Texas Attorney General Opinion: O-5250A Page: 4 of 10
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honorable , , Lookhart, Chairmnu Page 4
and apart from its stockholders, and the general character-
istics of each as a distinct legal entity, regardless of how
and by whom its took is held, mast be recognized uder the
laws of Tenas, unless such entity should be disregarded under
other rules of law hereinafter referred to. LK. Btutt Grow
oery Co. ot al. v. Sheppard et al., 137 . '. 2) 823. Arti-
cles 4727 ad 577 do not apply to oorporntions as each, bat
ody to a director or officer of an insurance company who re-
ceives any onoy or valuable thing for negotiating, proouring,
reoorendint or aiding in the probase by each company of any
property, or who is peaniaaily interested as principal, oo-
prineipal agent or beneficiary in sach purchase, The penalty
for a violaton of such statutes is not placed upon said in*
sarance corporation, but only upon such rirtetor or offleer,
therefore, said statutes could not have any application to
the matter here under consideration. The fact that a direotor
or officer of an insurance company oas stock in another ocr-
poration fro which said insurance company is making a purchase
of property would not, of itself, affect nuch purchase, in
fet even if said director or officer should reoeiv moaey,
or other valuable thing, for negotiating said pur ease, ame
would not be affeooted thereby, unlea there was unfairness or
iad therein, and this would be governed by other rules of
law, instead o the provisions at said Artilos~ 4727 and 577.
Said statutes visit a penalty only upon the director or offi-
cer violating same, and the legality of the transaction, ino
aoiar as the insurane oopany is eonoerned is determined by
other well-known rules of law. The facts here wtder coasidera-
tion do not show that the president of the City National Life
lasr ano. Company is to receive any money or valuable thing
for negotiating. procuring recommending or aiding in the
purchase of said building rom the Texas Discount Company
or that he is pecuniarily interest* as principal, ooeprinoipal,
agent or beneficiary in suh puarbase, in fact it is not shown
that any of the provisions of said Artioles 4727 and 577 can
be applied to him, or to thin transaction, the only thin con-
neotix# him therewith being his said ownership of stook in
the Texas Discount Company and being president of both of
said ocpanies. The only way he could be pecunerfily inter*
ested in suct purchase would be through the ownership of such
stock in the Texas Discount Company, but said statutes do not
forbid such sale on the grounds that a director or officer
of the insurance company owns stook or is a director or of-
floer, in the company from which said purchase is made, in
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Texas. Attorney-General's Office. Texas Attorney General Opinion: O-5250A, text, June 2, 1943; (https://texashistory.unt.edu/ark:/67531/metapth262518/m1/4/: accessed May 21, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.