THICAT-JYOECNHYGENERAL
OF TEXAS
PRICE DANIEL
ATTORNEYGENERAL
July 10, 1948
Non. Gee. B. Butler Opinion No. V-630
Chairman
Board of Insurance Commissioners Re: The sufficiency of the sub-
Austin; Texas mitted amendment to the
charter of the Praetorians
to effect an extension of its
corporate existence.
Dear Sir:
Your request for the opinion of this Department is as fol-
lows:
“Enclosed you will please see Original Charter of
Modern Order of Praetorians which shows by endorsement
that it was filed in the Department of State April 1, 1898 and,
by provision No. 4 that ‘the term for which said corporation
shall exist shall be Fifty years from the date of its incorpo-
ration!.
*‘Following the enactment of what is now Chapter 8,
Title 78 of the Revised Statutes the Modern Order of Prae-
torians qualified thereunder and has operated under its pro-
visions continuously.
“The directors have submitted to this Department the
enclosed original instrument~which has been styled ‘Amend-
ment Extension and Renewal of Praetorian Charter’. You
will observe that it purports to be the action of the Board of
Directors and is duly executed by such directors.
“Will you please advise me whether the enclosure last
above described is sufficient to renew the charter of the
Praetorian for the Fifty year period following April 1, 1948.
If your answer is in the affirmative, will you please return
the enclosure with your usual certificate of approval so as
to permit it to be filed here.
“If your answer is in the negative, will you please ad-
vise me whether the extension of the charter is controlled
by the provision of Vernon’s Article 131% and if your adv,ica
is in the affirmative,will you please advise me whether it is
necessary to require the resolution therein referred to to be
. .
Hon. Geo. B. Butler, Page 2 (V-630)
adopted at a regular or special meeting of the entire mem-
bership of the Praetorians or whether the expression of the
membership may be obtained by resolution from the respec-
tive local lodges or from the supreme governing body, which
is called the Supreme Senate.”
The Modern Order of Praetorians was first incorporated
on April 1, 1896, as a benevolent society under the provisions of Art.
713, Ch. 11, Title.XXI, R.S. 1895, which is as follows:
,“RELIGIOUS, CHARITABLE AND OTHER CORPORATIONS
Article
“Powers and privileges of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 713
“Article 713.(637) Any religious society, military
or fire company, literary, social, charitable or benevolent
association, other than colleges, universities, academies
or seminaries, or any grand or subordinate lodge, or other
order of free and accepted masons, or of the independent
order of odd fellows, may, by the consent of a majority of
its members, become bodies corporate under this title,
electing directors or trustees, and performing such things
as are directed in the case of other corporations; and,
when so organized, shall have all the powers and privi-
leges and be subject to all the restrictions in this title con-
tained, for the objects named in the charter, and shall have
the same power to make by-laws for the regulation of their
affairs as other corporations. Such directors or trustees
shall not usurp or exercise the fu.nctions of the officers in
charge of the spiritual affairs of any society.”
Article 713, as amended by the Acts of 1899, page 236, is
now Article 1396, R.C.S. 1925.
In 1899, the 26th Legislature enacted S.B. 166, page 235,
amending Art. 713, as the same is now found in the Revised Statutes,
and adding thereto Art. 713a, which has been carried forward into
the Revised Civil Statutes of ,1925 as Articles 1398, 1399, 1400, 1401,
1402, 1403, 1404, 1405, 1406, and 1407.
At the time of incorporation, its purpose clause was as
follows:
“2. The purposes of said corporation shall be: Benev-
olent: to relieve the necessities of the membe.rs thereof; to
promote fraternity and social intercourse; to succor and
assist members in time of sickness, death or destitution;
the relief of orphans and,widows of deceased members; and
to 1evyassessment.s upon the members thereof for the pur-
. .
Hon. Geo. B. Butler, Pa8e 3 (V-630)
pose of providing mutual indemnity in case of accident,
sickness or death.
