i 

nn 

OFFICE OP 

THE ATTORNEY GENERAL 

AUSTIN.TEXAS 

Ovarruled by O;k587-a 

/(.>, : i:fd I' 

Ronorsble CI. ;:;. Lockhsrt, Chsirrlan 

Rosrd of Insurance Commlsnioners 

Austin, Texas 

Opinion No. O-4587 

Deer 7lr: Ile : Incorporation of title insurance companies under Article 

1302a, as emended; powers and 

duties of the Board of Znsuranca Commisaionars to prescribe 

rates and policy forms for title 

insuranca risks outside of Texas; 

deposits and reserves required 

of suoh oompanles; their liability for franohise taxes; filing 

fees required; ellgiblllty of 

property to be reodved in psyment of oapltal stock and surplus. 

We have your letter of recant date requesting the 

opinion of this department on the above subjects, whioh letter sets out eight separate questions. We also have your 

supplemental request maklng certain additions and explanations in oonneotion with question 7 and adding a ninth question, whioh question No. 9 is divided into twelve subheads. 

lows : 

Your original opinion request reads in part as folW!i%is is the first title insurance oompsny 

attempted to be formed under Artiole 1302a a8 

amended (Acts 1929, Alet Leg., Reg. Sess. p. 

77, Ch. I+0 as amended by Acts 1931, l&d Leg., 

Rag. Sess. Ch. 269 and by Acte 1933, l&d Lag., 

Reg. Sess. p. 750, Ch. 222). For our guidance 

in the incorporetion, licensing, .examlnation and 

regulation of this company, es wbll as similar 

ones which may be incorporated in the future end 

companies which came utier the new legislation 

above cited upon its enactment, we request yolrr 

opinion upon the following points in oonnectfon 

with the construction of Artiole 13028 as it 

now stands: n 

Your questions are hereinafter stated and answered 

individually. 

Question No. 1 reads as follows: 
Hon. 0. B. Lockhart, page 2 

nDoee thle Board have the legal power and 

duty ot prsearlblng polloy form5 for ~150 lo 

writlag titla insuranae outalde the State of 

Texas by oompanles operating under Article 

1302aV 

We assume that your phrase “title Insurance outside 

the state” means title insurance oontraots medo outside the 

state on property outside the stete. 

Seotloua Nos. 3, 4 end 5 of Artiole 13020 reed em 

r ollowB t 

*Sue. 3. Corporations 80 formed, au ml1 

ea foreign oorporatlons en8 those oreated under 

Subdivision 57, Artiole 1302, Qr tha Revised statutes of 1925, or under Chapter 18, Title 78, Bevised Statutes of 1925, or any otheo law in 60 

2ar as the buolne5s cd either may be a tltla lnsuranae bualneso, eholl operate in Tex%s, under * 

the oontrol and sunsrvielon and under suoh nnlform rules and regi&tlone srS to ioraw of pollales end underwriting oontraotti~ and premlume therefor, ae may be from time to time.prascrlbe4 b the 

Board of Znauranoe Comdsslonere of Texas a JJ 

no Texas or foreign oorporat ion, whether &orperoted. under this eat or any other law ab the 

State of Texan, shall be permitted to Issue my 

title polioy ar mertg8go oertliloate or underOrrLting oontraot on Texas mepertz other thus 

under thla sot ana under euoh rules and rewtlat1ons. X0 policy of title lnsuranae af guGfmtiee 

of any oheraoter on Texue titles shall be lseued 

or valld unless mitten by a oorporstion oaarplylog with all provisions oi and authariaed m: 

quellfled under this aot. Before an 

vfded for herein shall be fixed or 

rate weo L ed, roesonable netloe shall lsaue~, and c hearing atforded to the oompanles ai’feoted by this aot. Every 

oampuny doing business under thls act shall tile 

with the Board or Insurance Odseioners the 

form rb guarantee, oertlfloate, mortgage polloy 

ar any polloy of title lnsuranos before the same 

shall be Issued, and the form must ba apwoved 

by tho Board, and be unlfara as to all compaaiee. 

Under no cironmstenoes map asp oa1~0n~ use aBy 

?orm until the same shall have been ausrivved bf 

he Boar& 

*The Board of Insurance Comailssionere &all 

have the right and It shall be its duty to fix 

ati promulgate the rotas to be oharged by MI? 

poratlons created or opereting hereunder ir 

premiums on polloles or certliloates and underwrftlng oontraote, .The rate Zixed by the Board 
Eon. 0. P. Leekhart, page 3 

shall be reaaohable tothe publle aad. non-eonfleoatory sa to the oaq~ny. For the purpose af 

aol.l.eotIng data on yhhh to datemIne the proper 

rates to be iixeb, the Boar& ahall have the 

right to require the ooqanies oporsting Iu 

Texas to sa&$t.suah lnfomatlon In suah form 

as it may d6iPl proper, all Ihfomation as to 

loss expsrIenoo, expense oi operation, and other 

material matter for Its oonslderation. 

“Ratea when once fixed shell not be changed 

until after a publIo heaxIng shall be had by tha 

Board, after proper not100 sent aih0t to all 

oompaniea interested In writing this buslnera; 

and after public hotloe in such manuer as to 

give fair publioity thereto for two weeks In advanoe. The Board must oall suoh heaxIng to oone$der rate ehmgee at the re 

writing tit10 lnauranoe,~or 

uest of a oompany 

i!r the Board thinks 

thst a ohango In rates may be roper. 

pany or other pcmeon Lntoreeto ii 

zany ecm- 

, reeling InJured 

by ang aotlon of the Roard with regard to rates, 

ahall hare the right to tile a,suIt In the DIatrlot Court of Travis ~Gounty, wIthin thhfrty’diya 

after the Roard hae made such order, to review 

the oatIon, In which auIt the oourt meg entor a 

3, 

udgment correcting the Rosrb’s order and ilxry euoh rntes ae may be proper, OF atfIrmIng 

the eotion o? the Board, Under no ciroumstanaea 

shall any rate of premium be oharged for ,polIales or underwritIng oontraots bi.frew fkola 

those iI@ lina promulgated by the Board, or 

those fixed In a final judgment of the court 

ae herdn provide& 

"Sea. 4. Gorporations organIze,b under the 

lawo of any other State ahell,be permitted to 

do business In this State on exaotly the a~’ 

bssis end. subjeot to the sams rules, regulations adil priosa and supenlefon a8 fIxed for 

Texas oorporationa. 

