Untitled Texas Attorney General Opinion ( 1947 )

Hon. Jaok C. Altaralr Opinion No,. V-102
County Attorney
Johnson County Re: Redemption Of COUti-
Cleburne, Texas house refunding bonda
I iseued in 1923
Dear Sir:
We hare received your letter of March 6,
1947, which we quote in part as follows:
“The County of Johnson issued oertain
Court House Refunding Bonds dated April
10, 1923, and due April 10, 1947. In
Ootobsr, 1945, the County called in the
outstanding County Court House Ref’und-
iog Bonds. One holder of these bonds
has refused to submit them and has de-
manded payment or principal and interest
to maturity date. QDMTION: In view of
the deoision handed down January 29,
1947, by the Supreme Court of Texas in
the cam or the State National Bank of
El Paso va. Tarrant County, Texans does
Johnson County have the right to oall in
the outstanding County Court House Re-
iunding Bonds?*
We have examined the oxigisal transoript
covering these bonds whioh is on file in the Comptrol-
ler t s Department. It is noted that the,bonds were
made payable serially from 1925 to 1953, inclusive. We
awnma that in your letter you have refcrenoe to thm
$7,000.00 of boada.(Nos. 96 to 102, inolusiva) whioh
mature on April 10, 1947. The tranaoript shows that
no option of redemption prior to maturity was included
in the bonds. Therefore, if they can be redeemed prior
to their maturity date, the authority au& come from
operation of law.
The reoord showe that the bond8 were is-
sued to refund $150,000 "Johnson County Courthouse
Bonds," dated October 10, 1912, due and payable forty
years from their date, Rwith option reserved to redeem
HQJP.Jack C. Altaras - Page 2 (V-102)
said bonds at any time after TEN YURS ifem their date.”
The authority toissue'the refunding bonds was round in
A$',;,'; 657, Chapter 3, Title 18, Revised Civil Statutes
e Yoreever, it is expressly stated in Sestion I
of the bond erdsr and in the bonds themselves that the
bonds were issued under the authority of the Oonditu-
tion aad Laws of the State of Texas, *partiaularly Ar-
ticle 657, of Chapter 3, Title 18, Revised Ciril Stat-
utes of Texas of 1911 e . ." Artiols 657 provided as
follows:
"Art. 457. Old bonds of legal issue may
be substituted by new. h- Where bonds have
been legally issued, or nay be hereafter
issued, by shy county for any of the pur-
poses mued in Article, 610, new bond8
beariag the same or a lower rate of inter-
est nay be issued ia conformity with ex-
iatiag law, in 114~ thoreof. (Acts 1693,
p* ll2. A&d 1901, p. 16.)"
The original -bonds were issued under the
authority of Article 610, Chapter 1, Title 18, Revised
Civil Statutes ~of 1911.
Article 611, which wae part of Chapter 1 of
Title 18, provided as follows:
"Art. 611. To run not exceeding forty
years; redoenable when. -hAll bonds issued
under this chapter ahall rim not sxceed-
ing forty years, aud shall be redeemable
at the pleasure of the county at any time
after five years after the issuance of
the bonds, or after any period not exoeed-
ing ten years, wh;toh.may be fixed:by the
oommissioner~q court. (dots 1893, p. 112, 1”
(Emphasis added)
The Supreme Court of Texas in the case of
Cochran County v. Mann, 172 S. X;'. (2d) 689, in inter-
preting Article 611 held as follows:
"As we eonatrue the above statute, where
bonds are issued under the ohauter there-
in referred to, if the Commissioners'
Court at the time the bands are issued
makes no provision oonoerning its right
to rode.6 the bonds prior to their matur-
Hon. Jack C. Altaras - Page 3 (V-102)
‘ity, they ma7 be redeemed at the pleasure
of the ooanty at any time aiter fire years
arte,r the issuance thereof.:, HoweVer, the
Commissioners! Court my, by an approprl-
ate order entered at the tihe the bonds
are Issued, postpone the date after whioh
the”bonds may be redeemed to not exeeedlhg
ten years from the date of their isauaneeO
The .bonds are redeemWe, in all, went, at
not eroeeding ten yeara rroa the date of
their iasuanoe,,‘~ Dallas C0uBty.Y. Loakbart,
;gk$e Trealmrer, I.28 Tex. 50, 96 9.1; 2nd
(aphada added):~
Earever the abhnmon County !Courthonae Re-
‘funding Bends were Issued in 1923. arler ‘the-authority
~0r Ilrtlal+ 657 .tilsh appeared in a dirreront ohapter.
