Court Opinion

ID: 4136377
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:12:53.657048+00
Date Added: 2024-06-11T14:21:59.190776
License: Public Domain

THEAVTORNEY                     GENERAL
                                      OF ?rExAti

  'WILL     WILSON
A-l-X-O-       GENERAL
                                                April    23, 1959

           Mr. William A. Harrison                 Opinion No. WW-602
           Commis5ioner    of Insurance
           International Life Building             Re:   What constitutes   Uoae building
           Austin, Texas                                 site and office building” as used
                                                         in particle 3.40 of the h~surance
           Dear   Sir:                                   Code.

                    You have asked the opinion of this office as to the definition of
           the phrase “one building site and office building for its accommodation
           in the transaction    of its business and for lease and rental” as used in
           Article   3.40 of the,Insurance    Code as well as its application to a spe-
           cific fact situation set ,out in your opinion request a6 follows:

                             “Attached hereto you will find a photostatic
                    copy of a plat of a certain city block.      The entire city.
                    block, is now owned ,by XYZ Life Insurance Company.
                    On tract ‘A’ is a twenty-story      steel frame brick build-
                    ing which is the home office building of XYZ Life In-
                  ‘,:,
                    surance Company.       The company acauired tract ‘A’ on
                    December     27; 1950, at a cost of’$575,000.      The build-
                    ing~was commenced       in January, 1952, and was com-
                    pleted in February,    1953.    At the present time the up-
                    peer nine stories of the building are under a thirty year
                    lease to one tenant, and the remaining eleven stories
                    are occupied by the insurance company and tenants
                    who have short-term       leases.   The insurance company
                    occupies space on seven floors,        which if consolidated
                    would take up only a little more than three floors in
                    the building.

                              “Tract ‘B”is  an ,unimproved concrete and dirt
                     lot, an undivided one-half of which is gowned by Com-
                     pany XYZ and is used for access and parking area.
                     One-half interest in this property was acquired by the
                     company on February     13, 1953 for a cash considera-
                     tion of $125,000.

                             “On tract ‘C’ is a si%-story  concrete parking
                     garage building which is owned by XYZ Life Insur-
                     ance Company.     The tract of land was acquired by the
                     company on December      27, 1950, for a $230,000    cash
                     payment.   Then parking garage was commenced        in Janu-
                     ary, 1952 and completed in February,     1953.    The garage
                                                                                        ‘.

    Mr,. William   A. Harrison,   page 2 (WW-602)                                        .:

            is a public parking facility and the’ income    from,,+     op-
            eration accrues ,to the insurance’compauy.

                     “Tract ‘D’ wa,a acquired in two parcels, the ,first
J         ‘. being on April 1, 1957, for $243,000, and the second par-
     ‘.      ccl on April 1, 1958, for $77,5,000.

                       “Therefore,   Company XYZ, since the purchase of
          ,” one’ori,ginal  building sits or.December      27, 1950; a& the ,’
             completion    of the home 219 P. 261, Volunteer State Life Ins. Co. v. Dunbar, 181 S.W.
    myclopedia         of Insurance Law, Couch, Vol. 1, Sec. 248, p. 585.     This
    conclusion   is reenforced   in Texas by the addition to the statute of the
    words “and for lease and rental,” an appendage not usually added to this
    type of statute in other states.