“980. 5. Any foreign or Uomestio oorporation issuing enr form of pollog or u&erwrltlng oontreota or charging any prtnnium rate8 to 

the publIo am either ownern' or mortgageo*s 

oertiilcatea or underwrIting oontracta on Texe8 

other than forms and rates ~mfi 

d of Xnsursnee Gommlsaiormrs here1 remit St8 right to 40 b&Iiluaa 

In Temaa; but l&&e &all not be ooaatrued a8 

t;;;;~g;g,g”~g ~~~~~t~?&~~I~ 

neem under this aot anA*doIng a genoral tI$l* * 

Insurance busllnees ror the publIo In this Stat+ 
Eon. 0. P. Lookhart, pega 4 

far rd.nauringor underqltlng allor anypart 

0r the buaInaa8 o? an+her auah oompany to be 

the same as the ahare to the pabllo.* ?l#QhaaIa ours) 

‘In the oase a? Hew York Title k Mortgega Company Y. 

Tarver, 51 Fed. (2d) 584, a three judge Federal oourt in oonatruing Artiole 1302a held as iollowsr 

‘That said Title Inauramta Aot 1s held to 

only relate to and iiieot ?ona o? polloles and 

prsmlum rates oi auah inauran0o, eto wIth3.n 

the state o? Texas, the 60Ing oi bus~n~sa within tha atate o? Taaaa; m&to be oxtra-terrltorlal In Its erreat, lrnd aamo oannot artrot tha 

form o? polIolee in use br oomplalnantr In other 

states than the state o? Texas fztr rates at premium ohargea on polioles wrItton outside tha 

atdt0 o? Texas not to be PSriOWed within this 

state. The atato of Teas hss the power to say 

what kind 0? title Inspran00 bualneas shall k 

pss-formpd in the state of Texas. Bothwoll et 

al. I, Buokbee, &Tears Go., 275 u. S. 2 74, M 8. 

0% 124, 72 Ly .EQ. 277.” 

This opinion was wr/tten on a motion Sor an interlwutorp Injunction, and the oourt*a order was auatalmed by 

, the Supreme hurt of the Unltod States in a memora8dat8 oplnIon reported in 76 L. Ed. 922~. 

The laat sentonoe In the ?Irat paragraph at 8aotIon 

3 above emphasized I? atanaing 8lona sight be bjord ewxgh 

to oover polIap rorma wed outsldo a? this Stato in oonneotlon wfth out o? state property, But tho atatiute 8hould %a 

oonstrued from Its tour oornera, In the 0as0 o? G~erolal 

Standard Insuranoo Campany v. Board o? Inmraoo CammlsaIemem, 34 9. WI, (26) 343 (error refused), the court raid: 

*The &ard,aan axerolse on4 th0 authority 

oonferred upon It by law an ollar and unmiatakable terms and will not be deeps to ba given 

by implloat%on nor can It be extond0d by Interenca but must be strlotlp ~onstruad.* 

Your questIon No, 1 Is amswerod In the nagative. 

Tour question No, 2 reads aa ?ollowar 

VfDoes this Boerd have the legal power and 

dut o? presoi+bing premlsm rates at wl&h oompa ni ee operating under artlole 13Q2a shall write 

title Insuraa0e rlakn outside o? Toxaa?* 

Wa assume that your pa0 *tit18 Inauranee rlaka 

outside o? Texaa*‘maana title MuraM (10Ptraota mado outside the State on property outside @ the Stat+~: 
Elm. 0. P. Lookhaxt, pago 5 

You will note that Saotlon 5 of Axtlele 1302a pmvideo a penalty (fertelture of right to do bWI~a8 in Tens) 

f w any oorparatlon ahar&ag rates other thak those praaexlbod by tha Board on polIoIea on Tams picOpextlq It pmVIde8 

no penalty for oharglng rates not 80 approved on property 

outside or Texas. Fox t&la reason and for the raa8ona sot 

out under question Ro. 1 your seaond question Is answered in 

the negative. 

Your question No. 3 with subdIr2sIon (0) thereof 

omitted reads as r0u0wsr 

“With reapsot to the QepOsIt or oaah os 

aeouxltles, regulxed by Seotlon 6 of the Aat 

equal to one-fourth of tho authorized aapltai 

at the oorporatlon: (a) Should this deposit k 

oonaidered a part of, or required In addltlon 

to, the aepltal steak of the Company? (b) In 

Saotlon 6 the daposlt la roqulred to be kept 

‘with the Stab’Ea “rd~~~s~hs~~~~~~~~~~~~ 

tory as arrr a nsme 

prorod br the Soard M Inaaranee &vmlsaiwera*, 

whexoas in SootIon 2 as anmadadtha aglpp(luiea 

axe granted osrtain prlvllagee with respaot to 

Inveataiant of portions of their oapltal atosk 

In abstraot plants in exowa of 50$ of the oap%- 

tal @took, provided that the7 maintain *with 

’ the ala%Iam dea as 

OODr P 

rot&&d .Sn 

lot be met 

by keepping tha deposit under the joint oantrol 

at tha State Treasurer and of thla Board?. . . 

(6) Can the seourltlea In this deposit IawfulLy 

aonaist of real estate, or notas or other obllgationa aaoured by lten upon raal aatats In Tmaa 

or other states where the ocmpany la ad&tad to 

operate, or bath In Texw and &bar states?* 

Subaaotion (e) of this question la not a.nswm&, 

sinoe your auppltiantal letter dlraote that it bo mItted. 

seotian 6 of &dole 1302a reads as ~o~ows: 

“All oorporations, QometIo and roroign rritIng title or mortgagoo polioias or uud*rw&ng 

eontracts must at all times have and ke.ep on 6s. 

posit with the State heaaury air mah other daposltory aa may be named by ,auoh oorporatlon and 

approved by the Boar% at ~Inaurenoa Comm,l8ai~nera, 

either oash or first mortgsga notes or ~auoh &ho 

aaourltiaa as ara now admieslbla for lmes~~ 

bp lIte Insuranoe aolspanlea under the iswe af 

this 3tate to an smeuut eqtil ts ona-iomth @ 

the authorized oapltsl 0r auah ooxpmatlos; pa+ 

rided, however, that auoh doposit *all in na 

evoat rxow4 the sum ef ~lOQ,~@CC&&* 
Hon. 0. P. Lookhart, page 6 . 

suoh reotion aoes not cay that the doposit e&U. 

be made out of ae8eta separate from and in adaition to thoao 

asaeta used in payment of oapital steak. You will notie* 

that Section 10 requires the aoatnntiation of aertala rssarv.8 

separately and apart from the oapital oS the a-any. That 

the Legislature railed to meke suoh a requirement es to the 

deposit under Section 6 is signlfioant. 

Neither does Seation 6 roqulre apeaifioallp that 

the deposit be msae out of ospital asseta. It merely meaaurea 

the amount of the deposit by the'smount of the authorimed aapital. 

