OFFICE OF THE A7TORNEY GENERAL OF TEXAS 

AUSTIN 

fionorable C. E. Alvia, Jr. 

County Attorney 

Corysll Collutp 

Gatesvilla, Texas 

Dear Sir: v 

Oplnlon So, O-1470 

8s: Reservation or aximp 

Vie appraolat4 ve or HoYember 7, 

eat out in the 

d Jrou hosewith 

yetma a praotloe haa 

n@anies and real mtatc) 

n thle oounty but alao 

ng a part of the PltnsxeiI 

-gurpow OS charter have followed suit. As a sesuit of thie praatlae apparently, wide laiaeraf. 

h&din&a are being b&t up by ~,OrWratf~aU *ibh 

were chartered r0r a dirrerent puq3oee. In ether 

words a number or theaa aorgoratlons are doing a 

big oil bua~nass when the 8aPO iS~nOt uOOlb886;PY, 

fnoldantal or pr+r fn the 81e~~iae of their 

true, proper, a&d obartered B¬ions. 
2 

&norable C, E. Alvls, Jr., Page 2 

*It QQ~XWJ to me that auoh operations are in 

violation of Chapter 4, TltlQ 32, Art. 

or the Revised Ci~ll Statutes or Texas. 

1359, et seq. 

-hermore, the traditional polloy 0r the law: @at or 

the rm4. a114sat1oh 0r laad end the lntsrests 

therein, does not seem to be well served by the 

vast aocmulatlon et suoh interests by great 

corporate organlsatlons. 

0 . . . 

41 vamld like to hay4 your views on this matter, aa I bellQve ltwlll prove to be of Qven wider 

ihterest to Texas ln‘the iuture." 

Slnae we da not have th4 charter of. Amy speaif~a lnsursnoe Qospahp or real estnte 108s oorporatlon before us, aud 

Ilkewlseg sin04 w4 have been turixlshed with no apecirio fasts 

and airsmstsnQes relative to the aQquiSitlOn oi any partloular traot of land OF the exQeptlon or ressrvatlon Qr any sertab+ -era1 interest by any suob aompaay, the preparatifon of 

a a~Qret.4 opinion sn the qnestiohs presented In your letter 

hss been dlffloult; and to a Qonslderable extent thatuhloh 

r0iti8 represents no mrs'than a Qollatlan or p8rkinent 

auth&.tlee. 

We indulge In t.hQ asmsptlon that the lahda rererred I, 

te were) lawfULly aoqulred by iorQQlo8urs proaesdlaga or otherwlee, either to Qnsble the corporation to carry on Its buslnesa, 

or to'seouro the paymnt of lndebtedneva or liability due, or 

belonging to the corporation, or for other Msful purposes. 

Then, upon Bubsequent sale, a uinQv8l interest was *rQtaluQdm; 

aud w4 prQsuPe that when you speak oi SUQh aorgoratlons vre~ 

talnlng a part OS the alneral lntetwts in lands", you refer 

to the oreation of SOJW suoh estate as ocourr~d in Way vs. Venus 

(C, C. A. 19511, 35 8. 81. (Zd) 467, or XlQln vs. Eusble Oil& 

Berlnlng co. (T. c; A. 19541, 67 S. W. (26) 9ll, whloh might 

opsiate as a seversaoe of the mineral estate and reserve a 

vested title in scum portion of the minerals in the lnsuranse 

or real estate loa~eoryratlons involved. See Texas Coqmny 

vs. Uaugherty [lVl5), 107 TAX. 226, 176 5. PI* 717, L. R. A., 

1917F 989, Stephen8 County vs'; Hid-Kansas Oil A-. Gas Company 

(lo+113 Tex. 160, 254 S. K. 290, 89 A. L. R. 566. 

IU this mmneation, Chapter~4 of Title 32 of the 

Revised civil Statute8 of Texas, 19%. dealing with the pm- 
Honorable C. IL Alvls, Jr., Page S 

ahase and OonYQyEUOQ of lands br aorporatlons gene&l.l~, la 

relevant (s tg the &YYiS%d Civil tjtatutes 0r 

1925 provldes that the laws governing aorporatlone in general 

shall apply to ahd govern lnfiuranoe companies lnoorporated 

in this 2tate,, insofar as the same are not inconsistent with 

those statutes dealing ep4olrlaally with lnaurancQ companies), 

and we quote the r0114sing Art&lea rro0 suah ahapterr 

*Article ZG39. COndltlOnS Of pUrChaS4~ -HO 

private corporamn shall be permitted to purahaee any lands under any provision of thfs ohapter, 

unless the lands so purchased are neaessary to 

enable such aorporation to do business 1~ this 

State, or except where suoh laud 1s purohaeeQ in 

due course or business to semre the payment or 

debt.' 

