Untitled Texas Attorney General Opinion ( 1942 )

Elm
OF TEXAS
Honorable 0, P. Lockhart, Chairman
Board of Insurance Commissioners
Austin, Texas
Dear Sir: Opinion No. O-4729
Re: Similarity of'names of insurance
corporations and related 'matter.
Your request for opinion has been received and care-
-fullyconsidered by this department. We quote from your request
as follows~
"The Old Texas Life Insurance Company of
Waco, Texas, operates as a statewide mutual
assessment life insurance association under
the provisions of Article 4859 (f), Sections
l-20 and 5068-i. The Texas Life Insurance Com-
pany is operated as a legal reserve stock life
Insurance company under the provisions of
Chapter 3 of Title 78 ana is also located at
Waco, Texas. It was incorporated in 1901 with
the present name, The Texas Life Insurance
Company has complained tothe Department that
the similarity in names is causing confusion to
the public and to its policyholders.
"The Old Texas Life Insyance Company
operated prior to 1940 as the aramount Life
Insurance Company and was located in Dallas,
Texas, On February 13, 1940, the Paramount
Life Insurance Company changed its name to
Old Texas Life Insurance Company by proper
charter amendment accepted in this Department
and filed with the Secretary of the State of
Texas e On December 31, 1941, by proper char-
ter amendment, the Old Texas Life Insurance
Company moved Its home office to Waco, Texas,
the amendment being accepted by this Depart-
ment and filed in the office of the Secretary
of the State of Texas, Since the company
moved to Waco, the complaint has arisen which
we previously mentioned.
Honorable 0, P. Lockhart, page 2 O-4729
'Your opinion is requested as to whether or
not under the provisions of Article 5068-l and
particularly Section 3 and under the facts stated
the Board of Insurance Commissioners has authority
to refuse to issue.renewal certificate of authority
to the Old Texas Life Insurance Company, if, after a
hearing, the Board is convinced that the use of the
name is confusing and misleading to the public."
Section 3 of Article 5068-1, Vernon's Annotated Texas
civil Statutes, reads as follows:
"Sec. 3. Upon application for charter to
do business in Texas the Board of Insurance Com-
missioners may determine whether the name of
the association would be confusing and mislead-
ing to the public; if so, It may refuse the certi-
ficate or charter, and prohibit the doing of bus-
iness under the name.
"Any amendment to the charter of an aaao-
ciation operating under this Act, changing the
name of ,the association, must be submitted to
the Board of Insurance Commissioners for approval;
and the charter of any association operating under
this Act may not be amended to provide for chang-
ing its name to a name that is determined by the
Board of Insurance Commissioners to be confusing
and misleading to the public."
The case of Board of Insurance Cormmissionersv. Na-
tional Aid Life, Tex. Civ. App., 73 S.W. (2d) 671, writ refused,
holds: (quothg head notes of said case)
"1 " Trade-marks and trade-names and unfair com-
petition
"Rule that equity will protect cqrporation
in use of name applies 'where,subaequentcorporation
attempts to use similar name to that of existing
corporation,
"2 . Trade-marks and trade-names and unfair corn-,
petition
"In absence of statute, administrative agency
granting charters, articles of incorporation, 01"
permits to carry on business will not permit use by
subsequent corporation of name aimllar to or $0 near-
ly like that of another aswould be likely to produce
confusion.
Honorable 0. P, Lockhart, page 3 O-4729
"3 . Corporations
"Under statute authorizing refusal of permit
to do business to domestic insurance corporation
if name is 80 similar to existing corporation's
as to be likely to mislead public, which provisions
subsequently wasmade condition upon which foreign
insurance corporations should be permitted to do
business, Board of Insurance Commissioners haa
power to refuse permit to'~foreign~insurancecor-
poration where name similar to that'of another
foreign corporation was likely to cause confusion
(Rev. St. 1925, arts. 4700, 5068).
"4o Corporations
"Statute authorizing refusal of permit to
do business to insurance corporation with name
similar to 'any other insurance company' applied
where permit had already been issued to foreign
insurance corporation with similar name and which
was then engaged in business (Rev. St. 1925, arts;
4700, 5068).
"5 e Trade-marks and trade-names and unfair com-
petition
"There is an unlawful appropriation where one
corporation appropriates and uses distinctive por-
tion of another corporation's name.
"6e Corporations
~"Name 'National Aid Life' held so similar to
name 'National Aid Life Aaaociatl~as to justify
Board of Insurance Commissioners in refusing permit
to do business to the 'National Aid Life' on ground
that similarity of names would be likely to mislead
the public in that the distinctive portion of two
names was identical (Rev. St. 1925, arts. 4700, 5068).
"7rj Constitutional law
"Statute authorizing Board of Insurance Com-
missioners to refuse permit to do business to ln-
surance corporation with name so similar to that
of existing corporation as to be likely to mislead
public held not unconstitutional as delegation of
arbitrasower (Rev. St, 1925, arts. 4700, 5068)~"
Honorable 0. P, Lockhart, page 4 O-4729
Under the authorities aited in opinion No. O-4173 of
this department, a copy of which is enclosed herewith for your
information, whic,h cites the case of Board of Insurance Commis-
sioners v, National Aid Life, supra',it is our opinion that your
question should be answered in the affirmative, and It la ao
answered,
However, before refusing to issue a renewal permit to
said-company, we think it would be proper to give said'insuranbe
company an opportunity to amend its charter In order to adopt a
name acceptable to the Board which would not be confusing and
misleading tothe public,
Very truly yours
ATTORNEY GENERAL OF TaS
By s/ Wm. J. Fanning
Wm. J,'Fanning
Assistant
WJF :GO:wc
Enclosure
APPROVED AUG 17, 1942
a/Grover Sellers
FIRST ASSISTANT
ATTORNEY GENERAL
This Opinion Considered And Approved In Limited Conference