Court Opinion

ID: 4138136
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:32:56.372592+00
Date Added: 2024-06-11T13:28:45.981670
License: Public Domain

TEIEATTORNEYGENERAL
                                     OF   TEXAS

PRICE  DANIEL
ATTORNEYGENERAL
                                      July    16,   1948

        Hon. George B. Butler, Chairman
        Board of Insurance  Commissioners
        Austin 14, Texas

        Attentioaz         Mr. Will G, Knox
                           Legal Examfner

                                              Oplnl.on     No. V-636,

                                              Re:    Authority   of a title
                                                     Insurance   company
                                                     under Article    1302a,
                                                     v.c.s,,   to acquire   an
                                                     abstract   plant in a
                                                     county of less than
                                                     90,000 populatioa.

        Dear Sfr:

                         By letter    dated    June 10,      1948,   you request
        advice      as   fellows~

                         “A @roup of citizens      of Cherokee
                  County have advised      us that the7 will
                  in due course submit Articles          of Inc-or-
                  peratfon   for a title     corporatiQn    te be
                  erganfzed    under Article     1302a and h&v6
                  stated   that they wish te purchase any
                  abstract   plant in Cherokee County.

                         “Please advise me whether a title
                  corporation    orflhfied~~under   Article
                  1302a, Vernon”s Annotated       Cfvll    Stat-
                 utes,    may purchase an abstract       plant
                  in the county of its domicile,         having
                 a pe~pulatlcn    OS less than Ilinety Thou-
                  sand according     to the last preceding
                 ~Foderal consus,”

                   Article  13028, V.C.S,,  was originally  enact-
         ed as H.B. 153, Acts blst  Leg.,  R, S,, 1929, Chapter 80,
         page 77Q Nowhere therain   was a title   insurance company
Hon. George      B, Butler,       Page 2,       V-676,

 prohibited  from acquiring    an abstract    plant fn any
 county of any size,      On the contrary,    it clearly    con-
 templated  the acqufsitfon    of such’plants     in any coun-
.ty as a necessary   incident   bf the business     authorized.

              The caption        of   the   original     Act     provided
fn parts

             “An Act authorfzfng    the creation
      of corporatfons     for the purpose of COQ-
      piling   and/or acquiring    and owning ab-
      stract   plants   in this or any other state,
      and to compfle Andy sell abstracts       of
      tftles   therefrom    and to insure  the title
      to lands and Interests      therein  and liens
      thereon,    o 0 *”

              The Act    then provided:

            “Section 1.   Private  corporations
      may be created  for the following     named
      purposes 8

             “(I.).     To cempfle and own9 or to ac-
      quire and own records         or abstracts    of title
      to lands and interests          in lands;  and to
      insure     titles    to lands or interests      there-
      in, booth in Texas and other states           of the
      United States;        and fndemnffy    the owners
      of such lands9 or the holders           of fnter-
      ests fn or Ifens         on such lands9 against
      loss or damage on account           of encumbrances
      upon ,er’defects       in’ the tftlo   to such lands
      or fnteres tr therefn 0

            “Such corporations  ray also exercise
      the followfng   powers by fncludfng.same    in
      the charter   when filed orfgfnally,    or by
      amendment;

            “(2)    Make and sell            abstracts         of tit;.
       fn any co-ties    of Texas            or other        states.
               Section    2 of    the   orfgfnal       Act    was described
in the     caption    as?
            n0 0
                 ,* regulating  the amount of paid
      fn capital   of all corporations  operating
      under thfs Act,     n oN
Hon. George     B. Butler,     Page 3, V-636,

It   was then provided       by Sectfon     2 that:

              “All corporations      created   and/or   oper-
       atfng.under    the provisions      of this law
       must have a paid-up       capital    of not less
       than One Hundred Thousand ($lOO,OOO,OO)
       Dollars D Any corporation         organized    here-
       under having the right        to do a title     in-
       surance business     may invest     as much as
       fifty   per cent of its capital        stock in
       an abstract    plant or plants,       provided    the
       valuation   to be placed upon such plants
       shall be approved by the Board of Indur-
       ante Commissioners       of this State.      D 0”

             Thus, nothing    in the caption     or the provis-
ions of Section     2 of the original      Act indicated  an
intention    to do more than to regulate       the amount and
character    of permissible     capital   and to place a liml-
tatlon    on the proportion     of capital   which might be
invested    In abstract   plants.

             By amendment, Section   2 was changed by S.B.
283,   Acts  43rd Leg,,  R, S., 19339 Chapter 222, page
750,   to Its present   form.   The caption of the amenda-
tory   Act provided:

              “An Act to amend Section       2, of an
       Act passed by the Legislature         of~Texas9
       February 26, 1929, House Bill No. 153,
       relatldg   to tftle   Insurance    business    and
       the capital    stock of corporations       doing
       such a business;     regulating    the amount
       of capital    stock of companles.Whfch       may
       be invested    in abstragt    plants;    and de-
       claring   an emergent p 0

Section  2 of    the   original    Act    as thus     amended thare-
upon read:

                 “Sectfon    2.   All   corporations      creat-
       ed and/or        operating     under the provisloas
       of this law must have paid up capital                  of
       n,;;l:;is      than One Htidred Thousand($10Q,OOQ,OO)
                    e Any corporation        organized     here-
       under having the right            to do a title       insur-
       ance business         may invest as much as fifty
       (50%) per cant,          of Its capital       stock in an
       abstract       plant or plants,       provided     the valu-
       ation      to be placed upon such plant or plants
Eon,   George   B, Butler,   Page 4,    V-636.

             shall be approved by the Board of Insur-
            anca Commfssfoners        of this State;      provided,
             however,    that ff such corporation         is not
             doing a trust business         as provided     in See-
             tfon 1, Artfcle      4 of the Act hereby amended,
            and maintains      with the Commissioner          of. In-
             surance the deposft       of One Hundred Thousand
             ($lOO,OOO,OO) Dollars,         in securfties      is pro-
            ,vfded in Section      6 of the Act hereby mend-
             ed, such of ft.8 capital         in excess   of fifty
             (50%) per cent,      as deemed necessary         to fts
             business    by its Board of Directors         may be
             fnveated    in abstract     plants;    and provided
             further    that no such corporation         may herr-
            after    acquire   more than one abstract          plant
             in any one county and shall not hereafter
            acquire any plant in any county in this
            State having a population.           of less than nine-
             ty thousand (90,000)        according     to the last
             preceding    Federal    census.”

