- . . 

T~~EA~~ORNEY GENERAL 

QFTEXAS 

R-788 

PRICE DANIEL 

ATTORNEY OENERAL 

AUWI-IN U.WS 

January 13, 1948 

Hon. George B. Butler 

Chairman ,Board of Insurance Commissioners 

Austin 14, Texas Opinion No. V-474 

Rc: The constitutionality of 

Section 2(A), House Bill 

85, 50th Legislature, 

prohibiting e.ny conncctions between burial associations. 

Dear Sir: 

Your request for an opinion regarding the 

above subject is two-fold: 

1. The constitutionality of Section 

2(A), of House Bill No. 85, 50th Lcgislaturc; and 

2. Whether this Section of the Act 

applies to Burial Associations organized 

both before and aftcr the effective / date 

of the Act. 

These questions will be discussed in the order stated. 

Section 2(A) of House Bill 85, 

turc, reads as follows: 

50th Leglsla- 

"There shall be no connection directly 

or Indirectly between two (2) or more Burial 

Associations. No member, director, or officer of one Burial Association shall be a member, director, or officer of any other Burial 

Association. No person whose husband, wife, 

or employee is an officer or director of 

one Burial Association shall be an officer 

or director of.any other Burial Association. 

No funeral director, undertaker, or funeral 

home directly or Indirectly connected with 

or designated by one Burial Ass;~clation as 
Hon. George B. Butler, Page 2 (V-474) 

Its funeral director, undertaker or funeral home shall be connected with or 

designated by any other Burial Association 

as Its funeral director, undertaker, or 

funeral home to furnish Its members with 

its services and/or merchandise or to 

service its policies or to be in any manner connected with Its affairs." 

The caption of the Act oro<;tlng aBurial Association Ra$c Board contains, among other things, the 

following: , . . making it unlawful for there to be 

any connection between two (2) or more Burial Associations; . . .' 

Prior to the passage of this Act, Article 

4875-a-4, v.c.s., which prohibited in general terms any 

connection between Burial Associations, read as follows: 

"Art. 4875a-4. Independent Assoclatkons.-- 

There shall be no connection between any 

two associations operating under this law 

and no one association shall contribute anything by way of salary orcompensation to any 

executive officer for the purposes of such 

other associations." 

In a former opinion, O-2879, by this Department, the following connections were held lawful under this Article: 

(a) Where two Burial Associations designated the same funeral home in their policies; (b) where there was a family 

relationship between the officers of the two associations; 

and, (c) where approximately 150 persons held policies In 

both associations. Later, another opinion, O-6956, rcaffirmed the legality of almost identical connections in 

addition to these situations: (a) Where two associatlcns 

appoint one agent to write policies In both associations; 

and'(b) where two associations occupy the same quarters 

and share personnel as well as operating expenses. In a 

third opinion, 0-5018, rendered after O-2879 and before 

O-6956; the connection of, interlocking or common of,f;f;; 

and directors for two associations was condemned. 

rulings were each made In the light of Article 50684, 

Section 23, v.c.s., which limits to $150.00 the value of 

benefits allowed by Burial Associations. The two asso-, 

oiations involved in O-2879 admitted that their purpose 

was to provlde benefits in excess of $150.00. Such were 

the views of this Department concerning the purposes of 

Article 4875a-4, supra, up to the time of the enactment 

of House Bill 85 of the 50th Legislature. 
Hon. George B. Butler, Page 3 (V-474) 

It has been contended In briefs filed in support of the proposition that this Act is unconstltutional that this section of House Bill 85 violates Section 

35 of Article III of the Constitution of Texas, which 

provides: 

"No bill, . . . shall contain more 

than one subject, which shall be expressed 

In Its title. But If any subject shall be 

embraced in an act, which shall not be cxpressed in the title, such act shall be 

void only as to so much thereof, as shall 

not be so expressed." 

