Untitled Texas Attorney General Opinion

THEAVTORNEY GENERAL
OF ?rExAti
'WILL WILSON
A-l-X-O- GENERAL
April 23, 1959
Mr. William A. Harrison Opinion No. WW-602
Commis5ioner of Insurance
International Life Building Re: What constitutes Uoae building
Austin, Texas site and office building” as used
in particle 3.40 of the h~surance
Dear Sir: Code.
You have asked the opinion of this office as to the definition of
the phrase “one building site and office building for its accommodation
in the transaction of its business and for lease and rental” as used in
Article 3.40 of the,Insurance Code as well as its application to a spe-
cific fact situation set ,out in your opinion request a6 follows:
“Attached hereto you will find a photostatic
copy of a plat of a certain city block. The entire city.
block, is now owned ,by XYZ Life Insurance Company.
On tract ‘A’ is a twenty-story steel frame brick build-
ing which is the home office building of XYZ Life In-
‘,:,
surance Company. The company acauired tract ‘A’ on
December 27; 1950, at a cost of’$575,000. The build-
ing~was commenced in January, 1952, and was com-
pleted in February, 1953. At the present time the up-
peer nine stories of the building are under a thirty year
lease to one tenant, and the remaining eleven stories
are occupied by the insurance company and tenants
who have short-term leases. The insurance company
occupies space on seven floors, which if consolidated
would take up only a little more than three floors in
the building.
“Tract ‘B”is an ,unimproved concrete and dirt
lot, an undivided one-half of which is gowned by Com-
pany XYZ and is used for access and parking area.
One-half interest in this property was acquired by the
company on February 13, 1953 for a cash considera-
tion of $125,000.
“On tract ‘C’ is a si%-story concrete parking
garage building which is owned by XYZ Life Insur-
ance Company. The tract of land was acquired by the
company on December 27, 1950, for a $230,000 cash
payment. Then parking garage was commenced in Janu-
ary, 1952 and completed in February, 1953. The garage
‘.
Mr,. William A. Harrison, page 2 (WW-602) .:
is a public parking facility and the’ income from,,+ op-
eration accrues ,to the insurance’compauy.
“Tract ‘D’ wa,a acquired in two parcels, the ,first
J ‘. being on April 1, 1957, for $243,000, and the second par-
‘. ccl on April 1, 1958, for $77,5,000.
“Therefore, Company XYZ, since the purchase of
,” one’ori,ginal building sits or.December 27, 1950; a& the ,’
completion of the home 219 P. 261, Volunteer State Life Ins. Co. v. Dunbar, 181 S.W.
myclopedia of Insurance Law, Couch, Vol. 1, Sec. 248, p. 585. This
conclusion is reenforced in Texas by the addition to the statute of the
words “and for lease and rental,” an appendage not usually added to this
type of statute in other states.
Likewise, the concept of what is properly within the meaning of
the phrase “for its accommodation in the transaction of its business”
and others of similar import has been greatly expanded by judicial
construction. The purchase by an insurance company of a hospital to
be u,sed primarily but apparently not exclusively for the treatment of
its employees afflicted with tuberculosis was upheld as being “requisite
for its convenient accommodation in the transaction of its business.’
People ex rel. Metropolitan Life Insurance Co. v. Hotchkiss, 120 N.Y.
~UPP. 649 (1909) . In tw o cases involving the proposed ownership by in-
surance companies of housing projects, such ownership being specifi-
cally authorized by the insurance laws in force, it was contended that
this would violate constitutional prohibitions against corporate owner-
ship of real property “except such as may be necessary and proper for
its legitimate business” or not “actually occupied by such corporation
in exercise of its franchise.* In both it was held that this’proposed
use did not violate the constitutional provision, the rationale apparently
being that it was necessary for present day insurance companies to
have a large field of permissive investments and that by making such
investments the companies were acting in furtherance of tlieir business.
