OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Honorable 0. P. Lockhart, Chalmtan
Board of Inaum.nce Comml~aloners
Austin 14, Texas
Dear 9lr: Opinion No. O-624
benefit cer-
d ln opinion
Your letter of Otto requesting the opinion
of thlr department on d therein, Is a8 fol-
lOU8:
treated to
52, R. G. S., 1913,
ding death benefit
of any other per-
red as to whether or
rtIficates* muat be of
tion 4 0f Article 4835
he organization 0P a
society, which certificates are
'No suoh society shall Incur
or than for such advanced paymenta,
eflt certificate nor pay nor allow,
lse to pay or allow, to any person
any death or disability benefit until actual bona
Pide applications for death benefit certiflaates
have been secured upon at least 500 lives for s
least $1.000.00 each, . . . , .* (Bsphfiria our8.)
:;nnoratie ;;. T;. Luckhart, pa&e 2
*U your answer to the nbcvs queatlon ts lo
ttw uegtitive, doas atl:i cc6 cm 611 of the atteahed
Pcrxm of certifiostee qUalip;r a8 e ‘?eoth benefit
oertirlocts’ for the purpose OP drterxlning the
mmber of embers of a friiteraol benefit society?
note partloularfy Purt ‘2 in the two red-bordered
oertifloatas an.1 Paxt (I) In the blue-bordered
oortir ieatr.
*If your anmfer to th*,Plrsh queatioa In in
the affirmatite, ,113an3 fraBrraa1 bermfit soolety,
bxobpt one operathg under the protfrdons of Arts-
810 483Sa, pe?dttWl GO imOUe a 4ceth benefit oer-
tlfioate providing fcr PaYQIOntOf lcra than $l,OOO.OO
aa a tloath bunaflt?*
Chaptqr 8, Title 78, Vornon*s rdm0tdbea Ofril Statutes
oontulne the tnmtutory prorimionr, 6efiting and spaolfloally reg-
ulating fratamal bonefib sooletler. Artlale d&38, VerBon’s A.+
notha Cirlf Statuterr preroriber la dotall the prooedure for
the organisatioa of, froternel benefit rool*t~er. ArGlolr 4%38a,
Yernon’e Annotated Ctrll Statute. permit* tha or~antaatlon of
Praternnl sooietiea
benefit On Y likited barnis; providing re-
qufremrnts to be met before a paneit 18 hued to auoh soolcty
by the larurenee department Of the State. It ham been broadly
said by tne supreme Court that the riuhtr, power@, and obllga-
tlonn of beAefit looiettier 8FO dotemined by rulea of law paoul-
iar, if not exolualraly, rpplloable to thm, aad the legality
of their aotlonr i8 not to be tested by rules which apply to or-
ganizations oommwoial in ptuvose. (Xlrtz v. Soreraign Oeap,
if.o.8’. 248 8.W. 436)
WI have tails4 to find
any oourt deolsion paaslng on
question8 similar to the aubrlttO& by you.
quO8tfOne Mtlole
14313, Vernon’s iinnotated
Cid1 Statutee pmvidsa in part that
r*i.$henany doawstio aoolsty #hell heTe lllrooatfnued burriness for
the period of one year’, or haa less then four hund,reb me~~ber#~,
its charter shall beowe iwill an.3 VOid.* Artiole 4852, Vernon’s
hnnototea Civil Statute8 provides In wt.:
“. . .Xhenaver after examiaatlon the Comalsalonor
icr matisfiftd thet any doaertio society !iaas fail& to
oonply rltn say provlsioti of Wi:3 ohapter, OT is ax-
00061~ 1Ga powere, or Se not osrrylq aut its oon-
traate in 6oo4 faith, or it traxmotlng buefnesa
.~__ _---*- -, yulj‘z ,
P~UdUIb~tlyi OI WbOIWVSruny dOL?L4StiC SOaiety,
after thr sxistbnce of 0116 year or mor6, ehall
hew a &enb6rehl;, oP lass then Pour hu.ndz-64, or
ehnll determine to 4Iecontinuo bueineee, said
Coemleelon6r may present the irate relating there-
to to the Attorney SOnera]., who shell, lr he 4eea
tha oiroumetanoee warrant, oo~m~e an e&ion In
quo wezrento in a oourt OP oomprtrnt ~urIe4iatlon,
an4 If It shall then appsvr apon the trial that
euoh eooiety ml~ould be eloced, eald eaalety shall
be en~olned rlvra carrying on nay further buelnese
and eomo person ehell be eppolntad r404lr4r 0r
luoh society and ehnll pro4444 at onoe to tab
poeeeeeIon 0r the bOok4, papers, mozA4~8, *nu other
re44te of the l oolety, an4 shall iorthwlth, undoi
the dimatlon oP the oourt, pme44d to aloe4 the
orralre oP the soolety, end to dletrlbuts its rutads