              Likewise,    the concept of what is properly within the meaning of
    the phrase “for its accommodation            in the transaction     of its business”
    and others of similar import has been greatly expanded by judicial
    construction.     The purchase by an insurance company of a hospital to
    be u,sed primarily      but apparently not exclusively        for the treatment      of
    its employees     afflicted with tuberculosis       was upheld as being “requisite
    for its convenient accommodation            in the transaction     of its business.’
    People ex rel. Metropolitan         Life Insurance Co. v. Hotchkiss,           120 N.Y.
    ~UPP. 649 (1909) . In tw o cases involving the proposed ownership by in-
    surance companies        of housing projects,      such ownership being specifi-
    cally authorized by the insurance laws in force, it was contended that
    this would violate constitutional        prohibitions    against corporate       owner-
    ship of real property       “except such as may be necessary            and proper for
    its legitimate    business”    or not “actually occupied by such corporation
    in exercise    of its franchise.*      In both it was held that this’proposed
    use did not violate the constitutional         provision,   the rationale apparently
    being that it was necessary        for present day insurance companies             to
    have a large field of permissive          investments     and that by making such
    investments     the companies were acting in furtherance              of tlieir business.
    The fact that the real estate in question (now comprising                 one city block)
    has been purchased in piecemeal            fashion over a period of time is en-
    titled to but little significance      in determining     whether or not it constitutes
     “one building site.”      An analogous situation is discussed           in the case of
    Board of Ed;cation        of Orange-County      v. Forrest,    et al., 130 S.E. 621
    jN.C.Sun.1.    There the Board of Education selected a site for a consoli-
    dated school building containing slightly over six acres.                 This six acres
    was composed       of two parcels of land s one of five plus acres and the
    other of 1.09 ac,res with a ‘“street, road or alleywayW intervening.                  The
    Board was able to purchase the five acres immediately                  and’proceeded
    to build the school building thereon.           Being unable to reach an agreement
    as to price regarding the 1.09 acre tract, condemnation proceedings
    were instituted, such additional land to be used as a playground,                  It was
    contended that the Board was empowered               to condemn only for school pur-
    poses or school buildings and was not authorized to condemn property for
    playgrounds     contiguous thereto.        The Court, however, points out that the
    Board is allowed to acquire title to “siteso” for buildings throughout its
    district and in this connection has the following to say:

                      II
                       a D s The meaning of the word ‘site’ as used in the
             statute is broad enough to embrace    such land, not exceed-
             ing the statutory limit, as may reasonably    be required for
             the suitable and convenient use of the particular   building;
             and land taken for a playground in conjunction with a school

      ‘.
     Mr.    William   A. Harrison,   page 6 (WW-602)

               may be as essential  as land taken for the schoolhouse          it-
               self. 24 Rawle C. L. 582, B 31.

                         “It appears in the statement of facts that the plain-
               tiff, after deciding to consolidate    the scho&.      selected as
               a site for the building a lot of more than six acres includ-
               ing the lot in question; that upon the reasonable        assump-
               tion that title to each lot could be acquired by purchase,
               the plaintiff erected a modern school building on the five-
               acre lot; and that afterwards     it~became necessary       to con,-
               demn the lot in controversy.       In all these matters the
               plaintiff was acting in the exercise      of a discretion   with
               which the courts seldom interfere.         (Citing cases.)

                        “Under the judge’s findings of fact the recess      of
               acquiring title to the five-acre    lot by purchd
               one-acre   lot by condemnation    may be regarded as sepa-
               rate stages m the accomplrshment         of a common’purpose
               to appropriate   both lots for the benefit of the school.
               Otherwise the plaintiff’s   original purpose would’ be’de-
               feated. 0 s 0m (Emphasis    supplied.)                 -?

      It would appear then that the determination   of whether ,=:&en   tract of !
    * land qualifies as “or@ building site” within the purview of Article 3.40
      presents a question of fact which must be resolved by you.                   .

               H&ever,   it shoul& be pointed lout that the manner in which
     property is purchased is but:one of the factors which should be taken
     into consideration    by you iA resolving     the question. The matter is ex-
     cellently  summarized     in Garfield v. Equitable Life Assurance     Society,
     164 N.Y.S.Zd    823 (N.Y.Sup.),   as follows:

                      “Singleness   is to be determined not solely        by the
              purchase but by the plan as well and its essential          and
              natural implications,   its purposes and policy.n

     Of course,  unrelated acquisitions of separate parcels  of real estate which
,
     do not reasonably   appear to be motivated by any particular  plan looking
     toward their ultimate utilization as a ““unitwwould be beyond the purview
     of Article 3.40.

                What constitutes an ,“offlce building” within the meaning of Article
     3.40   likewise presents a fact.question    which you must determine.

             In Rice, Att”y. Gen. v. Board of Police Com’re.    of City of Woon-
     socket, 97 A. 19 (R.I.Sup.) it was contended that c&tain    connected struc-
     tures constituted a “building” within a statutory wrohibition against the
     issuance of a liquor license-for  the sale of liquor in any build&g within
     200 feet of a school.   The Court held that the structures   in question rep-
     resented three distinct buildings. basing this conclusion’on    the following
Mr.~ William      A. Harrison.    page 7 (WW-602)

facts:   “It was built at a different ti.me, upon a different plan, and for a
different purpose.     There is no interfor connection ore means of passage
between the two.” On the other hand, we find the case ,of, State v. Crause,
 104 A. 525 (Me.Sup.)!   which announces that~ ‘a bitilding~ may ‘constitute an
entire block, consisting    ofseparate   and independent tenements,   one~of
which may be occupied for a dwelling house and another for a store?
Citing State v. Spence, 38 Me. 32.

