OFFICE OF ‘THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Attmatioa: 0. P, Saadorr
Aaal~t-3oouriti.r Dirlaion
DOW Sir1
addreeeed to the
nre lrrw alnoe 1934
'iootag~~sold prior
MOM 0r yoour queibtloa ha8 resulted in a
al OS the entire law goreanl~ the organ-
ization and opem$lon or oometery aasooiatioas In the state
of Teaaa, am well an the publie p01i0p that proffipted the Legis-
lature to armnd Title 26, Vernon’e Annotated Xatutes in Aots
1934, 43rd Lsgialature, 2nd Called ~esslon, Chapter 6i.
&tiolo 925, Yunon'a Amotet. 3tatut.r 61 2~x.w
prorid. t&t
m h u y o o wtu y lrroolatton whloh ha, latab-
~laJ$ and ir nm mbtabdag,operating an4 eon-
a oowtuy an4 wrry araoolationrhloh
mho.llLmttu rrlablieh smlataln opuato sad/or
oolrbuot a owok rid thla stai. urdt to
thin Ao8, 18 hue3' y wthoriud to orta& ish . . .
aa lmdaolblo fund for the geneal porprtual oan
TM8 Artlole rllrtlwr pro+lu*8 t&t thla trurt fund
Vmll forovor remain lrrrduoiblo end lntiolablo", and ahall
.bia o vo r l to d
ooordlrq to law the not boom fmrn raid law&0
moat to %a omd rololr for cha gonoral oan, mlntmmoo,
and abelli~t or the ouwtuy*.
Art1010 925a roqulrou that
“A pupotorl oar@ aaamtery16 on0 mhhh 6h8ll
hueatkr depotit in it& rpetuel oar0 funa M
provided aadu the prorim r ona of Art1010 5 an
wo ma l tqplralont to a mlnlmtu or Two&y7 20) ooatr
par rqm foot ai groundof %ntermsntright loU
OEdlrporod ot am pupdaml oare propertyfor o8rtlb
latemoat, uatll woh tund naohw a mlnimm .oO Oao
RUE&~& Thoumad Dollar8 ($lOO,OOO.OO~, and the
mlaimum thonafkr ehallbr Tea (10) Coat8
rqoaro rwtj a mlaimm or Ffftwa Dollarr ( %&O)
p a rlaah oryp% latonaent rlsht 8old or dlepo8ad ab
as perpetual oar0 property for mrosalouu latumnt,
aaa a ainlmw of Fite’Dollare (#WO) par *ash
aiohe informoat ri t #old or dia oroUof a0
potwlauo proper ehyfor oolumba r! orlatorm&n. r-
All other oaoterlrr huetotorb’ opmatlfu l8 nor-
potrul oar0 oewtuler r&all, with%8 one mar froa
th elffeatfre data of thlr Aot, wtahllrh their
trust ftantla la oaah or legal rwiirltloo in ooafora-
ity with the protirlonr thoruof and In th* Waat
or rame w to do, ahall not thuraftu oxmate
a8 a porp4tual aarr or in0 aaro rmotuy until the
pro~lrlona hereoS:are wapllod with."
Artlolo 929 roquirrr laoh perpetual ouo oaatuy
to ii10 Sooretu7
ia ltr offloe lr-wall a8 the off100 or ,%hthr
. _..
‘701
Honorable Wa. t. L8wWn~ Pae* 3
o? Stata, a statomant o? the amountof prinol
potwl oars Sand, the nabaroof tha ln~ortwa
olpal ?und, the nunbor of 8quuo rooti of gram spoo aad
the auubu OS arf911, u8d a aumbsr of nlehea dlspor& o?
wdu perpetual oan, prior to snd subsoqrunt to the lnaot-
wnt of thl8 Artlolo, oaoh srwntoly rot forth,
Artlols 916 states that
-0 to m8lowmtuy lswolatlon’ and *a8w-
olatlon’ are hour&~ tued Iatrroh
mean say w oration mm or
or 8ay a8.wo% tlon not opemted $0~ a
1s or shall be authorltod by it0 lrUoles to’oo~l..