In answer to subdivision (a) of question No. 3, wu 

are advised that the deposit may be mede out ai any asset8 

available whioh otherwise meet the requirements of sald Seotion 6 of Artiole 1302s. 

In eonneetion tith subdivision (b) & pueation 3 

we aall pour attention to the rule that separate prolrlsi8ollcl 

~of a statute will not be aonstrued as eonfliqtlng if auah 

construction aen be rraaoansbly avoided. 

We also oall to pour attention the fact that at tha 

tfma .of the amendment to Seotion 2 (Aotr of 19331 43rd Leg., 

p, 750) whioh reit4rO to the Wmmlssioner 0r Zn8u.ranoe thqre 

was oo.offlosr in Texas by that title. The otatute referring 

to auah oi'ifoe was rep8aled by the Acts of 1927; 40th Leg., 

p. 329, which oreated the Board of Insurance QtisdoMr8. 

All powera, duties, exu'prerogatlrea oi the QaP8intioner of 

Inauranae had prior to 1933 been transferred to the Board of 

Insurance Oamn.lsslcmere by Artialo 4862r, Revlard Civil Statutaa. It seems reasonable therafdre that the reference In 

Scotion 2 to the Commlseioner of Insurance was intended to 

ba to the Board of Insurance So+uv&seioners. This isot, in 

eonneotlon vdth the reference to So&ion 6 of the dot, idioats8 thst all suoh deposits should be kept a8 provided ln 

aaid Seation 6. We see no oompelllng reason'for keeping the 

individual deposits in alfferent nmmer& We Bee nothing to 

require that the aeposlts be kept under olnt ~control of the 

State Treasurer and the Board. Subdivie t on (b) of question 

3 Is answered in the negativs. 

In subcivision (d) of QUek3tiOn 3 the phraSS "OT 

othsr obligstlons* is too indefinite to fOTm a basis upon 

whiah this ofriae can formulate an opinion and this opinion 

will attempt to answer suoh question by disregarding auah 

phrase ana oonslaering the quemtion with suuoh phrase omitted. 

Se&ion 6 of Artiale 1302a provides that the daposit shall be “either oeah, or first mortgage notea or arueh 

other securltles aa are now adsd&Mble for Investment by life 

insuranoe companies under the laws of this state." 

I 

The referenae to securities which twe admiesible 

\ for Investment by'llfe insuranoe eompaniea rofora in our 
800 I 

Hon. 0. P. Lopkhart, pa60 7 

. / 

opinicui to Artiole 4725 of the Berlaed Olvil Statutes whlah 

apealriea the seouritiea in whlah l uah eomp~ea aa9 fm,eat. 

Suoh atatuto begina as iolbtat 

"A life laauranae aompany organlard &a 

the laws oi this atate may invest In or loan upon the iollowlng securities and none ethera.* 

It is true that Artiole 4726 sets out oertaln uandltlona under which such oompanlaa may hold Lana coavey real 

estate but auoh artlolee does not refer to auoh real estate 

aa an i nvestment. 

It is therefore 0ur opitthtt that We muat look ta 

Article I+725 to determine the “other seouritieaw reierreb 

to In Section 6 at Artiols 1302a. 

said drtiele 4725 autheriaea the iztvestmant in 

rirst mortgage loana aa followat 

"St may aleo mclke loane u 

on'Tsa1 estate the title to wh iY 

on first llana 

oh,Pa valid and 

the value of which le &9$ mare than the amount 

laeneh thereon.*' 

l!bero are other reqitlruaente as to inauranee ,on 

buildings aonatftutiag a,part of the value el'suah real eatats. %ham is no repulrement that the aeaurit9 for auah 

real estate loana be loaated.in Texas, 

While Artlole 4724 math,orlzrs~i~vwHment in real 

aatete lcena it dose net aufhoriee the pur0haae of reel l * 

tat0 at4 an imestment. In this sonueotlw you are rdarmd 

to our opinion No. O-4556 addressed to you aad holding that 

real estate IS not a *aeaurityn *bthln th6 maetint of A&.iale 

4720, 

In aahaeotion pdth aubaivialon (a) af'questloll 3 

YOU ewe advised that the depmit required In Seatlon 6 M 

Art3 .cle 1302a may lawfully oonalat ai notes atieured by first 

llena on rael estate, and it ia lmatarial fm the purpoa) 

Q? auoh deposit whether suah reel eatate ia Moated ln Texea 

OT in aoae other state in whloh tha aompanp ia permitted to 

operate, 

It is further out opinion that auah deposit -9 

not lawfully aauaist of the Teal estate itself Tegardlaarr 

of the loaatlon of suoh real eatate. 

Your quaRtion Ho, 4 reads a8 ioldowat 

*IS th. 5% Tt8tTVt Oi f&&t &WONS &UWhUI 

preaoribsd in Station 10 cxt the Aat, appl%oabie 

to pTdltSl8 UpCm bualnaaa e&&dde of Toxaat 

AR& %f stop and ii you should hold that the aampatties may lswWll9 charge, 01p that t&U Bear& 
Hon. 0. P. Lockhart, pa&o 8 

may lawfully preeorlbe, pramlum rat06 ior tibia 

lnsuranoa risk written on property outside or 

Texas different from prmiuza rates so preaorikd 

or charged in Temr, then 1s rruah 5$ pramlum resame on premium from business outside of Toxa8 

to be computed upon the premiums actually charged 

and received upon suah foreign business or upon 

the different rates as presodbed by this Corn- 

,.&vslon and chtirged upon/Was business, whathar 

.hlgher m lower than the foreign rates?n 

Said Section 10 of Artiole 1302a read8 in part 1111 

s0110ws: 

Wvery oompany doing’s title lhsuranee buainaas under the provisions of this act ehall ret 

aside annually as a reserve 5% of its gcoae prrmlums so oollected, bafore any dividends M 

paid, the .totals of such reserve shall 111)var 

beeiegrired $0 sxowd a totaL rasarva oi #lOO,- 

. . . . 

lt 

. 

Suoh provisioh roqtires tha l oaumulatlon of a fund 

for the protsotion cd pollopholdere ard should be oonstrued 

so as to beat aooampliah that purpose. The latter part oi 

Section 10 provides; . 

“Funds aooumulated undsr this provision 

shall never be wed ior the payment ot any obligation other than those oonneoted with title’ 

lnauranoe, and, la the event of the insolvency 

of .a ompany, the fuud hereby provided ,&all bo 

uaed to protect title insuranoa polloyholderr 

even though there be no acorued title lhsuranoo 

claims and even though there be unpaid obligatloxp 0r other sorts.” 