~hrtiale l%G. 9~4 0r SURPLUS. - AU pi+ 

vate oorpomtione authorized by the laws of Texas, 

to do business in this State, whose maln pur-goee 

18 not the aoqulsition or ownership Of le.nd8, WaXoh 

hsve'or.may aaeuire by leeee. marchas or otherwise more land than is seaessary to enable them 

'to carry on their buelness. Shall. Within fifteQn 

years fmm the date said land w be aoqnlred. In 

pod faith sell and convey in iS4 elmple all lands 

so acquired which are not necessary ror the transaotion 0r their buSln688.s (Undersooring ours) 

wArtl~l~ 1961. Liquidation. - An lands 

aoaulred by aorporatlona in pament *due o 

such comorations shall be sold and eomeped ae 

herein vrovlded, within flfte4n~y~rw3 iron the 

date of the aaQuiaition of suoh land.* (Underscoring oursl 

mArtiole $362. Corpoxetions prohibited. - 

No private oorporatlon heretofore or herearter 

Qhartered or oreated whose main ptargose of buslness 1s the aoquieltio&or ownership or laud by 

purchzme, lease or othekslse, shall hereatter 

be perdtted to aoqulre aaj land withlc this 

State by purahase, lease es otherw1oe.e 

nfU%iCIQ 1364. &Cheat pI'OQQQdin&J. - All 

corporations holding lands aontrary to the provls10na OS this law shall hold the same subject 
Honorable C. E. Ahis; Jr., Page 4 

to forfeiturs and eacheat proceedings. The Attorney 

Oenernl, or any aistrict or oounty attorney, 

when either of thez ha8 rea8on to believe that 

any corporation 3.8 holding landa In violation 

of this law, shall institute atit in the naae 

of the'Stats Of Texas, In Travis County, or in 

any couatg in Texas where such oorporetion may 

have an agent, or In any county where any part 

or the lend may be situated, against such OOIC 

poretion, ~8 i8 provided for the esoheat of 

estates of deeeased persona dying without devise 

thereof end havine; no heir8.v 

*Article 1565. Dieposition of penalties. - 

If it be dsteinined upon the trial of said suit 

that land8 are held aontrary to this law, the 

court trytbg said oau8e shall enter judgment 

condsmning nuo& land8 and ordering them to be' 

sold a8 under execution, the prooeeds of aueh 

sale to be first applied to the payment of cost8 

of 8UCh suit, and the balance to be paid into 

the State Treasury subjeat to be paid to the 

stookholders, or person8 entitled to receive 

the 8aae as owners, upon proper proor made 

within twelve months from date of aale. Ii the 

legal representatives of euoh aorporation fail 

to claim the said balance of money reallred 

on sale of aaid land, then it ahall e_xcheat to 

the State and be applied to the available sahool 

fund. The aourt trying said aause shall allow 

the attorney representing the State a reaeonable fee, to be taxed a8 cost in the suit. 

In no ease shall the State be liable for cost8 

or fees U&e88 it 18 SUoOe88fUl in said atit." 

The progenitor of these artioles was Senate Bill 4, 

Chapter 33, General Laws of Texas, 1893, 25rd Legislature, 

Vol. lo, p. 466, Sea. 4, whiah reeds ln part a8 follwa: 

%eo. 4. That all private aorporetions 

authorized by the l.aW8 of Texas, es provided in 

Chapter 101, Article 566, Aote of 1891, Twentysecond Legialaturs, to do business in thf8 

State, whose Biain purpose is not the aoquisition or ownership OS lands, a8 mentioned In 

the precedih$ seCtions, whloh haVS heretofore 

or may hereefter aaquire, by lease, purchase, 

or atherwi88, wore land than is neae88avy to 
Honorable C. E, blvls, Jr., Page 5 

enable thera to carry on their busiue88, aball, 

rithin fifteen year8 from the time thts act 

tak88 sffeot. or the date said land may be hereafter acquired in good faith sell and convey 

-i fee eimz4e all land 80 acauired dhih 

a& not necessary for the traneaatio~ofwth& 

business. tid no private aor:?oratlon ehall be 

perslitted to purchase any land under the proviaions of this and the preceding aeations 

unless the lands 80 purchased are neceeaary to 

enable suoh aorporetion to do business in this 

State, or except where such land ie lurahesed 

in due course of business to secure the payment 

of debt.. . .v (Unberscorlng ours ) 

W al.60 aall your attention to Article l320, Revised 

Civil Stztutssj: 1925, nhioh reads In part as followst 

*Xvery private corporation a8 such has 

pwer: 

* . . 

