I
.
- *
ENERAI.
May 10, 1949.
Hon. Raymond E. Hagee Opinion MO. v-826.
County Attorney
Calveston County Re: The applicabl1ity of stat-
Galveston, Texas utes prescribing bonds for
sale of real estate to es-
tates of decedent8 and
Suardlans when the flducl-
ary is a oorporqtion qual-
ified to aat nlthout bond
under Article 4982 of
Chapter 16.
Dear Mr. Magee:
Your request for an opinion IWadS, In part,
as fO11OW8:
"The County Judge has addressed a OORIN-
nioation to me asking for an opinion constru-
ing several probate statutes.
"The question In my mind involves the "
appllcabllltY of the statutes prescribing
bonds for sale of real estate to estates of
decedent8 and guardlanm where the fiduciary
Is a corporation quallfled to aot without
bond under Article 4982-86. . e .
"He ha8 applications pending by a bank
which Is quellfled to act as guardian by com-
pliance ulth requirement as to deposit of se-
curities with the State Treasurer in which
they Seek authorIt to sell a8 Admlnlrtrator
without bond.
"Re has the same question in an estate
of a ward whose guardian Is a Trust Company
qualified in compliance with the requirement
a8 to deposit of securities.
"The questions which he wants clarified
are:
Ron. Raymond E. Magee, page 2 (V-826)
"1. May the admlnlstrator be authorized
to sell without complying with quoted Article
35760
"2 . May the guardian be authorized to
sell without complying with quoted Article
42011"
Artlales 4982 and 4983, V.C.S., provide:
"Apt. 4982 . . .
"Any person or association of persons,
any State banking corporation or any other
domestic corporation, or any corporation or-
ganized under the laws of any other State,
provided such foreign corporation complies
with the laws of this State relating to ln-
surance other than life, may exercise the fol-
lowing powers by complying with the provisions
of this subdivision:
"1. Qualify as guardian, aurator, execu-
tor, administrator, assignee, receiver, trus-
tee by appointment of any court or under will,
or depositary of money In court, without alv-
lng bond as such.
"2. Become sole guarantor or surety In
or upon any bond required to be given under
the laws of this State, any other statute to
the contrary notwithstanding." (Emphasis add-
ed throughout.)
*Art. 4983 . . .
"Those Included In the provisions of this
subdlvlslon shall:
"1. Deposit with the State Treasurer
fifty thousand dollars aonsistlng of cash,
treasury notes of the United States, or gov-
ernment, State, county, municipal OP other
bonds, notes, or debentures, secured by first
mortgages or deeds of trust, or mortgages or
deeds of trust on unencumbered real estate In
Texas worth at least double the amount loaned
thereon, or such other fir8t class securities
HOIt, Raymond E. Magee, page 3 (V-826)
as the Comlssloner may approve. Said bonds
or securities shall not be received or held
at a rate above par, but Ii their uarket val-
ue Is less than par they shall not be held
above their actual market value. The State
Treasurer shall require any such depositor to
replace any securities 80 deposited on wh%ch
the interest shall not be paid within six
months after maturity, by other securities
equal In amount to those removed, upon which
the interest ha8 not been defaulted. The
funds 80 depOSitedshall be prlBarily liable
for the obll~atlens of the depositor in any
Capaolty herein luthorlmd, and shall not be
liable for &my other debt or obllgtior of
the depositor until all 8Uoh tl'U8t1iabllitle8
have been discharged.
“2. SatiStj the C@mSSiOtNr Of it8 801-
vency . The Commissioner shall Issue any such
depositor, when SatiSfled It Is solvent and
has made the required deposit, a oertifloate
8hOWiry;8UCh facts.
"3. Uaintain a prem.lumreserve of the
amount required to reinsure all outstmding
risks, to be determined by taking fifty per
cent of the premluu o? all unexpired risks
that have la88 than one Jsar to run, ad a
pro rata of all gross prerium on risks that
have more than one year to run.
"4. File with the Comlrslsaer, within
sltty day8 after the first day of each Jmuua-
ry, a report 8wCrn to br it8 presideat and
searetarJ or by two of its prlneipal liiio er s,
as to the surety and bond burlnerr (Lone by the
8am during the preceding year.