You will note that the latter quotation does not, 

cay that ths funds shall be used to protect Texas title Inmranoe policyholders, but merely says *title Insuraaco 

. 

po3.10yholders.H sr the rund is r0r the proteotion or all 

pollayholders it oould conoelvably bs very inadequate for 

that purpose if the oompany did a large business outside of 

the State and the reserve was acoumulatcd from Texas bueinass 

only. The statute does not say that the reserve 8haU be set 

aside from pxemiume on Texas business only. 

St la our opinion that the 5% reserve provided In 

said Seotioh 10 of hvtiole 1302e should be sot as168 frgn 

all premiums rotually oolleoted. 

Your Question hT0, 5 reads a8 r0u0net 

“Are oompanlea Bperating under Artlola 

1302a properly taxable undar Artlole 7084 or 
0. P. Lookhart, pg. / 9 

70647 It has been the oonotruotl~n si this Dspartment 00 far that 13020 osmpanies are all 

taable umler Astiole 7084 and that Uhapta 18 

oaauolty oampanieo doing e title lnouranos 

busl.orso are taxable under Art1010 7064. 10 

this construction oorroot?* 

Seotion 7 of Article lgOZa, reads as tollowst 

Vhe general levm applioable to paymant OS 

filing fees and trenchlee taxes of oarporaticmo 

having a oapltal stosk are hereby mods ap lloa- 

~e;;oo~m~satlono ocuulag uadar the pr Qvi OiOUO 

Domestio oorporatlons operatirrg 

under this iaw shall not be required to pay pmshun taxes. n 

Arjilole -7064 of the Revised Civil Statutes ppovideo in part as followor 

. 

*Every Lnsuranoe oorpomtion, Llmyd’o, Qc 

sodproealo, and eny other srgaaisstien ar o(poI 

sarn tranoaotlng the business of fir., matins, 

smdne inland, aooldent, orsdit, title, livsotosk, fidelity, guaranty, sursty, oaoualty, ce 

nny other kind or oharaotcts of lnaeranoe businaoo othar than the business of life lnOPan0m, 

and other than rratemal bansfit l sormletlms, 

within tbio state at the tlmo cd riuag lta annual otatawnt, oimll report to the Bcasd oi I* 

ourance Oommlodonoro the groem amount of premiums 

reoelvad upon propert loaatod in this Ststs cm 

on risks lasated in tL o Stoto dmlng ths prsSam .j+axeO.” 

mlole 7064 or ths Revised Civil Statutso provides In pnrt aa iollswo a 

%very tnsuranoe 0erporation, LloyB~o, 0s 

reoiprooala, and any other orgonisatlsn Br oeaaern tranoaotlng the busloass of fire, maurino, 

marina l&ml, aaoldant, oradlt, title, llrsotosk, rldelltg, guaranty, mrety, Oaauelty, QI 

any other kind or aharaoter ai i~uraneo buoineoo other than the businaso oi lit0 isauxaass, 

and other than fraternal bsaei%t aooooirtb5o, 

wlthln this State at the time of filing its a&- 

nual statement, shall repart to the Board or Inourenoe Goomls~ldnar8 the groao QaoupLti sf preriUi0 

received upon prbperty looat*d,in this Stat@ or 

on rlekm loaatsd in this State during the pm 

oedlng year, and cash of auoh insuranse oerrloro 

shall my an annual tqx upon auoh @ass praaf\gl 

reosipts aa r0xmst . , .* 
Hon. 0. P. Lookhart, page 10 

you wll,l note that this statute levies e tax on lnauranue aarrlers generally with oertaln axoeptlono whlah tar 

$8 based on gross premium recai ta. 

s 

He are of the opinion 

that the tax ievled by Artlole 064 Is the premium tax referred to in Sectim '2 oi Art1010 1302a and that domeetlo oorporations operating under Artiole 1302s are not requlred to 

pay the tax levied by Artiole 7064. 

It is true thst Artiole 7064 baa been re-enaoted 

with certain anendmenta sirroe the passsge of Artlelo 1302e, 

but In our opinion subh aotion did not affect the spaoial provision or Seotion '7 of Article 13020 regarding pnymant of premium taxes. In this oomeotlon It Is slgnirIoant that at the 

tlme or the orlgl~l eneotmant or Article 13020 (erraoti+e 

date, February 29, 1929) Inoludlhg said Section 7, the premium tax statute than In foroe, (Aota 19111 32nd Leg., ah. 

108, H. B. 292) provided ror suoh a tax on lnaurenoe aompanlea 

doing a title lmuranoa bualness. 

It lo rurther ux opinion and you aro so advised 

that In aooordanoe wlth $ otlon 7 ad Article 1302a, all omporatlona oomlng under the provldo~ of &t$ole 1302a are 

taxable under Artlqle 7084 whleh provldeo tar general franehlse tnxes on ocxporatlona. 

Are Chapter lg oaaualty aompanlea doing a tltla 

Insurance bua$ness'taxabla undar Artlole 70640 The answer 

to aueh question depends upon whether or not such crampties 

are *operatlr& under* Article 13028 80 so to be exeegtad‘trom 

the premium taxes by tha~tsma of eald Seotlon 7. 

It is true that suoh qaaualty eompanlea opernta 

under the supervIsIon of the Board of Insuranoe %mnnIaoloners as provided in Artlole U02a 80 far en the rates and 

policy f'orm used In their tltlo lnsurenoe bualneas Ia odnoerned. But under the provisiona ab Artiole 4989 the ISSDL 

anoe of title Insurema lo only one of the numerous'purposes 

ror which suoh oaapenloo xay be lmmrporeted. Suoh oaoualty 

oompsnieo are subjaot to the numerous statutory provlololu 

of Chtpter 18 of the Ravlsed Civil Ststutes entitled General 

Casualty Gompanlesl~ and therefore .opsrate under Artlole 1302e 

only to a lImIted exteat. 

It lo our opinion and you are so advised that,%&+ 

tlon 7 of Article 13020 does not exempt general casualty oompanics organized under the prwla$ons of oa$d Chapter 18 

from the taxes Imposed by Art1ol.e 7064 even though auoh aoxpanles are authorized to write title Insureme as wall as 

general -casualty lnsuranoa. 

