375
OFFICE OF TfiE ATI-ORNEY GENERAL OF TEXAS
AUSTIN
Wtobtr 51,
an opinion of this de
t if the follow-
olstion of sald
pard o? 1a6uran6. oomi6*lom, pa&a %
greator In reluo than r)lSO.OO (the lo@1 Malt
on burial lnsurane6). The laOibO6%twnt OS the
a56ocleti3n6 eotimate that spproxliaataly 180
parson6 hare polio166 in both essoalatlsn6 and
that suoh peraons would be entitlad to tuners1
boaalit o? a value graatar than @JO.00 through
tha orilolal fumrsl homa (Rannor Funeral BOBIO)."
The abova ltatuts, whl@h ie oet forth in yaut lette?
is found in Chapter 0~ of Vsrnou*~ Cltil Statutes, ~rtioh
@Wba-4 and reads so tollom~
"Thereshall be no Oonne6tlon betmen any tro
a66oal~tlCme operating under thir law and no 6zk0
assooirtion shall aonttlbuta myth1 by way of
salary or croapena*tlonto arnylxsautT to oiiloer
for the purposes OS suoh other asoooiation.*
aoation es, n+ticle 5050-1, vemon~a civil atatutu,
prariau f
"my ladlv~dua~, lndlvlduals, ilzm6, QQ-
part56ra!dp6, aorptwatioas er aoa%oiatiuas dolag
the buOi~~36 OS pTQViain& bUTid OP ftUMOi bOkW
fits, whlcth avader any olr0m6tanoe6 aray b6 pap
abla partly or wh&ly in m%sohamllreor 6er~Iooa,
no t ir lsa ea ao f one ziundrsd lnd flit7 ( )X50,00)
Do lla r s,or the value theMof, are henby deolacsd
to be burial. eaqaanlea, assootatio~ or rooiati66,
and shall oraanire ufidorprovision6 or Chaptrr tP4,
Aat or tha Fortpfirat Le&alatura, 1989, and
uclldrsat8 tharatoj and ahall OpOreto undar aad
bo gorrrnrd by.ChaptsT 874, Acts of the Forty-
first Legi~lattiro, 19#%, and aaendrPsnt0 thoseto,
and this Act. It shall ba ualarCul Sor a4 in-
dfrl4&il,ta6iridual8, firm, ao-partnorshlpo,
oorporationr, or asmelatlona, other than them
defined to logage in the budwas
a lmo +e, of pre-
ridlag burial or iunaral bwafi$8, whlah wader 04
clrcumataaces ray bb paid whaUy ox pertbyln
a6roh6ndl6o or 6elFllfo66.~
my tha pwardlag seatlon of th6 above atatuto, balng
goation 33 of said mtials, th e lmaptlon 06ation or chapter
374, Aots or tha portprim Le~lalaturo 3eotloa e9, lo ex-
reasly repaalad, brlag;i the wganl66don ~&#&aOpOratlOn Of
E urlal ar6oaIstlona, with2 n tha provisloas 41 Chaptu 9~.
Vernon*6 Gfvil Statuta6.
Artiole 48756-22, found in Chapter QA, Vernon*6
civil S(tat:mWe, proriiies la pert ae followa:
Wia l?cwrQ ahall not ‘revoke the rfght of any
assooietloa to do bueimas in this State exoegt
upon the judgment tr the Ccurt ol competsnt jurls-
Ul.ctlan, . . .m
Seotion 27 of i:rtlcla &75a, suura, ;mcvldss thet
(my asr#oQiatiOB that Piolutss sty cif t&s terlw, of Chaptar R74,
(.o&a$ier QA, Vertaon*s Civil %atntes), shall in adUltl,oon to
other penaltiea im>oaed on it or on its smmberr QP of~l~ms
subfoot iteelf to fOrfOitUxe bf its right to do buslnass ad
to aisro1ution.
Section 13 cl Article 6068-1, Vernon*6 Clrll Statutes,
ox~rassly states that it is the prrimry puspore of tha act to
IOOUM the smebesa of the aszoolntions snd their banaiiota~rlas
tha full and proatpt ~ayc.zmt of all alsirns aooordfng to the
mtiaum bmaflta provided in their aertiileatas.