The first sentence of Section 2(A) Is admlttedly germane to the caption of the Act. The argument Is 

aimed at the last three sentences of Section 2(A), which 

declare unlawful the very connections held lawful by 

this Department under Article 4875a-4, supra. The crux 

of the argument is that the wording of the caption failed to signal or Inform the members of the Legislature 

or the public that such connections bctweon burial associations held innocent by the Attorney General in 

the former opinions under Article 4875a-4, were on the 

threshold of being declared Illegal in the body of the 

Act. 

The general rule of construction harmoniously 

applied by all of the courts In these matters Is that 

the title or caption of lcglslatlve acts shall be libcrally construed so as not to violate the constitutional 

fi 

revisions. 

24, 

Gulf Insurance Company v. James, 143 Tcx. 

185 S.W. (2d) 966; Board of Insurance Commissloners v. Sprolcs Motor Freight Lines (Civ. App.), 94 S.W. 

(26) 769; 39 Tex. Jur. 95. It is also a common rule In 

construing captions or titles of legislative acts that 

where the provisions of the act are in any degree rclated or germane to the title or caption, the act will 

not be held unconstitutional. City of Beaumont v. Gulf 

States Utility Company (Clv. App. ,.163 S.W. (2d) 426; 

Phillips v. Daniel (Civ. App.), 9 1 S.W. (2d) 1193, crror refused. In the last-cited case It was stated: 

"The law is settled that under the constitutional provisions referred to any number of provisions may be contained in the 

same bill or act, however diverse they may 

be; the only requirement being that they arc 

conslstcnt with the general object or subject, 
Hon. George B. Butler, Page 4 (V-474) 

and have a mutual relation and connection, directly or indirectly, with the gcnera1 subject or object of the act or bill." 

Many cases were cited to uphold this ruling. 

WC cannot agree that any part of Section 2(A) 

ia wholly unrelated or foreign to the caption of the Act. 

The connectlons condemned in this section are not indirectly, but directly, related to the subject of the Act. 

The real subject of this Act is the regulation of Burial 

Associations through the creation of a Burial Association Rate Board. As a part of this subject the Leglslature has made it unlawful for there to be any connection 

between two or more Burial Associations. The first sentence of Section 2(A) is an almost word-for-word duplication of the related wording in the caption. The last 

three sentences of this Section simply specify certain 

particular connections which are unlawful. The 50th 

Legislature in so specifying these connections it dccmed unlawful avoided the dilemma created under the old 

Article, 4875-a-4, supra. If the Legislature had done 

In that Article what the 50th Legislature has done In 

Section 2(A), there never would have been any necessity 

for questioning the purpose of Article 4875-a-4. And 

simply because the Attorney General In the prior oplnions held certain connections to be lawful under that 

general statute Is no reason for holding unconstitutional House Bill 85 of the 50th Legislature, which declares 

those same connections unlawful. It affords no basis 

for holding that Section 2(A) violates Section 35 of 

Article III of the Texas Constitution. 

Section 2(A) applies to all Burial Associations without regard to whether they were organized bcfore or after the effective date of the Act. The language Is broad, clear and conclusive; no exemptions, cxccptlons, or conditions are contained therein. But conceivably, it may be urged that Insofar as this Section 

applies to assoc,lations and their contractual relations 

existing prior to the effective date of the Act, it violates Article I, Section 16 of the Texas Constitution, 

prohibiting the making of any law impairing the obllgatlons of a contract. 

We recognize the limitations placed upon the 

State in the exercise of Its police power to regulate 

an act or contract which affects the health, ,good morals, 

or the public welfare. Lone Star Gas Company v. Kcllcy, 
Hon. George B. Butler, Page 5 (V-474) 

140 Tex. 15, 165 S.W. (2d) 446; Nichols, Labor Commissioner v. Hart, 119 S.W. (2d) 1068. At the same time 

the authorities are uniform that if the regulation is 

a reasonable one and results in a benefit to the public, it does not violate the safeguards provided in 

the Constitution as to contracts. 

We think a complete answer to this assertion 

is found in the case of Daniel v. Tyrrell and Garth 

Investment Company, 127 Tex. 213, 93 S.W. (2d) 372. 

