Untitled Texas Attorney General Opinion

Aus- aa, TF
November 28, 1955
Honorable Garland A. Smith, Chairman
Board of Insurance Commissioners
Life Division
Austin, Teqas
Opinion No. S-182
Re: Interpretation of Sections 3 and
5 of Chapter 363, Acts of the 54th
Legislature, Regular Session,
1955, as to the necessltg of in-
creasing capital or surplus of cer-
tain limited capital stock companies
organized under the provisions of
Article 3.03 of the Insurance Code.
Dear Mr; Smith:
You have requested an opinion concerning whether the
provisions of Senate Bill 12, Acts of the 54th Legislature,
Regular Session, 1955, Chapter 363, page.916, require limited
capital stock companies organized and operated under the pro-
visions of Article 3.03 of the Insurance Code to Increase
their capital and surplus to comply with the requirements of
Article 3.02 of the Insurance Code as amended by Senate Sill
12.
You state In your letter:
"Articles of incorporation for four companies
have been approved by your office under the pro-
vlslons of Article 3.03, and the status of.these
companies is now in question for the reasons here-
Wafter stated. Two of the companies received ap-
proval, and thus became bodies corporate before
May 15, 1955; the other two companies were incorpo-
rated subsequent to that date. Mone of the four
companies had received a Certificate of Authority
from the Board of Insurance Commissioners on or
prior to May 15, 1955."
Section 5 of Senate Bill 12 provides:
"That Article 3.03 of the Insurance Code
be and it is hereby repealed; provided that
every company heretofore organized and now
opsl-atlngunder Article 3.03 shall, after the
effec%ive date of this amendment to the In-
surance Code, ba permitted to continue to
operate and write nex business subject to the
provisions of Chapter 3 of the Insurance Code
as amerrcled,
including the provisions of Set- .I~'
tion 2 of Article 3.02 of the Insurance Code. ~: ..
as amended; provided, however, no such company ~.``
shall be required to increase the amount of
or convert the class or form of its capital or
surplus to compiy with the requirements of
Paragraph 5 of Article 3.02 of this Code as
amerd fd . Ii
St Is noted that this section
dALerepeals the provisions of Article 3.03 of the Insurance
;
(.2)provides what may be referred:'toas a "grandfather Clause"
authorizing companies~organized.drd operating under,ArfXcle,..~
'~
3.03'.6r.
the effective date of.Senate Bill 12 to continue opera-
tions;
(3) permits companies falling within'the.."gra~f.fsther"~-iause~
to contihus.operation subject to provisions of Section,:2R,'of>.L
Article 3.02.
9 .
(4) provides an exception to the companies ~fslli``~'vithifl'the
"graIIdf8therclause" stating that such companies shall not:be
required "to increase the amount of or convert the class or.
form of its cepital or surplus to comply with~the.requSrements
of Par8graph 5 of Article 3.02 of this Code 8s amended."
Inde-
In Trio Independent School Dlstrick v.'i'Sabinal
pendent Scboo~District, 192 S.W.2d 899 .(Tex.Civ.App;~lgYb)
the court stated the rule of statutory construction govern&
your puestion as follows: w;i
"The act itself shows thst it was passed by
the House on April 17, 1945, by 123 yeas and no
nays. and was passed by the Senate on May 3??aby
26 yeas arxl2 nays, and was ,approvedby the
Governor on May 9, 1945, and it carried~the emer-
ger-cyclause. SsFd act became effective on May
oth, prior to which the election had been held,
Eon: .G8rland A. Smith, page.3 ($182)
its returns canvassed and the order entered by
the County School Board carrying the result of
said election which favored annexation into ef-
fect...An act does not speck just from the dete
it was p8ssed by the House.or by the Senate,
but it speaks from the date it takes effect,
that is on the date it ~becomesa law, which. In
this case was on May gth, and It was therefore
effective on and after'such date and included
all clesses of school districts that were with-
in the purview of the Validating Act which were
In being and had been recognized by the state
or county authorities as school districts prior
to,said times. In support of this view Judge
Gaiixes, in the case ofGalveston R.'& S.:A. R.
