Court Opinion

ID: 4137775
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:28:47.733398+00
Date Added: 2024-06-11T14:37:45.481555
License: Public Domain

AUWTIN ii. -
    PRICE DANIEL
    ATTORnrEY
          GENERAL

                                           February     4, 1950

       Hon. Jesse James                               Opinion   No. V-997.
       State Treasurer
       Austin, Texas                                  Ret   The procedure    for handling
                                                            funds of unknown stockhold-
                                                            ers deposited in the State
                                                            Treasury    under Senate Bill
                                                            402; 51st Legislature,   after
                                                            dissolution  of domestic cor-
        Dear   Mr.      James;                              porations.

                         Your    request    for an opinion is as followsi

                     *Please  note the enclosed file with reference to
               a deposit of $2.749.75, which we have just made to our
               Susperse Fund # 31 - Dissolution    of Solvent Corpora-
               tiO8S.
.

                       “Heretofore   deposits of this kind have been made
               as above to our Suspense~Account       where it remains for
               a period of seiea years, after whit+ it is es&sated     and
               transferred    to General   Revenue,

                       *However,  a new law was enacted              by the 51st Leg-
               islature,  Regular Session - see Chapter              576,

                      ‘This deposit was made by Baker, Botts, Andrews
               and Parish   of Houston for the W-K-M    Company of that
               city with request  that it be handled under the new law.

                        “Under the new law it would be escheated imme-
               diately.    The new law also requires  that the state adver-
               tise the amounts and owners of the money being held by
               the state.

                      “If this money is immediately    escheated and de-
                                                             .
               posited in General   Revenue, it would require   court ac-
               tion on the part of owners in order to get their maney
               from the state,   Heretofore  all that has been necessary
               was for owners to furnish.proof    of ownership.

                      “Pending your reply this money has been placed
               in Suspense.   We should like very much to have you an-
               swer the following questions;
              “1. Can the cost ef..4&ertiring          be taken out of
       thir deposit?

              “2. Should the tnotsry r4main.in Suspense Ac-
       cumt a reasonable    l4ngtb #f tieri to see if any @r+rt,
      ‘VP all, is claimed by 4wn4r,s’? If so, how long s.h4uld
       itremain   in Suspense udil~ it ic transferredto   Gen-
      ~erqt ~Revonue?

             YYour’answ4r        tt~,theee questions     will   be appre;
       CkUed,”

                2%~ statutc nscesrrry  for us to construe in order te
.aaewr    131 Tex. 175, 114 S.W.Zd 216
01936) 1 thi           the court had before it the statute pertaining   to
funds &elaq~gct~~a       estate, where the parties entitled thereto did
not demand their share of the estate within six months after an or-
der approving the report of the commissioner6       of partition.  The
significant provision of the statute considered    by the court direct-
ed that the funds in estate cases be paid to the State Treasurer,      and
not into the State TrOaSUry.     The Court said1
Hon. ;esse   James,   Page. 7 (V-997)

              “A careful anatysis of ths objdcts sought to be
      attafned by the passage of these articles,         3644 to 3660.
      clearly   excludes the fdea that the money should be placed
      in the general revenue fund and be pub)ect to payment
      oaly by hgislatfve     approprfations.      Nor do we thfnk that
      ths p?wisions     of articles   4371 and 4386 of ths Revfsed
      Civil Statutes, as amended, Vernon’s Ann. Civ. St. arts.
      4371,4386,     control this case, or that the Legislature         in-
      tended, by the enactment of those two articles,          to amend
      or change the mode of procedure described, in articles
      3644 to,3660.     The clear purpose of the law; as we con-
      strue it, is that the treasurer       shall keep a record   of such
      funds, and be prepared       to pay claimants     the amounts due
      them when the law has been complied with, In other
      words, the State Treasurer        becomes a custodian or trus-
      tee by virtue of ths articles      of’the ‘statutes.  Smith et al.
      v. Paschal-    ef al., Tex. Corn. App. 1 S.W.Zd 1086/s;,’
                                                                   ,~ .~.
              Siinllar language is used in .thc statute tinder”+asidera-
tion, for it provides that the funds be paid .to the State Treasury      and
not into the State Treasury.     ‘Thus it is quis manifest that the Leg-
isla=     did not intend to treat these funds as e&heated       ~funds. The
fact that the Js8islature   saw ‘fit to adopt part of the eschedt statute
in providfng a remedy for claimants,       does not necessarily     mean that
the funds are escheated     to the State by the act itself and that the en-
                                                            ,’ ..,:*.,
tire escheat statute applies,
                                                     ,.
              It is ‘observed iaat’ in the statutes adoptea bye the Legis -
lature as the necessary procedora!          statutes (Arts. 3286-3287, V.C.S.)
quoted above, Article 3287 provides,          “but without inteiest   or costs,*’
which means without       interest or dosts to the State. Sin&e the Leg-
islature  in this act has directed that the State Treasurer         upon re-
ceipt of the funds shall advertise       in one issue of some newspaper of
general circulati6n.h       Travis   County that he has custody of the funds,
and prescribes     the’information     that the advertisement    shall,contain,
but makes no speciftc provision         as to compensation,    we think it may
be reasonably     inferred that thfs cost may be approprfately         taxed a-.
gainst the funds in the same manner that the cost is taxed against
es&sated    funds.    This provision of the statute in regard to adi+er-
tising is for the benefit of claimants        of the fund andnot the State,
hence it should,bear      the cost of any precautionary      measures    pre-
scribed by the Legislature        for the benefit of any bona fide claimants
to the fund,

              We therefore answer your first question in the ~affirma-
tive. That is, the coat of advertising is to be taxed against the funds
so deposited.

              Since the procedural   statute here adopted fixes a mfni-
mum period     of ‘time within which claimants   shall file ,suft, as fn ~.

                                         ‘,.
      ion.   Jesse James,   Pa& 8 (V-997    )

      es&eat     proceedings,  which under the statute fs four years from
      the date of the judgment, you should hold the funds, less the cost of
      advertising,    in suspense for a period of four years from the date
      of the receipt of the funds, If at the expiration of that period no
      suit has been filed as prescribed     in the procedural   statute adopted,
      the funds should then be transferred to the general revenue. Of
      course, ff in the intervening time a clafmant has filed suit as pre-
      scribed by statute and should prevail, the funds will be available
      without appropriation    by the Legislature    to pay claimants who have
      judicially   established their title to the funds.

                                      SUMMARY

                      Funds belonging to unlocated stockholders of dis-
              solved corporations paiq to the State Treasurer       as pro-
              vfded in Senate Bill No. 402, AC@ Slut Leg.,, R.S.’ 1949,
              ch. 576, p, 1122 (Art.‘l395a,    V.C.S.), should bekept in
              a *uspense account for a period of four years.from       the
              date deposited, unless the owner or. owners of such funds,.,
              establish title thereto before. the expiration of four years
              from the date of deposit,     Claimants   may establish own-.
              ershfp and title. to such funds within four year.6 from the
              date’transferrhd   to &theState Treasurer    in the same man-
              ner as provided by law ‘for establishing     ownership and
             ‘title to escheated funds.

                    The cost of advertising   by the State Treasurer  in
‘..          the manner prescribed     by Article  1395s should be charged,
             against the funds.

                                                        Yours very truly,

      APPROVED8                                         PRICE DANJEL
                                                       Attorney General
      ,w. v. Geppert
       Taxation Division

      Charles  D, Mathews
      Executive Assistant
                                                        By&ToCdAssistant

      LPL/mwb