. OFFlCE OFTHE ATTORNEY GENERAL OFTEXAS AUSTIN

**Hon. trrak**  **3. Xear**  Amlrtult s4ewit1e, Cw~t*lonu **boontary of**  

## stcte mstin) Trxar ikar sir:

sting thr opin78 sattsr, hQ8

::p+ny 18 an inmrnesa or~alli.l(l

life ot th* provisiona statute0 or Texas, **UI** and **toll to**  **the d8** **”** eantalnlng the tol-Hon. Trank 0. rear, Page So. 8

aadcraiont

ooupoar oootalnrd la pol~oiar Llmled **by** 

### the Co ,?cv ~6 arrlgnod **rOr** that j)uT~Osa.



### Vs accordance

with unmlmus roclutloa of tbo rtookholderr of the Century Llfo Imirano~ **Con$wky,** it 18 **agree4 that**  no **bitldoadr** @hall bo deolartd or ;.a16 on thb oapltsl hook OS the aor,zany until the prlnolpal OS t!Sr **oartlifoate** 

### an4 all lntsrrst

duo oader lt rka11 hava **been** rotired and paid ln full, and lo **event** the Cmpany abculd **br** lfguidatebthe ob:lgatlomumr **thlr** osrtlfoatr #hall **bo** prlcr, und 

### l perlor .lam to **that** or tt* rtoakholdrrs.
=;ltn acoordanoewith thr lawoof the State of Texas the anoimt ot t!Ar oertlf~oste tmethar with the **interat** thereon rl;all be payable only out OS the rurplur of tta Cozwny after 

### worldlrq **for** all the re~orvea and other llabilltier OS the Comjant.
*Tkis oertifioate 1s tranrferablo only oa the bcoks of the Company la person or by **duty authorized**  **attorney u;on**  ltr **aurrsnder** properly
**ene0rrea.** 

### =XEl Tl'ML?S3

Xi12W?stha Centuryilte lmsurnnoe Cosqany ha8 oauaod tbl.8 orrtifiostrto be signed by its duly autkorleeb ofttows 6nd lta oori3orete

seal to bo herytoDatfpl tk.18 **by 0r**  **, .**  **. -** *

Searotary Trasidont

. c ghera is no cxpres* itatutcry awth~orlty for Chapter 3 Izmuranoe Cor;o?ation@ to borrow money) neither 18 there any rtatutory &TohlbltlonaC;alnot **tbd** exerOie@ Of such :o~er. **Thsro** im, 0r oOurm, co 8tatutOry **au** ttorizatlon ior the lssusnce oi tbeoo ;r:;OSsd eU>luS oe-tlrloatebc:ida.

Prlrato

It la t33:c0ad, as a goneral ;r3;oalt:on,ttat oorporotlormrmy, wlthout oxgrecr rtotutoty auttOPlty, **torr-w** nosy u?.en neoesmry In the legltlaatrnon. PTank D. Kecr, ?6&. 30. 3

ocurso oi tlm oorporato brulnrrr. -18 ~~10 wouid, it &eem8, llk6wlse applr to M lnraraooo oo,qorrtion suoh a8 the C*aturf Life Inrumx* Ceqx4.

WI, thsrbr0r0, OOGOO~~, iOr **th0** ?w?o~o~ 0f thi8 oplnlon, thot the Century Lilr Irmuranor Col.;a.ny bur tho pawar to borrow annoy rbsn naoessary in tka l~itbtito oourso of itr buslzosr, omflnlr~ ourorlrsr only to thr puertlaa **as to**  **ubothw** the progor*d 8810 OS l uoh murplu8 oortltiaatoboa68 rould **ba** a le it&et@, lartul end au**thorissd** eSerOlSo ai t&o **8ener a!**  **laplied** power **to borrow**  **money*** On this question, tCore are no prOOdMt8 in Tarar.
The plm of ISSUing aad 8Olliry to th0 FUbilO 8uob 8ur7l1.u oertlflostobond8 **by** tho Century Life IJIwrance Ooqa.ny, 

