               OFFICE   OF THE ATTORNEY       GENERAL    OF TEXAS




                                                         MayV
                                     AUSTIN

gb*&,m
     c. Magi
 &-   ..I-
                                                             19,    1939



       Honorable 0. Kennedy
       County Attorney
       Bee County
       Deeville, Texas
       Dear Mr. Kennedy:




                 In seeking our op                      beve question by
       your letter of Xay 6, 1939,                      py of en opinion
       of Honorable R. L. W
       directed to Iiono
       F'ublioAccounts,
       You desire a ret
                                          il Statutes, provides that
                                          xea, except such as may be
                                          subject to taxation, and
                                          ed as herein prescribed."
                                         es, povides, in part, that
                                     rposes of taxation, shall be
                                     , chattels and ef.fects,end all
                                      r evidences of debt owned by
                              whether the sanm be in or out of the
                              th the enunmration of certain species
                              There being no constitutionalor statu-
                           bstract books as such, the only question
                            or not such tOoks constitute "personal
       property" within the maning of the above cited articles.
                 Your letter does not present a fact situation for
       our consideration,nor a0 w-e deem same rrtcesssry. It is to
       be assumed that the abstract books in question are those com-
       monly compiled and kept in the orderly and profitable pursuit
       of the business of furnishing abstracts of title, and contain
       certain written and printed information which such business
       may be called uporrto furnish respecting the title to real
       estate in the locality where they operate. These abstract
Honorable 0. Kennedy, i&y 19, 1939, Page 2



books are prepared at considerableexpense end are c# great
value to the owners thereof in that they constitute the vark-
ing plant of a profitable business. It is commonly known
that these books possess a value by reason of the facts con-
tained therein and the use to which they may be put, rather
than the intrinsic value of the books, themselves, vrhlch
from a tax standpoint Hould be inconsequential.
          There is a dearth of authorities upon this ques-
tion in Texas, but as early as 1887 and before, ths courts of
other jurisdictionshave concerned tlmmselves with this ques-
tion because the novelty of abstract books as articles of
ownership has given rise to some doubts as to their legal
character as property. In resorting to the decisions of
other states fnr persuasive authority to support this'opinion,
we find in such states a contrariety of opinion, ani it shall
be our purpose to determInewhich of these tm, lines of deoi-
sions should be followed.
           The early case d Dart v. Woodhouse, 40 gich. 399,
29 Am. Rep. 44, while not involving a tax question, is impor-
tant in determining the nature of abstract books as property,
in that it held that *an execution levy made on a set of manu-
script abstract books was of no validity, beoause the right
of tlm proprietor of such manuscript to publish it IX to keep
it back from publication is not a property right but one which
is purely incorporated,ati attended with considerationsof a
nature entirely different.-fromany involved in other rights.'
The principle of law announced in this case is followed by the
same court in Perry v. City of Big Rapids, 34 N. W. 530, and
                                 _.-
Loomis v. City of Jaction, 90 N. VV.328   Both of these cases
Involve a tax question, and the case of-Perry v. City of Big
Raoids, which appears to be a leading case, holds that the
-ion      in the constitutionof Michigan vhich requires as-
sessments to be made on property at its cash value, means not
only wlmt may be put to valuable uses, but what has a recogniz-
able pecuniary value inherent in itself, end not enhanced or
diminished according to ths person who owns cr uses it, and
hence manuscript books containing abstracts of land titles were
not liable to taxation, as they had no intrinsic value but were
valuable only for the informationthey contained and which is
conveyed by consultation or abstracts made therefrom.
           This holding by the Supreme Court of Michigan has
Honorable 01 Kennedy, Ray 19, 1939, Page 3



 been directly overturned by later decisions by the Supreme
 Courts of three different states, and has been severely
 criticized in two of t&se decisions, wherein it was-pointed
'out that the Michigan decision was by a divided court, and
ms based upon reasoningwhich though ingenious was unsatis-
 fying,
            The case of Leon Loan and Abstract Company v. Equal-
 ization Board of Leon et al, 33 N. W. 94 by the Supreme Court
 of Iowa, was s,everestin its condemnatioiof the Xchigan cases
 hereinabove cited, and held that the abstract books, having
 an actual market value, and usable by anyone of ordinary in-
 telligence as a means of profit, axe personal property.and
 liable t;;ereforeto taxation, notwithstandingtheir manuscript
 character, and the fact that they are valuable only for the
'informationthey contain,which must be obtained by consulta-
 tion or extract therefrom. Similar disap?rowl of the Michigan
 cases is voiced by Freeman, in his wrk on Executions, Section
 110.
           The comparativelyrecent case of State v. St. Paul
Abstract Company, 196 N. W. 932 by the Supreme Court of Rinne-
sota in 1924, reasons very convincinglyas follows:
           "The abstract plant consists;of abstracts
           of title to real property in Ramsey county,
           taken from the official public records and
           assembled in books with copious indexes,
           together with the articles of e uipment
           used in connectiontherewith; 3%e matter
           contained in such books is collected from
           the public records, and In no manner par-
           takes of scientific discoverdes, nor are
           they like the manuscripts of an author,
           or a copyright, as contended for.
            "The general work of compiling these books
            is a mere copying of extracts from public
            records and assemblingthem in abstract
            books far convenience in furnishing ab-
            stracts of title to land in Ramsey county,
            to such persons as are in needTre ",",,same
            and willing to pay therefor.
            fact that there was kept an index, Seth a
            secret ksy, thereto, changed the character
            of the property no more than would a Yale
Honorable 0. Kennedy, Kay 19, 1939, Pege 4




            lock on the outer door of a dwelling,
            with a key in the pocket of the occupant,
            change the domicile. In other words the
            fact that informationcontained in the
            card index is in the form of a secret
            code or indicia t& key of which is
            known only to the me&)ers of the ap:>ellant,
            in no way changes the characterof the
            property, in our view of the situation.
            Nor does the fact that ths owners keep
            the abstracts of title prompted to date,
            by taking extracts from instruments re-
            corded in the office of the register of
            deeds and assembling them in the abstract
            books, change the situstion, other than
            to enhance the value of th? plant.
            Vie are of the opinion, and hold, that
            books containingabstracts of land titles
            v:hichhere a recognized tdalue,and which
            are kept and used as the basis of a busi-
            ness for profit, constitute taxable pro-
                    26 R. C. L. 138, and cases therein
            m-   .n
           It is our conclusion:thatthe weight of authority,
as well as sauna reasoning, supports the view that abstract
books, especially as prepared and maintained under modern con-
a.itions,constitute "personal property" within the meaning of
titicles 7145 and 7147, &vised Civil Statutes of Texas, and
are subiect to taxation. 61 C. J. 192. 26 R. C. L. 132. 1
R. C. L:~90. atate v. St. ?aul Abstract Compen , 196 N: 6i.
932, Leon Loan and Abstract Company v. .equalizaion Board of
Leon et al, 53 N. ii. 94, Booth Ranford Abstract Company v.
           P. 489, 23 L. R. A. 864. Xashinston Bank of iialla
                  Abstract and Security Company, 15 Nash. 487,

             The opinion of this departinentaaverted to at the
outset,   is grounded upon the minority rule announced in Perry
fkmorable 0. Kennedy, h;ay19, 1939, pee   5



v. city of aig Sapids, supra, snd is accorhingly overruled.

                                     Yours very truly
                                 ATTORNEY GXNZR4L OF TEXiS




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