THEA~TORNEYGENERAL 

OFI‘EXAS 

GROVER SJZLLRRS 

Honorable J. P. Gibbs, Commissioner 

Casualty Insurance Division 

Board of Insurance Commissioners 

Austin, Texas 

Dear Sir: Opinion No. O-7300 

Re: What constitutes an abstract plant 

as such term is used in Section 

21, Article 1302a, Revised Civil 

Statutes, and related question? 

This Department has received your request for an opinion 

as follows: 

"Section 21, 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 operating an abstract plant insuch county 

and making such arrangements for a division of 

premiums as may be approved by the State Board of 

Insurance Commissioners. In light of the above provision, we submit the following questions to you for 

an opinion: 

"1 . What constitutes an abstract plant as 

such term is used in Section 21, Article 

1302a, Revised Civil Statutes? 

"2 . May the Board of Insurance Commissioners approve or revoke an arrangement with 

reference to division of premiums entered, 

into between a title company and a representative, if the plant of the representative 

does not come within the meaning or meet 

the requirements of an abstract plant as 

such Is defined or stated in answer to Question No. l? 

"In view 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 administered by 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 shall be paid, allowed or permitted by any 

company, domestic or foreign, doing the business 

provided for in this Act, relating to title policies or underwriting contracts; provided this shall 

not Drevent anv title comDanv from avvointina as 

its representative in any-county any‘berson,-firm 

or corporation owning and operating an abstract 

plant in such county and maklng such arrangements 

for division of premiums as may be aDDrOVed by the 

Board of Insurance Commissioners.!' 

herein are supplied) 

‘(All emphases 

The caption of this Act is in part as follows: 

"An Act authorizing the creation of corporations for the purpose of compiling and/or acquiring 

and owning abstract plants 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: 

"Private corporations may be created for the 

following named purposes: 

'!(l) To comDile and 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 livens on such lands, against 

loss or damage on account of incumbrances upon or defects in the title to such lands or interests therein. 

"Such corporations may also exercise the following 

powers by including same in the charter when 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 legislatures up to and including the 

49th Legislature, fails to reveal any statutory definition of or 
Hon. J. P. Gibbs, page 3 0 -7300 

reference to the words “abstract plants" other than as contained 

in the Act, save and'except insofar as corporations may 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 law under the provisions of Section 56;.Article 1302, R.C.S., 

1925. It will be noted that the Article last referred to does 

not use the words "abstract plant." A careful search of the 

opinions of the Appellate Courts of Texas fails to reveal any 

judicial definition of the term "abstract plant." 

One of the fundamental rules of statutory construction 

requires that a legislative enactment be construed as a whole 

and that all of its parts be harmonized if possible, so as to 

give effect to the entire act according to the evident intention 

of the Legislature. In accordance with this rule, In interpreting the statute, the Act in its entirety should be considered, 

each part in connection with every other part. 

Another of the fundamental rules of construction is 

that where ambiguous or seemingly conflicting language is contained in the statute, the circumstances attending its passage 

which bear upon the legislative intent, and the state of the law 

at the time of its enactment, the conditions designated to be 

dealt with, and good intended to be accomplished and 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, 83 S.W. (2d) 

929, held as follows: 

the 

"No Inflexible rule 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 intent as stated in 

caption above referred to was to authorize the creation of ^ .-. . . corporations f'or tne purpose or compiling and/or acquiring or 

owning abstract 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 clause under 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 authorizes private 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 therein both in Texas and other States of 

the United States and indemnify the owners of such lands or 

holders of interest in or upon such lands against loss or damage 

on account of incumbrances u!on or defects in the title to such 

lands and interests therein. The Legislature also authorized 

the additional business 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 have defined the words 

"Abstract of Title" as follows: 

"A statement, in substance, of what appears 

in the public records affecting the title, and 

also a statement, in substance, of such facts as 

do not appear upon the public records but are 

necessary to perfect a title." Hollifield v. 

Landrum, 71 S.W. 979; Sparkman v. Davenport, 160 

S.W. 410; Wright v. Butt, 163 S.W. 360. 

It has also been defined as 

"An abstract of title is a written or 

printed methodical summary of the documents and 

facts of record which affect the title to land 

that may be in effect. . . .' MacMillan v. First 

National Bank of Bowie, 119 S.W. 709. 

In addition there are other Texas cases defining abstracts of 

title In practically similar language. 

Although persuasive, in the absence of a legislative 

definition thereof, the term "abstract plant" has been defined 

by the Supreme Court of Minnesota, in the case of State v. St. 

Paul Abstract Company, 196, N.W. 932, as 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 equipment used 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 caption with subsectlon (1) of Section 1 

of the body of the Act, it is plain that the Legislature intended to define an "abstract plant" as used in connection with the 

title Insurance business to be "records or abstracts of title to 

lands and interests in lands" which might either be COmDi.h3d and 

owned by the corporation or acquired by purchase or otherwise 

and owned by the corporation. These records or abstracts of 

title, when compiled or acquired, are to be used as the basis 

from which the title insurance company may determine whether or 

not it will issue a title insurance policy upon such lands or 

interests therein. 