### whereby lt mayraise ~omy, oloarly 18 not tha raploymnt of tte ::auai an& ocrmwclal raotkod of borrowiq money. Tke trrnaaotfon will not embhoo an unequlrooalobligation to **return** the ;rz?erty borrowed at regular int6rvci0, or at a **rttited** timma nor doe8 It uabreod l sthtod, or repbr, or oartnin tfne for tts payment of intorest. It draoes only,+ **obl&atfx** to repay **the** IWEJS

Mvanoeb olct

of thr rurplro i,t

t;r*-oabpnny in 4xoecs 0r g30,OOO. ~auid/or **from** tho proaeede Of 44rtain 6ndQWASentOWpOnb OOEtaftbd in pOifOie8 i8- sued by the ooiapary **and** assigned tsr that pur;~ao~, with the tritereast thereon gapable only out cf the 8urslu8 of the ooz.pany. Thera 18 **A0** ;ower la thr holder8 0r suah in,nrtrumants

o sraot payaftnt, dlthar of ;rlnolpaland interest,at ang atatod time, or at any tlzao, ?or that Rattu. The osrtlfloate3veat: in the QPmer a patu inters8t in the oa;ital or property oi the oowa4, in ease of llr\Alction,than **the** stookholder**thtceioiVe8** poaseaa; and tto oertlflootor further doalaro the **ropap** ieat of tbe'prlcoip4L ttewof with interest,when and **it ever**  **dot0 to**  **be superior**  **to** the right Oi the **ItOok** holders to dfvldends. Iurtherzora, In the oontraot of rubsoriptioo for suoh **06itifiOtte8,** fhero n?pwr8 tL:i* prorisionr

*oa co.l;llathn of t. Is subecrl;tionltls al80 *reed that f&ore stall be doilvored to m nithout ,Cilrtl;sr

osat s?.:clsas

3 the ospltal st ..ak **of** the **century** iX%%eurance can';any, ruiiylion.

?rank 0. Seat, Pa&e lo. 4

. % ia and non-Mae88abie, uhloh aaid l teak

**ha8** em dmvooltd with tha ooacant tor **tbl8** pur**po80~"**
**It ia**  olear **beyorb a4**  **Cuoatlcm** that tha tranrl otlonr oonturiplatrd **by** thr Centw Llfo Inauranoa COBpany la the sales of tkeoo 

### 8Ul'@UOoutifioata **bonds** 

### are ad 'hUl8- and tho 

### OO~panff8 uOt 

### *bOrWWin6" a8 thooe t8rt8o S4aook In their ordinUy OMOrOlal a~16 legal 

### 8011OeeIn fwt what relrtlon to thr,oaa,oany the oer%lfioeta

### holdu voula 

### l tan6, in a 1-1 senoo, whethof 

### a8 8 prsfrrrod staokholde? or as an annuity ouster, or ';oJIothln#

018e, %a imatarLll 8UffiO4 for thla oplnion, than ~$11 oartalnly not br oreeta **thr usual**  dobtor-ordltor

**,** borrowor-landrr

**, ralat**  **ion** vt.lah 

### 18 known arind

lllootrrtrdla ordlnaxy oosmreiai tranaaotlonr 

### uksroin !nonoy

18 loamd and borrowed.

It la **our** 

### oooold4r4d oplnlon that the prlaoiples wnounoed **by** rr. **Juatioac)** I3aKeanaa **a.?d** Butler In the oaae of Taylor ~8. Z%lladokQA **and** ilsadlag 1al:uay 031~ panf, **et** al, and UCalsWnt V6

. Ptlla4al~~la and 8sadi~ **a5liway OOZ;SMJ,**  at al, **1 X84.**  **a6p. 386,**  **oorroot;y** state the let wpllaabla to tho,iaatter under donslderatlon in thir opialon.