Your question Ho, 6 reeds no followa: 

wSeotlon 7 of Art&ala 13G2a refers to and 

adopts the *general laws appllaablo to payment 
I 

Eon. 0. P. Le&hart, p* 11 

0t rimg rw arsd rren0hie0 tdma 0r 00rp0mtime having a aapitel etook.’ Thla is tha prerioion on whioh wa base our oonolusion, mbodlad 

in question 5 abwa, that the rrtitt0hm tarn8 

am to be applied ae provided b9 Artlole 7084 

rather than 7064.. Insafar as riling is08 are 

oomerned, howavar , t¶oes thle prwlaion rerer 

to aa8 adopt Artlole 394 or does it adopt Article 3920 as applioebla to these oompanlas?* 

Artlole 394 or the Revised Civil Statutes aete at 

eortafn taoa whiah tha Seoratarg of State la authorlzed‘and 

raqafrad to oharga, among whioh ia the tollowlngl 

Tlpon tiling each ehertar, amendment or 

supplement thereto, of a private oorpmatioz 

oraatad for a09 purpoao lntaadad. for mutual pro- ’ 

rit or benarit,, Irung r0a or Firty (I50.00) 

Dollara, providod that ii the authorized oa 

B 

lkl 

atook 0r raid otlrparation ahall axoead Tan ho&= 

*ana ($l0,000*00) Dollara It shall be requika 

to pay an additlozal rib0 of Tan ( 

rar~~woh additional Tan ThauaWd P ~10,000.00) 

0.00) Dzllam 

Dollar8 of ita oapital steak or fraiWona1 pgt 

tharaor arter the rim.* 

Artlolo 3920 of the Revised Glvll Statutes rata out 

oertaiz fare to ba ahergrrd and noairad by the Board of xneuraneo eoplaia8ion0rs whhh reea indluda the roiiOa&r 

Tar flllng aaoh daolaratlon or oartlflsd 

oopy of the ohrrtsr oi an in8urenee oompany - 

Sa5.oo.r 

Roth of the above quoted provialozs war0 in erre0t 

when &tlola 1302s baeama offeotire. 

Ssotltm 7 of Artlola 1302a is eat out In the azaWeP to your question No. 5. Beotlon 8 of suah artiou road8 

ae r0iiOw3n 

The ohsrtter of oarrporatlozs inoorporstad 

hereunder, and the smendmsnte thereto, ahall ba 

filed with the F3oard of Ineuranga %amisaionara, 

whlah asid Board shall oollaot from the a@%& 

ocaapanies riusg roe8 and rranahiae tams raquirod by law. * 

It ;s cle’ar that tha riling ibaa, by wkatovar etatuts datermlzsd, are to be oollaoted by th? Board ai Ineuramao 

Commlealon6ws~ Oz riret oousldaratiaz it w&d aeem log&ml 

that the roes to be aOllaatad b9 the Board should k datawioab 

by Artlale 3920 whloh amimarat.8 end set8 out the teea to ba 

sollsotad by suoh Roard. It la alao trua that our Supram Oourt 1 

in the aaaa or Daniel ‘(1. me1 & Garth Invaatlarnt Qampanp, 93 

S. W. (26) 372. srpraaaly saitr 
‘lion. 0. P. Lookhart, pa60 12 

, "Title insurenoa Is a kind or type of lnmurenee. * 

. 

Rut we are faoed with Sbotion. 7 whioh apeolrlea: 

wbenerar laws applioable to riling reea end 

i,fi;r;yse taxes or oorporetions having a oepital 

Artlale 3914 above quoted aete out the riling reea 

r0r oorporatiana generally. Certainly Artlole 3920, ao rer 

aa the riung raei or oorporationa are oomeeraad, la not a0 

general as Artlole 394,. beoauae Artlole 3920 rlxes the ril- 

$2mzees of lnauranoa oompauiea and no other kind of oorpara- 

. The Legislature has thus IQEmireSt8d its Intention 

thet the oompanies inoorporatsd under Artiole 13026 ahall pa9 

the larger riling rees rixed by mials 39% The reason rer 

euoh intention ia apparent from the nature of oompanlee inoorporated uuder Artlole 1302a. Such oorperatioua map ba 

oreete(l ror a number of purposes In addition to the lnaurlng 

0r titles. lhe9 ma9 engage la au abatraot bualnea8, aaoumuleta end lend azoney, and aot as a truateo. The epeoitio purpaaea ror which they atap be inoarperalred are eet out in Seotlon 

1 Of Artlole 13026. Sines euoh oorparationa ma9 be luoorLa 

orated for auoh purposer;l in addltlon to the iseuanoe of title 

uranoe, it is reasonable thtat the9 ahould be required to 

pa9 the larger iillng fees raqu5xed of oorporatione geuerally. 

You era adtlsed thmt the amount or the rlling reea 

of oompanles incorporated under Artlole 1302a should be determined ‘by the apptioation Or drtiola 3914 or the RSViBed 

Olril Statutss or Texas. 

Pour queatlon No. 7-read8 es rollowar 

"Sinea by the 1929 lot (Art. 13026) these 

cmpanloe have been rsoognlasd 88 lnsuranoe oompenles and removed rrom oontrol or the EIeoretery 

of State end put under the Jurlsdlctlon of this 

Board, is our conatrnctiofi oorreot that this makea 

ma provisions 0r Artio1a 4705 applicable as to 

requirements far alQ,.lb~lity or seaurities In 

whM~ the caDite1 Stock Or 13026 o0nwanies map 

be inveatad?" 

- 

Ee also set out herein the portion 

mental request which deals with question NO. 

is a8 follows; 

"In oouueotion with qumtjlon No. 7, 8ha attorney ror the Cornpang earnestly eontends that 

because or. *the peculiar wording or Section8 6, 

7, and 10 of Artiole 1302A, Artiole 4705 hoe n0 

applioatlon~ to end doem uot goorern the allgibilfty of' the types of eeouritlas in whkoh this tkm- 
Hon. 0. P, Lo&hart, PW 13 

paakmmm&vast or InItIall9 a Its 8apital 

Ho, tharaOme, Uea tha positian 

that al.1 of’tha aoourItioa lietad Ia tha aahadula 

aooompa Sng.the arrIdavIt of the Inoorpamtore 

are elig Y bla under Article 13OU and l ep eo ia lly 

Sections 6, 7, and 10 theraoi. drtlolo 4706 

governs the investment ai fuuda 41 atook Inaurenoo ocmpanies other than llra, health and aooldent cempenlaa, over and abwe the5.r oapltal stook 

rids; and, of aourfba, whether mtlole 4706 Ie 

a plAoabla, 

w 1 ether Artlole 4705 Is 6pplIaeble to It. ThIr 

to this Gaiapany~wlll depend upon 

Department la going to require the Dompa4 to 

ay in WtIally a surplw rund of at laaat 

5,OOO.OG (whloh will probably result in 

Ita oapltal stock to #lO0,000) 

oorporatlng aud lfoaCaIng It; aAd, 

will hare diraotly Iwolled also the question 

or whether Artiola 4796 Is applIoebla to au& 

Sarplll8. 

quaation X?o. 7 by 1nquIrW whather 4 6 Is upWe, tharetorm, desire to au~glcmant 

plioabla aa to t&L CUpany In the imeebaent 

of Its surplus runda over and abwe ita authalead oapItal stook ftmd.* 

AB we underetend your question No. 7 a8 oupplrmentGldlStatutea govern the 0UglbtUty of preparty tha 

rd it ma9 bc, ra-stated aa followag Does Article 4705, Reriso$ 

Initially reodvad in parent of the @apIta% a,toak fir 

oorpemtlon and doea Artiola 476, Revised .Givil Statutea, 

govern the eligiMlity af property in Milti its aurplua ftmd8 

map be ixmestad? . 

