OFFICE OF THE AlTORNEY GENERAL OF TEXAS
AUSTIN
Ban. R. 0. wetem, Carualty Comalsrion8z
Bwrd oi Inauranor Cohmi8rlotmrr
hetin, Ttrss
bru 81r:
This will no pt Of YOUr 18tt8r
of January 18,. 1940 ach two rp8ohm
18a88 (LglWW5eltt8.+O on a8 to wheth8r or
ilOt 8UOh 8@U8me
l8 beill em8
888Ontial t0
full in order 8 OFiniOn 81aJ be
and agreement 8ntem.a iat0
, by aad botwm
, In aoneldemtlon o? the mm of
ml, the f%r8t payment being au8
ULa lik0 aBoUt dU8 the
oe8tie, month until thir aontrar
; ~~~~:a~(t~~=~~~~~o::h~$~~ !%aiift"r
l'8Oti1Or JWOfe88iO!Wd U8*.
"Now, the oompaay a008 hrrvbt oonrey tltlo
of the abovr ear to John Do., awin& th8 term
Hon. 8. 0. Waterr, Caanalty Comalaeionrr, Page 2
of thi8 OontmOt. It ir heroin agreed that
thi8 oontraot may be terminated by thlrtr
day8 notloe by either party, an4 it 18 undsr-
rtood that upon termlnatlon 0r thla oontraot,
title of th8 above car autometioally rsvert8
baok to Yotor Company nithout further
oost or damagsr on the part of either party,
exaept wherein the above oar nay hexa been
wreaked or daxaged rhlle in the posesssion
of John Dee, his hblr8, or a8sigunr. It i8
aho understood that the extent of damage or
aolllslon llabllitp on the part of John XXI
will be a mxlmun of $50.00.
%herea8, the oompany Is furnIGhIng
thle oar to John Doe in aon8lderatlon of the
a?,we stipulated paynent8, it la undsr8tood
by both partles that thir oar 18 to be 80~
rloed without oost to John Doe wlth the ex-
aeptlon oi the aMote set out $80.00 damage
liability, and his gasoline or fuel axponse.
-It is herein agreed thnt John Doe will
fUrnl8h the oompany with knowledge or certl-
floate to chow that proper publla llabillty and
property daraqe lnsuranoe 18 oarrled, and that
he 1s to proteat the oonpanp from any dmage
suit a?idng Out Of 001:181OA OF OOlli8iOIl8
whorein this car Is ooncerned during the ter-
alnat!on of this oontraat md while in possoes-
Ion of hlmaolf, hi8 holra, or a88lgU8l
*This aontraot entered Into thla s
1940.
Rotor coopmy John Doe
Aaoepted Aaoeptsd"
No,.2
=S”A?R OF TEXAS
couN?!i OF BUNK
Hon. R. 0. \?nLta?8,
Casualty Commlaaionar, Pago S
0
a oorporatlon of Bla~,Bf~rfc
County, Tbxa8, faaeor and
Blank county, Taxac, iaaaa8, agrea to tha toi:
lowing tS?LU8 Sad oonditlon8:
*1. _ :remaw pay so
month b,&m ~~"'~na~~~~~ day ii;aah
1940, for which monthly~$mnt aal=o; &?Sa8
and a098 hereby lease unto the 88ia bs8aS the
following described notor vahlola, to nltt
n Year coda1
+otor No. Serial No. -
to be used by said Leaaaa the aama a8 though It
W8H hi8 own. It IS lg r eed that the leeor in
no way raSSiVS8 t!;aaontrol o? tha as? other
than horain 8pcoifioally oont?aotad and in no
aauuar eaauma8 any llabillty ?or the nagllgenca
of tlla h813SS or hi8 agents.
“2. Said f.eaoea8hall obtain, in a good
and reputable lnauzanas ooupany, pay for, and
keep In force a public llablll~~ ~au?a~an$o-
licy (mlnlmua coverage 8
property damaga (mlnlmuta~mga a- )*on
said Rotor vahlala and aala Tall be
naasd a8 one of the ao-Insured.
*FL m8mrva8 the right to ahanga
o? 8ubatlwy oar oi llka type ior the one
daaaribad harain, whaxevrr it feel8 that It 18
to the boat lntaraat of dither party.
v%' Ieaaaa agrees to furnish, replao- or
repair ail tins and tubes without regard to
cost or dauage to aam, and will furnish liocnse,
wash, lubrlaata, repair and do all things naoaaa-
ary for the proper malateuanae aad rapair oi the
above dasorlbed oar or Its substitute, So long
aa thla ooontraotremain8 ln forea, rrubjaotto
all other provlalon8 of thl8 eontrsat.
