+, Allen Melton

Ekecutive Secretary State Board of Morticians Rio Grade National Bldg. Dall.as,Texas

Dear Mr. Melton: opinionNo. ww - 

### 551

RP: The authority of the State Board of Morticians to promulgate rules governing solicitation,and related questions. f You have submitted to this office various questions concerning the authority of the State Board of Morticians to promulgate rules governing solicitation.

Regulation of funeral directorsand embalmers, provisions for the State Board of Morticians, and authority for promulgating rules and regulations governing the said activitiesare provided for in Article 4582b, Vernon's Civil Statutes.

Section 2 of saidArticle provides:
-"The State Board of Morticians shall have the power and it shall be its duty:
"(1) To adopt and promulgate such rules and regulations for the transaction of its business and for the betterment and promotion of the standards of education, service and practice to be followed in the profession of funeral directing and of embalming In the State of Texas within its discretion. such beina consistentwith the laws of this State or'for the public good. No Zule or regulation promulgatedby the Board may be adopted, amended or rejected without due notice and hearing theregI&II (Emphasis ours). Acting under the authority conferredby the above Article, the State Board of Morticians, on January 

### 16,1958, proposed the:follovlng amendment to Rule 

### 3,Section 

### 6-B (3)of the Rules and Regulations of the State Board of Morticians of Texas:

"(c) Solicitation. "No licensee, apprentice, or any other person, whether employee, agent or representative,or one in any manner associated with a funeral establishment, shall solicitbusiness or offer any inducement,pecuniary or otherwise, for theMr. Allen Melton, Page 2 (w-551)

purpose of securingor attempting to securebusiness for such funeral establishment; such persons shallnot Issue any gift certificate,or discount certificate,or offer, or give, any discount for the purpose of obtaining funeral business; and suchpersons shall not use donations, gifts, bonuses or acts of servicedesigned, or calculatedto place the recipient, or his or her family, or relatives, in a position of obligation or indebtednessto the tinor, or the funeral establishmentto which suchpersons are related, and suchpersons shall not transfer, or offer to transfer, any property or service as payment or as token consideration,for business secured or influenced,or otherwiseprovided such funeral establishment,or in promise thereof."

A public hearing on such proposed amendmentwas called for February 11, 1958, and notice given to the funeral directorsand embalmers of Texas by mail under date of January 25, 1958. A hearingwas held as scheduled,well attended, and certain clarificationwas requested. On that day, without changingany of the wording in the Subsectionproposed January 

### 16,1958, the Board added a definitive paragraphto that Subsection as follows:

"Included in the above paragraph and prohibited are free ambulance service, free hospitalbeds, free, wheelchairs, free oxygen and/or oxygen equipment,or chargesmade therefor at discount, but not to the exclusion of any other acts, services or specific items of value which otherwiseare included therein,by the provision thereof."
The rule as changedwas to be effectiveas of February 11, 

### 1958,and would have been in effectwith the change,at that time, bad the definitiveparagraphnot been added thereto on that date, but notice of the additionalportionwas not given to the funeraldirectorsand embalmers of Texas until February 11, 

### 1958.

The obvious intent of the Nle is to control solicitation conduct on the part of licensees in the State of Texas.

After January 

### 25,1958, and both before and after February 11, 

### 1958,

various funeral establishments issued through the mail various certificates to numerousboxholders. These certificateswere of four classifications:

Type 1 authorizedthe holder of the certificate,ambulance servicewithin the city limits of a Texas city at a sliding scaleand the certificate furtherprovided to furnish the holder of the certificateand his immediate family and dependents funerals at "costplus approximately ten per cent".Mr. Allen Melton, page 3 (kh+%l)

Type 2 authorized a lO$ discount to holders of the certlficate and an additional lO$ discountupon the full payment of'the cost of such funeral, in cash, at the time of the funeral of such person.

Type 3 authorized a 20$ discount on any funeral SeNiCe selected,and a 25s discount on ambulanceand invalid coach service. I

Type 4 entitles the named individualto a complete funeral "at cost plus approximately ten per cent". It also provided a discount on casket. However, before the holder 1s entitledto any of these SeNiCeS he must agree to pay to the funeral,homethe sum of $10.00.

Another practice used by funeral homes is the issuance of an insurancepolicy. Insurancepolicies are sold through the organization and people who purchase sn insurancepolicybecome members of the funeral home's Family Security Plan. As a member of the Family Security Plan, the member is entitled to certain discountsand privileges in connectionwith the funeral expenses.

