Untitled Texas Attorney General Opinion ( 1961 )

. I.
E L%TTOX+LNEX
OF ?d?EXAS
AUSTIN 1s. TEXAS
December 29, 1961
Colonel Homer Garrison, Jr.
Texas Department of Public Safety
Box 4087, North Austin Station
Austin, Texas
Opinion No. ``-1231
Re: Applicability of Article
3272a, V.C.S., to security
deposits which are placed
by the Department of Public
Safety in the custody of
The State Treasurer pur-
suant to Art. III of Art.
6701h, V.C.S.
Dear Colonel Garrison:
From your letter of November 21, 1961, we quote as
follows:
"This Department would appreciate
your opinion as to the applicability of
House Bill No. 5, Act of the 57th Legis-
lature, 1st Called Session, to security
deposits which are placed by the Depart-
ment of Public Safety in the custody of
the State Treasurer pursuant to Article
III, of 670lh, of Vernon's Civil Statutes
(the Texas Motor Vehicle Safety-
Responsibility Act).
"The Texas Department of Public
Safety has on deposit In the State Treasury,
Trust Fund 914, approximately @,OOO.OO,
which represents security deposited by per-
sons prior to October 31, 1954, In compliance
with the security provisions of the Safety-
Responsj.billtyAct. Efforts to contact the
depositors regarding a possible refund have
Colonel Homer Garrison, Jr., page 2 (WW-1231)
been futile . . . Due to the diffi-
culty of obtaining Information concern-
ing the pendency of a judgment, the
Department has developed a practice of
returning the deposit, If it is other-
wise returnable, on an affidavit of the
depositing person that no action is
pending and no judgment unpaid. If the
depositing person is missing or deceased,
of course, such an affidavit is not forth-
coming. Nevertheless, there may well be
claimants who would be entitled to the
fund who have not been contacted."
Article 6701h, V.C.S., provides as follows in
Section 5 (a) of Article III:
"If twenty (20) days after the
receipt of a report of a motor vehicle
accident within this State which has
resulted in bodily Injury or death, or
damage to the property of any one (1)
person in excess of One Hundred Dollars
($lOO), the Department does not have on
file evidence satisfactory to it that the
person would otherwise be required to file
security under Sub-section (b) of this
Section has been released from liability,
or has been finally adjudicated not to be
liable, or has executed a duly acknowledged
written agreement providing for the payment
of an agreed amount in installments w'lth
respect to all claims for injuries or
damages resulting~from the accident, the
Department shall determine the amount of
security which shall be sufficient in Its
judgment for damages resulting from such
accident as may be recovered against each
operator or owner."
This same Statute further provides in Section 10
of Article III:
"Security deposited in compliance
with the requirements of this Article shall
be placed by the Department in the custody
Colonel Homer Garrison, Jr*, page 3 (WW-1231)
of the State Treasurer and shall be
applicable only to the payment of a
judgment or judgments rendered against
the person or persons on whose behalf
the deposit was made, for damages arising
out of the accident in questfon in an
action of law, begun not later than one
(1) year after the date of such accident,
or within one year after the date of any
deposit of any security under Subdivision
3, of Section 7, or to the payment in
settlement, agreed to by the depositor,
of a claim or claims arising out of such
accident. Such deposit or any balance
thereof shall be returned to the depositor
or his personal representative when evi-
dence satisfactory to the Department has
been filed with it that there has been a
release from liability, or a final adjudi-
cation of nonliability, or a duly acknowl-
edged agreement, in accordance with Sub-
division 4 of Section o or whenever, after
the expiration of one (i) year from the date
f the accident, or two (2) from the date of
deposit of any security under Subdivision 3
of Section 7, the Department shall be given
reasonabLe evidence that there is no such
action pending and no judgment,rendered In
sluchaction left unpaid." (Emphasis
Supplied.)