The fact that the real estate in question (now comprising one city block)
has been purchased in piecemeal fashion over a period of time is en-
titled to but little significance in determining whether or not it constitutes
“one building site.” An analogous situation is discussed in the case of
Board of Ed;cation of Orange-County v. Forrest, et al., 130 S.E. 621
jN.C.Sun.1. There the Board of Education selected a site for a consoli-
dated school building containing slightly over six acres. This six acres
was composed of two parcels of land s one of five plus acres and the
other of 1.09 ac,res with a ‘“street, road or alleywayW intervening. The
Board was able to purchase the five acres immediately and’proceeded
to build the school building thereon. Being unable to reach an agreement
as to price regarding the 1.09 acre tract, condemnation proceedings
were instituted, such additional land to be used as a playground, It was
contended that the Board was empowered to condemn only for school pur-
poses or school buildings and was not authorized to condemn property for
playgrounds contiguous thereto. The Court, however, points out that the
Board is allowed to acquire title to “siteso” for buildings throughout its
district and in this connection has the following to say:
II
a D s The meaning of the word ‘site’ as used in the
statute is broad enough to embrace such land, not exceed-
ing the statutory limit, as may reasonably be required for
the suitable and convenient use of the particular building;
and land taken for a playground in conjunction with a school
‘.
Mr. William A. Harrison, page 6 (WW-602)
may be as essential as land taken for the schoolhouse it-
self. 24 Rawle C. L. 582, B 31.
“It appears in the statement of facts that the plain-
tiff, after deciding to consolidate the scho&. selected as
a site for the building a lot of more than six acres includ-
ing the lot in question; that upon the reasonable assump-
tion that title to each lot could be acquired by purchase,
the plaintiff erected a modern school building on the five-
acre lot; and that afterwards it~became necessary to con,-
demn the lot in controversy. In all these matters the
plaintiff was acting in the exercise of a discretion with
which the courts seldom interfere. (Citing cases.)
“Under the judge’s findings of fact the recess of
acquiring title to the five-acre lot by purchd
one-acre lot by condemnation may be regarded as sepa-
rate stages m the accomplrshment of a common’purpose
to appropriate both lots for the benefit of the school.
Otherwise the plaintiff’s original purpose would’ be’de-
feated. 0 s 0m (Emphasis supplied.) -?
It would appear then that the determination of whether ,=:&en tract of !
* land qualifies as “or@ building site” within the purview of Article 3.40
presents a question of fact which must be resolved by you. .
H&ever, it shoul& be pointed lout that the manner in which
property is purchased is but:one of the factors which should be taken
into consideration by you iA resolving the question. The matter is ex-
cellently summarized in Garfield v. Equitable Life Assurance Society,
164 N.Y.S.Zd 823 (N.Y.Sup.), as follows:
“Singleness is to be determined not solely by the
purchase but by the plan as well and its essential and
natural implications, its purposes and policy.n
Of course, unrelated acquisitions of separate parcels of real estate which
,
do not reasonably appear to be motivated by any particular plan looking
toward their ultimate utilization as a ““unitwwould be beyond the purview
of Article 3.40.
What constitutes an ,“offlce building” within the meaning of Article
3.40 likewise presents a fact.question which you must determine.
In Rice, Att”y. Gen. v. Board of Police Com’re. of City of Woon-
socket, 97 A. 19 (R.I.Sup.) it was contended that c&tain connected struc-
tures constituted a “building” within a statutory wrohibition against the
issuance of a liquor license-for the sale of liquor in any build&g within
200 feet of a school. The Court held that the structures in question rep-
resented three distinct buildings. basing this conclusion’on the following
Mr.~ William A. Harrison. page 7 (WW-602)
facts: “It was built at a different ti.me, upon a different plan, and for a
different purpose. There is no interfor connection ore means of passage
between the two.” On the other hand, we find the case ,of, State v. Crause,
104 A. 525 (Me.Sup.)! which announces that~ ‘a bitilding~ may ‘constitute an
entire block, consisting ofseparate and independent tenements, one~of
which may be occupied for a dwelling house and another for a store?
