Court Opinion

ID: 4133349
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:36:55.030139+00
Date Added: 2024-06-11T14:37:39.972726
License: Public Domain

OP     TEXAS

                            AUSTIN.   TRXAS       78711

                                      April   12, 1973

Honorable Martin D. Eichelberger                  Opinion NO. H-      29
Criminal District Attorney
Waco,   Texas 76701                               Re:     Questions   relating to the
                                                          District  Court’s power to
                                                          regulate the handling of
                                                          Minor’s   funds deposited
                                                          in the registry   of the Court,
                                                          where no guardian has been
Dear Mr.    Eichelberger:                                 appointed.

    You have asked a number of questions concerning the handling of a
minor’s  funds deposited in the registry of the 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,    to withdraw funds recovered    by a
minor and deposited in the court.      Prior to 1893, the courts held
that the proceeds   of a judgment 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, 13 S.W. 60 (1890); Galveston
City Railway v. Hewitt, 67 Tex. 473, 3 S.W. 705 (1887).

    In 1893 the Legislature   adopted a statute authorizing withdrawal by
a next friend when the interest of the minor in the 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, in part:

               “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 a judgment is recovered      for money or other personal
           property the value of which 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. 122
Honorable    Martin    D.   Eichelberger,      page 2   (H-29)

        person to take charge of such money or other property for
        the use .and benefit of the plaintiff when he has executed
        a proper bond in a 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 of the court in which the judgment is
        rendered upon an application and hearing,    in term time
        or vacation,  may provide by decree for an investment
        of the funds accruing under such judgment.     Such decree,
        if made in vacation,  shall be recorded in the minutes of
        the succeeding term of the court . . . . ”

     It is 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, no writ
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 in the First National Bank,
        Waco,   Texas,   restricted   so that none of the proceeds
        recovered   by judgment 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 of Minor?”

     If the judgment is for an amount less than $1, 500.00,   upon the
posting of a proper bond, the court may permit withdrawal of the
funds by a next friend.    If the amount is in excess of $1, 500. 00, it
cannot.

    Your    second    question      is:

                                            p. 123
Honorable    Martin    D.   Eichelberger,     page 3   (H-29)

            “(2) Could the Court approve a bond 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? ”

    If the 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 in five 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 nonbond is required bf~the next friend.   Your
first question asks:

             “( 3) 1. The Court enters order requiring funds on
        deposit to be placed in the First National Bank by acquiring
        a Certificate  of deposit from the bank, that expressly
        forbids the removing of any of funds 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.  If the 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 of minor,    for his food,
        clothing,   education,  medical expense,   etc? ”

    Even if the 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 if the 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 a part of the certificate
        of deposit then where interest earned is less than
        $1, 500.00 a year, would Court have power to permit
        the next friend to withdraw the interest as it accrues
        for support and benefit of minor,   if a bond by next
        friend was filed with District  Court to cover the
        interest being used? ”

     The statutory authorization  to withdraw any funds is dependent upon
the amount of the initial recovery,   not upon the amount of annual    interest
and therefore,   even though the interest earned is less than $1, 500. 00,
if the interest of the minor in the 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 to be earned, and restrict the spending
        of principal,  and permit by Court order the withdrawal
        of interest? ”

    In our opinion the court would not have such authority.

    Your final question   asks:

             “( 3) 5. If no, ‘what would the next friend have to
        do to comply with provision of the Statute which ‘no
        bond shall be required of the 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’.       If funds 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, it may very well be that the bond
would protect the minor but the fact remains that there is no statutory
authority to permit a withdrawal if the minor’s    interest in the initial
recovery  exceeded $1, 500~ 00.

                                        p. 125
Honorable   Martin   D.   Eichelberger,    page 5 (H-29)

       As we have indicated,    the statute, and the cases construing it, leave
little doubt but that the provisions   for withdrawal by the next friend
upon posting a bond apply only to those cases in which the minor’s
interest in the recovery is $1,500.00      or less.   If the interest is greater
than that amount and it is thought desirable      to withdraw 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 in a 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 a next friend to with-
      draw 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