- “4 

othetilbe 

. 

. 

To purahase, hold, sell, mortgage or 

aonvep such real estate and personal 

estate a8 the uurnose8 of the aornoration shall 

require, and also to take;~Id and aonvey auah 

other property, real. person & mixed, or lair) 

shall be reaufeIte for suah ao~morntlon to aoauire in order to obtain or aeaure the mwaent 

or any Indebtedness or liability due, or belon - 

ing to, the cornoration.* (Underscoring ourslg 

Article X@, Revised Civil Statutes, 1925, 18 also 

pertinent; end reads tn part aa Sollows: 

*l?o aorporation, doan#stlo OT roreign, doing 

buainesa in this State, shall employ or use its 

8toOk; means, a88,&8 or other property, dlreotly or indireotly'@or any purpose whatever other 

then to aoaompliah the legltlmate buaineas of 

it8 creation, or those ourposes otherwise permLtted by law; . . ." 

*IKITE! The power or acquiring lends is not confined 

to corporationa formed to deal in real ea$bto. City of San 

ktonio 9.8. Salvation &my (CiV. App.), 127 8. 91. 660, error 

rsfu8Sd. 
Efonorabls C. E. Alvia, Jr., Fege 6 

Thus, with reepeat to corporations generally, it 

may be soen that the Legislature bas deolared the publia 

polfoy of the State to be'that ooorporetions whose main purpose i8 or WAS (at the time of the pas8a;e of the Act) the 

acpuiaition of lend are and xere forbidden to acquire land 

to any extant (see Article 1362, aupre), and oorporationa 

whose main purpose is not the aaquisition of lend, may eaquite the bfme only when neoeeaary for bUSiM88 ;>urposea or 

in due eour8e of business $0 seaum the peymant of debt. 

See Tjestbrook v8. ~88OUd~'ibX85 Lsnd & Irrigation Company~, 

(C. C. A. 1917), 195 S. Vi. 1155; Ca?n;rbell va. Rood, (&as. 

App. 1931) 35 S. Y;. (26) 93, 85 A, L. R. 266. It is apparent 

that the intention of the Lsglelaturs a8 exemplified by the 

original enactment of 1893 was that in no event should land 

be ?urohsaed by corporations unless these conditions were 

present, end in it8 wisdom it further provided for the llquidation of aueh land8 within fifteen yeai- when too muahwaa 

aaqulred., 

Artiale 4726 of the Revised Civil Statutea, a8 amended, de&s s=ERlV with life, health and accident lneuranoe.o0z~miea, and by Artiole 4Sl9 of the Revised Civil 

Statutes, Chapter 3 of Title 78 of the Revlaed Civil Statute8 

is made applicable to mutual life insuranoe ooxpanles. 

We quote Article 4726: 

*Every such insurance compsny may aeoure, hold, 

and aonvey real property only for the follnting 

~rpoaea and in the following manners 

"1 . One building afte and office building for 

its accommodation in the ttiansaation 0r its bu8ine88 

end for lsaee and rentals end auah office building 

may be on ground on whlah the Company 0wns a lease 

having not leas. thsn fifty year8 to run from the 

date of its acquisition by the Company, provided 

that the C-pony shell own.or be entitled to 

the use oT, all the improvessnta tinereon, wd 

that the value of such ~provementa.afiall et 

lea‘t equal the velne of the ground, end shall 

be 1 ot leas thaa twenty timea the ennuel average 

graund rentaL payable under such lease; end 

provided, eueh offias buildi 

9" 

shall have an 

snnuel avera*;e net rental 0r et least twice 

suoh annual gound rental; end, provided, further, that suoh Company &all be Liebl8 for 

and shall pay all State and local taxes levied 

en& sS8eS8ed 3gsihSt 8*uoh BxOUnd end the improveLbents thereOn whioh iOr :1ur~8aa Of tamit:on, 8bal.l be deamed real estates owned by the 

Coapeny. Provi&ed, that aa RoqUi8itiOn of auoh 
an oftlae bullding on leased ground shall be 

approved by the iicmrd ot Insurance Co~~IsaIoners 

of the Stete ot Texas before such Investment. 

