Mr. William J. Murray, Jr OPINIONNO. WW1217

Chairman, Railroad C&&ssion of Texas Re: TribuneBuilding Austin, Texas

Dear Mr. Murray: What constitutes sufficient compliancewith Article 1440, V.C.S. and Article 1054V.P.C. requiring the payment of interest on utility customer's deposits.
You have requested that this office reconsider a letter opinionwritten to Honorable W. S. Bussey, Chief Weights and Measures Division,Department of Agriculture, datedMarch 26, 1936 and filed In Book 370 at page 937 In our opinion files. That opinionheld thatArticle 1054 of the Penal Code made itmandatory for private utilities to pay theprescribed sixper centper annum Interest on meter deposits on the first day of January, of each year when service Is not discontinued sooner,whether demandedby the depositor or not, and that payment upon demand did not satisfy the requirements of the statute.

Article 1054 of Vernon's Penal Code contains the identical language set forth in its companion civil statute,' which is Article 1440Vernon's Civil Statutes, except for the addition of the last sentence containingpenal provisions. Article 1440 is as follows:

"Everyperson, firm, company, corporation, receiver, or trustee engaged In the furnishing of water, light, gas or telephone servicewhich requires thepayment on the part of the user of such service a deposit ofmoney as a conditionprecedent to furnlshing such service, shallpay sixper centper annum on such deposit to the onemaking the same, or to his heirs or assigns, from the time of such deposit, the same to be paid on the first day of January of each year, or sooner If such servicebe,discontil,lued. When such service is discontinued, such deposit, togetherwith any unpaid interest thereon, or suchpart of such deposit andMr William J. Murray, Jr, page 2 (W 1217)

unpaid interestnot consumed in bills due for such service, shallbe returned to such depositor,his heirs or legal representatives."
As you point out In your request, the 1936 letter opinion referred to above applied a strict and literal interpretation of ,thestatute In order to reach the rulingmade.

In order to determine the true sense of the Legislature,we think it Is helpful to quote the emergency clause of the original statutebefore its codification in 1925, which was Section 6 of House Bill 86, 38th Legislature:

ne -

---ET3 more revenue to properlymalntai: State Government and the crowded condition of the calendar createsan emergency and lmperativepublic necessity, requiring that constltutlonal ruleproviding thatbills shallbe read on three days be suspendedand the same Is hereby suspendedand that thisAct shall take effect and be in force from and after Its passage, and it is so enacted." (Emphasisadded)
From the foregoing, it is apparent that the primary concern of the Legislaturewas the fact that such deposits were not earning interestprior to the passage of the Act, and that during that period,many failures of such companieswere occurringwith no protectionbeing afforded the depositors.

A strict and literal Interpretationof Article 1054 and Article 1440 would require that all such companies either seek out their depositors and tenderpayment on the first day of January of each year or that the depositors actually appear at the companies'offices on New Year's Day.

New Year's Day Is a holiday, andmany persons are away from the cities of their residenceon that day. IfMr. William J. Murray, Jr., page 3 (WW1217)

payments were to be mailed theywould not be delivered on New Year's Day, for this is a holiday for postal employees. It Is therefore clear that a strict and literal Interpretation of these laws would require something impossible of performance. We do not believe that the legislature so Intended.

Sutherland on Statutory Constructionat Section 4706 gives the rule to be applledhere:

"The literal interpretationof words of an Act shouldnot prevail If it creates a result contrary to the apparent intention of the Legislature and If words are sufficiently flexible to admit of a constructionwhich will effectuate the legislative intention. The intentionprevails over the letter, and the lettermust If possiblebe read so as to conform to the spirit of theAct. 'Whilethe intention of the Legislaturemust be ascertained from thewords used to express ,it,themanifest reason and obviouspurport of the law shouldnot be sacrificed to a literal interpretationof suchwords.'"
In Wood v. State, 133 Tex. 110, 126 S.W. 26 4 (1939), the Supreme Court of Texas said:

"It is the settled law that statutes should be construed so as to carry out the legislative Intent, and when such Intent is once ascertained, it shouldbe given effect, even though litera?meaning of thewords used therein is not followed. Also, statutes shouldnever be given 2 construction that leads to uncertainty, injustice, or confusion, if it ispossible to construe them otherwise." The case of Commonwealthvs. Kentucky Power and Light
=Y77 S.~W.2d 395 [Ky somew at analogous stat&e, Ct A 1934) hlhi ld has beezPcalled t: o& a~~&~~on~ and is cited for the proposition that the Texas statutes are satisfiedwhen Interest Is paid upon demand only.

It is thereforenecessary to examine the Kentucky law construed In Commonwealthvs. Kentucky Power and Light Company, suora, and comnare its wording with the Texas statutes. The Kentucky law there construed is codified as Sections 2223-l, 2223-2, m. st. supp., 1933, and is quoted below:.

Mr. William J. Murray, Jr., page 4 (WW 1217)

"AnAct to require a public utility to pay Interest at the rate of six (6) per cent annually on the amounts they exact as deposits as security for thepayment of gas, electric and water accounts.
"Be It enactedby the GeneralAssembly of the Commonwealthof Kentucky:
"Sec. 1. That public utilities, such as gas, electric and water companies shallbe required to pay holders of certificatesof deposits six (6) per cent annually on amounts exacted from patrons for gas, electric and water accounts. "Sec.2. Failure to complywith the above Section shall subject the Utility Company violating saidprovisions to Indictment and prosecution and upon conviction to a fine of not less than One Hundred ($100.00)Dollars for each offense." The Kentucky court treated the obligation topay annually as being analogous to a demand note, and held that It was not necessary for the company to seek out Its depositors each year and thrustupon them an interestpayment.

It shouldbe noted, however, that the Kentucky law did not contain the specificdirective thatpayment be made each year. For this reason, the Kentucky case is not in point.

In this reconsiderationof Letter Opinion of March 26, 1936, referred to above,we have limited outselves to the first two questions answered. Those two answers and any other opinion in conflictherewith are expresslyoverruled and it Is the opinion of this office that Interest Is to be paid annually whether demanded by the depositor or not and that it Is not mandatory upon thepersons, firms, etc., requiring service deposits, to pay theprescribed six per cent Interest on the first day of January of each year.

We hold thatpaymentmay be made after the first day of January of each year on some date reasonably close to the first day of January and upon a regularbusiness day..

Mr. William J. Murray, Jr., page 5 (WW1217)

SUMMARY
Interest is to be paid annuallywhether demanded by the depositor or not. It is not mandatory that the persons, firms, etc., requiring servicedeposits,pay the prescribed six per cent interest onthe first day of January of each year. Such paymentsmay be made upon a business day reasonably close to the first day of January. To the extent of its conflictwith this opinion, Letter opinion to Hon. W. S, Bussey, Chief Weights and Measures Division, Department of Agriculture, datedMarch 26, 1936, filed in Book 370 at page 937. Attorney General's Opinion files and other oplnjorn.Lnconflictherewith, are overruled. Very truly yours WILL WILSON Attorney General

Assistant HB/fb
APPROVED: OPINION COMMITTEE Henry Braswell, Chairman J. C. Davis Vernon Teofan Pat Bailey Ben Harrison
REVIEWED FOR THE ATTORNEY GENERAL By: Leonard Passmore