         An analogy to the restrictions     of Article 3.40 is furnished by
corresponding    constitutional  provisions    and statutes relating to banking
which contain limitations     as to a “banking house* and engaging in busi-
ness at more than “one place.”        A proposa’$ to house banking facilities
in a building to be constructed     in the next block to the existing banki- .
connected by pneumatic tubes and a closed~ circuit TV was held a viola-
tion of Article 342~903,in    Attorney General Opinion WW-22.         A similar
addition, joined to the original by a tunnel below the street, was held
within the statutory and constitutional     limitation in Attorney General
Opinion V-1046:

                    “if the new structure,  when built, becomes a part
           of the bank’s ‘banking house’ then the proposed plan will
           not violate the provisions   of said Article.
    r..
                    “The contemplated      new structure,   although to be
    ,. 1

           erected across the street from the original “banking,
           house,’ will be physically     joined thereto by a tunnel un-
           der the street, which you state will be suitable for pas-
           sage back and forth.     It is evident that besides being
           joined physically,   the new structure,    including the pas-
           sageway, will be in close proximity       to the present build-
           ing. It will be used in connection with the original build-
           ing’ and as a unit will be devoted to one general common
           purpose.    It is our opinion that the two structures     will in
           reality be one and ‘when used in the manner proposed will
           constrtute the bank’s ‘bankmg house.”        D 0 am (hmphasls
           supplred.)

           Also   pertinent   is Attorney   General   Opinion R-1746:

                    “The emphasis appear%. to be on the singleness
           of the place at which thenbanking operation is conducted.
           . . .

                    “The sole question is. then, whether the separate
           building or installation  planned will constitute a separate
           place, or banking house or will constitute but a part of
           one place or banking house.     To resolve that question
           will require an examination    into all of the facts and cir-
           cumstances   throwing light on the question, many of which
         Mr.   William   A. Harrison,   page 8 (WW-602)

                                                                       ,
                    are not yet in existence.    Physical proiimity    will be but
                    an evidentiary fact for c’onsideratiorl.   Physical cdmmu-
                    nication by pneumatic tube is of siinilex limited signifi-
                    cance.   Any hypothesis   must neceesarily    assume i&en-
                    tion to use the separate ‘buildings’ at an integrated,    single
                   ‘business location.   Intention is’ always a fact question if
                    disputed.”
                                                            ..
                    While obviously in the banking field the emphasis is not onthe
,.,‘.-   singleness     of the physical structur,e,‘the   above are illustrative’of   the
         liberality with which restrictions,      of this type are interpreted    and may
         be of some ,benefit to you in passing upon these questions,.

                  We have been furnished :as. a supplement to’the bpinion request
         with. a brief summary    of’various insurance buildings which in the past
         have been considere~d by the Board and, the Commissioners.       A compari-
         son of those which have been rejected .and those which have not shows
         that these matters have been treated correctly    as questions  of fact and
         the determining  factor in each case has been whether or not the struc-
         ture was considered    by,the Bpard as an *architectural.unit.?

                   In determining   whether or not the pr’oposed plan comprises   an
          “architectural   unitm the Board has apparently taken into c~onsideration
         all the particular   facts’ involved, such as its proposed use both present
         and future, its physical aspects,     design and plan, the manner in wh$ch
         it was acquired, etc.                        .

                                            SUMMARY

                          Whether or n.0t.a ,particular re,al estate
                          investment    of a’ life insuranc~e company
                          constitutes   “ones building site and office
                          building,” as the phrase is used in Arti-
                          cle 3.40 of the Insurance Code, is a ques-,
                          tion of fact for determination     by ,the Corn-
                          missioner    of Insurance.

                                                     Very   truly your.s,

                                                     WILL    WILSON’
                                                                                 as

                                                     BY

         RVL:lm

                                                 .
Mr.    William   A. Harrison,   page 9 (WW-602)

APPROVED:

OPINION     COMMITTEE:

Geo.    P. Blackburn.   Chairman

J. Arthur Sandlin
William R. Hemphill
Tom I. McFarling,
John Reeves

REVIEWED    FOR THE ATTORNEY             GENERAL
BY:
     W. V. Geppert