Co. v. State, 81 Tex. 572, 17 s.w.67, 72, in
passlngupon'the effective date 'of a statute,
said:
"'We apprehend that no universal rule of
construction can be adopted when 8 statute, which
makes 8 distinction between'fu.ture.andpest
transactions, is passed"upon‘~'one'day‘to
take ef-
fectupon another; but we thSnk.the general rule
his that a statute speaks from the time it becomes
a law, and what has occurred between the date of
its passage and the time it took effect is deemed,
with respect to the statute, a past transaction.
This is by analogy to the rule for the construc-
tion of wLl1.s. Price v. Hopkin 1 Mich. 318;
Charless v..'Lamberson,1 IOW8 3 442 B3 Am.
Dec. 4517; City of D8venport v.
8. Davenport & St.
Pg Railroad Co., 37 Sowa 624; Gilkey v. Cook,
60 Wls. 13 B8 N.W.63g; Jackman v. Garland, 64
Me. 133; hransville & CJRailroad Co. v. Barbee,
74 Ind. 1t g. This rule should not be applied
when the language of the act shows a contrery in-
tention. But we find nothing in the statute under
consideration which evinces an intention that the
date of its passage, rather than that on which it
was to take effect, was to be considered the
dividina voint between the future and past failures
contemplated in the proviso.'" For additional au-
thorities see Scales v. Marshall, 96 Tex. 140, 70
S.W.945 (1902); Mooreman v. Terrell, 109 Tex. 173,
202 s.w.727 1918 ; Fischer v. Simon, 95 Tex. 234,
66 S.W. 447 I1902 .'
Hon. Garland A. Smith, page 4 (s-182)
Since Senate Bill 12 Spe8kS from its effective date,
it Is our opinion that the phrase "every compaFy heretofore
organized and now operating under Artiolt33.03"r9fers to every
company organized prior to and operating under ArtFcle 3.03 on
the effeotlve date of Senate Bill 12.
We are supported in this view by the following:
Sinae Article 3.03 has been repealed by Senate Bill 12, it
would be impossible for euch company to operate under the pro-
visions of Artlole 3.03 after the effeotf;ve date of Senate
Bill 12 without the “yandfather clause. Therefore, the
phrase “now operating”cannot refer to a date subsequent to
the effeotive date of Senate Bill 12. There Is no provlslon
In Senate Bill 12 which shows an Intention that the phrase
“now operating” refers to a date prior to the effective date
of Senate Bill 12 and no date other than the effeotive date
has been epeolfled, Had the Legislature Intended any other
date then the effeotlve date, it would have oOnt8inbd suoh
lanpmge . See Galveston H, & 9. A. R, Co, v. State, m.
You are therefore advised that oompanles organlmd
under the--provisions of Article 3.03 and o eratlng on the.ef-
feotlvs date of Chapter 363 Aots of the 5 i th Legislature, ‘are
authorlaed under the prodons of Section 5 to oontlnue opem-
tlons subject to the provlslons of Seotion 2 of Article 3.02
of the Insuranoe Code as amended without lnoreaslng the amount )
of or converting the class or form of their capital or surplu8
;&p;zlded ln Paragraph 5, Seotlon 1, of Artl~ole 3.02 as.
I
Companles organized under the provisions of
Artlole 3.03 of the Insuranoe Code and operating
on the effeotlve date of Chapter 363, Acts of the
54th Legislature, 1955 are authorleed to ocntlnue
operations subject to ihe provlslons of Section 2
of Article 3.02 of the Insurance Code,.as amended,
without lnoreaalng the amount of or oonvertlng the
class or form of their capital or surplus, as pro-
vlded in Paragraph 5, Section 1 of Artiole. 3.02,
as amended.
APPROVED: Yours very truly,
J. C. Davis Jr. JOHNBESJSHEPPWD
County Affairs Dlvlslon Attorney General
Elbert M. Morrow
Reviewer
Mar K. Wall
Rev9 ewer
L. W. Gray
Special Reviewer
Davis Grant
First Assistant