duot amy one or mom or all of ths bwlaosrrr of
a oeaetuy.w
T&a qlwrtlon you prosentir whether oaeto aago-
oIatloas, msanlng wrporatloa8 e non-profit uwolrt 7 oas
opuatlng ar pupotwl oar8 aaumterlrs, must lstabllsh a
trust deposit, as 8ot forth In ArtIolr 925a oaloulatod up-
on sales o? psrppetual oarr lntumont prop&y ooounIng ba-
fore the parrago a? Artlolr 925a In 1934, or marely u on
all emlo8 or suoh lntermont rl&htr ooaurring a?trr 19 PbV
Perpetual oars awotuy oontraotr ~IWOSOupon the
ornmtsry aswolatlon t& lndur ir rg
dutg of foruu 8mhg for
and propsrly maintaining the owmtery as a plaoo o? kautl-
fled sepuloher . Those who buy puptual oare omotrry rights
often do w in their hour o? beroatemat thlnkfrq onl
sultable nmorlal to their dseeasod kinwta, 86d an
susooptiblo to the promlsos of a promotor. ml8 ww
traot to be po#?mod by the aswalatlon parprtually, aad
the peoullar position or thorn who aoquire ths rpstual oars
interment right*, not only jostf?lo8 but no0088 r %atM a $or-
ous oontrol ot perpWul oar@ oamoterles by the Stat&
those endr), the Lsglslaturo has oaaoted Artlolrs 9% 925%
925b, dertgnod to ?ul?lll the oontraot obllgatlon of o-tory
assoolatlons, to protrot thorn who purahaso Oh80 rbhtr,
and to laforob sultable malntenanae o? the buIldi 8 Upa
gm.md~ ?or thm knrrit or the wmualty in gem l-2.
I
Suoh loglslatloa, without doubt, 18 r0MtltutlOlul
r md propem Vho State la the uarslao of ltr polioa Dowor
1 haa t&0 rlght~ to proride ?or the lstabllshesnt 8ad dlroontla-
I ~00 or oerartuho ud t0 rqmlate ttmir us*.” 14 aor. fur*
sea, 63, sootlon 2.~
i
Eonoesblo Wm. t. L8nab Pago b
Fa+@oraorr ~thow laotory 88m818tiaa.~ tgmrrtlng
under the prlvIlogo or l lor ?8to lh8rt.r 8Zo 8Pb sot to
ahUUIII# roplatlons and dut r08, for th8y t8ko t&u ir
o r 8klh8rt.r dtb *o rl t lxprossly roseno(.to tKt.to
40 *altar, rofom, or smsn f *. &tlolo 1310, YornoS'1 Ammo-
tat.6 %Bt\ltW. %OBO n@BtiOBS OflM OtO?~ SOlp Ol’8~iOli8
wd lS8.4~4tiOS8 OBB k s~&WtOd, th.Wforo, ..d.; the go-
1100 porr oi tbo St8t.j or under th8 rosonod penor l? the
St8te mar 4orpor8tlons lmofrr ls three rogulrtlonr por8ala
to oomotsry 4orporstloao.
mc, qUOSt:W 10, thU.?aPO, rhsll th.8. rO~8tlO.s
bo applied to $ho8. tTS.BoOtiOSS , wnt8aplstod la Artlolo 925,
whIQ mruma betore the ln88tmSat of this Artiolo 8s well
48 thO8e OOOUtin~ lubS.qU.nt th0r.t.‘) ‘fh.3’. 18 1pOh~)S6.
