A-wsIT\’ <Ir^ylfY.\,* February 11, 1966 

Honorable Herbert Middleton Opinion No. C-607 

County Audltor 

Taylor County Courthouse Re: Whether Taylor County 

Abllene, Texas can legally pay a 

short-rate cancellation 

premium on an "error' 

and omissions" insurance 

policy procured and 

cancelled under the 

Dear Mr. Mlddleton: stated conditions. 

Your recent letter to this office contained the 

following statement of facts: 

"After the passage of Section 4 of Article 

1937 as provled for by Section 1 of House 

Hz;,;;5, Acts 59th Le islature, 1965 Regular 

Ch. 456 p. $1 an 'errors and 

omlsslo~s~ insurince policy was issued to 

?$$r County for the benefit of the Cotinty 

On receipt of a copy of Attorney 

General's Opinion #c-536 the policy on 

which the premium had not been pald,'was 

returned by the County Auditor to the 

Insurance agent for cancellation. 

"In a lett$r (copy of which is enclosed) 

to the Hon. County Judge the agent requested 

the County to pay a short-rate cancellation 

premium. . . ." 

You have asked the opinion of this office as to whether Taylor 

County may legally pay the short-rate cancellation premium 

submitted by the agent who issued the policy. 

The policy in question was procured pursuant to the 

provlsions.of Section 4 of Article 1937 as enacted by Section 1 

of House Bill No. 125 Acts 59th Legislature 

Session, Ch. 456, P. 441, 

1965, Regular 

which reads as follows: 

-294-2- 
Hon. Herbert Middleton, page 2 (c-607) 

“Each county clerk shall obtain an errors 

and omissions Insurance policy, If the same be 

available, covering the county clerk and the 

deputy or deputies of the county clerk against 

llabllltles Incurred through errors and omissions 

In the performance of the official duties of said 

county clerk and the deputy or deputies of said 

county clerk; with the amount of the policy being 

in an amount equal to a maximum amount of fees 

collected In any year during the previous term of 

office immediately preceding the term of office 

for which said Insurance policy Is to be obtained, 

but In no event shall the amount of the policy be 

for less than Ten Thousand Dollars ($10 000). The 

premiums for said insurance shall be paid out of 

the funds of the county by the Commissioners Court 

of said county." 

The clear and unambiguous language of this Section 1s 

devoid of any expression which would make the respective countle 

of this State responsible In damages for the errors or omissions 

of county clerks or their deputies. The procuring of a policy 

of public llablllty Insurance cannot create a llablllty where 

I 

there Is none. Texas Prison Board v. Cabeen, 159 S.W.2d 523 

i 

dE;a;~.App. 1942,b error ref.); Jones v. Texas Gulf S5ulphur < 

p y, Houston Court of Civil Appeals (Dec. lb, 196 ). 

Section 52 of Article III of the Texas Constltutlo. 

provides In part as follows: 

"The Legislature shall have no power to 

authorize any county, city, town or other 

political corporation or subdivision of the 

State to lend Its credit or to grant public 

money or thing of value in aid of, or to any 

Individual. . . ." 

In Attorney General's Opinion c-506 (1965) we helc 

Section 1 of House Bill No. 125 invalid because of this provision of our Constitution. We stated In said opinion that: 

"As It would be In violation of Section 51 

and Section 52 of Article III of the Constitution 

of Texas for a county to pay a claim of a person 

for a loss suffered by such person for some act 

of the County Clerk or his deputies In the 

performance of their official duties, It would 

likewise be a violation of the same constitutional 

provisions for a county to pay the premiums on an 

-2943- 
Hon. Herbert Middleton, page 3 (c-607) 

Insurance policy which had as .lts purpose the 

paying of a claim predicated on facts which 

generated no county llablllty. In this same 

connection It was stated In Attorney General's 

Opinion No. O-1922 (1940) that: 

11 t. . . It'is fundamental that the 

county would have no authority to Insure 

against a non-existent llabillty.~n 

In this context the language of.the Court In Clotigh 

V. Worsham 

354 

74 S.W. 350 ($ex.Clv.App. 1903, error ref.) at page 

Is most appropriate: 

11 , 

. . . /T7he government Itself is not 

responsible for the misfeasances or wrongs or 

negllgences or omissions of duty of the subordinate officers or agents employed In the public 

service, for It does not undertake to guarantee 

to any persons the fidelity of any of the officers 

or agents whom it employs. . . .I" 

Statutes which are contra to the provisions of our 

organic law are void. They are no laws at all and therefore no 

rights may be acquired under them. Neither may acts or powers 

performed under an unconstitutional statute be justified or 

sanctioned upon the baals of Its provisions. 16 Am.Jur.2d 

403-404 Constitutional Law B 177; 9 Tex.Jur. 467, ConstltGtlona 

Law B 51; 39 Tex.Jur. 21, Statutes 6 8. 

"The foregoing rule has been deviated 

from by this court where It was shown that 

parties had obtained judgments In causes and 

the Legislature had enacted what was called 

Stay Laws, prohibiting the issuance of 

executions thereon for a certain period of 

time and where it was also shown that the 

partieshad obeyed the law before it was 

declared Invalid; and such rights acquired 

In such judgments are not destroyed by the 

period of limitation prescribed In such 

laws. Phillips v. Lesser, 32 Tex. 741; 

Sessums v. Botts 34 Tex. 

Wilson 35 Tex. $2; Id I3 

35; Cravans v. 

