Court Opinion

ID: 4140434
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:58:58.383908+00
Date Added: 2024-06-11T14:46:32.818836
License: Public Domain

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State Board of Education      of Texas
Austin, Texas
                                         Opinion No. O-5879
                                         Re: Are the Polk County 4% Road and
                                              Bridge Refunding Bonds of 1936
                                              callable under the provisions  of
                                              Articles  720 and 725 of the Re-
Gentlemen:                                     vised Statutes of 1925.

                Your letter    of June 12, 1944,   is as follows:

                “At its meeting on June 5th the State Board of Educa-
       tion was advised that the County Treasurer    of Polk County had
       issued a Notice of Call, in accordance  with the provisions   of
       Article 725, Revised Statutes of Texas,  1925, of the following
       described bonds now held for the account of the State Perma-
       nent School Fund:

                “POLK COUNTY 4% ROAD AND BRIDGE REFUNDING
       BONDS, dated October 10, 1936, bearing interest at the rate of
       4% per annum, original amount of issue $114,000,    balance out-
       standing $84,000,  maturing $5,000 in each of the years October
       10, 1944 to 1955, both inclusive, and $6,000 in each of the years
       October 10, 1956 to 1959, both inclusive.

                “Following the instruction     of the Board,    I desire   to re-
       quest your opinion on the following     question:

                  “Are the above-described  POLK COUNTY 4% ROAD
       AND BRIDGE REFUNDING           BONDS callable under the provisions
       of Article  725, Revised Statutes of Texas,  1925?”

                  Investigation   of the record on file with the Comptroller    of
 Public Accounts discloses      that the October 10, 1936 Polk County Road and
 Bridge Refunding Bonds, described        in your letter, were issued by Polk
County for the purpose of refunding, $114,000.       then outstanding of an issue
 of road and bridge bonds bearing 55% mterest,         issued by the county under
date of July 1, 1929, under the authority of Article       718, Revised Statutes
 of Texas,  1925.   The original bonds of 1929 expressly       retained an option
 of redemption five (5) years after their date. The refunding bonds of 1936
were issued under the authority of Article        725 of the Revised Statutes of
.1925, but these bonds did not contain an express contractual         provision where-
 under they might be redeemed before maturity.

                Article   720 of the Revised   Statutes    of Texas.   1925,   reads   as
follows:
‘State Board   of Education,     page 2 (O-5879)

                 “All bonds issued under this chapter shall runnot
         exceeding forty years, and may be redeemable     at the plea~a-
         ure of tha county at any time after five years after the is-
         suance of the bonds, or after any period not exceeding ten
         years, which may be fixed by the commissioners      court.”

                  This Article is contained in the same Chapter of the Stat-
utes as is Article    718, under which the original bonds of 1929 were issued,
and Article   725, under which the 1936 refunding bonds were issued.          The
Supreme Court has construed this Article as being applicable to bonds is-
sued under Article     725 so as to make such refunding bonds redeemable         af-
ter five years from date in the event no express contractual         provision for
redemption before maturity of such bonds is provided for by the commis-
sioners’ court at the time such bonds are issued.       Bexar County v. Grover
Sellers,  Attorney General, et al, 178 S.W. (2d) 505.      This decision controls
the question submitted and you, therefore,      are advised that the Polk County
Refunding Bonds described       in your letter are subject to call at this time
upon reasonable     notice, pursuant to the provisions   of Articles   720 and 725
of the Revised Statutes of Texas,      1925.

                                           Yours      very   truly

                                           ATTORNEY           GENERAL       OF TEXAS

                                           By   /s/    Gay-nor Kendall
                                                               Gaynor Kendall
                                                                    Assistant

GK:EP/cm

APPROVED        JUN 22,   1944

/s/   Geo. G. Blaekburn

Acting   ATTORNEY      GENERAL        OF TEXAS

                                                                        APPROVED
                                                                     Opinion Committee

                                                                     BY /s/ BWB
                                                                        Chairman