HonorableTom C. King
State Auditor
Austin, Texas
Bear Sir: opinionNo. O-1480
Re: Validityof old age assistance
warrantsheld by investors.
We are pleasedto complywith your requestfor OUT opinionon the
followingquestionsubmittedby your letter of September22nd:
"If a financialinstitutionor investorshould buy $15O,OOO.OC
old age assistancewarrantsfrom receipientsof old age as-
sistance.or the holdersof such warrants,and heI. them in
his/itsportfolio,would such holding in any manner affect the
legalityof the instrumantaas an obligationof the state
prior to the runningof the statuteof limitationon state
warrants?"
As you point out in your letter,Article 4371,Revised Civil Statutes
of Texas, 195, as amended,Acts 1931,k2nd Legislature,p. 396,
Chapter242, 8 1, provides:
*The Treasurershall contersignand pay all warrants drawn
by the Comutrolleron the Treasurywhich are authorizedby
Law. No money shall be paid out of the Treasuryexcept a
the warrantsof the Comptroller,and no warrant shall be
paid by the Treasurerunlesspresentedfor paymentwithin
two year5 from the close of the fiscal year in which such
warrantwas issued,but claims for the paymentof such
warrantsmay be presentedto the Legislaturefor appropri-
ations to be made from which such claims may be paid."
Old age assistancewarrantsissuedagainst the "StateDepartmentof Public
WelfarePund" under authorityof SenateBill No. 36, Acts 1939,46th
Legislature,are unquestionably valid obligation5of the State payableout
of said fund. Such warrantsare transferable,thoughnot negotiable.
Their validitycannotbe in anyway affectedby the fact that they may be
transferredto investorsand held by them so long as they are presentedto
the State Treasurerfor payment"withintwo year5 from the close of the
fiscal year" in which such warrantsare issued. Nor is suoh warrant
holder'ssecurityof payment impairedfor failureto presentsuch
warrantspromptlyto the Treasurerfor payment. Article 4386,Revised
Civil Statutes,control5the paymentof thesewarrantsand providesthat:
Hon. Tom C. King, Page #2 O-1480
,I
. . . in the event of a questionand necessityarisingas
to the priorityof paymentof any such warrants,they shall
be paid in order of their serialnumber . . .II
In accordancewith this Articlethe Treasureris requiredto maintain
in any fund out of which outstandingwarrantsare payable,sufficient
money to pay such outstandingwarrantsat all times, before he may pay
other warrantsbearinga subsequentserialnumber. See Williamson
vs. FranklinCounty,94 S. W. (2d) 1190.
Yours very truly
A!LTORNEY
GENERALOF TEXAS
51 Walter R. Koch
BY
Walter R. Koch
Assistant
WPiK:N/ldw
APROVFaDSEP. 25, 1939
s/W. F. Moore
FIRST ASSISTANT
ATTORXEY-L
APPROVED
OPINION
COMMJTEE
BP B. W. B.
CHAIRMAN