Xhlla the languego of tho partioular atatuto in-
volved la broad, WI attribute to the Laglslatur6 ‘an latent
to usa the word mooanaatloae in a business 661~6e without
ragard to that status created by blood tlos or CtmiLy
TOfatien6hi~I. In tracing the history OS this statute, a5
it appears in a oondsnaed fom, the Iaglslature sooaa to
hava borrowed it fro% the language used at tha time
looal
mutual aid aaaoolstlons , :~.wtioularlg burial asaoalatlons,
wera authorized as eapnrate entitles, ra&atrd by the
provlaions of the law a,-?Uasble to Pratarnal Bmeflt
goafatias and at suob tf%e, fraquantly opomtod and oostmllod
by other aseooiatfoea ~&ma offlaara were outside the
rcldlus and territory of the looal co-~sfez2lties. We find that
tha Lsginl&turs, in order to batter ra@alate ouoh abmoO~atlon6,
in lQO9 ll~~~tad theI.r cporat:on t'o a aortain Pooal tsrritorg,
aad thus exempted tb,ar,frum thca p?cvie:one ol ths general
law then a?plicabl.s, ;1ros9lsd they are in *GO awuuisr; dlrsotly
or indlroatly, dmnectbd, faUsratQd OS tleuociatstl rvllthany
aueh assoa?ntlec, end d-n not, diraatly or inulrsotiy, eon-
tribute to the azpei;.ae or su.pyort of nay cthfkr eueh aoeocria-
ticn, OT to tha offiaors, promotere or teenagers thereof.. . .*
(See Artiols 4869, Ravised Civil Statutes, prior ta its
appeal by Ctmpter 274, Forty-firet Legislature, AOts 1QgQ.)
~c?cur-Qlng to your Letter, the atnnagsment
or
Officers of botB &aaociations adrslt the purpose Of h%Vingg
378
tvo assoOlstion6 is to provide funeral benefit6 preatsr in
value than $150.00. whether or not this frank admlS6ion i6
to be eOnstrUed a6 a Working 6grEement or bU6ineES Oonnection
between the two assoolations 16 in itselr a question or raot.
The thought OCO'Ur6 to US thl;t th6 ststenents merely tend to
assert the result efr0oted a6 to the mutuul policy holder6 if
the two a65o~i6tion6 and ir true, merely reflect that whlah
would be rerfectly obvious. The law does not rustrlct any
slven territory to the operation of o~ne authorized burial
asEOQiatlon alone nor doe6 it operate to prohibit the policy
holder from beoomln& a member in mm than one burial assoclo-
tion opereting in the 6eme designated territory.
~;ollolec or oertlflc6tes issued by burial assoola-
tlons 6re required by Section 54, article 5068-1, Vernon's
civil ststutas, to chow on their face a sohedul% of aertaln
stipulated merchandiee and burial service which shall be
approved by the Board of In~urocce tXmnlasioner6 aa being ot
the reaeonable valu6 66 stated in the polloy, unless the in-
6~~66 6h611 6t the time Or it6 lESU6nCe elect t0 have Eame
peld in cash. This election is customarily made in an
applloatlon, a oopy of which 16 required to be ettaoheb to
and aad* a part 0r the polioy oontraat. It 1s ariparent that
the Legislature did not lntsnd to restrict the contract to
any SpkOlilO marchandlse or character of servloe. We
6CO6pt the proposition also that 66 between two assooiatlon6,
suoh soheduled merohandlse and burial service till vary to
6ome extent and la other6 be identical end similar. We
Iper6ly make 6uch ob6erYations as a reface to our oonoluslon
that the ract or the exlstenoe of 1 f ke contraota oontaln-
in& identical atlpulated merohandl6e in the burial services,
aervloed by the same agenoy and whoee oilicere are related
by laarrlage or blood kin, suoh itlots do not overcome the
reswaptlon that the es6ocivtiono 60 identified em oomply-
frig with the provision6 of the 16~ in their operation.
The .most serious qucvtion proeented 16 in that oon-
talned in your paregraph h'o. 3 whlah states thet the oost of
orgenialng the ::a~8 County Burial A~ saofation was in the
large part borne by the Ranner Burial ;j6sooiatlon. That
6160 16 a rect uestlon end while it ralees a rather strong
ln~erence ot :ire lole 4875a-4 bein?: violated, this raet
Boe6 mainly to the organization or the second 66societion.
we understand such costs xere paid out of the expense
fund and n3 facts refute euoh being charaoterlzed a bona
rid8 106n.
You 6r6 theretore resgeotrully PdVi68d, that in
the oplnlon of this department, suoh tecsts as presented in
379
pmrd of Insuranae Commissioners, 1a6e 5
your letter 0r October 31, are IneuSlloient as a matter oS
law to charge the two 66sOCistion6 n;imed as being oonnected
in their business operations in vlolotion or srticle 4875a-4,
Vernon's Civil Statutes.
Yours very truly
AppROVEDDEC 16, 1940