Article 3272a, V.C.S., after requiring the report-
ing of personal property subject to es&eat, provides in
Section 1 (c) as follows:
"The term 'subject to escheat' shall
include personal property presumed to be
subject to escheat by the prima facie con-
clusions contained in Article 3272, including
all personal property (1) of which the exist-
ence and whereabouts of the owner are unknown
and have been unknown to thever for more
than seven (7) years and (2) on which, from
the knowledge and records of the holder It
appears that no clafm or act of ownership
has been asserted or exercised during the
Colonel Homer Garrison, Jr., page 4 (WW-1231)
past seven (7) years and (3) on which no
will of the last known owner has been
recorded or probated in the county where
the property is situated within the past
seven (7) years." (Emphasis Supplied.)
At the outset it should be observed that in our
judgment there is nothing In either of the subject statutes,
Article 6701h, V.C.S., or Article 3272a, V.C.S., to Indicate
that the provisions of the latter do not apply to deposits
made under the former, insofar as such deposits meet the
tests laid down by Article 3272a.
The questions with which we are concered are (1)
When does the depositor become the "owner" of the security
deposit within the meaning of Article 3272a so as to commence
the seven year period?; and (2) What Is the effect of lack of
"Reasonable evidence", within the meaning of Article 6701h,
that no such action is pending and no such judgment is unpaid?
Section 1 (c) of Article 3272a makes it abundantly
clear that before "personal property", which the security
deposit manifestly is, can become "subject to escheat" by
virtue of the occurrence of the seven year period, there must
be during such period an "owner" of such property whose exist-
ence and whereabouts are unknown, as evidenced by the three
conditions specified In said Section of Article 3272a. Our
Inquiry then is when does the depositor become the "owner"
of the security deposit within the meaning of Article 6701h
and Article 3272a. The seven year period obviously cannot
commence until such time.
Article 6701h discloses that the purpose of the
security deposit following certain motor vehicle accidents
is to secure and insure financial responsibility of persons
involved in certain motor vehicle accidents so long as, within
certain limits, such persons are potentially liable for
damages arising out of the accident. It is with this purpose
in mind that we must determine the time when the depositor,
becomes the "owner" of the security deposit so as to set the
seven year period In motion.
It is our opinion that the time the depositor again
becomes "owner" of the security deposit and, therefore, the
time when the seven year period specified in Article 3272a
Colonel Homer Garrison, Jr., page 5 (w-1231)
commences, is the date upon which one year from the accident
or one year from the deposi% has expired, whichever is later,
without there having been an action at law filed against
the depositor for damages arising out of the accident. And,
if such action has been filed within such time, the depositor
becomes the "owner", and the seven year period commences, on
the date upon which the depositor has been released from
liability, or has been finally adjudicated no% to be'liable,
or has executed a duly acknowledged written agreement pro-
viding for the payment of an agreed amount in installments
with respect to all claims for injuries or damages resulting
from the accident, In other words, the deposi%or becomes
the owner when his security deposit is no longer potentially
liable under Article 6701h. At the aforesaid times, respec-
tively, the deposit was no longer needed or required under
the terms of Article 67Olh.
Manifestly, the depositorwould have no standing,
or reason, or occasion to assert or exercise any claim or
act of ownership over the security deposit until the potential
liability of the fund was removed. Therefore, %he failure of
the depositor to assert or exercise any claim or act of owner-
ship on the security deposit between t'hetime of the deposit
and the removal of ,thecondition of potential liability would
no% logically tend to prove abandonment. Thus, to hold that
the period of abandonment begins prior to such %Fme would be
to raise serfous questions as to the constitutionality of
the statute. 1% is a well known rule of construction that
where an act is fairly susceptable of two constructions, under
one of which the act would be constitutional and the other
of which would be of doubtful constitutionality, all doubts
will be resolved in favor of the former construction. 39 Tex.
Jur. 206, Statutes, Sec. 3.
1% is readily seen that the date upon which the
Departmen% receives "reasonable evidence" is merely the date
upon which the Department learned that the depositor had
previously become entitled to his security. The depositor
had good reason to claim, and lould have claimed, the security
on the prior date upon which his security ceased to be poten-
tially liable for damages arising out of the accident. He
is no less entitled to, and the owner of, such security as
of such time that:the condition of non-liability occurred
than is the payee on a promissory note entitled to the amount
of the note upon the date such note beczomesdue, although
in both instances i% may become necessary to prove before
some duly c,ons%i%u%'edauthority on a later da%e %hat the
amount involved was ac%ually due t:opayee as of the prior
date.