-5. It is agread that all rapal? work 18 to
Hon. R. C. ::atara,Casualty Ccmlaaionar, Taga 4
be dons by Lessor or SQnaona of Its own aalac-
tion and that Lo&sea will pay for any damage
dona to wld above daaarlbad motor vehicle when
such damage is cauead by the application of
oonm external foroe, exoepting ordinary wear
and tear. It ia a reed hmavar that no repair
bill ahall lxoeed ti40.00 for any ona acoldsnt
and that aaid laa8or will do said work at coet
plua 10%
“6. talc Leasea agrees to present tha car
at the service departLent o? said Lemaor at
least once eaah month or eaah one thoueand
~llea, whichever happana first.
*‘I. In oaee of eqina or ether trouble
outside of ?%mk County eaid Ieanae agrees to
cull Lesaor st Lensor’o expense and rec(ilve
inotruotiono (1~to what to do with said rotor
vehicle.
“0. 31s contract my 5e taminated by
the Leasac! et the and of any thirty day period
provided L,he c::r la returned tc said leouor at
its place cf b%ir:ess in 9-ank, ‘lexaa.
%e.id leemr my terchuate the contract
at any tine by t&lnc posseaeion of the car
at the end oi any thirty day pericd or If
tarrzinated duAring a thirty day period then 8aid
Lessor ahE renit to the Lessee the pro-rata
one thirtieth of the current month’s rate, if
paid, or i? said Lessee fails to rcaka payP,ent
aa provided, said Y,aaaor nay tominate thla
oontraot.
“9. Said I.eaaaa hereby aaraea that the
agents OS said Lessor nay enter the loaaee’a
premises or such other plaaa aa such motor vehl-
ale Eight be found and take posaaaaion oi said
mtor vehicle, and Leases apaoliioally walvaa
any claim for dSEagSa as a result 02 said Laaeor
or lta agonta taking (with or without paraiaalon
at Said Laasea) the motor vahial8 daaoribed above
or it a aubetitut8d motor vahlola, upon the iall-
ura of the Lemma to make payment of any monthly
Hon. 2. C. Yoters, Cnsualty &mrlseianer, Tage 5
. _ or to return
payment the car to the Issaor
upon its requesr.
“10. Thle oontraot le subject to the
rollawing epeolal oondltione supsraedlng any
omdltlone herein stated to the oontrary.
WSlgnad and exeou?ad this the - &Y
Of A.D. 1940.
Lessee
Lessor .
Tou desire to know If auoh contraota are In
violation or that portion of Hmee Bill PO. 626, Seatlon
1, .iOtS of 1939, of the 46th l.ep;islature (Sec. Bb of
Article 40591). reading:
"it shall he the &uty ol the Ccmfssloner
to require any oorporatlcn, peracE, firm, asso-
oiatim, local nutuel aid assaclctlcn OT any
looal aoaocletim, cor.rany m or~~nlzetlon, to
have a aertlPlout~ of authority hef9re beIn%
authorlzed tc carry on any Insurance business
In this State. Ii, in any event, any such OOE-
wny, person, f:%, assoolatlon, corporation,
looal aid aoeooiatlon or local o~anlzatlon
Ia nritim any fom of irmmnoe rrhatsoever
without a perr*lt, or certlCloate of authority
issued by the Departnent of Imu?anoe OS TexaB,
It shall be the duty of the Comisnioner to
sake known aald raot to the httorney General
cf tba State of Taxas, who 1s hnrehy rnqulred
to imtitute proo8edlngs in the District Court
of Travis County to restrain mch ~aryvatlon,
person, firm, assoclatlon, aor!:any, loon1 aid
asfioolatlon or oreanlzation iron arltlntc any
lnaurance of any kind or charactar without a
pemlt.”
Insurance has been defined aa ‘a contract by
whloh one party undetiakea to lndemlfp another against
1088, damage, or llablllty arising tram an unknown or
Hon. R. 0. Vlater8, Caeualty ~ommlsalonar, Pags 6
ooatiogrnt event.” Another more unlveraallf aooeptad
deflnltlon 1s:
*A oontraot of lnsuranoe ie an agreement
by whloh one party, for a oonslderatlon, pro-
mises to ap mane7 or It8 equivalent or do some
aot of raP ua to the assured up00 tha deotruo-
tion or Injury of mnethlng in whloh ‘;ho other
party has an iatarest.”
Sucjz definitions are aited in Yolwna 1, Cooleyst &loCs
on insuranoe, page 6.