There, a title insurance company contracted with Tyrrell 

and Garth to insure titles to its land. Later, the Legislature passed a law granting to the Board of Insurance 

Commissioners power to promulgate rates to be charged 

by title companies. Exercising this authority, the 

Board fixed a rate which materially changed the rate 

contracted for between the title company and Tyrrell 

ana Garth, who contended in the suit that the previous 

contract could not be affected by such action of the 

Board. The Supreme Court's language which disposed of 

that contention is deemed'appropriate to a disposition 

here. It was said: 

"It is the rule that the contracts, and 

rates to be charged, by those engaged in a 

business affected by public Interests, may 

be regulated. Munn v. Ill., 94 U.S. 113, 

24 L. Ed. 77; Union Dry Goods Company v. 

Georgia T.S. Corporation, 248 U.S. 372, 39 

%;i;"me .Court, 117,,63 L. Ed. 309, 9,A.L.R. 

. 

"The business of Insurance generally is 

now recognized to be one affected by public 

interests. 14 R.C.L. page 857, and authorlties there cited. 

II 

. . . The police power of the State to 

regulate the business of title insurance, as 

to forms of contracts and rates, cannot be 

contracted away by the title companies. Shaw 

vs. Lone Star Building and Loan Association, 

supra." 

Moreover,, it Is well established that parties 

who make contracts,affecting the public interests, do so 

subject to the State's right to limit~or prohibit the 

making of such contracts. See: International Brotherhood v. Huval, 140 Tex. 21, 166 S.W. (26) 107. 
Hon. George B. Butler, Page 6 (V-474) 

From what we have said, we do not wish to be 

understood as ruling that associations unlawfully connected should be disposed of without regard to the 

vested rights and interests of the lndlvidual pollcyholders of such associations. It 18 our understanding 

that the Commission will promulgate reasonable regulatlons and requirements through th& new Burial Associatlon Rate Board which will give adequate protection to 

such policyholders. This can be achieved by permittlng 

such association, under proposed rules by the Rate 

b3m'f,st;;e ;;;s~r+ice Its d eceased members until its 

; or (2) to reinsure its business In 

some other company (not a burial 'association) for cash 

benefits only; or (3) to convert all such associations 

wherein the benefits will be cash only. In this manner, 

the vested rights of Individual policyholders of such 

associations will not be distrubed nor vitiated. 

It is our o inion~,thathe regulations contained in Section 2(A P are reasonable and that they 

result in a benefit to the public. The Legislature 

in the same Act, Section 2(B), specifically declared 

that such connections are against the public policy of 

this State as follows: 

"It is against the public policy of 

this State for a Funeral Home or for those 

who own it in whole or in part to be connected directly or indirectly or affiliated with 

more than one Burial Association and the provisions of this Act shall be liberally construed and the Board of Insurance Commissioners shall make such rules and regulations as 

may be necessary to carry out the spirit and 

purpose of this Section. 

Thus it will be.seen that the Legislature wlsely'declared the clear purpose of the regulations and made liberal 

provisions for the Board of Insurance Commissioners to 

exercise the authority grantedtherein in a spirit of 

high regard for the welfare of the public. We are confident that In the exercise of this authority, the Board 

of Insurance Commissioners will exercise sound discretion in carrying out the spirit and purpose of this Act. 

It is therefore our opinion that Section 2(A) 

of House Bill 85, 50th Legislature, does not violate 

any provision of the Texas Constitution, and that such 

Section applies to all burial associations whether organized before or after the effective date of the Act. 
- , 

,- 

.,, 

hon. George B. Butler, Page 7 (V-474) 

SUMMARY 

1. House Bill 85, Section 2(A), 50th 

Legislature, does not violate Section 35 

of Article III of the Texas Constitution, 

nor does it unconstitutionally Impair existing contracts. 

2. Such Act applies to all burial 

associations organized before or after the 

effective date of the Act. Daniel v. 

Tyrrell and Garth Investment Company, 127 

Tex. 213, 93 S.W. (2d) 372. 

Very truly yours 

ATTORNEXGRNERAL OFTEXAS 

CEC:wb/JCP 

Charles E. Crenshaw 

Assistant 

APPROVED: