Court Opinion

ID: 4135388
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:01:37.868977+00
Date Added: 2024-06-11T12:33:19.771099
License: Public Domain

OIWiWEY          EN
                    OF      TEXAS
                   AUSTIN    II. TEXAS
                         Mar 3, 1963

Honorable Jesse James                Opinion No. C- 72
State Treasurer
Capitol Station                      Re: Authority of the State
Austin, Texas                            Treasurer to dispose of
                                         certain personal property
                                         transferredto the
                                         Treasurer by the State
                                         Banking Commissionerfor
                                         deposit in the State
Dear Mr. James:                          ConservatorFund.
       You have requested the opinion of this office in relation
to the disposition of certain personal property now held in the
State ConservatorFund.
       In your letter of request you have stated that:
              "Section 5 of Article 3272b, Revised Civil
       Statutes of Texas as enacted by the 57th Texas
       Legislature,required that the State Banking
       Commlsslonertransfer to the State Treasurer for
       deposit in the State ConservatorE'undall dormant
       deposits and other funds formerly owned by or
       deposited In liquidated depositorieswhich have
       been held by the Commlseionerfor more than twenty
       (20) years and of which the whereabouts of the
       depositors, creditors, or owners have been unknown
       to him for more than twenty (20) years. The Act
       also states in part 'the funds shall be subject
       to conservationand hispositionunder the terms of
       this Article.'
              "Among the dormant deposits and accounts
       transferredto this office there were several items
       of personal property, such as watches, old coins,
       collar buttons, razors, etc., as well as U. S.
       Liberty loan bonds, thrift stamps and war savings
       certificates.
              II
               . . .
              "Please advise . . . whether this office may
       sell the personal property such as watches, old

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Honorable Jesse Jimes, Page 2   (C-72)

      coins, etc., referred to, under the provisions
      of Article 3272a, Section 5 If the proceeds are
      deposited to the credit of &he State Conservator
      Fund and records are kept as to the amount
      received from the sale of each article.
             "Also please advise whether this office
      may convert the bonds, certificates,etc., that
      have fixed dollar value into money with the pro-
      cee,dsto be deposited the same as above stated.
              "In the event that you advise that this
       department cannot sell the property referred to,
       or convert the bonds certificates,and etc. to
       cash, ,pleaseadvise the proper steps that should
       be taken to permit this office to obtain title
       sufficient to permit this department to dispose
       of the property by sale or conversion into money."
       The property In question was placed In the custody of the
State Treasurer pursuant to the following portion of Section 5
of Article 3272b of Vernonls Civil Statutes:
              II
               . . .
              "The State E5anklngCommissionershall tra;ns-
       fer to the State Treasurer for deposit in the
       State ConservatorFund all dormant deposits and
       other funds formerly owned by or deposited In
       liquidated depositorieswhich have been held by the
       Commissionerfor more than twenty (20) years and of
       which the whereabouts of the di?potiltors,
                                                creditors
       or owners have'beenunknown to him for more than
       twenty (20) years. Upon delivery,  together with a
       certificateof su’ch facts under oath of the State
       Banking Commlssloner,the funds shall be subject
       to conservatlon'anddispositionunder the'terms of
       &Is Article. The State Banking Commlsslonershall
       deliver to the State Treasurer a record of the names
       and addresses of the depositors and creditors and
       gdxnounts of the deposits, credits, or other
            .
               "The State Treasurer shall keep a record of
       the name and last @own address of each depositor
       or creditor lls,tedon the depository reports and the
       amount 'ofeach depositor account. The record shall
       be available  for Inspectionat all reasonablebusiness
       hours by anyone satisfyingthe State Treasurer that

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Honorable Jesse James, Page 3   (C-72)

      he has an interest or possible interest therein."
      (Emphasisadded.)
       A careful read&g of the provision above quoted reveals
that it applies only to "dormant deposits and other funds." The
term "dormant deposits" Is defined in Section l(b) of Article
3272b, as "those-demand,savings, or other deposits of money
or its equivalent in banking practice         (Emphasisadded.)
The context in which the word "funds" is'uied throughout Article
3272b, as well as the generally accepted meaning of-the word,
indicate that the Legislature Intended "funds" to mean only
money or its equivalent in banking practice. Further, no pro-
vision similar to Article 3272a, Section 5, Is Included in
Article 3272b to allow the State Treasurer to dispose of property
other than money or to convert the property to money by sale.
It Is therefore apparent that Section 5 of Article 3272b con-
templates only the transfer of money or Its equivalent to the
State ConservatorFund by the State Banking Commissionerand
does not apply to other types of personal property.
       The power of sale under which you wish to dispose of the
property in question Is contained in Section 5 of Article 3272a,
the relevant portion of which reads as follows:
             "Sec. 5(a) All abandoned property other
      than money delivered to the State Treasurerunder
      this Article which has been escheated and the
      title thereto vested in the State of Texas shall
      be sold by the State Treasurer to the highest
      bidder at public sale . . .' (Emphasisadded.)
       Article 3272a was enacted by the 57th Legislatureat its
First Called Session and beoame effective 90 days after the
adjournment date of August 8 1961. Article 327213was enacted
by the 57th Legislature at l&s Third Called Session and became
effective 90 days after the adjournmentdate of February 1,
1962. Section 00 of Art~cLe,'3a7ab,provides that:
              "The provisions of this Article 32721,are
       in addition and supplementaryto and shall not
       be construed to repeal, alter, change, or amend
       any of the provisions of Article 3272a to 3289,
       Inclusive, Title 53, Revised Civil Statutes of
       Texas, 1925, as amended."
For these reasons, we hereby hold that the word "Article"as
used In the phrase "property       delivered to the State
Treasurer under this Artlcle"'c&~ained in Section 5(a) of
Article 3272a has reference solely to property delivered to the