You have submittedto us three questionsphfhh are in substance as follows:

1. Is the Board actingwithin the limits of Its authority to revoke or suspenda license i'fit finds that the funeral directors in charge and/or the owner of one funeral home, which Issued certificatesreferred to as certificates 1, 2, j', are In violation of the new rule governing solicitationby issuingand giving a discount for the purpose of obtaining funeralbusiness, or is the Board limited in the enforcementof the new rule governing solicitationto actswhich occur from and after the date of February 13, 1958, at which time all liceacZ.- sees in Texas were notified of the final action of the Board in promulgating the new rule governing solicitation?
2. Is the State Board of Morticians in any way restricted in the application of the new rule promulgated by it governing solicitationto the funeral establishmentwhich is Identified as certificate4 in the event that funeral establishments give a discountunder the service contract? “3. Is solicitationthroughnewspaper advertising, radio or television, wherein a discount is offered for business, a violation of the rule passedby the State Board of Morticians on February 11, 19581”
4. Is the State Board of Morticians In any way restricted in the application of the new rule promulgated by it governing solicitationto the funeral establishmentwhich carries the insurancepolicyplan?. .

Mr. Allen Melton; page 4 (W-551)

.TheLegislaturepmy delegate the regulation of-funeral directing and embalming to anadministrative agency, and authorize it to provide rules and regulation6 governing such profession. PrcitaUndertaking Co. vs. State Board,.182

### A. 808; Gulf C.~& S. F; Ry. Co. ,vs.State, l20 8.. W. 1028 (error ref.);~ilax+is~vs. Munici 1 Gas Com pa 2d 355 (error kiis9L); 42 Am.Jnr. 301 5 ,12;9 Tea&r. 97, l.Ter; Jur. 4 Pq, 59 s. w. 10 Yr. Supp. 101, Administrat$vez&w & Procedure. Where thenstatute expressly authoriees the agency to regulate an industry, it implies'authority to adopt regulations to that @d. Rail&&d Commissionve; Shell Oil Co., 139 Tex. 66, 161 S.'U. 2d 1022. 'And the agency may make,all reasonable rules and regulationsproper and necessary in the exercise of its powers. Texas Liquor Control Board vs. ,SuperSavings Stamp Co., 303 S.W. 26 536 error ref., n.r.e. ; 4,A~.L.R. 2d 667.
The statemay establishboards of undertaking and embalming for the purpose of 6mkIng rules for the control and regulation of the business;and the acts of suchboard6 will,be sustainedunless there is an unlawful delegation of legislat~ive power or the boards act in an arbitrary, capricious or unreasonablemanner. Gholson **VS.** Engle, 138 N.B. 2d 5G8; Louisiana Undertakers v6:La. State Board of MaImin& 58 So. 2d 303; .TrinkaServices vs. State Board of Mortuary Science, I.22 A. '266%; .Quesenberry,et al VS. Estep, supra; 104 A.L.R. 402.

~Thepower to~regulateini&des the authority to prohibit advertising of a charactertending to influencethe more gullible or susceptible person or to proclaim the superiorityof the advertisingpracti- : tioner. Sherman'v. State Board of Dental~Examlners,~6 S.W.2d 843. Those engaged in such professions are subjectto legislativeregulation, and the vocation itself being subjectto regulation, 60 are all its incidents. Kee v. Baber, 303 S.U+d 376 (Tex. Sup.Ct.).

Prom the foregoingauthorities, there can be little question of authority of the State Board'ofMorticians, acting under Article 4582b, to adopt, promulgate and enforcerules and regulationsgoverning solicits; tlon of business.

A&cle'4582b, Vernon’sCivil Statutes, governs the activities of the Board, and it is clearlyprovided in that Statute that no rule or regulation promulgatedby the Board may be adopted, amended or rejected without due notice and hearing thereon. In Greer v. Railroad Commission of TE, ll7 S.W.2d 142 (writdism.), the Court stated: .."

"Where the dtatute requires notice and hearing, such prerequisite is jurisdictional,and its omission renders the order void."
The notice and hearing as set out in'the Statute are without question mandatory requirements; therefore, since the definitiveparagraphwas added without'

any notice, that part of the rulewould be vold.,'Alse, since. ,, I ..,

Mr. Allen Melton, page 5 (WW-551)

the xe4Lin.g

of the certificateswas prior to the time the rule was to go into effect, then certainly the Board cannot assert that the rule is retroactive. Therefore, the Board ha6 no authority to revoke or suspend a license for an act committedprior to the time the rule became effective.

'TheBoard has authority under the Statute to prohibit solicitation after proper notice and hearing. However, in order to interpret the applicabilityof the rule against "solicitation",it is necessary, In our opinion, to define the term.

"Solicit" Is defined as: "TO ask'forwith earnestness; to make petition to; to endeavor to obtain; to awake or excite to action; to appeal to; or to invite." Black's Law Dictionary, 3rd Ed., p. 