“This Incorporation is not for profit, but for the mu-
tual aid of the members thereof; and funds collected from
such assessments shall be devoted exclusively to the pay-
ment of indemnity in the case of sickness or death of, or
accident to, the members thereof.
“The expenses of said Corporation shall be met from
assessments levied for that purpose, which in no case
shall be greater than may be necessary to meet such ex-
penses economically administered.
“Believing that the highest civic wisdom is contained
in the expressed policy of the fathers of the common-wealth
of Texas to foster ard protect its citizens in the acquisition
of homes, this Corporation shall also offer to its members
the means of acquiring homes by mutual aid and co-opera-
tion, and shall authority to levy monthly assessments
upon such of its-embers as shall desire to avail themselves
of this aid, the funds so accumulated to be advanced to its
members for the purpose of acquiring, building, or paying
for homes. Members to whom such advances shall be made
shall Cwtinue the payment of their, assessments and legal
interest upon amounts so advanced until by easy installments
an investment fund shall be created by which the same shall
be returned. Such advances to members shall be secured by
liens in favor of this corporation, for the benefit of its mem-
bers, executed in compliance with law. The expenses of this
home benefit department shall be provided for by deducting a
fixed sum from monthly assessments collected, which shall
in no case exceed the necessary requirements of the corpora-
tion economically administered, For this purpose only, said
corporation shall have authority to accumulate and loan money
to its members, and to erect or repair any building or im-
provement, and to accumulate and loan money for this pur-
pose.”
This purpose clause was modified insofar as the indemnity
insurance feature was concerned by the provisions of Art. 3096, Chap.
3, Title LVIII, R.S. 1895, which is as follows:
“Art. 3096. Nothing in this title shall be construed to
affect or in any way apply to mutual relief associations or-
ganized and chartered under the general incorporation laws
of Texas, or which are organized under the laws of any
other state, which have no capital stock, and whose relief
funds are created and sustained by assessments made upon
. .
Hon. Geo. B. Butler, Page 4 (V-630)
the members of said associations in accordance with their
several by-laws and regulations; provided, that the princi-
pal officer of every such benevolent organization (not con-
ducted by lodges a quorum of whose members meet in their
respective lodge rooms at least once each month), shall be
required to make an annual statement under oath to the de-
partment of agriculture, insurance, statistics and history
on the first day of January of each year, or within sixty
days thereafter, showing--
“1. Name of organization and where located.
“2. Name and residence of officers..
“3. The salary paid each officer.
“4. The gross amount of money received during the
year, and from what sources.
“5. The amount paid to policy holders on assessments
to pay losses.
“6. The amount paid out for all other purposes, stat-
ing in detail what purpose.
“7. Surplus in the treasury, if any.
“And should any such benevolent organization refuse or
neglect to make an annual report as above required, it shall
be deemed an insurance company conducted for profit to its
officers, and amenable to the laws governing such companies.”
Chapter 8, Title 78, R.C.S. of Texas, 1925, dealing with fra-
ternal benefit societies was originally enacted as Acts 1913, page 220,
and places under the jurisdiction of the Board of Insurance Commis-
sioners the business of insurance by fraternal benefit societies as de-
fined therein. The Board of Insurance Commissioners is given juris-
diction over these societies which were incorporated under its provi-
sions and is given jurisdiction, over any society which was incorporat-
ed prior to the passage of the fraternal benefit act but which engaged
in the business of writing fraternal benefit insurance policies by the
provisions of Art. 4839, which is as follows:
“Art. 4839. Powers retained--amendments
“Any society now engaged in transacting business in
this State may exercise all of the rights conferred hereby,
and all of the rights, powers and privileges now exercised
or possessed by it under its charter or articles of incorpo-
ration not,inconsistent with this chapter, if incorporated;
or if it be a voluntary association, it may incorporate here-
under. But no society already organized shall be required
to reincorporate hereunder, and any such society may amend
its articles of incorporation from time to time in the, manner
provided therem or in its Constitution and laws, and all such
amendments shall be filed with the Commissioner (Footnote:
Transfer of Commissioner’s powers and duties to Board of
. .
