OAG 40-53.

• Case Date: September 05, 1940
• Court: Oregon

Oregon Attorney General Opinions 1940. OAG 40-53. 63OPINION NO. 40-53[20 Or. Op. Atty. Gen. 63]School districts not authorized to procure insurance to indemnify lessor of vehicle used to convey children. Such districts have no authority to purchase a school bus on conditional sales contract providing that rental shall be applied in payment of purchase price of the vehicle. September 5, 1940.Hon. Rex Putnam,Superintendent of Public Instruction. Dear Sir: I have your letter of July 24, 1940, submitting three blank forms of rental or lease agreements covering the use of school bus equipment, and requesting my opinion upon the following questions:

"1. Can a union high school or first-, second-, or third-class district legally enter into the rental or lease agreement, marked Form 'A', covering the use of school bus equipment for a period of one year?

"2. Can a union high school or first-, second-, or third-class district legally enter into the rental or lease agreement, marked Form 'B', embodying additional options which the district may exercise, covering the rental of school bus equipment?

"3. Can a union high school or first-, second-, or third-class district legally enter into the rental or lease agreement, marked Form 'C', embodying an offer on the part of the lessor to convey title to such leased equipment to the district, upon their written request for such conveyance?"

64In paragraph 7 of form "A", in paragraph 9 of form "B", and in paragraph 12 of form "C", appears the provision that the lessee (the school district) shall insure said equipment against collision or accident in any form, and that the said lessee shall hold and save the lessor harmless from any claim of any kind whatsoever on account of the operation of said equipment while in the possession of the lessee. It would appear that this provision includes liability insurance against damages for injuries sustained by any person on account of the operation by the school district of such bus equipment. It is well settled that a school district is not liable for such injuries, and has no authority to expend the funds of the school district intended for the education of its school children in payment of premiums on insurance to indemnify the district against liability which does not exist...