Untitled Texas Attorney General Opinion

TEEAITORNEY GENERAL
OF TEXAS
Au-. TEXAS78711
aOEN L. BILL
A¶-ro- Q-AX.

October 24. 1974

The Honorable Joe Resweber Opinion No. H- 430
County Attorney
Harris County Courthouse Re:~ Questions concerning
Houston, Texas 77002 certificate of deposit under
Article 2372 p-3, V. T. C. S.
(S.B. 383, 63rd Leg.), the
Bail Bond Licensing Act.

Dear Mr. Resweber:

The 63rd Legislature enacted Article 2372 p-3, a comprehensive
act covering the licensing and regulation of bondsmen. (Acts 1973, 63rd
Leg., p. 1520, ch. 550). You have asked us a series of questions con-
cerning it. The constitutionality of this Act was upheld in Robinson v.
Hill,
- 507 S. W. 2d 521 (Ten. 1974).

In counties having a population of 150,000 or more a County Bail
Bond Board is created, composed of various county officials, to have
authority and control over licenses to be required of bondsmen. (Sections
3 and 5). Section 6 sets out the requirements for a license, one of which
is the deposit with the county treasurer of a cashier’s check, certificate
‘of deposit, or cash,in the amount of $5,000 as one means of guaranteeing
that any forfeiture will be satisfied. Section 6(d)(l). Section 6 (f) provides:

Before application of the cash deposit, cashier’s
check, or certificate of deposit, or before any
action is taken to liquidate property held in trust,
the sheriff or his agent shall make demand of the
licensee to pay the judgment. In the event of failure
or refusal to do so within 30 days of the demand, the
sheriff may apply the deposit to pay the judgment or
liquidate the trust and apply the proceeds to pay the
ju,dgment. The licensee ahall keep the sheriff notified
of the mailing address to which notice of a judgment may
be sent, and the mailing of notices by certified mail to
the address provided by the licensee shall be sufficient to
comply with the notice requirements of this section.

p. 1988
.

The Honorable Joe Resweber page 2 (H-430)

Your first question is: “In whose favor is the certificate of deposit
made in the Bail Bond Act styled S. B. 383?”

The alternatives, it would seem,are that the certificate be made
either in the name of the licensee bondsman or in the name of the County
Treasurer.

The obvious purpose of the required deposit of Section 6(d)(l) or
the execution of a trust deed to the sheriff conditioned that the property
may be sold to satisfy a forfeiture (Section 6 (d)(2) ) is to place resources
in the hands of the County with which to satisfy a forfeiture without having
to resort to court proceedings.

A certificate of deposit, whether or not negotiable, is an acknowledge-
ment by a bank of receipt of money with a promise to repay it. Section 3.104
Texas Business and Commerce Code. In our opinion if the certificate were
payable to the bondsmen, the purpose of the act would be defeated. We
therefore answer your first question that the certificate of deposit should
be made in the name of the County Treasurer or in a manner that the
sheriff can reduce it to cash without any action by the bondsman.

Your second question asks: “Who owns the accumulated interest? ”

Just as the principle of the certificate of deposit “belongs” to the
bondsman until applied to a forfeiture, so too, in our opinion. interest
on it also belongs to the bondsman until applied to satisfy a forfeiture.

Your third question is: “If partial payment occurs on a deposited
certificate of deposit, what happens to the residue? How is the forfeited
money replaced ? ” Section 6(e), we believe, specifically answers these
questions. It provides:

The cash deposit or the funds realized from the trust
may be used to pay the judgments of any bail forfeitures
that result from the person’s execution of a bail bond, if
the licensee fails to satisfy the judgment within 30 days
subsequent to the date of issue by presentment of final

p. 1989
i

The Honorable Joe Resweber page 3 (H-430)

judgment to the county treasurer. When any sums are
depleted from the deposit or trust to pay a judgment
resulting from a forfeited bond, the licensee shall, as
a condition to continuing as a licensee, replenish the
amount so depleted. When the licensee ceases to
engage in the business of executing bail bonds and
ceases to maintain his license, he may withdraw his
security deposit or trust upon presentment of a
release by the sheriff, if there are no judgments or
bond liabilities outstanding against the license. Any
portion of the deposit or trust not used to pay judgments
shall be returned to the licensee or his heirs or assigns
upon’presentment of a release by the sheriff. (emphasis
added)

You next ask: “When a certificate of deposit matures, is it to
be cashed? ”

It would be our opinion that, so long as the bondsman otherwise
meets the security requirements of Section 6(d) he may be given authority
to withdraw a cer.tificate.

Your fifth question asks: “Is the cashier’s check described as one
alternative to be cashed or held i,ntact? In whose favor is to be made?”

Section 6(f) snpra, speaks of application of the cash deposit,
cashier’s check, or certificate of deposit. We interpret this to mean
that the cashier’s check, like the certificate of deposit, is to be kept
in that form for use when needed. Also like the certificate of deposit,
the cashier’s check should be made payable to the County Treasurer.

The court’s decision in Robinson v. Hill, s, specifically
answers your sixth ques’tion as to the law’s constitutionality. Your
seventh question asks whether, if the law is constitutional, the bondsman
should make the deposit before final approval of the.bond “as per section
6, paragraph (d) (l’)? !’

p* 1990
- -._ .

The Honorable Joe Resweber page 4 (H-430)

Subsection 6 (d) (1) calls for the deposit upon notice that the
applicant has been tentatively approved.

We therefore answer your seventh and last question in the
negative.

SUMMARY

Certificates of deposit and cashiers checks
deposited to satisfy the bail bondsman’s licensing
act should be executed in the name of the County
Treasurer.

DAVID M. KENDALL, Chairman
Opinion Committee

p. 1991