Hon. Geo. B. Butler, Page 5 (V-630)
Insurance Commissioners, see ,art. 4682a, ante.) and
shall become operative upon such filing, unless a later
time be provided in such amendments or in its articles
of incorporation, Constitution or laws. Acts 1913. p. 220,”
The question therefore arises as to whether or not the orig-
inal charter of the Modern Order of Praetorians, filed April 1, 1898, as
a benevolent association was ever changed so that the Modern Order ofi
Praetorians became a fraternal benefit society under the provisions of
Chapter 8.
The sole power given to the Directors or Supreme Senators
as contained in the articles of incorporation, dated March 31, 1898, is
as follows:
“The Directors or Supreme Senators, of this Cor-
poration are authorized to arrange for the adoption of by-
laws for the government thereof, and to provide for any
alterations, changes or amendments thereto which may be
from time to time necessary to carry out the ends of this
incorporation.”
Article 4839 provides that “any such society may amend its
articles of incorpqration from time to time in the manner provided
therein or in its Constitution and laws.” If any valid amendments were
made under the provisions of Chapter 8, such amendments must be
made by virtue of the above caluse or by virtue of the Constitution and
by-laws adopted by the society. The above clause only gives authority
for the Supreme Senators or Directors, which terms seem to be synon-
ymous, to arrange for the adoption of ‘by-laws and to provide for any
alterations, changes or amendments in the by-laws.
The Constitution which had been adopted by the Modern Or-
der of Praetorians and which was in force June 10, 1923, provides in
Art. XXV, the subject being “Amendments to This Constitution, * as
follows:
“Sec. 1. The Constitution of this Order may be amend-
ed at any session of the Supreme Senate by a majority vote
of all Supreme Senators present and voting on a resolution
setting forth the amendment sought to be made, and which
has been published in the immediately previous issue of
the official organ of this Order.
“Sec. 2. Upon a petition of not less than 10 per cent
of the members in good standing, provided that the peti-
tion from each Council petitioning is signed by a majority
of its members in good standing, setting forth the part to
be amended, the Executive Committee may order a vote
Hon. Geo. B. Butler, Page 6 (V-630)
to be taken by all Councils in good standing, and shall
cause such proposed amendments to be published in the
official organ thirty days before such vote is to be taken,
and if the amendments so submitted shall receive the ap-
proval of three-fourths of all the members present in
good standing in their respective Councils, as reported
to the Executive Committee by the several Recorders,
the same shall be declared adopted.
“Sec. 3. The Executive Committee shall have power
to make land adopt bye-laws not in conflict with this Consti-
tution, as may be advisable in*carryi.ng out the objects and
interests of this Order.
“Sec. 4. All amendments to this Constitution shall be
in force and take effect thirty days after the adoption there-
of.”
By reference to Sec. 1 it will be noted that the Constitution
can be amended by a majority vote of all Supreme Senators under the
circumstances set forth therein. The Supreme Senate and its powers
,are set forth under Art. V, including the methods of meeting. The
Board of Advisors created under Art. XI, and under Sec. 3 of ,said
Article, “shall between the meetings of the Supreme Senate, exercise
all its powers, except to change and modify or repeal this Constitu-
tion.” The Executive Committee created under Art. mas no author-
ityo do anything concenaing the Constitution, but it may under Sec. 3
of Art. XXXV make and adopt by-laws not in conflict with the Consti-
tution. The Directors or Trustees created by Art. XII of the Consti-,
,tution seem to have no powers except to convey or encumber real es-
tate belonging to the corporation by a vote of 2/3 of the Directors. It
is provided further that the home office of the Order shall not be con-
veyed or encumbered except by authority of the Supreme Senate.
