## THEA~TORNEYGENERAL OFI‘EXAS

GROVER SJZLLRRS

Honorable J. P. Gibbs, Commissioner Casualty InsuranceDivision Board of InsuranceCommissioners Austin, Texas
Dear Sir: OpinionNo. O-7300 Re: What constitutesan abstract plant as such term isused in Section 21, Article 1302a,Revised Civil Statutes, and related question? This Department has receivedyour request for an opinion as follows:

"Section21, Article 1302a,Revised Civil Statutes of Texas, 1929, provides, among other things, that a title company can appoint as its representative in any county, any person, firm or corporation owning and operatingan abstract plant insuch county and making such arrangements for a division of premiums as may be approvedby the State Board of InsuranceCommissioners. In light of the above provision,we submit the followingquestions to you for an opinion: "1

. What constitutesan abstract plant as such term isused in Section 21, Article 1302a,Revised Civil Statutes? "2

. May the Board of Insurance Commissioners approve or revoke an arrangementwith reference to division of premiums entered, into between a title company and a representative, if the plant of the representative does not comewithin the meaning or meet the requirements of an abstract plant as such Is defined or stated in answer to Question No. l?
"Inview of the fact that an abstract plant is not defined by the Title Act (Article 1302a), the Department feels that it is necessary to secure an opinion in order to clarify the matter, and in order that the Title Act may be better administeredby the Board of Insurance Commissioners."Hon. J.P. Gibbs, Page 2 0

## -7300

Section 21 of Art. 1302a,V.A.C.S.,which is Section 21 of H.B. No. 

## 153, Chap. 40,Acts 41st Legislature,Regular Session, 1929, page 

## 77,is as follows:

"No commissions,rebates,discounts, or other device shallbe paid, allowed or permitted by any company,domestic or foreign,doing the business provided for in this Act, relating to title policies orunderwriting contracts;provided this shall not Drevent anv title comDanv from avvointina as its representative in any-county any‘berson,-firm or corporation owning and operatingan abstract plant in such county and maklng such arrangements for division of premiums as may be aDDrOVed by the Board of InsuranceCommissioners.!' herein are supplied) ‘(All emphases

The caption of this Act is in part as follows:
"AnAct authorizing the creation of corporations for the purpose of compiling and/or acquiring and owning abstractplants in this or any other state, and to compile and sell abstracts of titles therefrom and to insure the title to lands and interests therein and liens thereon,

. . . .' Section 1 of the ACt is in part as follows: "Privatecorporationsmay be created for the followingnamed purposes: '!(l)To comDileand own, or to acquire and own records or abstracts of title to lands and Interests in lands; and to insure titles to lands or interests therein. both in Texas and other states of the United States,,and indemnify the owners of such lands, or the holders of interests in or livenson such lands, against loss or damage on account of incumbrancesupon or defects in the title to such lands or interests therein. "Such corporationsmay also exercise the following powers by including same in the charterwhen filed originally, or by amendment: "(2) Make and sell abstracts of title in any counties of Texas or other states."
A careful search of Revised Civil Statutes of Texas, 1925,, and all acts of subsequent legislaturesup to and including the 49th Legislature, fails to reveal any statutorydefinition of orHon. J. P. Gibbs, page 

## 3 0-7300

reference to the words “abstractplants" other than as contained in the Act, save and'except insofaras corporationsmay be formed for the purpose of making, compiling and owning abstracts of title to lands and liens of all character on any property or any other abstract of records in this State, or County thereof, required by lawunder the provisions of Section 56;.Article 1302,R.C.S., 1925. It will be noted that the Article last referred to does not use thewords "abstractplant." A careful search of the opinions of the Appellate Courts of Texas fails to reveal any judicialdefinition of the term "abstractplant."

One of the fundamentalrules of statutory construction requires that a legislativeenactmentbe construed as a whole and that all of its partsbe harmonized if possible, so as to give effect to the entire act according to the evident intention of the Legislature. In accordancewith this rule, In interpreting the statute, the Act in its entirety should be considered, each part in connectionwith every other part.

Another of the fundamental rules of construction is thatwhere ambiguous or seemingly conflicting language is contained in the statute, the circumstancesattending its passage which bear upon the legislative intent,and the state of the law at the time of its enactment, the conditionsdesignated to be dealt with, and good intended to be accomplishedand the mischief sought to be remedied, should all be taken into consideration.