4 Tex. 324; Townsend 

v. Q&an, 36 Tex. 548i'Delesplne v. Campbell, 

52 Tex. 4. 

II 

. . . 

-2944- 
Hon. Herbert Middleton, page 4 (c-607) 

"We think there exists a sound distinction 

between a decision which holds that rights 

acquired under a judgment will be protected from 

limitation, where the parties obey a law before 

It Is declared void, and a decision which holdsa sale made under a void statute conveys no title 

to the land. In the first Instance the legal 

rights of parties already acquired are protected 

In spite of a void statute; while In the second 

Instance, If the sale of land under a void 

statute were sustained, the partles would not 

only have their rights already acquired protected, 

but would also gain rights under a void s,tatute. 

This court has held, and still holds, that 

original rights obtained under a judgment will 

be protected in spite of a void statute, but 

It will not extend the rule to protect rights 

acqulred.under such void statute." Sharber v. 

Florence 131 Tex. 341 115 S.W.2d 604 (1938) 

i&k, 

66f7 of 115 S W 2a* see also Sessums v. 

34 Tex. 335'(i8$). 

In the case before us, the sole authority for the 

procurement of the policy of Insurance and the payment of the 

premium by the county Is the statute which we have heretofore 

held unconstitutional. The fact that the policy ln question 

procured and remained In force for a period of time prior to 

our holding cannot supplant the absence of authority to pay 

premium. We can find no valid basis to support the payment 

the premium apart from the unconstitutional statute, therefo 

the exception to the general rule stated above has no applic 

Where the statute which authorized the procurement 

the policy and the payment of the premium Is unconstltutiona' 

we are without power to raise an Implied contract to pay the 

premium for the period the policy was In force; the Implied 

contract would run afoul of the same constitutional prohlplt: 

Edwards County v. Jennings, 89 Tex. 618 35 S.W. 1053 (1896) 

Noel v. City of San Antonio, 33 S.W. 263 (Tex.Civ.App. 1895, 

error ref.). 

In City of Tyler v. Texas Employer's Insurance Assc 

288 S.W. 409 (Tex.Comm.App. 1926) the Insurance corporation 

brought a suit to recover unpaid bremiums on a policy of work 

compensation insurance Issued to the City of Tyler covering 

certain employees of the city. The Court held that the Workn 

Compensation Act did not apply to cities; that Section 52 of 

Article III of the Texas Constitution denied to the Leglslatt 

the power to include cities within the scope of the Act or ac 

-2945- 
Hon. Herbert Mlddleton, page 5 (C-607) 

the payment of premiums for a policy of compensation Insurance. 

The language from page 412 of that opinion Is conclusive upon 

the question before us: 

"Viewed from another standpoint the Legislature would have no authority to include 

cities and towns In the act for the plan 

necessarily permits such cities and towns becoming subscribers to grant public money or 

thing of value In violation of the section of 

the Constitution already quoted. The purpose of this wholesome provision is to prevent the gratuitous appropriation of public 

money or property. The purposes for which 

. public money may be expended are clearly 

defined by law, and a grant In aid of or to 

any Individual, assoclatlon, or corporation 

whatsoever Is not one of these purposes, but 

Is expressly forbidden. When the Workmen's 

Compensation Law Is analyzed and fully understood, It Is clear that to permit a munlclpal corporation to become a subscriber to the 

Insurance association therein provided authorizes 

It to grant public money by way of premiums 

for Insurance In aid of Its employes to whom 

It is under no legal llablllty to pay. As already 

pointed out, the act contemplates compensation 

In the absence of any legal llablllty other than 

the acceptance of the plan. Cities and towns 

have no power to appropriate the tax money of 

Its citizens to such a purpose. It Is at best 

a gratuity, a bonus to the employe. The city 

might as well pay his doctor's fee, his grocer's 

bill, or grant him a pension. 

"It may be conceded that those employes of 

a city engaged In industrial work of a proprietary 

nature are as much entitled to the compensation 

provided by the act as are the employes of strictly 

private corporations. This is not the question. 

The question Is, Has the Legislature power, In 

view of our constitutional provisions and 

limitations, to authorize cities and towns to 

make such insurance for their employes? We have, 

with much hesitancy but after due deliberation 

concluded that the Legislature has no such powei, 

and that, if It had attempted to exercise such 

-2946- 
Hon. Herbert Middleton, page 6 (c-607) 

power, Its act would have been void. The wldsom 

of the Constitution Is for the people. Expediency 

will not justify a violation of Its provisions." 

In our opinion, Taylor County may not pay the shortterm cancellation premium for the policy of Insurance procured 

by the County Clerk. The policy insured against a llablllty 

for which the county was not responsible; the premium would 

purchase nothing for county purposes. Under such circumstances 

the payment of the premium would be an unauthorized grant of 

public money proscribed by Section 52 of Article III of the 

Texas Constitution. See also Georgia Casualty Co. v. Lackey, 

294 S.W. 276 (Tex.Clv.App. 1927, no writ history). 

SUMMARY 

Section 52 of Article III of the Texas 

Constitution prohibits the payment of a shortterm cancellation premium for a policy of 

insurance procured by the County Clerk of Taylor 

County pursuant to Section 4 of Article 1937, 

Vernon's Civil Statutes. 

Very truly yours, 

WAGGONER CARR 

Attorney General 

WGS:ml 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Paul Phy 

Kerns Taylor 

John Reeves 

John Banks 

Malcolm Quick 

APPROVED FOR THE ATTORNEY GENERAL 

By: T. B. Wright 

-2947-