From a resume of the Constitution and by-laws in effect
on May 11, 1927, it would seem that no one except the Supreme Senate
had the power to alter, amend, or repeal the provisions of the Consti-
tution then in force.
It~appears that a charter amendment; a copy of which is at-
tached to the brief of The IWaetorians in the file, was filed with the
Commissioner of Insurance on June 14, 1927. It also appears from
the records of the Secretary of State that the corporation attempted to
file this charter amendment with the Secretary of State, Mrs. Jane Y.
McCallum, prior to that date,. but that she refused to accept it on the
ground that the Secretary of State had no authority to file an amend-
ment to the charter of a fraternal insurance society, since that was
purely under the jurisdiction of the Board of Insurance Commission-
ers. Thereaft‘ar, it was sent to the Board of Insurance Commission-
ers and filed as above stated. No other amendments have ever been
Hon. Geo. B. Butler, Page 7 ‘(V-630)
filed in the.office of the Secretary of State.
In analyzing this proposed amendment it is necessary to
look to the basis of the amendment,w hich is set forth as follows:
“BE IT KNOWN that at a regular meeting of the
Supreme Senate of the Modern Order of Praetorians, in
quadrennial session asembled, held at Dallas, Texas,
on the 11th day of May7A.D; 1927, the following resolu-
tion was duly passed and adopted:
‘RESOLVED that Article I, Section 1 of
the Constitution of said Order be amended to
read as follows:
“This organization shall be known as The
Praetorians, Its principal office shall be in the
City of Dallas, State of Texas.“’
“I, John W. Payne, Secretary of The Praetorians, do here-
by certify that the foregoing is a true copy of the minutes of
the meeting of said Supreme Senate of said Order held on
May llth, A.D. 1927.
“WITNESS my hand and the seal of said corporation this
the 18th day of May, A.D. 1927.
“-8 - Jno. W. Payne
Secretary
“Sworn to and subscribed before me this 24th day of May,
A.D. 1927.
“-s- George Lintner
Notary Public
Dallas County, Texas,”
From the foregoing it is readily apparent that the only a-
mendment or change in the Constitution which was authorized by the
body authorized to make such amendment or change was to change the
first section of Art. I of the Constitution, so that the name of the so-
ciety should become “The Praetorians” instead of “Modern Order of
Praetorians.”
However, a reference to the amended charter shows that
after reciting the meeting of the Supreme Senate as above set forth,
the Directors mentioned in Art. XIII, who are the same as the Board
of Advisors, which latter, as stated above, has no authority to change,
modify, or repeal the Constitution, then proceeded not only to change
Hon. Geo. B. Butler, Page 8 (v-630)
the name but to change the purpose clause of the corporation from that
of a benevolent association to that of a fraternal benefit society under
the provisions of Chapter 0, Title 78.
Therefore, insofar as the charter amendment filed in 1927,
with the Board of Insurance Commissioners attempted to change any-
thing in the charter except the name of the society, it was absolutely
null and void since such change was not authorized either according
to its Constitution or by-laws or by virtue of any statutory authorities,
the directors of the Modern Order of Praetorkns as such having no
power either express or implied to change the purpose clause of the
corporation.
Since the amendment of 1927 was not legally effective, ex-
cept to change the name of the corporation from “The Modern Order
of Praetorians” to “The Praetorians.” and did not otherwise change the
articles of incorporation or the charter or the purposes for which such
corporation was originally chartered, namely, as a benevolent associa-
tion with the rights and privileges enumerated in its articles of incor-
poration, it is still a benevolent association incorporated under the pro-
visions of Art. 1396, R.C.S. 1925, and not under the provisions of Chap-
ter 8, Title 78, R&C. S. 1925.
The foregoing factual situation is identical, save for the
corporate names, with the factual situation set forth in Opinion No.