Colonel Homer Garrison, Jr., page 6 (WW-1231)
However, there Is no doubt that the Department of
Public Safety does no% have to release the deposits unless
it receives "reasonable evidence" that the deposits are no
longer subject to being used for the purposes for which the
deposit was made, namely the satisfaction of any final judg-
ment rendered against the depositor for damages arising out
of an accident in an action a% law commenced within one year
from the date of the accident. The date upon which the
depositor becomes the "owner" of the deposits may, as we
have demonstrated, precede the date upon which such reason-
able evidence is received by the Department of Public Safety.
The question of what constitutes reasonable evi-
dence that there is no such action or judgment must, in the
first Instance, be determined by the Department of Public
Safety. We are no% prepared to say that it is unreasonable
for the Department to require an affidavit from the depositor
or his personal representative that no such action is pending
and no such judgment is unpaid, where the Department has no%
received other reasonable evidence that such condition exists.
Manifestly, the mere absence of any notification to the
Department that such an action or judgment exists is not
reasonable evidence of the non-existence of such action or
judgment. 1% is well known that civil actions often pend
for many years before becoming final and we take notice of
the fact that the Department of Public Safety does no% receive
reports from the clerks of the courts in Texas as to all of
the civil actions which are filed In this State.
But, this Is no% to say that the affidavit from
the depositor is the only way In which the Department can
satisfy itself that no such action or judgment Is pending.
For instance, it would seem that such an affidavit from the
persons for whose benefit the deposit was originally made
would, in the situation where the depositor cannot be located,
serve the same purpose as an affidavit from the depositor.
There may be other reasonable evidence and when this is given
to the Department, the depositor, or those who hold under him,
should receive the security deposit monies. If they are un-
known and the property Is otherwise in the condition specified
in Article 3272a, the property should be reported.
In the particular fact situation presented in your
letter, the Department of Public Safety has received no
affidavit from the depositor and apparently no other reason-
able evidence that the depositors of the security deposits
Colonel Homer Garrison, Jr., page 7 (WW-l23l)
have no action against them which was commenced within one
year from the accident or one year from the deposit, and
have no unpaid judgment from such action against them.
Therefore, the subject deposits cannot be released by the
Department and cannot be reported under Article 3272a, for
it Is not known whether the depositor became the owner of
the deposits seven years ago.
If, however, reasonable evidence of the absence
of such action and judgment is ever produced, the seven year
period specified in Article 3272a must be deemed to have
commenced at the expiration of 'one year from the date of the
accident or one year from the deposit, whichever Is later,
assuming no suit was filed within said period, or if such a
suit was so filed, said seven year period must be deemed to
have commenced on the date the judgment was satisfied or the
date said written agreement to pay damages was entered into
or the date upon which any judgment of nonliability occurred.
SUMMARY
Security deposits made under Article
6701h cannot be released to the depositor
until the Department of Public Safety
receives reasonable evidence that the
deposit is no longer subject to being
used for the purpose for which the deposit
was made. An affidavit as to such fact
from the depositor or his personal repre-
sentative is not the only proof that will
constitute reasonable evidence. When other
such reasonable evidence is received by
the Department, the seven year period
specified in Article 3272a, V.C.S., will
be deemed to have commenced as of the time
the security deposit ceased to be poten-
tially liable for damages arising from the
accident. The Department has a duty to
report security deposits where it has the
reasonable evidence and the condi,tions
specified in Section 1 (c) of Article 3272a
have occurred.
Very truly yours,
WILL WILSON
Attorney General of Texas
Colonel Homer Garrison, Jr., page 8 (WW-1231)
Assistant Attorney General
HGB:afg
APPROVED:
OPINION COMMITTEE
W. V. Geppert, Chairman
Vernon Teofan
Coleman Gay
John Reeves
Morgan Nesbitt
REVIEWEDFORTHEATTORNEY GENERAL
BY: Houghton Brownlee, Jr.