 to rtirat aaab p r a r lol uoatraata. a 

We 07rrrule thla ootentloa. The pollor 

tb atit. to regulate tb bualnara oi tit P 

omor oi 

l inaulc 

*nom, aa to r ormo 0r oontrrota urb ratoa, oanaet ba 

ocmtraoted arrr by tLr tltlr ampaq.~ 

16 Corpus Jurir Srauuduai 417 stataa, 

*Oa tha otbr hop& &es lte tlwlr titrmatitc, 

apwatloa, l tatutoa rra upha P d wJUh have ao adterse l rreoa on trotad or l ubataatIal ri&Oa, or 

maral~ mgulatr rights, (oltlag Danlal ‘I. T~rall 

aad Oarth Iatratmna Ooapaay, 93 9. W. (21 213) 

or ohawe their r0rr, partioularl~ mhara muoh lc 

~1010tIoa la in tb proper l xeralaa or palIar 

power, ur whIah l oaaerna tlm publla Intaraat or 

mlater aarol~ a0 ~ovarnaaat mattara.W 

Llkarl8a wa do- the lo~alatloa la quoatlan to ba 

aonrtItuaIonal am a proapratlTa regulation rathrr than a ratroa*tIta ngta0ai0n in its lntana and l oopo, albeit tranamotiona both prior and ,aubaaquukt to the l naotmaat of this 

~o~~l*tlon or0 oonaldand in aaaaurlng tb ragulatlona lmThis lr a ra(ul8aioa prorp~atlta Iwaharaotw althou& pradloatr4 upon part 00 well as rutam 00100 of pspaw1 aaro iatarama rtht am a maana of mraaurlw tha obllgatIoa iapoao~ 

Yo u l ra ahorarora l 6rlaad that Artloloa 925 and 

9250 ocapel 011 omatorf aaaoolatloaa dralrlnd to ooatlnua 

~rimaa aa parpetual oars or~aterlaa, am dailaad In the Aot, 

to build up l trust fund to the l tatutor~ raauvar oaloulotma oa footap, and/or orrpt Iator-nta, -a/or aioh* 
705 

’ 

Honarabla h. J. Lawson, Pago 7 

intorunts rlghta 001 prlor 4 to th a l aaotm*nt 0r tCo80 mla188, ma well am thoaa l olb l ~baaqu~nt thereto. 

Par) truly Joura 

f OEXEPAL OI TXXAS