Court Opinion

ID: 4136125
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:10:06.82468+00
Date Added: 2024-06-11T14:22:05.357011
License: Public Domain

%-HE   ~TTORl?GEY                 GENERAL
                               OF-     TEXAS

                              Ausnlv    11.   TEXAS

   WILL    WILSON
AlTORNEY     OENERAI.

                                 June 7, 1960

     Mr. A. W. Walker                    Opinion No. WW-854
     County Attorney
     Dickens County                      Re: Whether Dickens County
     Spur Security Bank Building             may deposit with the State
     spur, Texas                             Treasurer all of the money
                                             necessary to service the
                                             interest and principal on
                                             outstanding bonds to ma-
                                             turity, and then spend the
                                             surplus in the sinking fund
     Dear Mr. Walker:                        on road purposes7

              You state in your letter requesting an opinion of
     this office that Dickens County has some outstanding road
     bonds, and that there is more than enough money in the sink-
     ing fund established to service the bonds to pay all of the
     principal and interest that will ever be due on these bonds.
     You have asked the following question:

                    "Can Dickens County deposit with the
                State Treasurer (the paying agent on such
                bonds) all of the money necessary to serv-
                ice the interest and principal on these
                bonds to maturity, and then spend the bal-
              > ante of the sinking fund on road purposes?"

              The outstanding road bonds which you describe are
     Dickens County Road and Bridge Funding Bonds, Series 1936-A.
     These bonds were issued for the purpose of cancelling and in
     lieu of a like amount of outstanding Road and Bridge Warrants
     of Dickens County pursuant to the authority of Article 2368a,
     Vernon's Civil Statutes. Therefore, according to the terms of
     this last mentioned article, Chapters 1 and 2 of Title 22, Re-
     vised Civil Statutes, are applicable and govern as regards the
     establishment and disposition of a sinking fund for bonds is-
     sued under the authority of Article 2368a. Article 723, V.C.S.,
     after providing that the Commissioners' Court shall levy annual
m.   A. W. Walker, page 2 (WW-854)

ad valorem taxes sufficient to pay the interest on authorized
bonds and create a sinking fund for their redemption, states:
          *
              .   .   .

         "Provided that when the principal and all
         interest on said bonds are fully paid, in
         the event there is any surplus remaining in
         the Sinking Pund, not in excess of One Thou-
         sand ($l,OOO.OO) Dollars, said remaining
         surplus not used in the full payment of the
         principal and interest on said bond or bonds
         may be used by the county for maintaining and
         repairing the courthouse and jail and the
         roads and bridges of said county, as may be
         determined by the Commissioners Court."

         Thus, we see that before any of the surplus funds of
such a sinking fund may be expended for the purposes named in
the statute, the principal and all interest on the bonds for
which such sinking fund was established must be fully paid.

         Article 437933,Vernonas Civil Statutes, provides for
the discretionary designation of the State Treasurer as paying
agent on bonds issued by counties in Texas, and designates him
ex officio Treasurer and fiscal agent of such counties for tbe
purpose of receiving deposits of funds for the payment of bonds
issued by such counties and interest thereon. However, Section
5 of Article 437933provides that "At the request of the munici-
pality or political subdivision, the State Treasurer shall remit
to said municipality or subdivision of the State any balance
remaining in his hands more than two years, for which bonds or
coupons have not been presented for payment . D *"   Therefore,
if in 1960 Dickens County deposits with the State Treasurer all
of the money necessary to service the principal and interest on
the outstanding bonds to maturity, then, two years later, at
the request of the county, any remaining balance must be remitted
to the county. A deposit made by the present Commissioners'
Court of Dickens County will not be binding on the county in the
future.

         Prom the information which you have submitted to this
office, it appears tbat the outstanding bonds above referred to
Mr. A. W. Walker, Page 3 (WW-854)

will all mature within less than two years. This does not,
however, negate the possibility that all of the interest cou-
pons and the bonds to which they pertain may not be presented
for payment on their respective maturity dates. As long as
the possibility remains that Dickens County could withdraw
funds so deposited before the principal and all interest had
been fully paid, our opinion is that the principal and all
interest could not be considered to have been fully paid.
We are further of the opinion that, before a county which has
outstanding road bonds can deposit with the paying agent all
of the money necessary to fully pay the principal and all
interest that could ever become due, and thus have the princi-
pal and all interest considered to be fully paid, statutory
authority must exist for such a deposit for the purpose speci-
fied. At the present time there is no such authority.

         Since the principal and all interest on the bonds
for which a sinking fund was established must be fully paid
before any remaining surplus can be spent, and since we are
of the opinion that a deposit with the State Treasurer of all
of the money necessary to service the interest and principal
on the outstanding bonds to maturity would not have the effect
of rendering such bonds fully paid, your question is respect-
fully answered in the negative.

                           SUMMARY

             Under existing statutes, Dickens County
        may not deposit with the State Treasurer
        (the paying agent for the outstanding bonds)
        all of the money necessary to service the
        principal of and interest on certain out-
        standing bonds to maturity, and then spend
        the balance of the sinking fund on road pur-
        poses.

                             Very truly yours,

                             WILL WILSON
                             Attorney~'Genera1of Texas
                                                      _   . .   c

or. A. W. Walker, page 4 (WW-854)

                              w
                                     obert T. Lewis
RTL-s                               Assistant

APPROVED:

OPINION COMMITTEE:
W. V. Geppert, Chairman

John Reeves
W. E. Allen
Dean Davis
Charles Cabaniss

REVIEWED FOR THE ATTORNEY GENERAL
By: Leonard Passmore