The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1900-04-29
ACKNOWLEDGEMENTS
,,,.,.., Generals Department Answers
'"''i Oues.ious by Commissioner.
J, ~ has BEEN aIslNTtRpRtTtD
narrated, the Companies Are
r,,ual within the Mean
ing of the statute.

Tsxas, April 2s.--Ine attorney
AUS !. written the following defining
s .sr, are insurance companies as con
,.rol,ted BY the act of 1877
y, PATERSON Johnson. Commissioner
az Austin. Texas ~ n,,o.,fon
Hs, air: / have your communication
DEAF as.e. stating TO this department
r sa nur opinion to you of February
w. ~, sas soveral companies ~ho hold char
N IVY under the acts OF 1891. sub
u W. "a mage 1872, aro writing and de-
ti''svn s,a,xard fro insurance policies,
ns.,.hy they promise to pay a stipulated
sns ~. !, li-yel premium, said policy be-
w - ~, things what we understand and
ms standard fre insurance policy,
IN TX M addition that they contain a
W. AZ have a printed bylaw upon 1t
ass..sr,laIly stating that the insured, by
Ns.ins the policy, becomes u member
.l" ,.o,npany, and as such shall be gov
W. Nv the bylaws of the company and
.'sa,,,laa 10 the privileges ana benefits
s.ss,r nroyided for. You ask whether
.s cn,npan,es have authority to write
w such as that which has been ex-
eSssss IN us and referred TO In your
tonmuncation ,,. =
TX ~ several companies which holl
s.r,sr. under the act above rets:"ad Ia
.,ssa- are substantially old line irs m
m,,nes polioles, such as are issued by
,.o,k companies or what we unaer:t4 N
Issuance variance, as old line fire in"
nrance companies
nroper consideration OF the question
r,,fNztfnY time
,saI PASS upon, involves a construction
!, ssIt act OF 1897, subdivision %, as
,aana on page 1872. acts OF 1897. This Is
III The legislation IN this State upon the
rMsct OF mutual fire insurance com
,aaies
II order to understand what the lests-
,,turs meaus and intends by regular
A insurance company, or rather, by a
,onpsuv which Is not a mutual fire In
suapce company we may, and should,
lax Il Title So of the Revised Statutes OF
I'D from pages 5S3 TO COS, Inclusive,
ThsreIore, there Is no difficulty in deter
Mining whether fire Insurance company
sSjeh pretends to be incorporated under
NE said last cited law. IS doing business
Is provided by law: but ! confess that
ne question Is more difficult OF solution
when II Is presented as to whether or'aot
company Incorporated under the above
suoi 1897, as mutual company, is doing
Business according to law.
mutual insurance company Ia ono
h which the members mutually contribute
/ 70 the Payment OF losses aud expenses,
where the benefit 10 accrue or Indemnity
! t conditioned In any manner upon he
persons holding similar contracts; such
companies differ essentially from stock
Insurance companies. Tho former need
many bylaws and conditions that are not
required In stock companies, aud each
person who insures therein becomes a
member OF the association, Joyce on In.
slts1ce, Vol I, Section $40. Baxter VS.
cheisea Mutual Fire Insurance Company
Allen tiass.) 1914
You are respectfully advised that IN
ny opinion company organized rs a
mutual FIRE insurance company, can not
I issue policy 70 It's members limiting
for such policy 10 a fixed or stated or level
! premium, for specified length Of time;
hat Is, thar It can not issue a standard
rs Insurance policy for stipulated pre-
/ mum and either IN Its bylaws, or other
vie, limit the liability of the policy hold
srtoa specified sum OF money for q stated
4 tine. This involves the distinctive feat.
us between a stock company snd NV
! 'uI company.
"a Vol 1e, American g. English Enc. OF
br, ,, 10, It is said
Notwithstanding their ancient origin
ne ice. OF cooperative assurances had
aot become matter Of considerable and
general Importance until within the last
.Senty-hve ytsAss, and as subject OF
ungaucn In the courts, such contracts
gag attracted but little attention until
within ten Years"
! nnd In discussing this question with
us gentlemen who are operating some oil
~ mutual companies OF Texas, that great
,alance Is had upon the case OF the Union
.%ulance Company VS.. Hogue, 81 Howard
80 Some OF the text books refer 10 this
suaoriy for the position that policy hold
may execute a note for a stated
.lount In consideration for a policy Is.
wv ~ mutual company for a certain
'sn iof stated time. The parties who
Vpersung, or propose TO operate, mu-
~. ". ecnpanies--in Texes also rely upon
~ sulaority to sustain the above propo.
plt upon an examination o. sid
y is found that the general act o.
NNNASAtAAS Aht pONHl upcn kht
Wlpinles organized under IL TO make
assscss OF insurance against FIRE and
~ policies, provides for certain
ssas OF capital stock $500, O0OJ secured
premium notes upon engagements Of
mssuee entered into by thG companies
M, suuiuon to the right commanding tht
IA, ~ 81 insurance. This capital stocE
~ ~ yulSlned is essential to a complet,
y,h a undsr the act; for, without
~ ~ corporation is forbidden to entci
IN IN me business OF insurance. This pre-.
H,s.suy engagement and the giving o.
Az notes is designed as an imme.
security 10 those who. conhdiug II
s'.i iesponsibility of the company, shoulC
a. spphcation for insurance on its
ta,ss,.ss mo operation. The notes thus con
4 ~ -, capital are to be made payabl,
n, m..nin year from their date, aut
min ~ oe made payable, therefore
vn sae terms OF the act. on demand
A .-<--~4y okQer periOd. apd tha,y ara fna AZ