OF’kICZ OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

Dear air: 

,;“\ 

\ \ 

Opinion no . . 4%55$6 

R45: May tb0 00rarlc a te 

payableXalg_ out b? 

surplus, in tlie$o 

“\ 

,/ 

.gwbposoU be lsgarjy 

issued and sold bi\the 

/ 

‘Jsion ‘~rservve Life In- 

<.’ ./‘8llrml00 $ompany , inoor- 

. . . ‘. poratedxunder Chapter 3, 

Title .4e of the Rev ised 

. ..-. 

./ \, 

Y Girt.1 etatutes BP amend- 

” e&j x 

‘.. 

Your i0tter.a >Auguet 19,~.l9+3, requesting the 

opinion of this departmnt on the abovs/stated question is 

aa follows: 1’~ ‘,.‘., ‘. 

“Ih my letter of August 14, I forwarded 

to ,&u a‘+py of ‘correspondence between Honorabie,$ae~er Moore aqd ,~the writer with rererence 

,‘to a p~opoadd,.rorm or” oertlfloate to be rold by 

ilJuion tieserve Lire Insurance Compsny payable from 

‘its surplus:.. Additional oopiea lncludlne the surplus certifioate are enclosed for your ready rerereooe;.. Mr. ~ItIsore has requested me to rerer 

the mstter to you. Copy of the request and copy 

0r the xmicler of laoorporatlon 0r the insurance 

company are enc loscd. 

“Till. you pLeaae advise m wnethsr the 

certificate payable oqly out of surplus, in the 

form proposed, ray be legzlly issued md sold by 

Union AeserVe Lif 0 Insurance CocIpauy, incorporatad under Chapter 3, Title 78 of the Heviaed 

Civil statutes a8 mended7” 
The proporrd oertliioate under ooneideratlon 

readr an follow8: 

“THIS CERTIFIES that John Doe, the holder 

hereor, ha8 pald Into thr 8urplur of UNION RESEW’S 

U.F% I!WiiCE CONPm, herelnsrter oallcd 'COmpaayr* 

the mm or Dollarm,# 

4 ), and the Company agree8 to pa 

intereat thereon at tb rate o? five per oent (bj I 

per annum la the manner hereinafter net forth. fnterost la payable on the first day8 of January an&! 

July or eaoh mar. The prinoipal is payable on the 

day or - io Pallure to 

Tan7 lnnstallment when due’rha-t th8 option of 

the owner or holder hereof, mature the prlnolpal, together with all intereat then due. 

*A8 to th8 Compauy, thie Certfiloate 18 payable 

only out or the 8urplur OS the Company and no other 

asset8 of the Company 8hsll ever be llabb thereror. 

‘For value reoelved, the payment of all prinolpal und Intereat ln the amount8 and at the tim8 stated 

above i8 hereby guarauteed unoondltlonally by Charlea 

A. ;doCormiok oi Austin, Texa8. 

*In oaae or the llquldatlon or the Company, 

and a8 between th8 stockholder8 and oertlrloate 

holder8, the right8 oi the Certificate Holders ahall 

be in all thing8 wperior to the right8 of the Stookholder8 or the Company. 

ing ii 

“Thir la one or a ‘number of oertlfioatem. totalprincl2al 

all due a8 to pr lncipal and interest at the aame time 

a8 i8 this Certirloate. 

“The iesuanoe ot thl8 Certlricate ha8 been authorized and dlreoted by the unanimoun vote of all 

the stook ot the Colpany, and by the uuanlmoue vote 

or the Directors of the Company. 
Zionorablo 0. P. LookhArt, pueo 3 

720 

*IN 1IzN”;Stl ‘XER~OOB, The Union 288ene 

Lite Inruranoe Company ham oausrd thir Certificate to be aigned by It8 duly authorized oirioerr and ltm Oorpotate seal to be horaunta 

aftiX8d thl8 day or A 19-0 

“Oharlom A. UoColalOk oi Auetin,. Texam, 

hereby afiixes him mignature herato am uzkoonditional guarantor o? tha pwmmnt of thir Certlr*08te, aooordlng to it8 tenor and 8rr46t.* 

%e thlnlc that the surplus certirlcate proposed by 

the Union Heaerve Llfo Inruranos Company oan be dlstinp,ulshed 

rrom the oertirioate oi the Century Life Inauranoe Company 

whioh was dimapproved dn.OaT OplniOn No. O-1814. 

It IS oonorded in our Opinion No. O-1814 that the 

right to borrow money 18 inherent in a oorporation, mubjeot, 

however, to the limit at ions whioh may be placed u.pon it the 

. . 1~~s of the goverment to which it is responsible. Ry issuing 

and selling the above mentioned oertlrloate the Union Reserve 

Life Insurance Company seek8 to exerolsa it8 premgstlte am 

a corporation to borrow .mney, but meek8 to ooatraot with 

those rro3 rhom It may borrow mney, that such money will be 

paid back at a partioulsr time, and bear a particular rate of 

innreat, but that it will be paid baok,only rroln a apeoial 

. 

page 505r. 

It Is stated by Couoh on Insurance in Volum8 1, 

as * * amag the oorporata powars enJoyed 

by a oorporatlon famed to oarry on insurance 

business my be meat loned the right to aoquire 

ad bold such roal estate as Is necessary and 

proper for futurs use in aarrylng on it.8 business, 

to borrow money toepay lossem, or to protect its 

asseta. + * l ” (To the sa;pb errsot see Am, Jur., 

vol. 29, p. 84) 

The attorney for the Union iieserve Life Insurance 

Company lnrorms urn by various letter8 written to us in oonneo- 
;ioonorsble 0. 2. Loolrhrrt, pdge 4 

tion with the question under oonsideratlon that ths proposed 

certificates are not to bs aolQ to ths pub110 gemsrally but 

-dl?S to bs aold to a very Lisitad i?JKCber Oi psCSon8, sad that 

the proposed certificates are not to be larksted in such a 

way as to oom within ths tsrm8 of ths 3aOurltie8 AOt. In 

oonnsotlm with the rorsgolng statmeat it ir to be understood 

that ws sxprss8 no oplnloa rhsther suoh propossd osrtitloats8 

ars srouritles within the abasing of ths Saouritler Aot. This 

is a utter to be dsteralned by the Secretary of Stat*. 

It is oonosdsd also 10 the Oorrsspondsnos of ths 

attorney abovs msntloaed that “it is not eontsnplated anf 

Mfloer. or direotor of ths Company will purchase any of ths 

propass osrtif ioates,w 

In answer to the above stated question you am 

respeotiullJ edrissd that there la no statute prohibltfng 

an lnsursnos oompauy suoh as the Union Reaervs Wfe Snsuranos 

Cospang from borrowing raonsy in ths nanasr propossd by said 

~ompuny by the iaeuanos of said proposed oertlfloatsr nhloh 

- ars nsrs evidence of tbo money borrowed by said Company. 

Yours rsry truly 

By vArdsll Ullliams 

~sslstaat