That title Inf3mutaa la a type af Issuranao la no 

longer an open question ainoa t&e oaaa or Daniel. t. !Pymll 0 

Garth ln~sstment Gmpany, supa. 

A~%iol$ i+7Q&:of the Revised Givfl St@$utaa wMah 

reads 118 r0mm3t ,:‘r 

“Tba oapltal atouk uf any auoh iaauraana omapanp, axoept any writing Life, Health, and Aaoldent Ixiauranoe, Bhal.1 oonsistr 

"1. fnlaniul money cif the United Statoa; 

OT , 

OT inc~&atad town or &by thar&f, m In the 

In the bom¶@ oithis'mta cw angoaunty 

atookof alynatlanalbamk~ or 

"3. In riret martgag upm un5noumbarad 

raal eatata in this State, the title to WM.& ia 

talld, and the mwkat ralue of whlah $a neb lose . 

'then rorty (40) per cat mere than th* apotw 
1, Hon. 0. P. Laakhart, paSo l4 

loaned thbraon. Ii any part of the raluo of l uah 

real eatato 10 In bulldfnga, mmh buIldInga ahall 

bp luaurod agalnat'losa by Piro Sor not 10s~ than 

sixty (60) per 6-t at the value ther~~~i#~~~~~ 

E; gotme pyablo 7 au6h rompany, 

0 pror slone of tai8 Artlalr, with rem-' 

peat to the value af real eatato, aomparad to 

the mount laaned tharoon, 8hal.l not apply to 

loana seaured by real e&ate whlah are lnmrad 

by the Federal Rousing AdmIniatrator.* 

la iotmd in Chapter 2 of .TItlc 78 of tha RavIse4 bit11 Statutos. Chapter 2 1s entitle6 Rlnaorpcestlon af Inauranae Colr 

panIaa.W The words *any aueh insurance aompuap aoatainbd.* 

Artialo 4705 rear bak to aorpaaetlmm tormnd under Artlali 

,4699, Revised Olvll Sta tutea , whiah 10 styled wParmatlon eb 

~gtmlea* end to Artiale 4700 etylad *Articles ai Inaarpara- 

. w Artiaiea 4699 and 4705 -0 round with the uaeptioa 

of aertala later amenbmenta not port&n& Jmro la ttm Itch 

vised Statutes a? l&V a8 Axtlale8 3028 and 3Oj4 uabr tlu 

ahuptor elao styled thare aXnaorparatIon of Inauranae Campanls8." Xn duaawmlag Artielr 3CZii @ the Ravlsed Statutes 

oS 1695: and the title on IMuruPae themln oentaiad mar 13apream aourt in tha aaae of State t. Burgess, 109 S. W, glP,mXdt, 

We ara thus lead to the aonaluslan that 

Artiale 3028 In Its ori 

it la, a genaral pror?.e 9 

n~wa8, as I.a its laagw@ 

on applleable to ali1 lnmranaa oarrporatlons exoopt 8-h a# nny be 8x&a& 

ed by Axtlale 3996.w 

Xt Artlole 3028 (nm Astiola 46991 la a Sanaral cltatuto It 

reasonably rollows that Artialaa 4705 and.4706 in the sun 

title are statutes of a abaU8r nature, Fro16 the abev* wo 

ara lead te aonafud% thet Artlala 4705 Is Intahclad aa a ga+ 

era1 statute gwernIn&z the aspIte stark requixwaaata af Insuranoe corporatloh8 havi.aS a aapltal atoak unlara auah oe 

poratloru'ara exampted from Ita reQuiremetes by Ita t$nn tams 

or the terms of acane'ather Artiali, 

The attorney for the iuaorporatar6 aaam'to oonae$a 

that Artiola 4705 aa8 Title 78, Chapter 2, are ep lIaablo 

lxmmanoa oarporationa generally but oonteads ~8 s 

to 

ollowst 

"The Statutes applIoable to the rormtion 

of aorPoratloni3 generally (Saatlon 57, Art. 

1302, ol the Revised Statutes) parn&ttad the inoorparatlon of gaaraaty title oampau$an wlthaut 

aupervlalon ot. any ~kfnd ar aharaataT insafar aa . 

the Board of Insuraaoe ~QaP*donem we8 oonssrned up until passage of ArUole 1gOZa In 1929. 

Caasaquantlr, tha geuaral incorporation statutea, 

luolpains the .statuta govarnlag the aapital 

steek requiramante o$ all 

r 

Irate mrparetlom, 

gweraec¶ and aoatrolled tl la SyiraatP aampauia8 
Hoa. a. P. Lookhut, p8&a 15 

u until the tlaa' of thi pa88 * Artlelo 

902.. Art1010 1302a ob*ngrb r h,.~QQU@atiioa 

of the general inoerpontioa l tatut*~ eaW 'in .' 

the partloulara thorala set 06. Rb ilad BO 

referenae of any klad or ohsraoter in Art. 1302a 

to Art. 4705 ur any othar artlole of Title 78, 

Chapter 2 applloable to iosuruiee aorperatlona 

generally.* 

One ai tho pmtloulera lq Artlole 1302a. Rati& 

Civil Statutes, whleh ohangee the 8p Uoatloa ob tke g~~al 

I lnoorporatlon atatutea la the prwia f on la Cho$loa23 %hd a0 

further oorporatlon shell be aharteroduader aubdlvlmlon 57 

or Artiole 1302 whloh ia .thr general statute sot 

purpoeea for whiah rlvat~oorpcrratlom may ,br aha 

provlelon aeeme to boata the iateatlon @f not=!? . 

6roatlon or tit10 lnaru'enoe ampaalea ander th* 8aarml ,qparrtlon statutea, Rhea the Legla~turo wlahodtomko tb, 

general laws ragerdiag illlug ier# l ppllaeblr.te title iuauren80 eorpavatioar, it illa 80 b l Igprea8 pro vlmlo lSt b ia no t 

uureaaouablo to premium that t ho &glalaturo, It ft wished to 

make the goneral laowpomtloa atatufaa rdbr thur bi18 ib 

atlr8aoo In 

7 

aration atetote*, ap*lleaLle to aa humrum 

aerpor%tIoa~ two&&d hate done 60 by oxp?oaa povi#len. 