At pp So0 and 391 In 

### the abava 08&a, Yr. Suatloe Xoltonnan

**My8:** ***X&ataver porrU**  th4 **defendant** 

### h88 &I the pro+ iru oar only **be** found in lto **gercnl** authxlty to borrow ooaoy. Walther In the oEarter oi th8 dofar?dant,

301 in tho 

### 8wzlal **aot** wLloh m&t&r

### 1Z.8 it to sell bcnd8, whioh It cay ~6~0 below par, 18 anything ooztalned to 

### 145alleot&o oontested **propoaltion, UdO88**  **it oad**  be put on the **i3OtiRB Ot**  **8 108fb**  **%a8** it them to10 oharaotar? I think p?aia.ry

not. It doe8 not proposo to oreate tbo mlatlon of debtor and oreditar bo**tween** the 

### dsfsndant **and th8**  **4UtSOrlb4r8.** Tha mozep obtalml by tko defeidant oould **wt** be **r8- g4rd4d**  as borrowed, beoeuso **tkat iD.plie8**  SO-laburaezeent,

an4 lt la not deaandablo by ;yhX;bl orlbera or **gayable** by the defendaS. rot the aaarntial and dlotlngulstlng**Qml%tie8**. of a loan. It oontuplnter l 8tlpul8tlonthnt

the **rubscrlbere,** In oordderatlon of the oua **paid-not lrnt-by**  thu, rfxll bo l ntltlod to rooeiro, ln a reaotr **and** unorrtain oontlngmoy, a portion of the drtondant'r

### l srnlnjje,

to be IUD**uro4** by a eertnln rnta per oont, upon three **thee** the l**ume paid**  **by** thorn, nnd eftor thnt da11 partlolprta 1~1th

the ecmsoarbardoldere in the dirlelon OS the **reelduaq** 

### l e r oin ge i

**By** uhat alloweblo a0rinitim of l lorn or borro vin g l uoh a **~~in6tloa** oan **be** rbrroed I am at a 1088 to eon-

#or will tho lsrt that it **18** to **be** lvl**d.nOBi 01**  

### the **8&d DrltiIk4**  **Of tb0**  **d~f8dUIt** ohango **Itr** inho?mt $baraoter end brlq it withLn the ran@ of a power to alob it ia not otherrlu raforabla.

‘In one reepeot, nad in one 0~~17, **door** 

### the plan propored ruamblo l loan, rod thet 10 In the resiilt to be attained. They are both **txpodhnte** tor rrifilq money,Jut tbg *tbo& g **~00omx418~-**

**At 2~**  **398 and**  **395, in**  **oonourri~,ti.** Justioo Butler l

nye:

“ That the dsir,?naatr hnre ;ouor to borrov **monay 18**  **not** quostiozrd,**and** oould not be. WC.. pl8latlffr assert, **hox*r*r,** **that ttle**  **18** not a ~p~;eltlon to **bo?rou mo~b~,**  but l l **ob8me**to 8011 The derendnnteOAlm a proicsltlon to borrow that it la 

### l **trlotlv**

- oonoedlng that, l? it 10 not, buC rlrtuall~ 18 to sell stook, thy hare no latiul authcrlty to oarry it out. Thr l rltal 18SUOof 1&W

18 ehbarp1ydorlned **Md** preesnte6. It lr GIN thnt ndthsr nqxiroe **nor admit8**  oi *ttsrdsd dteousel.on.Btery l h.ilaelbh d0mfti0n or the term **borrow** or loan, **am** ap;lled to rrmay acd oousrrolel transactloss, **embrrooe**an obl.lga-Eon. lrack D. wear, ?age Uo. b



