# Tmz A~IRNEY GENERAL

GERALD C. MANNx-mAITGENEY GENERAL 

## OF’ TEXAS **Au-.** 

## 11.

TBxAn

Honorable JCSECJames State Treasurer **Austin,** Texas Dear Mr. James~: Overruled by O-7410 insofar as it conflicts. Opinion No. O-4535 Re: **Assignment** ofvendor’s lien notes to State Treasurer. In**your** letter ofApril 10, 1942, you state the Southern Guaranty Company, Ltd. has depoatted with the Board of Insurance Commissioners, tobe held by the State Treasurer, various vendor’s lien notes, under Article No. 4982 ofthe Revised Civil Statutes.

You ask, ?Is it necessary for us to have assignment of lien covering thes,e **notes;** if so. should they be made tothe ,StateTreasurer or to the Board of Insurance Commisaionere, and should they be placed on rec,ord inthe county where tha property hislocated 7*

These notes are evidently deposited with you under Article No. 4983, rather than Article 4982, and our answer is based onthis assumption.

Article.4982. ofthe Revised Statutes, relates tocertain powers that may be exercised by association ofpersons and corporations when~it ~hascomplied with thenlaw.

Article 4983 provides that in or&r to qualify under Article 4982, itis ngcessary for~the association or corporation to “Deposit with,the Stats Treasurer $50,000.00 consisting of cash, treasury notes ofthe United States, or government, state,,countB municipal or other bonds, notes ,or debentures, secured by first mortgages or deeds oftrust, or mortgages or de.eds of **trust** onunincumbered re,al estate in Texas worth at least double the amount loaned thereon, or such other first-class **securities** as the Commissioner **may** approve.”

Iu order that the vendor’s lien may be effective, it csnecessary that if the note is assigned a,scollateral, the lien must also be transfe,rred in writing, and be place,d of record. This is necessary in order to prevent theHonorable Jesse James, Page 2 (O-4535)

lien securing the note from being released by the party towhom it is payab.le. Ittakes an assignment ofboth the note and lien securing same to comply with the provisions ofArticle 4983 ofthe statutes,.

We therefore answer your inqutry that before you accept the vendor’s lien notes as a deposit under said’ 

### statute, you should have a transfer ofthe lien **securing** the notes made to you’as.State Treasurer, in **trust,** tobe held by you under the provisions ofArticle 4983. By placing said language in ~thetransfer, itwould be notice to any purchaser ofthe land against which the notes may be lien that the State Treasurer was holding the notes intrust, and

.that before he could obtain a release he would be compelled to obtain a release .fr.om the State Treasury,

Ifat any time the company depositing the notes with you desired to .withdraw same and substitute other securities, then, as State Treasurer, you rould either release the notes or retransfer the original notes and accept the new ones inlieu~thereof. ifthe new securities ‘were ~eligible as such under said statute.

In addition to having the,notes transferred toyou, before the notes are accepted an abstract should be furnished showing that the,notes are a first lien onthe land. You should then hold the abstract, together with the transfer ofthe notes inyour possession, after having first filed the tr~ansfer for record in the county where the land is located.~ The expense incident to recording the transfer ofthe notes should be borne by the depositor. Before you are authorized to accept any securities for deposit the same must be approved by the Board of Insurance .Commi&ioners. Itis the duty of said Board to appraise the securities and pass upon the question as towhether the real estate securing the notes is worth at least double the amount ofthe notes. It is a,lso the duty of said Board to~have ~thetitle examined and determine that the notes are a first lien onthe land. All ofthis expense is to be borne by.the depositor. t’

**You~are** advised that this Department has under consideration a request~fr,om the Board ~of**Insurance** Commissioners as towhether the Southern Guaranty Company, Ltd. is competent to qualify under Articles 4982 and 4983, This opinion is not to be interpreted as answering said question. We are answ,r-, ing 

### your question at this time because of its importance as it relates to

### your general duties under said statutes. APPROVED APR 24, I942 /s/ Grover Sellers FIRST ASSISTANT ATTORNEY GENERAL GWB-MR:tiw APPROVED OPINION COMMITTEE By /s/ BWB, Chairman Very truly 

### yours ATTORNEY GENERAL OF TEXAS By /s/ Geo. W. Barcus

Geo. W. Barcus, Assistant