                   It is to be noted that nothing         in the ca -
       tion of the amending Act would indicate          an intent -9 on
       to     more than to regulate       the investment     of capital
       stock.   Nothing is there present        to indicate    an inten-
       tion to prohibit    entirely    the acquisition      of abstract
       plants  in smaller    counties.     In other word,s, the ca -
       Mona of both Acts as they relate          to Section    2 dea-3
       solely  with security    and soundness      of invrstnent    pol-
       icy.   This fs also borne out by the emergency clause
       of the &mandatory Act, which readsn

                    ‘The fact that under the exlstFng      law9
            the people dealing    with the aforementioned
            corporations    have not had rdeqyte   protec-
            tion oruates    an emergency.  0 0

       ‘pae taxt of Section   2 as orfg:inally      enacted and as
       amended indicates    an intention      to leave the concorns
       free to invest    in abstract    plants   provided   not more
        than 502 of the capital      is utilized    for that purpose.

                    The amendment offered      an exception   to theme
       502 limitation    in the utilization      of capital   for iq-
       vestment in abstract      plants,   where such a concern did
       not do a trust business       and where it maintained
       $100,000.00    on deposit    as security   for its commit-
       rents e Iti such event,      it was allowed    to Invest In
-   *

        Hon. George    B, Butler,     Page 5,    V-636 0

        excess    of 50% of its capital      in abstract     plants.     But
        this concession     carried   a proviso     or llmltatlon     which
        the Legislature     must have considered       an appropriate
        security    measure by preventing       concentration     of such
        excessive    Investments    of capital     in one county and by
        preventing    such excessive    Investments      In small coun-
        ties o These provisions       do not, then, prohibit         any
        such “Investment”      or “acquisition”      in a county of less
        than 90,000 population       where the concern will not have
        Invested    more than 502 of its capital         stock In abstract
        plants as a result      of such “mcquisltfon”,

                      Such a construction    is consistent with the
        validity     of~Section   2 as amended as being germane to
        the cmptlon,      and does not bring the statute   Into con-
        flict    with the rule stated     in 39 Tex. Jur., pp. 104,
        105, Section      48, thmt:

                    “A title   expressing     r purpose to amend
              a statute    in a certain    particular    is decep-
              tive and rfslemding      in so far as the body
              of the Act purports      to &mend the prior      l&w
              in other partlculrrs      s The amend&tory Act
              is void to the extent       that its provisions
              go beyond express     limitations      or the scope
              of the title.”

        A construction      that the amendment was intended          to and
        does prohibit      under all circumstances        the acquisition
        of mn abstract      plant in a county of less than 90,000
        population     would, in our opinion,      effect    an amendment
        and provide     to not only Section      2, but also to Section
        1 of the original       Act, authorizing     such concerns      to
        require    abstract    facilities  and to nmake and sell          ab-
        stracts    of title    in an ceunties     of Texas.’      (Empha5is
        supplied)      This woul T-E e a broader amendment than ap-
        pears to have been intended,

                      That the last “proviso”    in Section   2 Is a
         limitation    only on the next preceding    “proviso”   is
         supported    by the cases cited   to the text of 39 Tex.
        ,Jur. 193,    Section 102, to the effect    that:

                     “Ordinarily    a proviso  is limited      to
              the clause which next precedes          it and to
              which ft Is rttached.        So where there are
              successive    provisos,    the qualifying    terms
              of the lrst will be understood         is refer-
              ring to the one next preceding,
Hon, George B, Butler, Page 6,   V-636.

This language is cited in Tide Water oil Co. v. Bean,
148 3. W, (2d) 184, 191 decided by the Court of Civil
Appeals at Dallas in 1941, which also cites the text
of Frix vq State, 148 Tenn. 478, 256 3. W. 449, 451,
where the Court said:
          "The rule of construction being t&t
     s proviso must be limited to its appllca-
     tlon in the particular section of the stat-
     ute in which It is found, unless a contrary
     intent clearly appears9 certainly it should
     be held that the effect of a proviso in an
     amendatory statute should be limited in its
     application to the statute in which it is
     found, and not extended to the original stat-
     ute of which the statute containing the pro-
     viso fs an amendment."
          You are therefore advised that 8 title insur-
mnce corporatfon orgrnlzed under Article 13028 may ac-
quire an abstract plant in a county of less than 90,000
populrtion if anch will not ef’fectthe investment of
more than 5O$ of its capital stock in an abstract plant
or plants.

           A title fnsurmncr corporation organ-
     ized under Article 13028, V, C, S., may
     rcqufre mn rbstract plrnt fn 8 county hav-
     in less than 90,000 population, ff such
     wif 1 not result in the investment of more
     than 50s of its c&pita1 stock in an rb-
     strrct plrnt or plants.
                           Yeu~a wry   truly

A??RWED~              ATTORNEYGENERAL OF TEXAS

                            $&2i5&d&
                      BY           Idd I&Denial
                                      Assistant