Court Opinion

ID: 4135463
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:02:34.439847+00
Date Added: 2024-06-11T14:27:21.758629
License: Public Domain

December     31,   1962

Honorable J. M. Falkner                            Opinion No.    WW-1515
Commissioner    of Banking
Department   of Banking                            Re:    Whether au existing,     non-
Austin,  Texas                                             profit, incorporated
                                                           association  of cemetery
                                                           lot owners,   chartered
                                                           in the year 1894, can
                                                           establish a perpetual care
                                                           fund under the provisions
                                                           of Article 912a, V.C.S.,
Dear Mr.   Falkner:                                        and related questions.

        Your letter states that a nonprofit,  incorporated  association of
cemetery   lot owners desiresto establish a perpetual care fund under Article
912a, V. C. S.   The charter of this corporation   was granted by the Secretary
of State in the year 1894, prior to the enactment of Article 912a, and said
charter does not provide for a perpetual care fund.

        The questions in your letter which we feel we have authority to answer
are paraphrased     as follows:    Can such association     establish a perpetual care
fund under the provisions      of Article 912a from donations of a portion only of
the lot owners for perpetual care of their lots?        If the answer to the first
question is “yes”,    would the fund be subject to the supervision       of the Banking
Department?     If the answer to the first question is “yes”,        can a majority of
the members    cause the donations to be mandatory on all members,             thus
creating a perpetual care fund for the entire cemetery?

        Section 5 of Article 912a is entitled “Authority to Corporations”,
and sets out the powers and rules by which cemetery      corporations  may be
formed.    This section also contains a clause which reads in part as follows:

             ‘1. . . and provided further that the provisions  of this
        Act shall not apply to . . . any association   of cemetery
        lot owners not operated for profit.   . . now existing or
        hereafter   organized.   . . I’
Hon.   J. M.   Falkner,   Page   2   (WW-1515)

It is our opinion that this clause was enacted to exempt only those organ-
izations named in it from regulation under the Act.           It was not intended
to prohibit a nonprofit incorporated     association    of cemetery    lot owners
from voluntarily   adopting the provisions     of the Act.     Therefore,   in answer
to your first question,   the incorporated    association    can elect to amend
its charter,  bring itself within the provisions     of Article 912a, and
establish a perpetual care fund according to those, provisions.

        In answer to the second question,    if the association   did elect to
amend as above described,     the provisions   of Article 912a would then re-
quire examination   and supervision   of the association   by the Banking
Department.    In particular,  see Sections 2, 3, 4, 30, 31, 32 and 33 of
Article 912a.

         In answer to the third question,        we quote in part from   Section   15
of Article 912a, entitled “Establishment          of perpetual care”:

               ‘1. . . If the cemetery    originally sold cemetery lots
        without provision for perpetual care, it shall have the
        right to accept deposits from such lot owners for the pur-
        pose of establishing     perpetual care endowment on those
        lots, provided said deposits meet the requirements        hereof,
        such deposits to be placed in trust in conformity with the
        requirements      of this Article. I’

It is our opinion that this part of Section 15 provides for the establishment
of individual voluntary perpetual care funds in the type of association     in
question,   and by implication  prohibits a majority of the members     who may
want such a fund from making it mandatory on a minority who do not.          The
power given in Section 6 of Article 912a to nonprofit cemetery      corporations
organized by cemetery     lot owners allowing such corporations    to tax the
property for the purpose of its general improvement       and upkeep does not,
in our opinion, give such corporation     the power to tax for the establishment
of a perpetual care fund.
Hon.   J. M.   Falkner,   Page   3   (WW-1515)

                                 SUMMARY

                   A nonprofit,  incorporated    association of
               cemetery   lot owners,   in existence prior to
               the passage of Article 912a, V. C. S., can
               elect to amend its charter and adopt the pro-
               visions of Article 912a, and establish a per-
               petual care fund according to the provisions
               thereof.   This fund would be subject to exam-
               ination and supervision    by the Banking Depart-
               ment . Donations to such a fund could not,
               however,   be made mandatory from those
               members    who do not desire to establish such
               a fund for their individual lots.

                                                 Very   truly   yours,

                                                 WILL WILSON
                                                 Attorney General        of Texas

JGZ:lmc

APPROVED:

OPINION   COMMITTEE:

W. V. Geppert,     Chairman
Pat Bailey
Dudley McCalla
Norman Suarez
Tom Peterson

REVIEWED    FOR THE ATTORNEY             GENERAL
BY:  Leonard Pasamore