### OP TEXAS AUSTIN. **TRXAS** 78711

April 12, 1973 Honorable Martin D. Eichelberger Criminal District Attorney Waco, Texas 76701

Dear Mr. Eichelberger: Opinion NO. H- 

### 29 Re: Questions relating to the District Court’s power to regulate the handling of Minor’s funds deposited inthe registry ofthe Court, where no guardian has been appointed. You have asked a number of questions concerning the handling of a minor’s funds deposited inthe registry ofthe **court** by a next friend, pursuant to Article 1994, Vernon’s Texas Civil Statutes. There is no common law authority for a next friend or person other than a legally appointed guardian, towithdraw funds recovered by a minor and deposited inthe court. Prior to 1893, the courts held that the proceeds of ajudgment for the benefit of a minor were to be paid into the registry and to remain there until a legal guardian qualified or until the minor’s disabilities were removed. Galveston Gil Co. v. Thompson, 76 Tex. 235, 13S.W. 60 (1890); Galveston City Railway v. Hewitt, 67 Tex. 473, 3S.W. 705 (1887). In 1893 the Legislature adopted a statute authorizing withdrawal by a next friend when the interest ofthe minor inthe recovery did not exceed the value of $500. 00. (Acts, 1893, 23rd Leg., Ch. 6,~. 3). After numerous amendments both adding provisions and increasing the stated dollar amount, the statute is now found as Article 1994, Vernon’s Texas Civil Sta&es, and provides, inpart:

“Minors, lunatics, idiots or non compos mentis persons who have no legal guardian may sue and be represented by
‘next friend’ under the following rules: 1. In such cases when ajudgment is recovered for money or other personal property the value ofwhich does not exceed One Thousand Five Hundred Dollars ($1, 500.00), the court may by order entered of record. authorize’ such next friend or other p. 122Honorable Martin D. Eichelberger, page 2 (H-29)

person totake charge of such money or other property for the use .andbenefit ofthe plaintiff when he has executed aproper bond ina sum at least double the value of the property, payable to the county judge, conditioned that he will pay said money with lawful interest thereon or deliver said property and its increase to the person entitled to receive the same when ordered by the court to do so, and that he will use such money or property for the benefit of the owner under the direction of the court.

“2. The judge ofthe court inwhich thejudgment is rendered upon an application and hearing, interm time or vacation, may provide by decree for an investment ofthe funds accruing under such judgment. Such decree, ifmade invacation, shall be recorded inthe minutes of the succeeding term ofthe court . . . .” Itis clear, that, when the recovery exceeds the statutory amount, the provision for withdrawal does not apply. See for instance, Gulf Sea and S.F. Railway v. Younger, 45 S.W. .1030 (Tex. Civ. App., 1898, nowrit hist. ); Travellers Insurance Co. v. Calcote, 205 S.W. 2d 56 (Tex. Civ. APP., Fort Worth, 1947, err. ref., n.r. e.). Your first question is:

“(1) Whether or not the Court, after ordering the funds of the minor deposited inthe First National Bank, Waco, Texas, restricted so that none ofthe proceeds recovered byjudgment can be spent without a proper order of Court and bond as required by law, can by proper Court order, permit the next friend to withdraw the interest on sum invested for support ofMinor?” Ifthejudgment is for an amount less than $1,500.00, upon the posting of aproper bond, the court may permit withdrawal of the funds by a next friend. Ifthe amount is in excess of $1,500. 00, it cannot. Your second question is:

p. 123Honorable Martin D. Eichelberger, page 3 

### (H-29)

“(2) Could the Court approve abond by next friend indemnifying the minor against loss from use of interest until he is twenty-one, and permit the interest to be used for his education and medical attention? ” Ifthe amourit of the recovery exceeds $1, 500. 00, there is no authority, either at common law or by statute, for the court to permit the next fr,iend to withdraw interest to use for the minor’s education and medical attention. Your third question is infive parts all based upon the premise that the funds are invested in such manner that they may not be withdrawn without an order of the court and thus non bond is required bf~the next friend. Your first question asks:

“(3) 1. The Court enters order requiring funds on deposit to be placed inthe First National Bank by acquiring a Certificate of deposit from the bank, that expressly forbids the removing ofany offunds from bank, without order from Court, would the order so entered apply to the interest as well as the principal? ” It is our opinion that the order should forbid removing of any funds, including interest, without other order of the court. Your second questions asks:

“(3) 2. Ifthe order of Court depositing the funds does not apply to the interest on deposit, could Court, where no guardian has hem appointed, permit the interest to be paid under order of Court to the next friend for use and benefit ofminor, for his food, clothing, education, medical expense, etc? ” Even ifthe order entered by the court does not apply to interest on the deposit, nevertheless there is no authorization for the’court to permit the interest to be paid to the next friend ifthe initial recove.ry exceeded $1, 500.00. Your third question asks:

p. 124-

Honorable Martin D. Eichelberger, page 4 (H-29)

“(3) 3. If, the funds are apart of the certificate of deposit then where interest earned is less than $1, 500.00 ayear, would Court have power to permit the next friend to withdraw the interest as it accrues for support and benefit ofminor, ifabond by next friend was filed with District Court to cover the interest being used? ” The statutory authorization towithdraw any funds is dependent upon the amount of the initial recovery, not upon the amount ofannual interest and therefore, even though the interest earned is less than $1,500. 00, ifthe interest of the minor inthe recovery exceeds that amount, nothing may be withdrawn. You ask:

“(3) 4. Would the Court have authority under Art. 1994 as amended, where no guardian has been appointed, to set a bond large enough to cover the principal on deposit and amount of interest tobe earned, and restrict the spending ofprincipal, and permit by Court order the withdrawal of interest? ” Inour opinion the court would not have such authority. Your final question asks:

“(3) 5. Ifno, ‘what would the next friend have to doto comply with provision ofthe Statute which ‘no bond shall be required ofthe next friend in respect to such monies until the same are withdrawn from financial institution, ‘AT WHICH TIME THE COURT SHALL ORDER SUCH BOND TO BE MADE AS BE APPROPRIATE UNDER OTHER PROVISIONS OF THIS ARTICLE’
. Iffunds did not excee.d $1,500.00 in interest, why would not next friend’s bond protect minor and comply with statute? ” Under the circumstances ycu state, itmay very well be that the bond would protect the minor but the fact remains that there is no statutory authority to permit awithdrawal ifthe minor’s interest inthe initial recovery exceeded $1, 500~00. p. 125Honorable Martin D. Eichelberger, page 5 (H-29)

As we have indicated, the statute, and the cases construing it, leave little doubt butthat the provisions for withdrawal by the next friend upon posting abond apply only to those cases inwhich the minor’s interest in the recovery is $1,500.00 or less. Ifthe interest is greater than **that amount**  and it is thought desirable towithdraw the funds for use in the support of the minor, then the provisions of Part 3, Chapter 5 of the Probate Code must be followed. SUMMARY Where the interest of a minor ina recovery exceeds the amount of $1,500.00, neither Article 1994, Vernon’s Texas Civil Statutes, nor any other statute or rule of common law would authorize anext friend towithdraw a portion of the recovery or the interest on the recovery for the purpose of supporting the minor and paying his necessary expenses or for any other purpose. Very truly yours,

Attorney General of Texas

DAVID M. KENDALL, Chairman Opinion Committee

p. 126