within thrso strtutos, ~otornlng porpotusl 041~ o8motorlos,
lnflI4*tIag 811 IStontloS Of the k#iBttUrO t. wosrifno tb ap-
pliO4tiOa O? thO8O’~4@..~8tiOBS t0 84148 O? lOtI OOOUMill(r
situ t&4 rnrotmsnt in 1934. PO the 4ontrsry. homovor, Art-
1010 925s ,nr.rldos,
"All other 04mOtOri48 horototoro OllU8tim( 88
porprturl 04ro ooaotorIos shall, within one you
fro. t88 .itastiTr dSt. d thi8 AOt, lst4bl1sR their
trust fund8 in oash or legal 8orurltIrs la ooniarn-
ity 81th tt. proTidon8 tbuoof, and in thr 8V.a
Ot f8ii~O SO t0 de, lhBll rPOt t&S,rOBftB? OpWBtO
8s 8 ~a~atrrslosr4 or fro* oar4 oemotory ontll tho
~r OTiSiOXISh Or OOfl?O BtS4p11.6 8itka
n0 deem it slgniflosnt th8O A?t:s1e 9258 &WtBinily
to the oslsulstlons of the trust doposIts is aou8hod in laa-
&3lB@ Ot th8 DBSt tOllSO, t0 Wit1
.A pupoto8l Bars soWtOry is one rhloh shrll
hero8tt.r 6OpOBlt la Its porpotusl 4uo faad . . l
8n SElOUSt OttitBlOJXt t0 0 4llSi.S. & ?..Stf (20)
Cents par squ8ro foot of g0ttfia of lntrrmont r-8
S&d 0l'diBDOB.d Of SD pl'P.tuSl .Sr. fPOp.Fty f.r
lgrth iL¶tomO5t. . .; a dnlmm af Flitson Dollsn
(315.00) per *sob rrypt Intorasnt right rold or
&18p0844 or as pupotw8l omro poporty so MWO-
hum Intrrrarnt, and l ninImua oi Fits Dollus
($5.00) par ecrsb niche lntomat &ht 80ia or
dlrpoaed a? 88 perpetual earn nroporty to oolur-
lmriua intomoat. g (ufidr~i11dRg lUppiid.)
‘703
Honorable wm. J. Lam a, Pago 5
Rad tlu Lagialatura latando6 to lldt tha tnmt
drpoalt to mu0 0010~ or porpatual ran propart languaga
la th. ruturo tonao r o rl xamplo, ‘whloh thy ml1 I'aall *
dlrpoaa or’, 01 looi U hararrtor~, = uld hare km rpp?oprlata.
Tha ngulatloa or parpatual oar0 ormatrriaa ooa-
tan lmtoa that tho not lnooma or tha lnroatmd trut fund ir
to !a uaad to aaiatafn th6 rntiro prrpatual oara oorwterr
Ii the rund woo oraatad only out 0r thoaa prpotual tit.&
moat rlghta rold sitar 1934 the burden on the.8 lOto, OrJpto,
and nlohoa, aold ritor 1934 would bo onaroua, lnaawah aa
the inO~66 Or thi0 rUnd WOPS~b0 UOO~00 flMnO0 the tlpk0.p
0r th0 ontlro porpotual oar0 propart or th0 oaniotor~ ama
010 tion. ‘-‘r think thla warnnot th, ;rdantlon of tbr La@,.-
l*tlU..
Art1010 1, z?ootion 16, constitution or tbr wt. or
Toxaa poridaar
VO bill of attainder, ox post raoto law,
r6troaotlra law, or any law impairing tho obll-
gatlon or ooatraota, aball be node.”
Willa the Oonatltutlon or Toxaa olaarlf rorblaa
the paaoago ot rotroaotlto lawa, it lo our opinion that the
lam. in quratlon do not ooma within theso oonatltutlonal
rohlbl tlona. Thorn oan k no doubt thst th6 ~glrlrtloa
% quoatlon would ba oanatltutlonal ii It required all
oomatarloa aalllng perpatual car0 rl&ta to naintaln a
oartaln oapltal atook, or to oroato a truat fund or a oar-
taln amunt datom.lnod by tha alzo or tho oomatary bualnaaa,
inannrruoham thla tJp6 of ragulatlon baa bean uphold In 0th~
ri0id0 0r law aa ooaatltutlonal, notnithatanding tb oontan-
tlon that euah ragulatloa lmpalra tha obligation oi a eon-
traot, mad warn unoonatltutlonal 60 a ratroaotlva law. In
Jmrrrrson County Tit18 buaranty Company f. Tamor, 29 c, W.
