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THEATTORNEY GENERAL 

OF TEXAS 

September 17, 1969 

Honorable Jesse James 

State Treasurer of Texas 

Drawer X 

Capitol Station 

Austin, Texas 78711 

Opinion tie. M-476 

Re: Whether funds held in deposit 

by chain store for the purpose 

of paying its own money order 

type drafts but which drafts 

are not timely presented, are 

Dear Mr. James: subject to escheat laws. 

Your recent letter requesting the opinion of this office 

reads in part as follows: 

"A chain store has established a new money 

order service for its customers, and is in compliance with the State of Texas 'Sale of Checks Law'. 

Store prepares forms of money order type drafts on 

one of store's bank accounts which is established 

for this service. Store has not established a 

trust or agent accounts. Store sells what are, 

in fact, its own bank drafts drawn against its 

accounts and secured by its assets. The creation 

of the new bank account for these checks is for 

ease of record keeping only. Store fills in the 

date and amount and such other relevant information 

as may be necessary, when customer purchases the 

draft. Store gives the original to customer and 

retains a copy for its internal purposes. The 

payee is not named at the sale time. The drafts 

are serially numbered and appropriate records are 

kept on each draft issued. A service charge is 

made. Store deposits the purchase money in the 

aforesaid account. The deposit remains therein 

until the draft is presented for payment. 

"Store prints on the obverse of each draft, 

'Void unless Presented within SIXTY (60) days', 

or words to that effect. Store dishonors any 

items presented after more than 60 days from the 

date of purchase. Moreover, store asserts the fouryear statute of limitations in any action brought 

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Hon. Jesse James, page 2 (M-476) 

to recover on any draft when said action is commenced after four years from date of issuance. 

“Record copies retained by store at the time 

of issuance are used for identifying items over 

60 days old. When an item goes over 60 days, 

the record copies are given further processing 

and a separate account is established. Funds 

equivalent to the face amount of the over-60- 

day items are transferred from the active account 

for drafts to the account for items which will 

be dishonored. For ease of operation, these 

changes appear on the books of store and do not 

involve a transfer of funds at the depository or 

the creation of a new bank account. 

"1. Are the funds which remain on deposit 

for those drafts which are not presented for payment subject to the escheat law of the State of 

Texas? (Article 3272a, Revised Civil Statutes) 

"If the above is answered in the affirmative, 

then the next question is: 

"2 . If subject to escheat laws and reported, 

is the affirmative defense of the Statute of Limitations available to the store so that proceeds would 

not be payable to the State upon demand, but only 

subject to being reported under the facts as presented?" 

Article 3272a, Vernon's Civil Statutes, requires that 

certain personal property be reported to the State Treasurer of 

Texas as property subject to escheat. The personal property 

covered by this article is defined in Section l(b) as follows: 

"The term 'personal property' includes, but 

is not limited to, money, stocks, bonds and 

other securities, bills of exchange, claims for 

money or indebtedness and other written evidences 

of indebtedness, dividends, deposits, accrued 

interest, purchase payments, sums payable on 

certified checks, certificates of membership in 

a corporation or association, amounts due and 

payable under the terms of any insurance policy, 

security deposits, unclaimed refunds and deposits 

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Hon. Jesse James, page 3 (M-476) 

for utility or other services, funds to redeem 

stocks and bonds, undistributed profits, dividends, 

or other interests, production and proceeds from 

oil, gas and other mineral estates, and all other 

personal property and increments thereto, whether 

tangible or intangible, and whether held within 

this State, or without the State for a person 

or beneficiary whose last known residence was 

in this State." 

Under the facts which you have presented, the chain 

store is indebted for the face amount of the drafts or money orders 

sold. The assets of the corporation secure the payment of this 

indebtedness. The term "personal property", as defined above, 

clearly includes an indebtedness of this nature. 