### 1639.

Therefore, it is our opinion that the sendingby'mail, or perSOna circulationby employees or representativesof the funeral home of any certificatesentitling the holder to certain designed 'discounts

### or free services is prohibited by ths rule as promulgatedby the State Board of Morticians. The purpose of the rule is to prohibit solicitationand not to impose restrictionsupon the rights of individualsto enter into contracts. Phillips v. State, 136 Tex.Cr.Rep. 430, 125 S.W. 2d 585~(1939). Therefore, the portion of the rule which reads as followsmust be construed as an invasionand infringementupon a person's constitutionalright of libert% to contract:

"'

. . . such persons shall not issue any gift certificate, or discount certificate, or offer, or give, any discount for the purpose of obtaining funeralbusiness; and suchpersons shall not use donations, gifts,bonuses or acts of service designed, or calculated,toplace the recipient,or his or her family, or relatives, in a position of obligation or indebtednessto the donor, or the funeral establishmentto which such persons are related, and such persons shall not transfer, or offer to transfer, any property or service as payment or as token consideration, for business secured, or influenced, or otherwiseprovided such funeral establishment, or in promise thereof.,;': I.
"Included in the above'paragraphand prohibited are free ambulance service, free hospitalbeds, free wheelchairs, free oxygen and/or oxygen equipment, or chargesmade therefor at discount,but not to the axclusion of any other acts, servicesor specific items of value which otherwise are included therein, by the~'provisions thereof."
If the above quoted language is an attempt by the Board to regulate prices, then the Board has gone beyond its authority. However, the above quoted language is really surplusage, for the Board has ample authority to govern solicitationunder the rule which reads as follows:Mr. Allen Melton, page 6, (w-551)

”

. . . . "Ho'licensee,apprentice,or any other person, whether, &ioyee,~ag& ,orrepresentative,or one in any manner ' associated,$th a funeral~e6tabliehment,shall~eolicit .bueineee,



### or offer any inducement,pecuniary

### or otherwiee, for,the purpose of securing or attemptingto Becure business for such funeral eatabliehment;

. . ."
The ansver to the second questionmuet be governedby contract law. Any party who had receivedan offer, termed a "service contract"by the funeral home, prlor,to the effectivedate of the new rule, may accept such offer and then form a valid and binding contractwith the funeral home. Certainly, the Board cannot contendthat sending out such offerwas prohibited prior to the effectivedate of the rule. The rule in question is one prohibiting solicitationand solicitationonly. If the service contractwas solicitationit occured prior to the time the rule became effective. This point has been discussed in answer to questionone, so, there is no need to go into it further. The honoring 

### of the certificate has nothing whatsoever to do with solicitation,and it is only the honoring of a valid contract. However, in the event this practice of sending out certificates or service contracts is continued in the future, then the Board does have the authorityunder the rule,to restrict the activity of the funeral home. t i .Inreply to your third que6tion,this office is of the opinion that newspaper, radio or televisionadvertising,wherein a discount is offered, Is a form of solicitationthat is prohibited by the rule promulgatedby the State Board of Morticiaias.A general' solicitation which offers a "discount" to prospectivepatrons as a pecuniary inducement to securebusiness for a funeral establishmentviolates Section c 

### of such rule.
The fourth questionpresented to this office has many ramificationsand it is difficult for us to answer the question since the regulation of an insurancepolicy fallswithin the purview of the Insurance Commission. However, if this Family SecurityPlan is only a subterfuge by which the funeral home solicitscustomers,then the Board can regulate such **activities.** In otherwords, if the benefits derived from being a member of the Family Plan are limitedby the funeral home to only those policy holders that deal-withthem, then, since the funeral home is derivinga benefit by virtue of a solicitationby an insurance company owned in part or by the funeral home, then this activity falls within the rule promulgated by the Board of Morticians governing solicitation.Mr. Allen Melton, page 7 (W-551)

SUMMARY
The notice and hearing before promulgation of rules by the Board of Mort.iciau6 is msndatory, and any act committed prior to the effective date of the rules does not comewithin the sanction imposed thereby. The Board does not have the authority to impose restrictionsupon rights of individuals to contract,however the Board does have the right to prohibit SOliCitatlon as that term is defined in this opinion. Further, the State Board of Morticiansmay apply the rule promulgated by it governing solicitation to a funeral home offeringdiscounts and benefits so long as the benefitsand discounts are not an integral part of a life insurancepolicy sold by an insurancecompany.
Yours very tNly,

WILL WILSON Attorney General 

### of Texas 

# B&dw

Assistant IS:aw

APPROVED:
OPINION COMMITPEE

Wallace P. Finfrock Tom I. McFarling Marietta McGregor Payne
RRVIRURDFORTHZATIO~ GENERAL BY: Morgan Nesbitt