Judge Sharp, speaking for the Supreme Court of Texas in the case of Magnolia Petroleum Company v. Walker, 

## 83S.W. (2d) 929, held as follows:

the "No Inflexiblerule can be announced for the construction of statutes. However, the dominant rule to be observed is to give effect to the intention of the Legislature. Generally the intent and meaning is obtained primarily from the language of the statute. In arriving at the intent and purpose of the law, it is proper to consider the history of the subject-matter involved, the end to be attained, the mischief to be remedied, and the purposes to be accomplished.

. . . .'
It is manifest that the legislative intentas stated in caption above referred towas to authorize the creation of

^ .-. . . corporations f'ortne purpose or compiling and/or acquiring or owningabstract plants, and to compile and sell abstracts of title therefrom and to insure the title to lands and interests therein and liens thereon.

It will be noted that the purpose clauseunder Subsec-Hon. J. P. Gibbs, page 4 

## O-7300

tion (1) of Section 1 of the Act above referred to in pursuance of the caption authorizesprivate corporations to be created "to compile and own, or to acquire and own records or abstracts of title to lands and interest in lands; and to insure titles to lands or interest thereinboth in Texas and other States of the United States and indemnify the owners of such lands or holders of interest in orupon such lands against loss or damage on account of incumbrancesu!on or defects in the title to such lands and interests therein. The Legislature also authorized the additionalbusiness named in Subsection (2) supra,authorizing such corporations to make and sell abstracts of title in any county of Texas or other States.

The Appellate Courts of Texas havedefined the words "Abstractof Title" as follows:

"A statement, in substance, ofwhat appears in the public records affecting the title, and also a statement, in substance, of such facts as do not appearupon the public records but are necessary to perfect a title." Hollifield v. Landrum,

## 71S.W. 979; Sparkman v. Davenport, 

## 160 S.W. 410;Wright v. Butt, 

## 163S.W. 

## 360.
It has also been defined as "Anabstract of title is a written or printed methodical summary of the documents and facts of recordwhich affect the title to land that may be in effect.

. . .' MacMillan v. First National Bank ofBowie, 119 S.W. 709.
In addition there are other Texas casesdefining abstracts of title In practically similar language.

Although persuasive, in the absence of a legislative definition thereof, the term "abstractplant" has been defined by the Supreme Court of Minnesota, in the case of State v. St. PaulAbstract Company, 

## 196, N.W. 932, as follows: "Theabstract plant consists of abstracts of title to real property inRamsey County, taken from the officialpublic records and assembled in books with,copious indexes, togetherwith the articles of equipmentused in connection therewith. The matter contained in such books is collected from the public records, and in no manner partakes of sci~ent!,fic discoveries,nor sre they like the msnuscripts of an author, or a copyright,as contended for.'. .

Hon. J. P. Givvs, page 

## 5 O-7300

Construing the captionwith subsectlon (1) of Section 1 of the body of the Act, it is plain that the Legislature intended to define an "abstractplant" as used in connectionwith the title Insurancebusiness to be "records or abstracts of title to lands and interests in lands"which might eitherbe COmDi.h3d and ownedby the corporation or acquiredby purchase or otherwise and ownedby the corporation. These records or abstracts of title,when compiled or acquired, are to be used as the basis fromwhich the title insurance companymay determinewhether or not itwill issuea title insurancepolicy upon such lands or interests therein.

Since the Legislature has defined the term "abstract plant"without any limitationas to the area or locality to be covered by the records or the abstracts of title, the conclusion nest be drawn that the title insurance companymay confine its. activities to any given area, no matter how small. In the course of ordinary and careful businessusage as an insurer, it may, therefore, if itdesires, compileand/or acquire and own only such records or abstracts of title to such lands or interests in landupon which, as insurer, it offers itself to the public at large as beingwilling to issue title insurancepolicies.

Section 2 of the Act provides in part as follows: "Any corporation organizedhereunder having the right to do a title insurancebusiness may invest as mch as fiftyper cent of its capital stock In an abstract plant or plants, provided the valuation to be ulacedupon such slants shall be approved by the Board of Insurance-Commissioners of this State." (Emphasis ours). The words "abstractplant" appear only three times in the entireAct. First in the caption above referred to, second in Section 2, and third in Section 21. Following the rules of statutory constructionabove set forth it unzst be concluded that the term "abstractplant" as used in all three sectionswas intended by the Legislatureto m;an "recordsor abstracts of title to lands or intereststherein, for the purpose of the regulation or the construction of the entire act.