### tlon to rmarn the ~mpwtr borrowA A loan **of awn.7**  **i8** 

### u!iirorMl~ underdocad to b8 

### the dellwry O? l Oertd n 

### em t0 wOW8r, 

### on oontnot for its **cdu.rn** 68&l8=117 **with** **inter*et,** **88 OOCtp~n8StiOfI**  **?Of It8**  **dOt8CtiOn UIb**  **~80. Ts**  **Oall** tb. **pSm8ot Of**  **GoW7 t0**  **s:?OthaZ,** who 18 to ?oOein en6 PWIanMtl~ r+kia is l8 hle Ovn, in OOIi8ld~~tiO~ ?OP Ut MLIIUi b4n8fls 02 3ZW?lt, **8 lOM,**  would **Saw to**  **be** l **P18h d8P8@**  **Of hn**  6uW..

men 18 SO 8Uoh thw kfIOW t0 8W?OO or trraMOtion# in WOO87 l8 M 1rrwIwmable 10~ **in** the **8SnoS** bera 1nvolVed. @o+wnfMnf8 bale 18WIed **Obl~&itiOzl8 WitbOUt**  $rOVi@lOn **of 8ti&&a**  tlon for c(l~ym& of the grlnaripal borrouedg but euoh Obl@tiUIe are r*detmable at plwuure. Rumlng, howwe?, for aa lnd~flc1t.o tiae, vlth no pziwer

in the holder **to oxaot**  prymeat, the **bare** oor& to bo Peg&r&ad **Se** lrredewaable usan lnreataent in them 18, themtore, traetei **and** deeOrlb,sd, not 08 a loa0, **but a8**  the pUI%hW Of

ain ooiImsrul0l tremea0t1on*. App171Iq thlr **tort to**  th. DrODO8- ition here uador tocsfderatlon,It b4om8 plain that tba treomotlon oo:~tes>lsted 18 not a lo-. *.*" 

### fUn&arsocrlry ours) Purther, 

### frooi t&e not0 to tb0 *bore Oase, l t pa 39s we quote:

l m * 6 In tke oa ae of Eo ct T. ~ulokellror ;aln.Co. 70 X.Y. 139, 0.6 **ooc;5n7 being**  **ia nS86**  of fu&de, the rtoolcholder~ adopted 4 bplav protldlzq that rtookholdorr who 8hOdd **8tUPa%d8? t&dim**  **Oel%ffiO¶t88 an4**  **38~** five **do115?8 00**  

### each sm. of etoakahouldbo l

### ntltlad$0 the l

### -e nuabor **a? 8hSr@8**  **of >rOfm-~d**  rt.:~ &culd be entitled to 3 :er oat tk:::~ to beI&IA. Prank D. ?har, Pa&O HO. T

. . paid out 0s the **gmfite** 

### 0s the **o~;any, any**  **8w**

plru **tbaraafter** to bo 

### dlrld~dpro rata eaoq ooraonMd sr0fmro4 StoOkholder8. 

### Yhe oawt bald tC8t it 414 not fSl1 nlthia the ?ovartO~- **borrow aono7,**  **and W&B**  **ultra** rlree. **lolpr a.,**  **8SJ8:** 'It *aa not 8 **borrovlag.** ?'h.idea t$ bar**r078b.g i8**  **nof fiihd**  **00s tmiOS8**  **tbOm 18**  **in th@**  8&?earuOt

th8t%?OE

l jGOUIf8c,

Of undorrtandiry that what 18 borrowed ~111 **b8 npd.4**  **0s** 

### roturnti th8M t~n8aOtiOn8 1% 1, :%,pii!i:tl:!h it **18** oslled, but nbai, la 

### ?eeB4

. ~,ty8aotlon 10, 

### that the oourtreon-

.

**3%. SSIO**  **Of SJMOtt**  **1. OOEtbfitO~O**  **06tWiihtd** Jllnsm 00.‘ ut al, 808 ?ed. Rep. 

### 881, l~voln6 bond8 18.
**rued by**  a oomoratlon by 

### wElsh It **aersed** 

### to pal thou 

### ?a843 rrlue 

### with interest tit **0s** aortafn ?uud8 areated ?rOn the IL& **8ur3h8 0~cifi4p**  **Of the**  **OOIS3a~ ~6**  **in** th0 event of liquidationor 6188O'iutiw, tha ob~igstloo
**8bCBl:d** attaob to a 1 