(2) 316, the 00d8810n Ot Appoala atatadt
wo rurthor hold tht It la tha lottlo6 b w
0r this atat. and 0r thr untra .etatoa that a Qorc
poration auah am thia ham co VoatOd rl&t in t&O
pri~llogm or doingi a tit18 guaranty bualnoaa 00 a
00rpOratlOn lfxl thgr8toro atirara no Los8 of an
r.atod rlgbt or @m-rtr fn 6 oh*ne h the *toI-
utO law raqulrlng larger 0ap5.tOl ICoOk tO OOntiOw
a tho ltata.a
b ua lna a !n
Honoralla Wa. J. Lawaoo, Pap b
Alao in Daaiel 7. Ttmll and Clarth Iraatmat
Oonpr~, 93 @. W. (2) 372, tb LSuprmo Court o r Taraa ltatod:
“It Ir oontaadod by Trrrall and Oartb that
the mloa mad n8ulr$Ionr r&mtad by the ~mr(
(Iaauran80 C00daaionaraf Iiy authority or 0 law
whlah kaaam liirrtiva artor the aoatraat ktwara
it and tha tltlr rompany woo lntar*d into, laaAot
ba applIod 00 00 to rtirat aaab p r a r lo lua
oatraata.
We 07rrrule thla ootentloa. The pollor omor oi
tb atit. to regulate tb bualnara oi titPl inaulc
*nom, aa to r ormo 0r oontrrota urb ratoa, oanaet ba
ocmtraoted arrr by tLr tltlr ampaq.~
16 Corpus Jurir Srauuduai 417 stataa,
*Oa tha otbr hop& &es lte tlwlr titrmatitc,
apwatloa, ltatutoa rra upha Pd wJUh have ao ad-
terse lrreoa on trotad or lubataatIal ri&Oa, or
maral~mgulatr rights, (oltlag Danlal ‘I. T~rall
aad Oarth Iatratmna Ooapaay, 93 9. W. (21 213)
or ohawe their r0rr, partioularl~ mharamuohlc
~1010tIoa la in tb proper lxeralaa or palIar
power, ur whIah loaaerna tlm publla Intaraat or
mlater aarol~ a0 ~ovarnaaat mattara.W
Llkarl8a wa do- the lo~alatloa la quoatlan to ba
aonrtItuaIonal am a proapratlTa regulation rathrr than a ra-
troa*tIta ngta0ai0n in its lntana and loopo, albeit trana-
motiona both prior and ,aubaaquukt to the lnaotmaat of this
~o~~l*tlon or0 oonaldand in aaaaurlng tb ragulatlona lm-
This lr a ra(ul8aioa prorp~atlta Iwaharaotw al-
thou& pradloatr4 upon part 00 well as rutam 00100 of ps-
paw1 aaro iatarama rtht am a maana of mraaurlw tha ob-
llgatIoa iapoao~
Yo u lra ahorarora l6rlaad
Artloloa 925 and
that
9250 ocapel 011 omatorf aaaoolatloaa dralrlnd
to ooatlnua
~rimaa aa parpetual oars or~aterlaa, am dailaad In the Aot,
to build up l trust fund to the ltatutor~ raauvar oalou-
lotma oa footap, and/or orrpt Iator-nta, -a/or aioh*
705
’
Honarabla h. J. Lawson,Pago 7
intorunts rlghta 001 prlor
4 to th a laaotm*nt 0r tCo80 ml-
a188, ma well am thoaa lolb l~baaqu~nt thereto.
Par) truly Joura
f OEXEPALOI TXXAS