AUSTIN ~LTExASI
November 20, 

### 1957

Veterans' Land Board OpinionNo.WW-263 General Land Office Austin 14, Texas Re: What procedure is necessary for theVeterans' Land Board Dear Sir: to replace lost bonds?

You advise this De artment that "theholder ofVeterans' Land Bonds numbered 8 '76through 

### 8885,Series 

### 1954, f; has lost such bonds and has requested that such be replacedby the Board", and you request our opinionrelative to the procedure to be followedby the Board.

The State of Texas, acting by and through theVeterans' Land Board, issuedunder constitutionaland legislativeauthority 15,000 of its bonds, each of the denomlnation of one thousanddollars, aggregating fifteenmillion dollarsand, collectively, designatedas The State of TexasVeterans' Land Bonds, Series 1954.

The bondswere approved by theAttorney General, registeredby the Comptrollerof PublicAccounts, and sold on the market.
Ten of thesebonds held by the same owner are now alleged to have been lost. The bondswere not registeredas to ownership. Consequently, they constitute ten general obligation bonds of the State of Texas, payable to bearer in the principalamount of one thousanddollars each, bearing 2f$ interest,with coupons attached for semi-annualInstallments thereof. The principal sum not fallingdue until June 1, 

### 1979, therewere at the time of issuance fifty couponsannexed to each individualbond. Each coupon is payable to bearer.

Section 49-b of Article III, Constitutionof Texas, is the basic law underlying the issue of bonds. The leglslative enabling act is contained in Article %21m, V.C.S.

The applicableportion ofArticle !?t21m is found in Section

### 3 in the following language:

"All bonds issued under the provisions of this Act shallhave, and are hereby declared to have, all, . \
>

Veterans' Land Board, page 2 

### WW-263)

of the qualitiesand incidents of negotiable instrumentsunder the laws of this State. The Board (Veterans'Land Board) is fully authorized to provide for the replacement of any bondwhich might have become mutilated, lost or destroyed." (Insertours) Although authorizing theVeterans' Land Board to provide for the replacement of any bondwhich might have become mutilated, lost or destroyed, theAct itself does not state any method or procedure for the replacement of bondswhich are eithermutilated or have been lost or destroyed. However, Section 21 of Article $21m, V.C.S., provides in part as follows:

*The Board is hereby authorized and empowered to make and promulgate suchrules and regulations under thisAct as they shall deem to be necessary or advisable, and to enforce the same."
It is the opinion of this office that although the Legislaturehas not specificallyprovidedany statutorymethod for the replacement of bonds issued under the provisionsof Article %21m, V.C.S., which have been mutilated, lost ore destroyed, the Veterans' Land Boardhas the power to promulgate reasonablerules and regulations providinga method for-the replacement of any bondwhich has beenmutilated, lost or destroyed. In promulgating such rules and regulations, itwill be necessary that the Board provide for adequate and completeprotection for the State of Texas against the possibility that the originalbonds alleged to be lost or destroyedare presentedfor payment, thereby creating a double liabilityagainst the State of Texasupon a single obligation.

As a suggestion,we point out that any rules promulgated by your Board should include the following safeguards:

If the bond or coupon is claimed to be lost or destroyed, the owner shall furnish the Board:

(1) Broof of ownership. (2) Proff of loss or destruction. 

### (3) Execute and file with said Board an indemnifying bond in a sufficientamount to be approved by said Board and the Attorney General, conditioned that the parties thereto shall pay all and any loss or damage thatmay be incurred or sustained by the State on account of the bonds and coupons so claimed to be lost or destroyed or those issuedas replacements therefor,Veterans’ Land Board, page 3 (Ww-263)

and conditioned further that the applicant will hold the State harmless and ~I.11 return to the Board, upon demandbeing made theref or, such duplicate bonds and coupons, or the amount of moneynamedtherein. The indemnity bond in this case should run to the State of Texas payable to the Governor, for the benefit of the Board and its fiscal and/or paying agent, and cover a period of time extended four (4) years beyond the maturity date of the bonds.

(4) The replacement bond and coupons should be of substantially the same form and tenor as those originally issued, except that they will be signed by the appropriate persons in office at the time of such re-Issuance. In addition each bond and coupon will state on the back thereof that it 1s issued in the place of such bond or coupon claimed to have been lost or destroyed and that adequate security for the payment thereof at maturity is filed with said Board.

(5) Further each coupon and each bond shall have endorsed on its face by the Board the word WDUFTJCATE”, or “REPLACEMENT”,

together with the date of its issuance, (6) The replacement bonds with appurtenant coupons shall be approved by the Attorney General and shall be reglstered as such by the Comptroller 

### of Public Accounts, State of Texase (7) All costs of preparing and Issuing the new bonds and coupons should be borne by the owner.

Neither Article III Section 49-b, Constitution 

### of Texas nor Article 5+&m V.C.S provides any speciflc’method for the repiacemeni’of ’ mutilated, lost or dsstroyed bonds ,issued by the State 

### of Texas through the Veterans t Land Board. TheVeterans ’ Land Board is authorized and empowered to makerules and regulations to provide for the replacement of such bonds which have been mutilated, lost 

### or destroyed. Yours very truly, WILLWILSON Attorney Gen6iU of Texas

CKFtrztrwb 

# BY

&&$&i&k Agsistant- . _

Veterans' Land Board, page 4 (WW-263)

APPROVED: OPINIONCOMMITTEE W. V. Geppert Mrs. Marietta McGregor Payne Milton Richardson Richard Stone Weyland Rivers