It la trua that aorp~etloaa iarm& uatlar ArtleSe 

Guard. Under aartaia ooadltioru tha Roard r$ rowka auah 

oorperratleate oertlfrl8.ate of authority. The Aot~ovid0aoaa a 

gww1rs3 lntwbtlon to raxsvo title inmx8am oompd.ea frpr 

the ol8sa of private oorporatioaa -ally and plme thaa 

in the olaaa br statue o? lnsu~anor oorporatioa8. 

The mere faati.thit Artlele 1302a appoere in Per-- 

non*8 Annotated Civil Stetutee~uudor the tItl;;~p~va~ 

oorporatlons gene-rallg has ue aignltlaenoe. 

passed elnao the revision of 192s ead the A6t do06 aot &or, 

lgnate in what chapter of The Revised OltIl Statutes it 8hWld 

be plapea. 

The fipplioatlon of Artiulr 4705 and'4706 to tlblo 

-1nauranoe cmpeaiaa, will not nPil%fy th4~prwlalona of SWtlon 2 @S Article 13028 whiah l hwa lnvratmwdi of a sertala 

10 nmiatained in that eaaditlon, Tha toram of both Artlr1ea 

muat give way wheta ia oeailiot rlth the tema ab Artiolo 

1302a whluh Is the more aooent 8nb mare partl6uZlar atatulm, 
Han. 0.P. Imkhart, pa@ 16 

In answer to question Na. 7 it la the oplnlon ei I 

this departmat and you a??8 so advleed that,Artlola 4703,‘. 

Revised Qlvil Statutes, la epplioable to Aetiraiaa the initial aapltel atoak requiramanta of a title inaurea6e oarporetion to be oraetab under Artiale 1302a RevlaeA Clvll Btatutas, and that &Mole 4706, Revised 0~~11 Statutes, gwiraa 

tha Investment of its funds over and above ita paid up aapltal 

atook, Snd it la further our opinion that aueh artlolea ara 

eppliaable only Insofar as they do not oonfllot with einy provisions of Axtiols 13028, Revised 01~1~ Statutes. 

In aooorAenaa with the Aireatluna in your supplemental request, question No. 8 la omdtte4 from this oplaloa. 

Your question 19,. 9 aontalnwl in your aupplamantal 

lotter consists or twelve aubdlvlslona and euoh queatloa together with tha exptination in oonnaatIon tjhlsrewith, sea88 es 

follows: 

"In atud~ng the aahaAule or easeta aaoclqpan@g the affidavit of the l~oorporetara, 

,whloh assets will be tendered in payme* ti 

aapltal atook end surplus (before eotual fib 

lng 

t 

the obartor will probably be rewrlttra ao 

as o divide theae smote u 

$lOO,000,caplt~l at&k and B 

into a n&tlmum of 

5,000 aurplua) we 

observe ttist the assets are af?irmatlvaly diaolaaed ta ambraoe (6) ia? tltlee to real 

(b) reel eetak purahaa& ooatraota,,,Jrsd 

or other mouetarg obll@ttlom &eau@# 

lion upon real aatate, acane of all~%bxoe af 

whloh are located In the State at Rew &!!xiao' 

end some in the Utate of Texas. Of oourae, bafore either aharterlng or Iioenalngthla Cola, 

Q~IV this Departmsnt will 8laaharge its roepona~bllltg of detemalnlngwhether or not tkm 

eaaete aa llated in the eahadule to the e~rrldevlt @re aotuallp valid fee titles, raal estate 

purchase contraate and obligations secured by 

rmit liens upon Pea1 estate, and tha laaatlon 

thereof (whather in Toxas or lOen Maxlao) and the 

value thereof. Eiut, r0r the purpose of determining the legal ellglblllty of tha varloua 

olaeaee of aasata so tanderaA In payment of 

the authorized aapltal stoak and tha aurplua 

funds whiah may be set up 1nitIelly in lnoorporati4j this C-pa y , we ask you to anawar apaoirioal p tha r0im ng queatlona in additfon 

to those propolinded heretofore, regard&ass of 

whether you holed Artlalas 4705 and 4706 appllaable, ar whether you hold Artlole 13OZA a? aaaia 

other extialo or artlolea of the statutes epplloabla, with refaranae to the lnveetimant of the 

aapltal anA surplus rum30 of this Wspa~r 
Boa. 0. P. Lookbart, pa@ 17 

“A. Are i6r fltlse to real estate sltwtr 

o d in Ten8 lllglblr to be raooirad in paJnwn0 

ou the'eapltal ‘atook funds of this Company? 

"B. Oan iee.titlee to JnLl estata outal& 

ai Texas ba raerived in payment or oapital 

hook OS t&e Campany? 

q. Otm fee titles to rul eetato otltride 

OS Tome bo rooepted in payxmt oi aurplue af 

this aon@myt 

“% Oanraal estate purahaee oontrectr upon real property in Taxas k aoaepted in pya#at 

of oapltalgtook of this Ocmpanyt 

V. Qan real estate purohase oaatraots Upon real property situated oataide of~Tem8 ~ba 

l ooapted In paymat or oapital stock at this' 

-mw 

Oan rati l stata pur&aae ooatraets upon p(to&tf outside or Ton6 be aacepted’ln 

payment 0r~8orplui~of air Gcmpaaj3 

other monetary obllgatloa8 

apanraalestata blkni 

cd aapltal ateak or thlm 

by first lieno upon real a8tato 6ituated oa,lt8ide 

of Texas ba rowlvad in pafment tg aapital stook 

0r this oampauyt 

Can aota a other obli 

by iii% lima upaa raal a6tate '5" 

tlona mcrurod 

s tuated 3.n Taxno 

ba raoaived in payment of swplw of thir Qcqaay? 

Caa notes artd other obli~ttone aeeured 

bg ii% lion8 ttptm real ssteto crituated cstttalda 

at Tmas ba no'*lY~d la payment or the SurpluB 

or thb ghmgaay?" 

We da mt att&pt to azwuer aubdlvl&mu E,T,,O and 

~Ha slnw the term "rmal aetato ptrrohasa wntraots" dam sot 
No& 0. P* La&hart, Pa#$a 18 

AUO we dll Ulaxegaxd the pJ&raae *or othw monetary 

obl&atlona” oontriaed lr~aubdivMbn8 I, J K, and L, koauao 

8u.h phxaa. la too %n~.tiaLt. to b. the bsaja of an oplnioa, 

Subdivlelous 4 and B of qareatlon No. 9 are anawarod 

In th. nsgatlve. See Astio1. 4705, Rlav1s.d Civil statuttea, 

heretoftie quoted. 