"2. Suah a8 have been aoqulred in good 

faith by way of security for loans previously 

contracted or for moneys due. 

*3. Such n8 have been oonveyed to it in 

the satisfaction of debta prevlouslp~contractcd 

in the course of its dealInga. 

"4. Suah as have been purohaeed at sale8 

under judgment OP decrees of oourt, or mortgage 

or other lien8 held by such oos~paniee. 

*All euah.real property 8peoIfled In subdivieions 2, 3 8nd 4 of this Article whleh @hall 

not be neoeseary for it8 acoonmodatloh la the 

oomrenient transaction of it8 burdnese shall be 

Consequently, It may be eeen that vith respect to life, 

health ehd accident lnsurance'compaeiee, the Legialatula ha8 

8hortened to five years the period for legal corporate holdlng, 

6s eet out in Chapter 4 of Title 32 or the Revised Civil 

Statutes (Articles 1360-1301~. 

A further limltatlon oa Artlolrs X%30-1561 of the 

2evIsed Clvll Stetutes, supra, ?aap be found in 

an& 5008 or the Revised Civil Stetutes, 

insurance canpanles. Fe quote! 

"Art. 5007. 80 8ueh company ahall be permftted to purchase, hold of Uonvey real estate, 
Honorable C. E. Alvls, JP., Page 8 

except tor the purpose and in the manner herein 

S8t fQPthi 

='I. BOP the ereotlon and malnteuance or 

buildings St least ample aad adequate ror the 

transaation 0r It.6 own business. 

“2. Such as Shall hove been mortgaged to 

it in good faith for money due. 

"3. Suoh a8 shall hove been oonveyed to 

it in the Satieraotion 0r debts 

trrrcted in the course of its dea P 

PeViOU84 oonings and which 

muSt be taken fn by the company on aaaouat o$ 

the debt SecruPed by suoh mortgage. 

-4. Such as ahall have been purohased at 

sales upon judgments, decree8 OP znortgagee obtalned or made for such debts. No compeay lncorporated a8 aforsoald shalJ. puTshase, hold 

OP convey real estate in any other oaess or ror 

any otheP.przrpose.* 

*Art. 5008. All real eatate 80 aoqUlred, 

eXOfmt as 18 004u~~ed by buildlllgs used in whole 

or in Dart for the aocommodetioa of such oorapanfss 

'ill the tPaAlZba4tiOn Or it8 bUSiine88: 8half. t4XOODt 

a8 hereinafter orovided. be mid agd dlswsed of 

Within ten years after such 001u~aay 8hall have 

aosulred title to the same. Ifo maeh aompany shall 

have euoh real estate for e lonucr DeriCtd than 

that above mentioned, Unleae th; said company 

shall prooure a certificate rrom the Commiealoaer 

that the interests of the company will suffer 

materially by a rorced Pals of. such real eatate, 

in which event the time ror the sale may be extended to euah time 88 the Commlsaioner Shall 

direct in said 4ertlfiaate.v (Undersooring oUr8) 

Likewise, a spe4ial statute ha8 been enaoted With 

Peepeot to building and l*n aeaoeiatioas, Artiola 882a46 

ef the Revised Civil Stat&k OS 1925, which reads in part 

88 fO11OWS: 
289 

Table 0. E. Alvie, JP., Page 9 

been acquired unless (a) there shell be 8 bulld- 

‘i e thereon ocoupled by it a8 an orri 

t:, Banking 

08; OP (bf 

coami ssioner or Texae on application 

of th b rd of dlrectors shall have extend d 

the t~ze"~lthln which enoh aele ehall be mmie. 

R . . . (3ndereaorlng oure) 

The facts set rorth in~your let%er are not in +bselves euixcl0nt to present 8 situat,ion falling within th& 

purview of Articlea 1549, SSla-14, 46Rl, or 4999, Revised 

Civil Statutes, 1925, so a8 to enable the Attorney General to 

rorreit the charter 0r euch corporetlon. Westbrook va. 

Missouri-Texas Land k Irrigation Co. (C. A. A. 1917),,,1955S, W, 

ll54; Alamo Club vs. The State (C. 0. A.), 147 S. W. S59,i 

writ refused; Union Men's Pmternal & Senerlalary AE+Q'VS. 

The State (C. C. A.), 190 S. W. 242: Kaplan Dry Goode'Co. ~8. 

Say; Bra;. ('2. C. A.), 214 8. W. 4S5; 10 Tex. Jurle. para. 