Citing State v. Spence, 38 Me. 32.
An analogy to the restrictions of Article 3.40 is furnished by
corresponding constitutional provisions and statutes relating to banking
which contain limitations as to a “banking house* and engaging in busi-
ness at more than “one place.” A proposa’$ to house banking facilities
in a building to be constructed in the next block to the existing banki- .
connected by pneumatic tubes and a closed~ circuit TV was held a viola-
tion of Article 342~903,in Attorney General Opinion WW-22. A similar
addition, joined to the original by a tunnel below the street, was held
within the statutory and constitutional limitation in Attorney General
Opinion V-1046:
“if the new structure, when built, becomes a part
of the bank’s ‘banking house’ then the proposed plan will
not violate the provisions of said Article.
r..
“The contemplated new structure, although to be
,. 1
erected across the street from the original “banking,
house,’ will be physically joined thereto by a tunnel un-
der the street, which you state will be suitable for pas-
sage back and forth. It is evident that besides being
joined physically, the new structure, including the pas-
sageway, will be in close proximity to the present build-
ing. It will be used in connection with the original build-
ing’ and as a unit will be devoted to one general common
purpose. It is our opinion that the two structures will in
reality be one and ‘when used in the manner proposed will
constrtute the bank’s ‘bankmg house.” D 0 am (hmphasls
supplred.)
Also pertinent is Attorney General Opinion R-1746:
“The emphasis appear%. to be on the singleness
of the place at which thenbanking operation is conducted.
. . .
“The sole question is. then, whether the separate
building or installation planned will constitute a separate
place, or banking house or will constitute but a part of
one place or banking house. To resolve that question
will require an examination into all of the facts and cir-
cumstances throwing light on the question, many of which
Mr. William A. Harrison, page 8 (WW-602)
,
are not yet in existence. Physical proiimity will be but
an evidentiary fact for c’onsideratiorl. Physical cdmmu-
nication by pneumatic tube is of siinilex limited signifi-
cance. Any hypothesis must neceesarily assume i&en-
tion to use the separate ‘buildings’ at an integrated, single
‘business location. Intention is’ always a fact question if
disputed.”
..
While obviously in the banking field the emphasis is not onthe
,.,‘.- singleness of the physical structur,e,‘the above are illustrative’of the
liberality with which restrictions, of this type are interpreted and may
be of some ,benefit to you in passing upon these questions,.
We have been furnished :as. a supplement to’the bpinion request
with. a brief summary of’various insurance buildings which in the past
have been considere~d by the Board and, the Commissioners. A compari-
son of those which have been rejected .and those which have not shows
that these matters have been treated correctly as questions of fact and
the determining factor in each case has been whether or not the struc-
ture was considered by,the Bpard as an *architectural.unit.?
In determining whether or not the pr’oposed plan comprises an
“architectural unitm the Board has apparently taken into c~onsideration
all the particular facts’ involved, such as its proposed use both present
and future, its physical aspects, design and plan, the manner in wh$ch
it was acquired, etc. .
SUMMARY
Whether or n.0t.a ,particular re,al estate
investment of a’ life insuranc~e company
constitutes “ones building site and office
building,” as the phrase is used in Arti-
cle 3.40 of the Insurance Code, is a ques-,
tion of fact for determination by ,the Corn-
missioner of Insurance.
Very truly your.s,
WILL WILSON’
as
BY
RVL:lm
.
Mr. William A. Harrison, page 9 (WW-602)
APPROVED:
OPINION COMMITTEE:
Geo. P. Blackburn. Chairman
J. Arthur Sandlin
William R. Hemphill
Tom I. McFarling,
John Reeves
REVIEWED FOR THE ATTORNEY GENERAL
BY:
W. V. Geppert