Court Opinion

ID: 4144620
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:47:25.534529+00
Date Added: 2024-06-11T14:49:43.056622
License: Public Domain

OFFICE   OF THE A7TORNEY        GENERAL     OF TEXAS
                              AUSTIN

 Honorabilk. Ben J, Dean
 Dietriot  Atbarney
~Breokenrld~, Texas

Dear Slrr
                           Opinion Number
                           Ret Eligibillt
                           bonds af Stepb

         We are inreoelpt                         c+f Deoember 15, in
vihloh you requssb our opi                        setloM,  whtdl are -

                                                 ndnmnt thereof?
                                                 to oredit   for
     them   bond6

                       sots    underlying   your questions         are as

of whloh bo
roads whloh are,&ow and have been for many year8 eonatltuting
a part of the Sttite 8igbway System of Texas, end as suuoh have
been maintained by the State of Texas as a part of its de&g-
nated Stats Highway System,   Them bonds were on and after
Honorable    Ben J, Dean, page #2

JanuarJr 1, 1933, eligible    to partioipate  under the provisions
of Chapter 13, pa e 15, Aote of the Third Called Seeslon of
the Forty-second  f!eglslature,   as emended,
        On February 25, 1924, prior to the enaotment of        the
above mentioned law, Ste hens County, from *he interest        and
sinking rti6 of Series S bonds on hand, purchaeed three         Series
A Road Bonds, Number6 491, 492 and 493, which bonds were        not
due and payable until February 15, 1942.
        No order of the Commlselonera' Court of Stephens County
has ever been made or entered oanoelling said 'three road bonds.
          The Board of County and District  Road Indebtedness has
refused to give Stephens County oredit for the above three named
bonds or any pe.rt thereof,   basing their refusal on the opinion
of the Attorney Generalts office    of date January 18, 1937. We
have reooneldetid   the opinion of the Attorney General~e Depart-
meQt, dated January 18, 1937, addressed to Mr. W. H. Gordon,
Cairf Aooountant, Board of County and Dlstrlot     Road Indebted-
nom, Austin, Texas     written by the Honorable Viotor W, Bouldln,
Assistant Attorney beneral, and have oonoluded to agizee with the
pr inoiple announoed thetieln . 006 think it immaterial that your
bonds are serial bonds, as diatlnguished    from the term bonds
Tudor oonsideration   in that opinionJ llk&wise , we think the
optional feature oontalned in said bonds has ~no bearing on the
proper answer to this question;
        We are oonstralned  to adopt the oonolusions reaohed in
that opinion irrespeotive  of it8 failure to alte authorities.
As a matter of law we oonolude that the three bonds purdhassd
with Series A sinking fund money were paid off and dlsoharged
and no longer existed on Jenuary 1, 1933.   The question as to
whether or not the bonds so purohased have been dleoharged ap-
pears to us to be aoademla.   Said bonds were bought with funds
acoumulated for that very purpose and when said money &is been
used to purchase said bonds, HO think the interests   have merged,
In the aaee of Smith vs. Cooley, 184 S.+ W. 1050, the court said1
         YChe   p4~~44~i0n   by the maker of annate is prima
     facie   evldsnae    that said note has been paid;"
Ronorable   Ben J. Dean, page #3

         This pronounoement by the oourt was in line with
earl1 er authorlt 10s.  see oase of R&eland vs. Miles, 24
8. W. 1113 and Stephens VS. Yoodle, 30 9. W. 490.    Further,
in the oase of Close vs. Steel,   2 Tex. Rep. 237 and 13 Tex.
Rep. 625, the court said:
        Vh4 delivery    of a note by the owner to the
     maker, with intent to discharge the debt, dle-
     ohargee the debt.*
           Artiole   5939, Revised Civil Statutes of 1925, pro-
vides that a negotiable       instrument is discharged Yvhen the
prinolpal    debtor beoomes the holder of the instrument at or
after maturity fin his own right.”        We ,think there can be no
argument but that the instrument itself,         wbioh merely evi-
dences the obligation,      beoomes ineffectual    under suoh oir-
ownstanoee.       Suoh, we believe,   is the meaning of this statute.
However, if .the prin~oipal debtor should oome into possession
of the instrument at or after maturity throuep fraud, we do not
think this statute oould effeotively        dlaaharge the obligation
whioh said instrument evidenoed.         Judging from the statement of
faots set forth in your letter         we oonolude that there was no
fraud praotloed by the oounty in obtaining these bonds, but
rather, on the other.hand,        the oounty deliberately     purohased
said bonds prior to maturity with funds acoumulated for
the purpose of retiring      that debt, and we believe      it was the
purpose of the owner of the bonds at the time of delivery             to
the oount y to dlsoharge the oounty from its obligations.            Ao-
oordlngly,     it is our opinion that said bonds were automatl-
aally oanoelled      by said purohase, and t&refore       do not oome
within the purview of Seation 6, Subseation (a) of Rouse Bill
#68S, whioh reads, in part,’ as follows:
         “All bonds or other evidenoes of indebtedness
     heretofore   issued by oountles or defined road
     dietriots  of this State,whloh mature a or after
     January 1, 1933 * * * e
        It must be admitted that the faoe of the bonds so pur-
ohased and oanoelled provided for a maturity date subsequent
to January 1, 1933, but in view of the language uaedlin Sub-
section (a ), Seotlon 0 of said Act, whiah reads,as follows!
Honorable   Ben J. Dean, page #4

        Vhethor seid indebtedness         is now evidenced
     by the obligations   or$glnall.$     $s~~   or by re-
     fundlng~:obllgatlons  or both
it seems olear that the Legislature       intended that only such
lndebtedneas as was    outstanding   as of  January 1, 1933, would
be eligible  to partl lcipate~,ln the moneys alloostea   to the
Boarddot Counts'and Dletrict      Road Ind4btedXlSBB. Accordingly,
we must answer~question number one in the negative.
        Having answered your first queetion in the negative,
we deem it unnecessaryto  answer question number two.
        Trusting that the foregoing        BatlStactorlly    answers
your inquiry, Fro are

                                        Very truly   yours
                                 ATTORREYGENRfUL0FTEXAS

                                   BY
                                             Clarence    El Orowe
                                                        Assistant