'5. Pay taxes on It8 surety and bond
buzm78 a8 required of other surety oompa-
It was held In Attorney Oeneral's OPlnlOn Ho.
2541 under date of January 11, 1924,
-. (Opinions of Attor-
ney General, 1922-1924, page 306) construl Art1c1es
540 to 545, Revised Civil Statute5 of 1911 now Artia1er
Hon. Raymond E. Magee, 'page 4 (v-626)
49?? and 4983) that_.since
-. . the laws of the
_ -. . State
. . of _Texas
aumorize ana perPut mate mm8 ana maze Dau ana
trust companies to act a8 guardlan~admlnlstrator, etc.,
without bond, National bank associations doing business
In Texas nay be authorized and empowered by the Federal
Rersrve Bo8xd to perform suah powers and functions in
TOX88. Following this op'lnion,it was held In Attorney
t3eneral's Opinion Ilo.O-5929 that where a State or a
National bank complies with the deposit requirements of
Artiolea 4982 aad 4983, it ha8 met the full requirement8
of law and may functiolain such fiduciary eapaclty wlth-
out a bond. It was further held in this opinion thr
ti 1 a01 required the execution of a l8ale68 bond
ref8idiess of whether or not the bank actually executed
a general' bond and regardless of the fact whether the
bank had made the required deposit under the term8 of
Article 4983. SUbSeqUent to the above mentioned Attor-
nej aeneral's Opinions, Artioles 3576, 4201, and 4216,
V.C.S., have been amended so as to provlde the following:
'et. 3576 . . .
Vhenever any property of an estate Is
ordered to be sold by the county judge, such
order shall be entered upon the rinutee of
the uourt, Shall describe the property to be
sold, the time and Dlace of sale, and the
terms of said sale,-and shall re&lre the ex-
ecutor or admlnlstrator to file a good and
sufflolent b d Subject t the approval of
the court, $ if the sure&es on said bond
are naturiiilpersons, same shall be In an a-
mount equal to twice the amount for which suoh
real estate 18 sold, but If the surety on said
bond Is either a dOBeSt or for8ign cerpora-
tion permitted t0 do bUslne88 in thi8 State
for the purpose of ls8ulng surety, guaranty,
or Indemnity bonds guaranteeing the fidelity
of executors, admlnlstrators and guardians,
same shall be equal to the amount for which
8UCh real estate 1s sold, plus any additional
sum the court shall find necessary and fix
for the protection of said estate; provided
that where the sale of Such real estate is
nade to the owner or holder of a secured
clalr against the estate the sale of the real
estate securing suah claim, and.ls In full
Hon. Ramond E. Magee, page 5 (V-826)
payment, liquidation and satisfaction there-
of, no bond shall be required except for the
amount of cash, If any, actually received by
auch~executor or administrator in exoesa of
the amount necessary to pay& liquidate and
satisfy such claim In full.
"Art. 4201 . . .
"An order for the sale of real estate
shall state: (1) The property to be sold, g%v-
lng such desoriptlon of It as will Identify
it. (2) Whether it 1s to be sold at pub110
auction or at private sale, and If at public
auction, the time and place of such sale. (3)
The neoeaslty 8nd purpose of such sale. (4)
That no sale made by the guardian pursuant
thereto shall be confirmed nor shall the tlt-
le of the ward to such real estate pass to
the purchaser unless and until It shall first
be found and determlned by the court, by an
order duly made and entered to that effect
kh t the guardian's general b d If the s&e-
11:s thereon are natural oers:iia:la In an
amount equal to double the value of the per-
sonal property then on hand, Including the
amount for which said real estate may be sold,
plus such additional sum as may, In the opln-
Ion of the court, be neoessary to protect the
estate of the ward, and that the sureties on
such bond are solvent; but if the surety or
sureties qn,aald bond 8re either a domestic or
foreign aqrporatlon or corporations permitted
to do buSine88 in the State for the purpose of
issuing surety, guaranty, or lndemlty bonds,
mmxanteelns? the fldellts of auardlana. the
to protect the estate of the ward as above
required, an additional bond shall be filed
In accordance with the above requirements.