,* l 

I?or do we believe the quest&ma eet forth in your 

letter aontemplate a eltuatlon in whioh the land ra8 originally 

llle@lly acquired, 80 a8 to enable the Attorney General to 

lgstrain the oorporatlon from eoqulrlng more land or vlolating the legl8letlva manbate a8 set forth in Article 1359 of 

th8 Revised Civil Statutes of Tex.68, 8upra. Staeahw ve. Rootledge (Sup. Ct.. 1922), 24.1 8. 91. 9951 ye&son VS. Wseteti 

Union Telegraph Company,, 269 Fed. 598; lfational'Eqtiteble 

f%oaiety, et al ~8. Alexander, et al (C. C. A. 1918), 220 S . W. 

lS4; C8mpbell vs. Rood (Corn. App. 1951) 55 S. W. (26) 93, 

S5 A. L, R. 266; City of Wink ~8. Griffith Amusement 00. 

(Sup. Ct.) 1'3 8. W. (Zd) 695.. 

As regrettable as it may be that the Legislature 

he8 not provided a mr6 8ummry remedy for the eituatlon described ln your letter, we believe that it has et least provided a complete and exclusive one in ~h@pter 4 of Title 52 

of the Revised Civil Statutes, rhieh forms a part Of the 18wS 

against the craatlon 0r perpetuities. kaaerloan Tribune News 

Colony Co. va. Schuler, 34 0. A. 560, 79 S. W. 575. 

AS stated in Schaelder ve. SaLlere, 913 Ter. 550, 

84 5. W. 417, at page 420:~. 

"Under the present law of this atate, enacted 

mrch 24, 1895, the QOP oration had 15 years from 

the passage of the lew k and ee the statute now 

reads, 15 years from the aequlsltlon of the land) 
Honorable C. E. Alvls, Jr., Page 10 

to as11 

>lred. 

the land, and the t5.m lms not yet oxRev. St. lS95, art. 9490. If the State 

should seoure a dealaratlou of forfeiture, the 

lands would be sold, and the prooeeds diatributed to the stookholders. Revised statutes 

1395, Artlole 949e. This shows that the holding 

of the land is not unlawful." 

insertion oure) 

(Pareathetical 

Cousequently, you are respeotfully advised and It Is 

the considered oplnlon of this dspartaent that under the faots 

set out in your letter 0r Noveaber 7, 1039, aad those additional rects assumed$ln this o 

real estate loan corporations f 

inlou, insurance oo~~p,aates and 

with the sxoeptioh of the 

speoial corporations mentioned in the paragraphs to rollor), 

retaining a nineral interest In lands whioh they have originally, lawfully aoquired by foreolosure or otherwise, and 

subsequently sold at private sale, may hold suah lancis or 

retain such interests ior a period of 15 years rroiu the date 

of original aoquieltion or suah lands In aocoxdanoe with 

llrtloles 1560 aad 1351 of the Bevlsed Civil Statutes, befom 

,being subjeot to.forfeiture and escheat proceedings lnstltuted 

by the Attorney General of Texas aa provided In Artialiii lJ$h 

or the Revised Civil Statutes or 1925. 

Elth respeat to life, health and aooident insurano~ 

Wapanles, you are respeflt?ully advised tlut such oor~ratloops 

have rive years In which tb dispose of real estate net necessary 

in the crmvenient transaotlon of business, without an extension 

or time granted by the Commissioner of Iasuranoe. 

Moreover, it is tha opinion of this Department that 

general oasualty insuranoe ooa~nies have ten years inwhieh 

to die?ose or real estate not aeoessary in the omvenlent 

traasaation of business, unless granted an extension or time 

*y the commiseioner 0r Insurancs. 

It IS the further oplnlon of this departzient that 

buildlug and loan assooiatfotnUmxst disjxme of every parcel 

Or real estate aoquired by euoh aseoclations within five Yeam, 

~10~8 Rrd.ed 83t exk.enaion or tLme by the RanklagCoxxlssioner 

of Texas. 

we ~hafl be glad to itirish a mere ap0iriO opinion 

v you will iurniah this department inisrmation as to the 

parti&lar typ or mr~mtlon and the articles or the Revlsad 

Civil Statutes under whhh It was lnoorpy!ated, and ia addi- 

, 
291 

&noreble C. E. Alvis, Jr., Page 11 

tion all factzand cireuMtanoes relative to the acquisition 

or any particular piece of land and the retention or the 

mineral interest. 

Yours very truly 

Al!TOR?fEX GEEWLL OF TEXAS 

BY-R?&& 

Walter R. Kmh 

Assistant