15 the 1925 revision of’ Texas i3tatuteai Artlole 657 wati
plaoed’ in the laae chapter with Articl.er ‘610 and, 61.1.
In the Revised Civil Statutes of 1925 ,these statutes
appear-in,Ohaptsr 2.of Title 22 as Arti. 7b8 (610),
720 (611). and 726 (957). The ‘Supreme Oaurt$r the
oa8e’or Bexar oouaty Y'. .Bellerr 178 ,S. w,. (ad) 505, i
hold that ,thi redergtlon prmid~ae Of &tiele 720 ‘ipi
” plkd to’ all bolaas fswed under Ohapts 2 l,f Tit10 22,
whioh idolu#od rowrg bonds issued L der the author-
‘ity or .APtioIe 725. ,ti that chapto+.
We haYa stated borore, howover, that tho
refunding bonds tmder oonsideratlon.were lsauod i& 1923
under the l uthor,itV of Ariiiale~ 057; whloh appeared in a
diftrrent ohaptor irom~Az=tlole f311~, and as stated by
th,e ‘SuPrems ceurt :in the 0464 0r at4te mat10541 Bank or
241 Pad Y.' Tarrant County, Texhs, 199 9. 3. (2d) 152:,
eWe are here conatrul~ ‘the applloahle. stat-
utes as they existed in 1922, when, the fund-
ing bonds InVolved in this ault w4r4 lsmmd.”
The statutes were the same in 1923 as ‘in 1922*
X5 the Tarrant Oounty ease t,he ~i,dentloal log-
al quest,ion am thr one under oonslderation was berore
tha Bnpreme Court+ Tartint~ Qot@ty~ had. ,lssued refunding
bonds in 1922 under the .autherity ~of’Artlole 657. Ro
right or prior rede.mptlon was retalnod in those bond@.
The Court held as fo~llats:
Hon. Jack C. Altaras - Page 4 (V-102)
“. . . It is undisputed that the right
to redeem such bonds before the aatur-
ity dates staateaia suah bonds was not
reserved in the bonds or in the orders
of the Ceiamissioners' Court authorizing
their issuaaoe. The redmptien article,
Article 611 of Chapter 1 of Title 18 of
the 1911 statutesi provides that 'all
bonds issued under this chapter ahall
be redeelpable' within a certain period
of time. It is quite obvious that that
article does not by its ewu term apply
to bonds issued under any other chapter.
Jefferson County v. Sellers, 142 Tex.
528, 180 S. W. (2d) 138; Gavin v. Potter
County (Civ. App.), 187 5. W. (2d) 705
(writ refused) . . .'*
. . .
"We have conoluaed that the redemption
provisions of Article 611 6f the Retised
Civil gtatuter of 1911 applied bnly to
bonds issued uuder Chapter 1 of Title.
15 of the 1911 Revised Civil Statutes,
and cannot be applied to funding la4mb1
Issued under Chapter 3 of Title 12 or
the 1911 Revised Civil Statutes."
As the Johnson Ccunty Courtheuso
Refunding Bonds, dated April 23, 1923,
contained no eptFon or prier redemp-
tion, under the decisioa of the Supreme
Court of Texas in the case of State %a-
tional Bank of El Paso v. Tarrant County,
199 S.% (Ed) 152, the outstanding bonds
of such issue are net subject to redemp-
tion prior to maturity, and the CO~DILS-
sienere' Court of Jehnsos County has no
right to call in suoh sutstaading bonds
prior to maturity. Of ooureel; such
.. .
Bon. Jack C. Altaras - Pags 5 (V-102)
bonds may be redeeoled before aatmity
with the consent of the holdars there-
Of.
Very truly yours
ATTORNEY
GEWERAL
OF TXAS
-”
George WKsSparks
GWS-stwb Assistant
ATTORNEY
GBtWtAL OF Tpus