Therefore, the qualificationprescribedby Section 21 of Article 1302a, supra, Is that the %epresentative" own and operate in the countywherein he is designated 8s such, an "abstract plant" as that term isuniformly used in Article 1302a,whichwe have defined hereinabove. In otherwords, the "representative" of a Title InsuranceCompany is not requiredby Section 21 of Article 1302a, to own and operatean "abstractplant"with complete records or abstracts of title to $Q of,,thelands in the countywhere he acts as such "representative,Hon. J. P. Gibbs, page

## 6 0-7300

Your secondquestion is as follows: "May the Board of InsuranceCommissioners approve or revoke an arrangementwith reference to division of premiums entered intobetween a title company and a representative, if the plant of the representativedoes not come within the meaning or meet the requirements of an abstract plant as such is defined or stated In answer to Question l?"
It is a well-known rule of statutory constructionthat an officer or department of the State Government is only vested with such powers as may be granted to itby either the Constitution of Texas or by the Legislature of Texas. The power must be based upon some specificdelegation by either of the sources above mentioned and power by implicationwill never be presumed or impliedunless it is practically indispensableand essential to execute the power actually conferred. et al. v. Water ImprovementDistrict 283, S.W. 151, $%"~~p.).

In the case of Commercial Standard InsuranceCompany v. Board of InsuranceCommissioners,

## 34S.W. 2d, 

## 343(writrefused) which discussed some of the powers of the Board of Insurance Commissioners,Judge Baugh wrote as follows:

7, *

. . . .The board can exercise only the authority conferredupon it by law 'inclear and unmistakable terms, and will not be deemed to be given by implication,nor can it be extendedby inference,but must be strictlvconstrued.' 51 C.J. 56; State v. Roblson (Tex. Sup.)30 S.W. (2d) 292, 297.If (Emphasisours). Again in the case of Board of InsuranceCommissioners v. Guardian Life InsuranceCo. et al, 

## 180S.W. 2d 906, the Supreme Court of Texas, citingwith approval the Commercial Standard Insurancecase just quoted, lays down the rule of law as follows:

"Theboard can exercise only such authority as is conferredupon it by law in clear and unmistakable terms and the samewill not be construedas being conferredby implication." Following such rule of statutoryconstruction it is necessary to look at the plain and unambiguous language of Section 21 which provides in part:

"This shall not prevent any title companyHon. J. P. Gibbs, page 7 O-7300

from appointing as its representative in any county any person, firm or corporation owning and operatingan abstractplant in such county and making such arrangements for division of premiums as may be approved by the Board of InsuranceCommissioners." (Emphasisours). The language of the emphasizedpart of the act just quoted can lead to the one conclusion that the authority of the Board of Insurance Commissionersthereunder Is to approve or disapprove that part of the contractwhich has been entered intobetween the title insurance company and its representative for the division of the premiums. The Board of Insurance Commissionershas no authority to approve or disapprove the contract of appointmentby the title insurance company of the person, firm or corporation owning or operatingan abstract plant as its representative. Nor can it inquireas to the qualiflcations of such representative other than to satisfy itself that such representative owns and operatesan "abstractplant" as above defined.

As to the other powers delegated to the Board of Insurance Commissionersby virtue of the other sections of the act, none of them specifically or by implicationwould authorize the Board of Insurance Commissionersto exerciseany supervision over the acts and conducts of the representative of the title insurance company other than to satisfy itself that the arrangement for the division of premiumswas being carried out In accordance with the contractualagreement as approved by it.

You are thereforeadvised that the authority of the Board of InsuranceCommissioners to either approve or revoke any arrangementbetween the title insurance company and its representative is as hereinbeforedefined.
Yours very truly
ATTORNEY GENERAL OF TEXAS
CKR:ms:wc
APPROVED AUG 21, 1946 s/CarlosC. Ashley FIRST ASSISTANT ATTORNEY GENERAL By s/C-K. Richards C.K. Richards Assistant

Approved Opinion CommitteeBy s/BWB Chairman This Opinion ConsideredAnd Approved In Limited Conference