No. 3088 C. H. Lewi.8v. Ind. School Did,. of Austin,Sup. Ct., involvesthis question. . INSURANCE- MUTUALCOMPANIES
1. Countiesand other politicalsubdivisionsmay not legallyinsurepropertyin mutual fire in- surancecompaniesbecauseof the prohibitions containedin Section52 of Article3 of the Texas Constitution.
2. That part of section6 of the Acts of the Forty-firstLegislature,FirstCBlled Session, Chapter40, p. 90, (Vernods AnnotatedCivil Statutes,Article4860a-8) purportingto give public corporationsthe right to purchasein- surancein mutual companiesla unconstitution- al, being in violationof Section52 of Art. 3 of the Texas Constitution.
(This.opinion overrulesConferenceOpinion No. 2880)
OFFICE OFTHN AT'i?OHNFX GENERAL September20, 1939
Hozl E. G. Moseley ...CidlDistrictAttorney Dallas,Texas Att'n: Hon. Harold McCracken,Assistant
Dear Sir: ,OplnlonNo. O-924 Eon. E. G. Moseley,page 2, (O-924)
Re: Can the countyof D&as obtain in- surancein a mutual fire or casualty commwithout violatingthe laws of the state of Texas?
This office is in receiptof your inquiryas statedabove. In view of the importanceand difficultyof the questionas reflectedby the variousrulingsheretoforemade by this Departmentduringformeradminietra- tions,and the lack of Judicialexpressionby the Courtsof Texas on the exact point involved,ve have undertakento reviewall available authorities on the subject.
The first expressionof the AttorneyGeneral'sofficewe have found appearsin a letter opiniondated August 8, 1919,writtenby Assistant AttorneyGeneralE. F. Smith to Eon. Fred L. Blundell. In that opinionit ., was held that schooltrusteeswere not authorizedunder the law to insure schoolbuildingsor propertyin mutual fire insurancecompanies. The reason given was that .amutual fire insurancecompanywas to a certainextent a partnership, No authoritywas quoted. (Letter opinions,AttorneyGeneral, Vol. 230, p. 235).
The first conferenceopinionon this questionwas renderedto Miss Annie Webb Blanton,State Superintendentof Public Instruction, on June 14, 1921, by AssistantAttorneyGeneralL. C. Sutton. Holdingeach member of a mutual companyto be in the insurancebusinessthe opiniondenied authori- ty for an independentschooldistrictto insurewith a mutual fire insurance company. (ConferenceopinionNo. 2361, AttorneyGeneral,Vol. 56, Conference s opinions,p. 274).
It Is to be noted opinionNo. 2361~~1 approvedas a conferenceopinion by AttorneyGeneralC. M. Cureton,now Chief Jueticeof our SupremeCourt. c On June 27, 1923, Mr. Sutton,the author of opinionNo. 2361, supra, wh;te a letteropinionto Hon. S. M. N. Marrs, State Superintendent of Pub- lic Instruction,holdingthat becauseof the languageof Senate Bill 213 (Cn. 180, page 392, GeneralLaws, Thirty-eighthLegislature, RegularSession, 1.923 1, authorizing public or private corporations,boards or associatedto hold policiesin any mutual insurancecompaniesorganizedthereunder,that echo01districtwould come within the purviewof the words "publiccorpora- tion" and thereforehad authorityto insure schoolbuildingsin such mutual companies. (Letteropinions,AttorneyGeneral,Vol. 260, p. 219).
A letter opiniondated April 22, 1931, writtenby AssistantAttorney GeneralGrady Sturgeonto Hon. Frank W. Martin,held the Legislaturewithout constutut~ionalauthorityto sanctionmutual insurance.bycounties,cities or schooldistricts. He cited Section52 of Article3 of the Constitution, assertingthat.ipsurance by counties,citiesand schooldistrictin such companieswould be in derogationof such constitutional provision. (Letter opinions,AttorneyGeneral,Vol. 320, p. 745). Hon. E. G. Moseley,page 3, (O-924)
The most recent conferenceopinionon the subjectbefore us was written by AssistantAttorneyGeneralEverettF. Johnsonto Hon. S. M. Ii.Marre on March 23, 1932. The opinionreviewedthe authoritiesat the time, and held it permissiblefor counties,citiesand schooldistrictsto purchasesuch i~nsurance . The opinionheld.political subdivisions did not violateeither section52 of Article3 or section3 of Article11 of the Constitutionof the state of Texas. The opinionwas based on the statutoryprovisionsof Chapter9, Title 78 of the RevisedCivil Statutes,as amended. All prior