Subalvlelow c: snd D ai qwetion FID. 9 am not in 

our aginlon answered by the terms o? Artiole 4706; aoh 

reads in part a8 followa: 

m oompany, aoept any urltiag life, health, 

ana aooident, lnsuraam; organlaed und.r.tho 

vlaiow of thl~ ehaptsr shsll invest its ruar 

war snd above lte paid up eapltal stook in inn 

otbx manner than as follows; . . .* 

Ztlo txui t&t ttixeot imsstmaut Inrealelrtatr is not parI dittad by the tsnna of oath artlole, But aa we aoaatrua yaaz 

lattax allP question the iwtl.rstate ia thla ease fa te In 

ooavay8d to the ocaipaay on iaeqxpox~tioa a8a glit or eealsibutlon, ~fhe acioeptsaa. of aaah coatributlon la aot an inv.atm.at'dthin the asauingat Artlol. 4706 whfah la a pm+ 

cf*e statute. Wobnter dttrirats the word wlmwt* as iot 

Tharafa. otw haZd5.ag a$idar qnastfon.Sa..'I d..s nat mesa that 

ktlole 4706 is declalva ,ai the altuatloa maaentrd ln cubdl~lalaar, Oven& r) of quastiwL9. Emover, Artidle 4715 under the t&tie on inauranc. prwid.,a. that the 1~~8 fwez%lq 

eorporatione in gmnewl shall a 

sorporotlona lnaorparated la th ! s~atate laaufar as the aam 

ply to and g0vSz-n LSUXSM. 

8~. aot lmonslstent with auah t&St& In Cbir ooaaeotien wa 

direot year attention to Article U&I uUoh raada aa tollawat 

*AU ~lvato’eorpoxatlona author-iaed bay T 

the mm or mxae,.to do bwlnesa In this stat., 

whoso satin pqou. la not the a.qtisiUon or 

~ownsrahlp of lands, whloh hava or msy aaqu%ra 

by lowe, puwhaae or Nhsr*8sr iWar8 land thaa 

.is rrsoessary to srreblr them to olrrg on the@ 

date said land Bay b8 aaqUirOd, 

bwlnes~ shall, wl)$dn fltteea earsgig 

Ll 

isell and eonroy in $00 Illimptb alt landa,aa io* 

quired *hiah are.not neaesrary rw the txanaa4- 

tl* of their bual1#a6,* 

Aadtc Artisle l.j64?&iohrradaaa r0lloat 
saw aubBjact to iarfalt\tre aad l aehsat poe.wd- 

-65. The Attornbr Ga&eml, a say distrlot or 

oounty attorna~, whm either OS tkam ha8 reaa0a 

to b6U.m that 

@iI 

oorporatlon la holding lands 

in vio Jb tt0f0n r t a la w, dull fa 5tltntl e ult 

In the mum ar the State or Toxaa, in TrWIS 

County, or in any oounty in Texas wheti aueh 

eorporatlon MS hare an agent, ur ln sn~‘oouat~ 

whwo anf part cd tha land ma 

agalaat owh aorporatlon, as f 

ba sltuatad, 

a provided tar 

the esaheat or astatos Or dewased persons 

dyZn& wIthout devise thereof and having no hairs.* 

In the case of 0arnpb.U v. Hoodi 35 S. W. (26) 93, 

(Otau. App.1 Dec.) the oourt mldr 

“For many yeare it hss born tha astebllshad 

poziog or our stats to prohlblt oorporatlona, ’ 

with eertala axaaptlons, from aaqulrlng l&l.” 

l?he aourt .rlrrther saldr 

qt 1s true, as ar$wd b 

i 

the plaLntlii8 

lnerror, thst ii tha oorpom Ionhaa eon6umm9 

od the deal by aoqulring the lands no one omald 

hsve questioned its title sxaapt the stata.* 

Wo aan rind no lsa raquirlng the wt&l or a 00~1 

poxate sharter beoause it la llk.ly that awh sorpontian 

ma aoqulre by oontribution lands rhieh it la not Ulmm4 to 

ha f d, tharerore the question Imlv.d.ln aubdlvl8lma 0 and 

R as to the corporation'6 right ps la& of r&&t to reaefn 

and hold euah landa 1s new lar ely 

f: 

l eabnle. St should k 

dstarmlmd when it aotually ar ses by proper preoaadiaga tmdex tha tarma or Brtlale 1364 abw. quoted. 

Subdlvislon I af uestlon Xo. 9 1. anawexed la th. 

arrimotlve provided. suoh r f rst lleo note6 on Toxw raalta 

mset the requirements or Artleli 4705, Revlsad Olvll Ststutaa, 

ee to the value of the seaurlty, fire Iuaummee, et& 

SubdIvIsIon J of questi,on No. 9 is awwered in the 

negative beoauae Artiale 4705, Rsvlrml Civil Etatutee, npeolr1.a rirst mortgsge notes on rosl estate In this Ststa. 

In anawar to aubdlvlslona E cud L of qusatioa Iio. 9 

you are sdvlsed that for the s-a ran110118 58t Outi abevo in th. 

dlsouasion or subdivleloua C and D we do not pass upon the 

aorpoxatlon*s rl&t.to receive br o@ntrIbutlmka end thereafter hold suah first lien notes an a part of it8 aurplu8. 

However, your attantlon 1s $lreoted to Se&ten (b) of ArtIole 

4706 authorizing invf3stm6as of aurplua rum3 a6 r0uOpILlt 

"1x3 bonds or rirat 3.l~~ ~n~unlmmbered 

real estate In this State OR In any other BtSt8, 
oountry, or provlnoe la.whio& suoh 0-w ry 

k duly llaon6ed to oondliot’4n iMur6noe bu6ln860, 

ati prorUing in scloh 1tWanao ruoh real eat&o 

ahall be warth at least ferty (@) p&r oont mm-0 

than tho empunt lasnad thqmon: '!ka relua'of 

suoh real estate shall be de&ermine6 by a raluatlon nade under oath by two (2) freeholdera of 

the oouaty whore the roal ~eateto is looqted; end 

it the bui.ldlnga are oonaidor6d a part of the 

value of the real aetato; thoy must be lmwrod 

' against loss by fire for not lesa thau qixtr (60) 

‘pek oent of the value theroof, *it& loaa-pa3abl.o 

~olauee to suah mupang.* 

. . 

You are therefqe advised that a tit&o Mmiranoo 00~ 

pany my lnveet its surploa funds in first lien note8 on an-' 

tibarad raal estate either &nthis Stst,e @r w othar atat* 

in which it is duly l%oelreed to s&z&M (UQ laaaranoo bus&near 

protidod the other ~equlroinents oil.&1010 4706 ire uMo$i&. 

.Tmitirq th%a -oplaloa dll aid in tha detom&& 

t&m of tho probLsm6 b6fare you, wo are 

. . 

DQt6brJrb