Court Opinion

ID: 4136211
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:11:04.246747+00
Date Added: 2024-06-11T13:20:06.699607
License: Public Domain

The Honorable    Zollie    Steakley                     Opinion   No. WW -768
Secretary  of State
Capitol Station                                         Re:     The authority   of the
Austin 11~.Texas                                        Secretary     of Stats to accept
                                                        and file DrOoosed      articles
                                                        of incoraoration      having the
                                                        ~urpo8e     to act as attorney-in-
                                                        fact for a recinrocal       or inter-
                                                        insurance     exrfiange organized
                                                        and operating under the oro-
                                                        visions of Chapter 19, Texas
Dear   Mr.    Steakley:                                 Insurance Code.

         You have asked our opinion on the authority of your office              to
accept and file articles of incorporation which include the following
Duroose clause:

                         “The Purpose for which the corporation   is organ-
             ized is to act as the attorney-in-fact for a reciprocal   or
             inter-insurapce    exchange organiaed and ooerating under
             the provisions   of Chapter 19. Texas Insurance Code.”

            Prior to the passage    of the Texas Business     Corporation    Act. a
corpor8tion     could be organized    in Texas only if its pronosed    puqmee      was
specifically    authorfeed  by the laws of this state,    In one of the most
fundamental      changes made in our corporate       law by the Buainess CORD-
oration Act, corDorations      may now be organized for any lawful ouruose
or purnoses (Art. 2.01A). However,          as originally  enacted t&e:‘~c,W&ak*e-
                                                                         &‘%      ~:.z
Business     ;orporation   Act specifically   prohibited  the incorporzMx
under of Attorneys-in-Fact       for reciproca;l   exchanges   (Art. Z.OlB(4)(d).

           It has been held that prior to the oassage      of Article    1513a. Vernon’s
Civil Statutes the DUrDOSe     “to act as attorney-in-fact    for a reciprocal     or
inter-insurance     exchange” was not a lawful purpose for which corporationa
could be formed in Texas (WW-395).          Article  1513a is a ape&al act authori8+
ing the creation of corporations      the purpose of which may be, among other
things. to act as attorneys-in-fact     for rsciorocal    exchanges.      They must
meet certain specified     requirements    among which is a fully oaid in capital
of $500.000.     Being a special act dealing with a uarticular        kind of corporation,
Article   1513a was not reuealed     by the passage    of the Texas Business
Honorable     Zollie   Steakley,    oage 2 (WW-768)

Cornoration     Act (9.15B).

          At one time, then, the only i~~anner in which a domestic corn-
 oration Drowsing to act as attorneys-in-fact     for a reciarocal or inter-
insurance exchange could be created in Texas was by meeting the
requirements   of Article  1513a.   Such situation was altered by the last
Legislature  by the DaSSage   of S.B. 90, which amended Article    19.02 of
the Texas Insurance Code.

            Section    1 thereof   reads   as follows:

                      “A corporation     may be organized in Texas to
            act as attorney-in-fact    for a reciorocal  or inter-insurance
            exchange.    The general laws for incorporation       shall sun-
            olement the orovisions     of this Act to the extent that they
            are not inconsistent    with the provisions  hereof.”

          The “general laws for incorooration”    referred to are obviously
those in effect at the time of the oassage  of the Act and mean in this case
the Texas Business Cornoration     Act.

            Section    3 of S.B.   90 nrovides:

                      “Chanter 388 of the Acts of the 55th Legislature,
            1957, (Article  1513a) shall not anply to a cornoration.
            either domestic   or foreign, which acts only as attorney-
            in-fact for a reciprocal   or inter-insurance exchange.”

           By virtue of this provision cornoration attorneys-in-fact   for
reciorocais   need no longer meet the rather stringent canitalization~
requirements     of Article 1513a.

           The “repealer”   clause of S. B. 90 is found in Section 4 thereof
and orovides that “all laws or aartsof      laws in conflict with the orovisions
of this Act are hereby reoealed.     ~ .” Section 1 of the Act, oroviding in
effect that acting as an attorney-in-fact    for a reciorocal  or inter-insur-
ance exchange is a lawful aurpose and nroviding that the general laws for
incorooration   shall aooly, being in conflict with Article Z.OlB(4)(d)     of the
Texas Business    Cornoration    Act, the latter is repealed inaofar as it is
in conflict,  City of Fort Worth v. State, ex rel. Riglea Village,      lEi6 S.W.2d
323. 327.
            Honorable      Zollie   Steakley.   oage   3 (WW-768)

                      Had the Legislature   intended that corporations   df the tyDe
            in question be incoruorated   by the State Board of Insurance,    it would
            have been a simple matter so to provide.      Instead, the Legislature
            has directed their incoruoration    by your office by virtue of the re-
            ference to the general laws for incoraoration     contained in Section 1
            of the Act.

                     In answer to your question, then, we hold that your office
            has authority to accept and file the articles of incorporation in question.

                                                  SUh4MARY

                                    The Secretary   of State has the authority
                                    to accent and file articles   of incoruoration
                                    having the purpose “to act as the attomey-
                                    in-fact for a reciprocal    or inter-insurance
                                    exchange organized and operating undei
                                    the nrovisions  of Chaoter 19, Texas Insur-
                                    ance Code.”

                                                                       Very   truly yours,

                                                                       WILL WILSON
                                                                       Attorney General      of Texas

            RVL: jg

            APPROVED:

            OPINION      COMMITTEE:

:           w.   V,. tippert.   Chairman

            ~C.’K. Richards
            B., H. ‘Timmons, Jr.
            W;. 0. Schultz~
    “-‘.:   Robert Bud Lewis                            .,

            REVIEWED   FOR +%ATTORNEY                        GENERAL
            BY:
                Leonard Passmore