Ve are fanlllar with the line cf oaem8 dealing
35th autoro??lle clubs to nU.oh you xake referwoe. A=w
thCSe iS the case Of I:EtiOctIl diltb Service .:Orp. 78. Sate,
5s ST 2nd. 209, a:nT the &as cases th?reln oited.
In the cmc cf Fatlcnal i.utc 3ervice Corporation,
surra, (writ oi error rafu.=Jed), the juC,y.cnt of the trial
court ?orfelt.ini?. tb!n ctarter of the named conpany was up-
held. The corporetlmi Wllll ?.?corporr.teE aa ai1 automobile
ol:b (without. t:l%??r,?ity tC Fits iZ3UxWXe ) :Aaier 8Ub-division
91- cf firtials 1302 of 7216 ?:t?vired Civil statutes. The
corpzatlm Insua3 to its mzbsrs a cerLiiioate which pro-
vided, anon;J ofhcr thines, for annual dues of t25.00 and
provided that such co~r%?,?y wculd Cause to be repaired in
Its I-evbc;rehlp garages eurinc the cuxent react a;?g dmage
to membere* nutorotiles caused by acclde3t oi net less
than t7.50 nor 12rc3 than 5250.00 &.imay,ea.Suok oontraot
elearlg creetec? an obllcction on the part cf the automobile
olub withti the purview of the aooepted definitions of
lnsuranco and we do not question the correctness cf the
holding in this and stifler came.
We have carefully examined the instrun?ents tsn-
dered. Pefert1n.g to the flrat of said lnstrwxents, we note
an attempt to transfer tltlo from the eo-called hssor to
the lessee. Construim the vkole of the c.ontrtct, however,
we neaessarll~y conclude tth t su0I.i lnstment remtins a
lease e.greernent and the paraIxunt titib to tl;s vehlole
remains in the ieseor. A contract nuot be oonstrued by
lte purpose, effect, contents azuI import, and not woasaarll~
by t~ta~;minology used. Kationai Auto t‘ervico Corporation
VI. , su?ra.
?ha oeaond lnatruaant doa not pwport .to trano-
ic title and lo, tbamrme, a rlxple loom oont%aot.
Thu flrot oonttnot aontain8 a provision that,
in event of loeidrat to ths nutmob in quaetion and
Uonaga thsrato the ztont of tho luesoo’r llabfllty fat
mob esmlrrgurib be 8 !KbOO. The rsoond oontruot proviidas
that the extent of the leesso’r liability for Ulmllar dam-
ltg till br #40,00. Rath of auah oantraots prorlde fu*
thw that the lxobae of the dmage will bo borne by the
lmlaor. It ir thla feature of sash of suoh oontraot8
whfah &van rise to the question at wbthr cr not the
ierumoe of tho oontraots oonotltutes the otWyin(; on of
an lneurano~ buulm8r.
ve rind no Texas suthoritlsa to citr he~la.
It was held in the cam of Ee Plrs Gm?tif’loate, 39 I%.
Co. Ct. US, oited in 8S A.L.R. 732 that 0 firs oertici-
cafe lauued by (I leaaor OS a ohnttei, b9 wkloh the l~snor
agree6 that, in oaae ot injury tc or dedruation ot the
oame by fire,ha till restore the haze ta the oondltlon
la whlah it wap.br.forsthe rim, io not a oontraat of lasu-
@no0 wher8 the DB~:OBOCfXGFl3ni~S and if3K:Ede W part Oi a
oon’-saot of leuae, dthin the cou:..ir~ of 8 6tatUte prohiblt-
inn an9 parrron, pwtnar~hlp, C? aoooclcctlon iron isc,u:nc:
any pdliuy or Y8ki.w a coJltmot of inQcler?nlty G,~tlxst loas
by firs, without suth~ltp sz3weso39 oonferred by t: aknr-
ter of incorpor0tlon.
‘f?ls twtr in tht- above cltad oam cltfrr traz
those in the instant oatae only in thut In tho oltad ouse
tborv *OS an s~remant on the part of the fe~bor to aamws
ffla lose_;whereas, we hem have a0 agFe*cent by the lenno~r
to a a mme l portion of the lees by $&Q&&i&.
Ko believe that the aontraota subalttetl oannot
be brcuqht within the &efinlt:one or imurence hcrela prr
rented and thet the abcre oa6e ig oontrolling. #Je neoeaB-
nrlly oono1ude that thr! lgrudmate, sad the basis c? yc.ur
mquest, era net ruot: an to oonatltute the ki::clr onfpgod
.‘I in the ?nm?tmoe buslnml).
YCUX-6 V0l-y t,rJlg