to those entitked thereto. lo lu4k p~004oQInge
shall be oomeqO44 by the Attorn4y Oenerel against
any euoh sooiety, until after notloe has bsen duly
served on the ohlet cuemutlveofP1e.n ar the eo-
olety rrt4 a reeeonabls opportwllty given to 10,
on a 48% neuub4 1x1 said notice, to show oeuse why
e-uoh prooeedlng should not be oo1sm4riowl.*
ArtI 4838 euthorfzee a eo4i.oty wh4n lt has neoived
Y prslimlnary oertlrlo~&~e m authorlee b? said etatuto to lolloit
&4mbsre ror tti6 yUrpO44 or oompl4ting its organl44titm,4nil such
eooi48y eh&:l collbot Prom 6eoi1 applioant the amount OP not lees
than 01% re(ruLr no&W&p peyment, fn lsoomhnoe with its table of
rates ee prorI444 by its Constitution an4 Lawe, en4 lball leeue
to haot eald 8pplloant a reoelpt r0r the am3mt 90 c?olleoteb. No
e>uoh eoolety shnll inour any liability other then for woh aI-
vnn04 yaymenE8, nor Ieeue any benePlt o4rtlPIomte nor pay or sllow,
or 0fr4r or pxwsri44 to pay or 4llow, to any pbrcan any 4eath or
4leabllIty benerit until ~aotual boaa PI46 applioet~oa6 ror death
bonollt cu~tifioete~ hare bee3 aeoured upm at least ilts hundre4
llres for at laaet cm thouemd 3ollere oaoh. fell Rrtlol4 4838
presorlbse ths KIUZ~BF
of applictmtr for 4osth b6netit oertiPicctte
or et least firs hundred anii ttnt saoh applloetlon must be ior st
laaet one tho,usakd &lien for death benePlte berors the sooiety
otm oompleta its or(ganleatIon an4 begln buelneaa. Ttlia statute
furthor provides that when any eooisty has les8 than four Dunllr64
me~bera Its, chtrrter eke11 beoom null an4 7914. UowOIvbr, this
ettatute does not provide for the amount or the deeth bonatlt oer-
tliicatee of salA Pour huadrei mambere, aor 4044 +.rtIols 4852
Honorable ‘3. P. Lookhart, peg4 4
preeorlbe my type of death benefit oertlP1oat.e Per the Pour
hundred mmbber8. In view or the POragolng etetutee, it 18
our opinion that the death benefit oertirIoete8, 8Pter the
completion ot the organization an4 the be&Inning of buelneee,
the slnimuin Pour hun4re4 member8 are not neoemaarily oP the
type required uncier Seation 4 0P ArtI 4838 Por qu4llPylng
membmr8 In the organization of a fraternal benefit looiety.
Ii tha L4&8lature hal intended that four hundred mu&mre
holding death beneilt oertltlaater to the oxoluelon or any
other pweon were to be ot the type roquind under Seotion 4
or hrtiale l&S Por qu8llPylng momben in the orgaslsatlon
oP the trrternal beaeilt soolety, it would hare me44 euoh
requlremont ia pleln languege. TherePorn, It Is the opinion
or this department that your rir8t question 8houl~4 be eMwere
In the negatlre, an4 it 18 so anawend. You Purthsr state in
4rr44t that it OUT answer to your rht queetion 18 in the
negative, do48 any one or all oP the ltteo h e form8
Q oP oer-
titloetes quelliy as a *death benwilt oertlPloate* for the
purpose or 4etemInlng the number ot msmber8 ot the Pnteruel
bonePit soaisty. Our oplalon MO. O-6092, rererred to In your
inquiry, ho148 among other thIag8, that the term wPou.r hundred
memberew u8e4 In Art1014 U38, Saetioa 4, an4 Art1414 4852,
means Pour hundred &ember8 holding death benerlt oertlPloatee
to the exoluelon ot any other person. In other WOrdS, thl8
opleion holds that the Pour hundred aember muust hold death
benrrit obrtiPIoatee an4 that umber8 holding loolbent and
health pollolee without death bemilt are ozaludad, that 18
to 8ay t&et holden or eoolaent end health pollci48 without
death b4norlte are not oone14er44 rot the purpo84 0r dotor-
mining whether or not the loolety ha8 Pow humlreb aembers
holding 4sath benefit oertltioatee. Arter oarePu.lly lx4nln-
ing the toram of oertliloatee lnoloeed with your Inquiry, It
I8 our opinion that all oP eel4 Porme quallry as a “644th
benerlt eertiPloate* ror the purpose or betsralnlne the number
or members or tha Preternal b684tit eoai4ty.
dls am returning herewith the Porn eertiflo.sts8 eub-
mltted with your request.
Yours very truly’,
ATTORtnrVQMRRN. OF TEXAS