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Honorable Jesse James, Page 4   (C-72)

State Treasurer under Article 3272a and does not Include
property placed in the custody-of that office under Section
5 of Article 3272b.
       It Is of further significanceto observe that the
property subject to sale under Section 5(a) of Article 3272a
Is restricted to "property .     which has been escheated and
the title thereto vested in theaState of Texas." The property
delivered to the State Treasurer under Section 5 of Article
3272b does not fall within this classification,In that It was
deposited in the State ConservatorFund "subject to conserva-
tion and dispositionunder this Article" and has never been
the subject of an escheatproceedlng.
       In view of the foregoing, It Is our opinion that the
State Treasurer may not sell the personal property deposited
with his office pursuant to Section 5 ,ofArticle 3272b under
the power of sale contained In Section 5(a) of Article 3272a.
Therefore, your first question la answered In the negative.
       In consideringyour second question, It becomes Important
that the legal obligationswhich lnltlally came Into being at the!
time the property was deposited with the liquidated depository
be fully a precl'ated.In Tyler County State Rank v. Rhodes,
256 S.W. 9g7 (Tex.Clv:App.m       d    Its made In banklng
practice are characterizedas foiIo~~"~t page 949:
              "Bank deposits are of two kinds, general and
       special. A general deposit Is a deposit generally
       to the credit of the deposltor‘tobe drawn upon by
       him In the usual course of the banking business
       and creates the relation of debtor and creditor
       between the bank and depositor. The money or funds
       deposited Is mingled wlth the other funds of the
       bank, and becomes the property of the bank. It is
       not contemplatedthat the Identicalmoney shall be
       returned to the depositor,but the relation of
       debtor.and creditor arises between the parties. A
       special deposit Is the placing of something In the
       custody of the bank,,of which special thing restltu-
       tlon must be made. Title to the thing deposited
       does not pass to the bank, as It does in the case of
       a general deposit but remains In the depositor. It
       does not enter into the general funds of the bank.
       It forms no part of the bank's disposable capital.
       It Is to be kept by Itself and specificallyreturned.
       Money or effects deposited with a bank for safekeeping
       to be returned upon demand 1s a special deposit and
       does not create between the bank and the depositor
.-

     Honorable Jesse James, Page 5   (C-72)

            the relation of debtor and creditor. Such a
            deposit creates the relation of ballor and ballee.
            The same deposit cannot be both a general and a
            special deposit; The chief characterizingelement
            of a special deposit is that the thing deposited
            shall be kept safely and returned to the depositor."
            After so defining general and special deposits the Court
     specificallyheld that a Liberty Bond which had been deposited
     with the bank was a special deposit. For holding to same effect
     see Tyler County State Bank v. Johnson, 257 S.W. 932 (Tex.Clv.
     APP. 19241.
            It Is our opinion that the bonde, certificates.etc..
     about which you have inquired fall Into the classlficatfenof
     special deposits. Thlsbedn~the case, the original depositories
     were mere ballees and, as such, they were without authority to
     sell, exchange or otherwise dispose of the property without
     specific authority under the terms of the special deposit. Any
     unauthorizeddlsposttlon of the property would constitutea con-
     version of the property on the part of the depository.
     County State Bank v. Johnson, 257 S.W. 982 (Tex.Clv.App.W,.
            In the absence of facts which would show that the original
     depositorieswere authorized under the terms of the special
     deposit to exchange the stocks and bonds in question for their
     cash value to be held In their place neither the Banking
     Commissioner;by virtue of his statutory possession (See Article
     342-801, et seq., Vernon's~Civil Statutes and prior statutes),
                              by'virtue of Section 5 of Article
     nor the State Treasurer,~,
     3272b of Vernon's Civil Statutes acquired any power of dlsposi-
     tion with regard to these speclai deposits. Therefore, In our
     opinion, the bonds, oertlflcates,etc., having a fixed dollar
     value which were placed In the custody of the State Treasurer
     pursuint to Section 5 of Article 3272b may not be converted into
     cash to be held or deposited In their place. Consequently,
     your second question Is hereby answered In the negative.
            In view of the above conslderatlon8,the personal propert:y
     to which you refer In your letterof request was transferredto
     your office in error. In answer to your third question, personal
     property other than money or its equivalent In banking practice
     should be reported to your office by the State Banking Com-
     missioner in accordance with the provisions of Article 3272a.
     Such property may then be disposed of as directed by Article
     3272a, after a final judgment of“escheathas been entered in
     regard to the property so reported.

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Honorable Jesse James, Pige 6   (C-72,)

                      SUMMARY
      Section 5(a) of Article 3272s of Vernonls Civil
      Statutes does not authorize the State Treasurer
      to offer for sale gersonal property placed In
      his custody under the terms of Section 5 of
      Article 3272b of Vernon's Civil Statutes; bonds,
      eertlflcatesand other personal property having
      a fixed dollar value, which were placed in the
      custody of the State Treasurer under Section 5
      of Article 3272b, may not be converted Into money.
      and held in their place. Personal property other
      than money or its equivalentin banking practice
      should be reported by the State Banking Comm.lssioner
      to the State Treasurer in accordance'wlth.Artlcle
       3272a.
                                   Yours very truly,
                                   WAGGONER CARR
                                   Attorney General of Texas

JAPJr/ca
APPROVED:
Opinion Commlttee
W. V. Geppert, Chairman
Murray Jordon
Norman Suarez
Gordbn Zuber
Malcolm Quick
APPROVED FOR THE ATTORNEY GENERAL
BY: Stanton Stone

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