Untitled Texas Attorney General Opinion ( 1950 )


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  • PRICE   DANIEL
    ATTORNEY GENERAL
    September      22,   1950
    Hon. C. H. Cavness                      Opinion     No.    V-1110
    State Auditor
    Austin, Texas                           Re:     Whether      United States
    21% Treasury         bonds,    in-
    vestment      series   A-1965,
    may be accepted        by the
    State Treasurer        for de-
    posit under Article         4739,
    V.C.S.,    in view of certain
    provisions      in these bonds.
    Dear    Sir:
    You have   requested   the opinion        of this     office   on the
    following      matter:
    “In our current   audit of the accounts     of the
    State Treasury     Department     we find certain    United
    States   Treasury   bonds held by them as collateral
    security    or to secure  deposits    of public money    but
    which have in their terms       certain   provisions   which
    may mean that they are not acceptable           to the State
    for such purpcses.
    “Attached   hereto   you will find a copy of
    one of these bonds ‘2*%      Treasury    Bond - Invest-
    ment Series   A-1965’    with the provisions   about which
    we are concerned     . . .”
    You ask whether    this provision         renders       these bonds
    ineligible     to be held by the Treasurer      uas       collateral      security or
    to secure      deposits  of public money.g.
    Each bond provides      on its face that “it is not ac-
    ceptable  to secure deposits    of public moneys,    is not transferable,
    and may not be sold, discounted,      hypothecated    as collateral   for
    a loan, or pledged  as security    for the performance     of an obliga-
    tion or for any other purpose.’
    The United States Treasury      Bonds here in question
    were deposited     by a Texas    insurance  company     with the Board   of
    Insurance    Commissioners      in October,  1948.    The bonds were ap-
    proved   by the Board    of Insurance    Commissioners      and are now on
    deposit   in the office of the State Treasurer,      who is the custodian
    Hon.   C. H. Cavness,         page    2 (V-1110)
    of such deposited     securities.    We have been advised     by the Board
    of Insurance    Commissioners       that the bonds were not deposited
    to secure   deposits    of public money    but were deposited    under the
    provisions   of Article    4739,  Vernon’s   Civil Statutes,  which provides:
    “Any life insurance          company,        accident     in-
    surance     company,       life and accident,         health and ac-
    cident,    or life, health and accident             insurance      com-
    pany, organized         under the laws of this State, may
    at its option,     deposit     with the State Treasurer
    securities     equal to the amount           of its capital      stock,
    and may, at its option, withdraw               the same or any
    part thereof,      first having deposited            in the treasury
    in lieu thereof       other securities        equal invalue       to those
    withdrawn.Any        such securitie,?.,     before being so orig-
    inally deposited        or substituted,       shall be approved
    by the Commissioner.              When any such deposit              is
    made,    the Treasurer          shall execute       to the company
    making     the deposit      a receipt     therefor,      giving    such
    description     to such securities          as will identify        the
    same;    and such company            shall have the right to
    advertise     such fact, or print a copy of the treasurer’s
    receipt    on the policies        it may issue;        and the proper
    officers    or agents      of each insurance           company      mak-
    ing such deposit         shall be permitted,          at all reasonable
    times,    to examine       such securities         and to detach
    coupons     therefrom       and to collect       interest    thereon,
    under such reasonable             rules and regulations           as may
    be prescribed        by the Treasurer,          and the Commissioner.
    Such deposit      when made by any company                  shall there-
    after be maintained           as long as said company             shall
    have outstanding         any liability     to its policy holders.          . . .*
    Under this statute a Texas       insurance   company    may,   at
    its option,   tender  securities     to the Board   of Insurance    Commis-
    sioners   for approval.    and if approved,     such securities     are deposited
    with the Treasurer.       The Treasurer       has no control    over such de-
    posited   securities   except    that he provides    a safe depository    where-
    in such securities     are kept.
    The title to these     securities    while on deposit     with the
    Treasurer       remains    in the insurance       company    and neither    the
    Treasurer       nor the Board      of Insurance     Commissioners       has any
    authority     to subject   securities    so deposited     to the payment      of the
    company’s       indebtedness.      We think the purpose        of the statute    is to
    enable    insurance     companies     to obtain better     financial  standing     by
    advertising      the fact that securities      equal to the amount      of their
    capital    stock are on deposit       with the Treasurer.        Guaranty     Life Ins.
    Co. of Houston       v. City of Austin,     
    108 Tex. 209
    , 
    190 S.W. 189
    (1916).
    Hon.    C.   H. Cavness,   page   3 (V-1110)
    Therefore,     it is apparent     that such a deposit    is not
    “to secure     deposits     of public moneys,”       or “pledged   as security
    for the performance          of an obligation     or for any other purpose,”
    and the fact that securities          are not transferable     does not make
    the same     ineligible    for deposit    with the Treasurer      for the pur-
    poses   of the statute when approved            by the Board.    Atty.  Gen. Op.
    O-4054    (1941).    Consequently,      we conclude     that the provisions    to
    which you refer       on the face of the bonds do not prohibit          a Texas
    insurance     company     from depositing        such bonds with the State
    Treasurer      pursuant     to Article    4739.
    SUMMARY
    United States   Treasury    Bonds,  Investment
    Series   A-1965,   approved   by the Boaad of Insurance
    Commissioners       as provided    in Article  4739, may be
    accepted    for deposit  with the Treasurer      as contem-
    plated by that Article.
    Yours      very   truly,
    APPROVED:                                PRICE      DANIEL
    Attornev     General
    Willis   E.    Gresham
    Antitrust      Division
    Everett   Hutchinson                         Walton       S. Roberts
    Executive   Assistant                                        Assistant
    Charles   D. Mathews
    First  Assistant
    WSR:”
    

Document Info

Docket Number: V-1110

Judges: Price Daniel

Filed Date: 7/2/1950

Precedential Status: Precedential

Modified Date: 2/18/2017