### the run&S as& 4SSSt8 Of the O-y, tiT@ather with Other **:ZOViSlOll8 8fSil8l**  **’ t0**  **th8 8UPJdW**  

### ooawfloate **boa48** under tonslderstion horeln. ¶%a oaurt held **that** the in8tntariStS trr curotionWr8 ad provable tQSili8t th4 08tSt.S

O? the batkrupt **OOrpUl ’** **StiOn,** for th roawn that 

### they oreatrdEO ilxed llabllltiy agalnet it.

It ir, therefore, 0~~~op1ixfon that the graoral lwllod authority 0r **tto** century Life **Inrorsaar** co-,any to borrow nonq? roil4 not lSgsllz8 it8 **gropoarlt** ospedil t rw ralrl l **uP?lUs Oetti?**  7 ItLOWy,J XUUEiiJ~J,

thb **fSSURn0~**~6 **8Sh Of**  **oat0** bonUaruoh **88** the **8US&Ih** whloh lOocm~anled your letter.

**A8** obsaned in 

### the beglnnb Of tttl8 crpliiioa,

tha **8pOOlfiO 8tatUte8**  **0s t,xae**  rolatlng to **insurance oorgor**  atlow ad petloularly to thos8 

### ormtod under Obapter **3,** Title **78,** 

### ibvl~edCivil stetUb8 O? Tax&o, 1928, a# 8madSd, do not SxprSSely authorit 8uob insuranos Scm**3snlae** to **borrow** mocby, nor do tksy prohlblt the eXerOlee 

### or 8-h ?ower. It 18 8fgCifiM5t, althoe UOt &iVelk OOUttrOiing

?OIW ih thi8 OphiOn, 

### that the lb&htW ia emSting **Chapter** 1, Tltlo **08,** Rarlssd Civil **St8tutae Of**  **%S8, 1928,**  P~nlbe, 

### &lb **f** 

### l

rtrlnl~

to mutual lii0 

### lnsurano8Oaas?eo floallt authorlab l dVanOO%Ont8to Suoh

### 73

la sureno*

@0093sDleo

by My porooa

la aILm nu

l lDll4.T to 

### the pursh.40 oi tha pmporod surplus oertliloato bodr to b, ~MOU& by th* Centu?r Lit8 hat&r-* Collgu~. t?hb l uthOri ution

10 found iB A rti 48lb, rup ra , m0 ra0t tbd the hgi014tun d*Oti lt ~00r8rarl, t0 OSpn44ly 4ubhorlx• rueh Cb4pter t ooap4ni.o to 

### rueln l 4vuiewmnto 

### in thlo mumo~, definitrly lntlloateo that it 

### oonoelted

mok pew? to bo ma-alatent la lnour~oo eorporrtlono 

### oreated uader rnd by **authorlt~ of**  **t&a** otat**utro** thorotofara anaot.4 **by it.**  Chaptar t of (IOWTOO, mo ori(%n4lly l

no ote4 

### la 1909. fhlr 00n0fd**t10* oartdnlf 1rw aspha to t&o poaftlonrr hare t&m la thlo op nlan;

f nuwll, t&t, oonood~ the powu la m lnou~0ao4 **oorpor8tian** ln Tax40 **to** borrow monq, the turtbrr gowar to 

### lm~~m rurploro4rSltlo4to bonda, a8 ecmtenplated b bo 14g4ll7 L tW&nttq IAS. fnmiranoa WJI~, oaonot

. 

### You 41-0, themfora, r4opootf~11~ 4dvlsoa 

### that lt lo tha 

### oplaiooof thlo dogrrttaaat thab 

### the CoaturyLife Imetwanoe Compaayof fort Worth 06 under the 14wa of T41141, to I Toras, lo not autcorti4ou4 ruqilar osrtlrloato boadr with th4 term an4 oondltloao and la tbr mncrr oontuplated, u l 4t **out** la tziio opinloa aad in your lettw.

WAtob