HonorableTom C. King State Auditor Austin, Texas
Bear Sir: opinionNo. O-1480 Re: Validityof old age assistance warrantsheld by investors.
We are pleasedto complywith your requestfor OUT opinionon the followingquestionsubmittedby your letter of September22nd:
"If a financialinstitutionor investorshould buy $15O,OOO.OC old age assistancewarrantsfrom receipientsof old age as- sistance.or the holdersof such warrants,and heI. them in his/itsportfolio,would such holding in any manner affect the legalityof the instrumantaas an obligationof the state prior to the runningof the statuteof limitationon state warrants?"
As you point out in your letter,Article 4371,Revised Civil Statutes of Texas, 195, as amended,Acts 1931,k2nd Legislature,p. 396, Chapter242, 8 1, provides:
*The Treasurershall contersignand pay all warrants drawn by the Comutrolleron the Treasurywhich are authorizedby Law. No money shall be paid out of the Treasuryexcept a the warrantsof the Comptroller,and no warrant shall be paid by the Treasurerunlesspresentedfor paymentwithin two year5 from the close of the fiscal year in which such warrantwas issued,but claims for the paymentof such warrantsmay be presentedto the Legislaturefor appropri- ations to be made from which such claims may be paid."
Old age assistancewarrantsissuedagainst the "StateDepartmentof Public WelfarePund" under authorityof SenateBill No. 36, Acts 1939,46th Legislature,are unquestionably valid obligation5of the State payableout of said fund. Such warrantsare transferable,thoughnot negotiable. Their validitycannotbe in anyway affectedby the fact that they may be transferredto investorsand held by them so long as they are presentedto the State Treasurerfor payment"withintwo year5 from the close of the fiscal year" in which such warrantsare issued. Nor is suoh warrant holder'ssecurityof payment impairedfor failureto presentsuch warrantspromptlyto the Treasurerfor payment. Article 4386,Revised Civil Statutes,control5the paymentof thesewarrantsand providesthat: Hon. Tom C. King, Page #2 O-1480
,I . . . in the event of a questionand necessityarisingas to the priorityof paymentof any such warrants,they shall be paid in order of their serialnumber . . .II
In accordancewith this Articlethe Treasureris requiredto maintain in any fund out of which outstandingwarrantsare payable,sufficient money to pay such outstandingwarrantsat all times, before he may pay other warrantsbearinga subsequentserialnumber. See Williamson vs. FranklinCounty,94 S. W. (2d) 1190.
Yours very truly
A!LTORNEY GENERALOF TEXAS
51 Walter R. Koch
BY Walter R. Koch Assistant
APROVFaDSEP. 25, 1939 s/W. F. Moore FIRST ASSISTANT ATTORXEY-L
APPROVED OPINION COMMJTEE BP B. W. B. CHAIRMAN