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
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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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