     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