Property covered by the statutes is required to be reported by the holder if it has remained unclaimed by the rightful 

owner for a period of seven years. It is therefore patent that 

at the time the statute requires a report to be filed the periods 

prescribed by the two and four year statutes of limitation (Articles 5526, 5527, Vernon's Civil Statutes) would already have expired; and in those instances where such statutes would afford 

the holder a valid defense to an action by the owner for recovery 

of the property, such defense would have accrued at the time the 

report is required. However, this fact does not foreclose the 

question of whether such property is nonetheless required to be 

reported. 

It is a well settled principle in this State that the 

statutes of limitation do not destroy a debt but merely extinguish 

the remedy. Campbell v. Holt, 115 U.S. 620, 6 S.Ct. 209, 29 L.Ed. 

483 (1885); Hays v. Cage, 2 Tex. 501 (1847); Livesay v. First 

National Bank, 57 S.W.26 86 (Tex.Comm.App. 1933); Central National 

Bank v. Latham, 22 S.W.2d 765 (Tex.Civ.App. 1931, error ref.). 

A olea of limitations is an affirmative defense and is not availabie unless specifically set forth in a party's pleadings: it is 

a defense that may be urged or waived. Gillian v. Day, 179 S.W.2d 

575 (Tex.Civ.App. 1944, error ref.); Travis County v. Matthews, 

235 S.W.2d 691 (Tex.Civ.App. 1950, error ref. n.r.e.); Gard v. 

G, 244 S.W.2d 884 (Tex.Civ.App. 1951, no writ); 37 Tex.Jur.2d 

379-382, Limitation of Actions 5193. 

Our courts have held that a plea by the holder of personal property that limitations has barred the claim of the person for whom the property is held is a valid defense to an escheat 

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Hon. Jesse James, page 4 (M-476) 

action under Article 3272a in those instances where the nature of 

the obligation between the holder and absent owner is such that 

the limitation statutes are applicable. Southern Pacific Transport Co. v. State, 380 S.W.Zd 123 (Tex.Civ.App. 1964, error ref.); 

State v. El Paso Electric Co., 402 S.W.2d 807 (Tex.Civ.App. 1966, 

Dickie Mfg. Co., 399 S.W.2d 568 (Tex.Civ.App. 1966, error ref. 

n.r.e.1. 

Assuming, as stated in your letter, that the chain store 

in question is acting in compliance with "The Sale of Checks Act" 

(Article 489d, Vernon's Civil Statutes), Section 12 of that act 

makes a seller of checks, regardless of their form, liable for 

their payment according to the negotiable instrument laws of this 

State. We express no opinion upon the efficacy of the seller's 

addition of the words "Void unless Presented within Sixty (60) 

days" to the checks which it sells. It is our opinion that checks 

sold pursuant to "The Sale of Checks Act" create an indebtedness 

evidenced by a contract in writing and an action to recover upon 

such indebtedness would be subject to the four year statute of 

limitations (Article 5527, Vernon's Civil Statutes). 

Because the defense of limitations is one that may be 

urged or waived at the election of the debtor, we have heretofore 

held in Attorney General's Opinions C-475 (1965) and WW-1232 

(1962) that a holder of property subject to Article 3272a is required to file the report required by such article even though a 

plea of limitations, if asserted, would defeat the subsequent 

escheat of the property reported. We adhere to the holding of 

these prior opinions. 

You are hereby advised that in our opinion both of your 

questions must be answered in the affirmative. 

SUMMARY 

An indebtedness created pursuant to "The Sale 

of Checks Act" (Article 489d, V.C.S.) is subject to 

Article 3272a, V.C.S., and must be reported to the 

State Treasurer even though the escheat of such 

property under Article 3272a would be precluded by 

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Hon. Jesse James, page 5 (M-476) 

a plea that such indebtedness had been barred by the 

four year statute of limitations (Article 5527, V.C.S.). 

eneral of Texas 

Prepared by W. 0. Shultz 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Kerns Taylor, Chairman 

George Kelton, Vice-Chairman 

Roy W. Mouer 

Fielding Early 

James McCoy 

Fisher A. Tyler 

MSADE F. GRIFFIN 

Staff Legal Assistant 

HAWTHORNE PHILLIPS 

Executive Assistant 

NOLA WHITER 

First Assistant 

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