Since the Legislature has defined the term "abstract 

plant" without any limitation as 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 company may confine its. 

activities to any given area, no matter how small. In the course 

of ordinary and careful business usage as an insurer, it may, 

therefore, if it desires, compile and/or acquire and own only 

such records or abstracts of title to such lands or interests 

in land upon which, as insurer, it offers itself to the public 

at large as being willing to issue title insurance policies. 

Section 2 of the Act provides in part as follows: 

"Any corporation organized hereunder having 

the right to do a title insurance business may 

invest as mch as fifty per cent of its capital 

stock In an abstract plant or plants, provided 

the valuation to be ulaced upon such slants shall 

be approved by the Board of Insurance-Commissioners 

of this State." (Emphasis ours). 

The words "abstract plant" appear only three times in 

the entire Act. First in the caption above referred to, second 

in Section 2, and third in Section 21. Following the rules of 

statutory construction above set forth it unzst be concluded that 

the term "abstract plant" as used in all three sections was intended by the Legislature to m;an "records or abstracts of title 

to lands or interests therein, for the purpose of the regulation 

or the construction of the entire act. 

Therefore, the qualification prescribed by Section 21 of 

Article 1302a, supra, Is that the %epresentative" own and operate 

in the county wherein he is designated 8s such, an "abstract 

plant" as that term is uniformly used in Article 1302a, which we 

have defined hereinabove. In other words, the "representative" 

of a Title Insurance Company is not required by Section 21 of 

Article 1302a, to own and operate an "abstract plant" with complete records or abstracts of title to $Q of,,the lands in the 

county where he acts as such "representative, 
Hon. J. P. Gibbs, page 6 0 -7300 

Your second question is as follows: 

"May the Board of Insurance Commissioners 

approve or revoke an arrangement with reference 

to division of premiums entered into between a 

title company and a representative, if the plant 

of the representative does 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 construction that 

an officer or department of the State Government is only vested 

with such powers as may be granted to it by either the Constitution of Texas or by the Legislature of Texas. The power must 

be based upon some specific delegation by either of the sources 

above mentioned and power by implication will never be presumed 

or implied unless it is practically indispensable and essential 

to execute the power actually conferred. et al. v. 

Water Improvement District 283, S.W. 151, $%"~~p.). 

In the case of Commercial Standard Insurance Company v. 

Board of Insurance Commissioners, 34 S.W. 2d, 343 (writ refused) 

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 conferred upon it by law 'in clear and 

unmistakable terms, and will not be deemed to be 

given by implication, nor can it be extended by 

inference, but must be strictlv construed.' 51 

C.J. 56; State v. Roblson (Tex. Sup.) 30 S.W. (2d) 

292, 297. If (Emphasis ours). 

Again in the case of Board of Insurance Commissioners 

v. Guardian Life Insurance Co. et al, 180 S.W. 2d 906, the 

Supreme Court of Texas, citing with approval the Commercial 

Standard Insurance case just quoted, lays down the rule of law 

as follows: 

"The board can exercise only such authority 

as is conferred upon it by law in clear and unmistakable terms and the same will not be construed as being conferred by implication." 

Following such rule of statutory construction it is 

necessary to look at the plain and unambiguous language of Section 21 which provides in part: 

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

from appointing as its representative in any 

county any person, firm or corporation owning and 

operating an abstract plant in such county and 

making such arrangements for division of premiums 

as may be approved by the Board of Insurance Commissioners." (Emphasis ours). 

The language of the emphasized part of the act just 

quoted can lead to the one conclusion that the authority of 

the Board of Insurance Commissioners thereunder Is to approve 

or disapprove that part of the contract which has been entered 

into between the title insurance company and its representative for the division of the premiums. The Board of Insurance 

Commissioners has no authority to approve or disapprove the contract of appointment by the title insurance company of the person, firm or corporation owning or operating an abstract plant 

as its representative. Nor can it inquire as to the qualiflcations of such representative other than to satisfy itself that 

such representative owns and operates an "abstract plant" as 

above defined. 

As to the other powers delegated to the Board of Insurance Commissioners by virtue of the other sections of the act, 

none of them specifically or by implication would authorize the 

Board of Insurance Commissioners to exercise any 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 premiums was being carried out In accordance with the contractual agreement as approved by it. 

You are therefore advised that the authority of the 

Board of Insurance Commissioners to either approve or revoke 

any arrangement between the title insurance company and its 

representative is as hereinbefore defined. 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

CKR:ms:wc 

APPROVED AUG 21, 1946 

s/Carlos C. Ashley 

FIRST ASSISTANT 

ATTORNEY GENERAL 

By s/C-K. Richards 

C.K. Richards 

Assistant 

Approved Opinion Committee By s/BWB Chairman 

This Opinion Considered And Approved In Limited Conference