However, where the sale of such real estate
18 made to the owner or holder of a secured
Hon. Raymond E. Hagee, page 6 (v-826)
claim against the estate and the same la of
the real estate securing such claim and la In
full payment, liquidation, and satisfaction
thereof, only the amount of cash, If any, ac-
tually received by such guardian In excess of
the amount necessary to pay, liquidate and Sat-
isfy such claim In full, shall be considered
together with other property of the estate in
passing upon the aufflclencg of the bond as
hereinabove required. (5) It shall require
the sale to be made and the report to be re-
turned to the court in accordance with the
law."
“Art. 4216 . . .
"At any tWe after the expiration of floe
days after the filing of a report of sale, the
Court shall inquire Into the manner In which
such sale was made, and hear evidence In sup-
port of or against such report, and If satls-
fled that such sale was fdlrls made and In
conformity with the law and that the uardlan
ha8 on file a good and 8ufflclent*d enera
in an amount, If the sureties thereon are nat-
ural persona; equal to double the value of the
personal property then on hand, Including the
amount for which said real estate Is being
sold, plus such additional sum as may, In the
oplnlon of the court, be necessary to protect
the estate of the ward; but If the surety or
sureties on said bond are either a domestic or
foreign corporation or corporations permitted
to do business In the State for the purpose of
lseulng surety, guaranty or Indemnity bonds
guaranteeing the fldelkty of guardians the
bond shall be In an amount equal to theylue
of the personal property on hand Including the
amount for which said real estate may be sold
plus such additional sum as In the opinion of
the court may be necessary to protect the es-
tate of the ward; and if and when the guardi-
an's general bond has been examined by the
court and found to be In the amount above re-
qulred with good and sufficient sureties there-
on, or if the guardlan's general bond is found
to be lnsuffl~lent, then an additional bond
shall be filed in accordance with the above
Hon. Raymond E. Hagee, page 7 (V-826)
requlreQent8; a8 evidenced by an order duly
made and entered b;lthe oourt'to that effeot,
the oourt shall cause to be entered a dearee
ConfIrmIng such sale, and order the report of
sale to be recorded by the clerk, and the
proper conveyance of the property sold to be
made by the guardian to the purchaser, upon
compllanae by such purchaser with the terms
of sale. The provisions of this Article shall
be mandatory, and unless the court shall first
determine that the guardian's bond is adequate
and solvent as above set forth, an evidenced
by an order made and entered by the court to
that effect, any sale of real estate hereafter
made under the provisions of this Title shall
be void.* (Emphasis added.)
It will be noted that Articles 4201 and 4216
now state that If the "general bond" of the guardian IS
sufficient, as evidenced by an order duly entered by
the court to that effect, real estate may be sold wlth-
out the necessity of a "sales" bond In addition to the
'general* bond.' There is no comparable provision ulth
reference to administrators.
Therefore, it U.our opinion that where a bank
has qualified to act as guardian or admlnlstrator by
compliance with the requirements of Articles 4982 and
4983, by making the required deposit of securities with
the State Treasury, such bank may act as guardian or ad-
ministrator without giving a wgeneral* bond as required
by Articles 4141 and 3386, V.C.S. It is our further
opinion that suah bank aannot sell property as admlnla-
trator without filing a speolal *sales bond as required
by Article 3576. However, such bank may sell real ea-
tate under the provlslons of Articles 4201-4216 as
guardian wlthout filing an addltlonal *salea" bond if
the court Is of the opinion that the deposit of securl-
ties with the State Treasury is of sufficient value to
protect the estate of the ward.
SumaARY
A bank uhlch has quallfled to act a6
$uardlan or administrator by compliance rith
the requirements of Articles 4982 and 4983,
by raking the required deposit of seourltles
with the State Treasury cannot sell proPert
Hon. Raymond E. Hagee, page 8 (v-826)
as administratorwithout riling a special
"sales" bond as required by Article 3576.
However, such bank may sell real estate un-
der the provisions of Articles 4201-4216,
as guardian, without filing an additional
"Eales" bond, if the court 1s of the opln-
lcn that the deposit of securities with the
State Treasury Is of sufflclent value to
protect the estate of the ward.
Yours very truly,
ATToBlEY OAL OF TBXAS
JR:bh
FIRST ASSISTNW
ATTORRBY OBNBRAL