O-4160 by the Hon. Gerald C. Mann, Attorney General, addressed to
Hon. W. J. Lawson, Secretary of State, and approved March 14, 1942,
a copy of which is attached. In that opinion it was held that the amend-
ment filed by the corporation extending its period of existence, having
been filed with the Board of Insurance Commissioners who had no le-
gal authority to receive and file the amendment for the purpose of ex-
tending the corporate life of the corporation, such filing was nugatory
and did not comply with the general laws for extending its corporate
existence as a charitable or benevolent association.
This Department expressly approves the reasoning contain-
ed in Opinion o-4160, and therefore holds that the “Amendment Exten-
sion and Renewal of Praetorian Charter” forwarded with your request
is not sufficient to renew the charter of the Praetorians for the fifty-
year period following A;:ril 1, 1948.
Your second question is res’tated as follows:
“If your answer is in the negative, will you please ad-
vise me whether the extension of the charter is controlled
by the provision of Vernon’s Art. 1315~ and if your advise
is in the affirmative, will you please advise me whether it
is necessary to require the resolution therein referred to
to be adopted at a regular or special meeting of the entire
membership of the Praetorians or whether the expression
Hon. Geo. B. Butler, Page 9 (V-630)
of the membership may be obtained by resolution from
the respective loca~l lodges or from the supreme gover-
ning body, which is called the Supreme Senate.”
The charter of the Praetorians expired by virtue of its terms
on April 1, 1948, and the only legal method whereby the corporation may
be revived and its corporate existence may be revived and extended is
under the provisions of Article 1315, R.C.S. which is as follows:
“Corporations created for the support of benevolent,
charitable, educational or missionary undertakings, the
support of any literary or scientific undertaking, the main-
tenance of a library, or the promotion of painting, music
or other fine arts, whose charter has expired by limitation,
may revive such charter with all the privileges and immun-
ities and rights of property, real and personal, exercised
and held by it at the date of tbe expiration of its said char-
ter, by viling. with the consent of a majority (~1 its stock-
holders, a new charter under the provisions of this chap-
ter, reciting therein such original privileges and immuni-
ties and rights of property, and by filing therewith a cer-
tified copy of such original expired charter. Acts 1874,
p. 120; G.L. vol. 8, p. 122; Acts 1883, p. 98; G.L. vol. 9,
p. 404; Acts 1907, p. 301; Acts 1909, p. 226; P.D. 5942.”
That this is the proper method of reviving the charter of
such a corporation is in accordance with the rule of law laid down by
the Supreme Court in the case of Flowers v. Pecos River Ry. Co.,
156 S.W. 260. Article 1315~ would be inapplicable since it applies only
to corporations chartered under the general law. However, if the cor-
porate existence of the Praetorians is revived under the provisions of
Art. 1315, a copy of such amendment should be furnished to the Board
of Insurance Commissioners as provided in Art. 4839, R.C.S. 1925.
SUMMARY
A benevolent society chartered in 1898 under the
provisions of Art. 1396, R.C.S. 1925 and whose charter
has expired by expiration of law may be revived only
under the provisions of Art. 1315, R.C.S. 1925, although
such corporation was engaged in the business of issuing
fraternal benefit insurance policies under the provisions
of Art. 4839, R.C.S. 1925.. The attempted filing with the
Board of Insurance Commissioners of a charter amend-
ment extending the li.fe,of the corporation under the pro-
visions of Ch. 8, Title 78, R.C.S. 1925, prior to the ex-
piration of its charter by operation of law, was without
Hon. Geo. B. Butler, Page 10 (V-630)
legal effect to extend the life of the corporation. Flow-
ers v. Pecos River Ry. Co., 156 S.W. 260;;Opinion No.
O-4160 to Hon. W. J. Lawson, Secretary of State, March
14, 1742.
Very truly yours
ATTORNEYGENERALOFTEXAS
C. K. Rikhards
Assistant
CKR~/JCP
ENCL.
ATTORNEYGENERAL