Untitled Texas Attorney General Opinion ( 1961 )

Mr. William J. Murray, Jr OPINION NO. WW1217
Chairman, Railroad C&&s-
sion of Texas Re: What constitutes sufficient
Tribune Building compliance with Article 1440,
Austin, Texas V.C.S. and Article 1054 V.P.C.
requiring the payment of
interest on utility customer's
Dear Mr. Murray: deposits.
You have requested that this office reconsider a
letter opinion written to Honorable W. S. Bussey, Chief Weights
and Measures Division, Department of Agriculture, dated March
26, 1936 and filed In Book 370 at page 937 In our opinion
files. That opinion held that Article 1054 of the Penal Code
made it mandatory for private utilities to pay the prescribed
six per cent per annum Interest on meter deposits on the first
day of January, of each year when service Is not discontinued
sooner, whether demanded by the depositor or not, and that
payment upon demand did not satisfy the requirements of the
statute.
Article 1054 of Vernon's Penal Code contains the
identical language set forth in its companion civil statute,'
which is Article 1440 Vernon's Civil Statutes, except for
the addition of the last sentence containing penal provisions.
Article 1440 is as follows:
"Every person, firm, company, corporation,
receiver, or trustee engaged In the fur-
nishing of water, light, gas or telephone
service which requires the payment on the
part of the user of such service a deposit
of money as a condition precedent to furnlsh-
ing such service, shall pay six per cent per
annum on such deposit to the one making the
same, or to his heirs or assigns, from the
time of such deposit, the same to be paid
on the first day of January of each year, or
sooner If such service be,discontil,lued.
When such service is discontinued, such
deposit, together with any unpaid interest
thereon, or such part of such deposit and
Mr William J. Murray, Jr, page 2 (W 1217)
unpaid interest not consumed in bills due
for such service, shall be returned to
such depositor, his heirs or legal repre-
sentatives."
As you point out In your request, the 1936 letter
opinion referred to above applied a strict and literal inter-
pretation of ,the statute In order to reach the ruling made.
In order to determine the true sense of the Legisla-
ture, we think it Is helpful to quote the emergency clause
of the original statute before its codification in 1925,
which was Section 6 of House Bill 86, 38th Legislature:
ne
-
---ET3 more revenue to properly malntai:
State Government and the crowded condition
of the calendar creates an emergency and lmpera-
tive public necessity, requiring that constltu-
tlonal rule providing that bills shall be read
on three days be suspended and the same Is
hereby suspended and that this Act shall take
effect and be in force from and after Its
passage, and it is so enacted." (Emphasis added)
From the foregoing, it is apparent that the primary
concern of the Legislature was the fact that such deposits
were not earning interest prior to the passage of the Act, and
that during that period, many failures of such companies were
occurring with no protection being afforded the depositors.
A strict and literal Interpretation of Article 1054
and Article 1440 would require that all such companies either
seek out their depositors and tender payment on the first day
of January of each year or that the depositors actually appear
at the companies' offices on New Year's Day.
New Year's Day Is a holiday, and many persons are
away from the cities of their residence on that day. If
Mr. William J. Murray, Jr., page 3 (WW 1217)
payments were to be mailed they would not be delivered on New
Year's Day, for this is a holiday for postal employees. It
Is therefore clear that a strict and literal Interpretation
of these laws would require something impossible of perform-
ance. We do not believe that the legislature so Intended.
Sutherland on Statutory Construction at Section
4706 gives the rule to be applled here:
"The literal interpretation of words of an
Act should not prevail If it creates a re-
sult contrary to the apparent intention of
the Legislature and If words are sufficiently
flexible to admit of a construction which
will effectuate the legislative intention.
The intention prevails over the letter, and the
letter must If possible be read so as to con-
form to the spirit of the Act. 'While the inten-
tion of the Legislature must be ascertained
from the words used to express ,it, the manifest
reason and obvious purport of the law should not
be sacrificed to a literal interpretation of
such words.'"
In Wood v. State, 133 Tex. 110, 126 S.W. 26 4 (1939),
the Supreme Court of Texas said:
"It is the settled law that statutes should
be construed so as to carry out the legisla-
tive Intent, and when such Intent is once
ascertained, it should be given effect, even
though litera? meaning of the words used there-
in is not followed. Also, statutes should never
be given 2 construction that leads to uncertainty,
injustice, or confusion, if it is possible to
construe them otherwise."
The case of Commonwealth vs. Kentucky Power and Light
77 S.~W.2d 395 [Ky Ct A 1934) hlhi ld
somew at analogous stat&e, has beezPcalled t: o& a``&``on~
=Y-
and is cited for the proposition that the Texas statutes are
satisfied when Interest Is paid upon demand only.
It is therefore necessary to examine the Kentucky law
construed In Commonwealth vs. Kentucky Power and Light Company,
suora, and comnare its wording with the Texas statutes. The
Kentucky law there construed is codified as Sections 2223-l,
2223-2, m. st. supp., 1933, and is quoted below:
.
Mr. William J. Murray, Jr., page 4 (WW 1217)
"An Act to require a public utility to pay
Interest at the rate of six (6) per cent
annually on the amounts they exact as de-
posits as security for the payment of gas,
electric and water accounts.
"Be It enacted by the General Assembly of
the Commonwealth of Kentucky:
"Sec. 1. That public utilities, such as gas,
electric and water companies shall be re-
quired to pay holders of certificates of
deposits six (6) per cent annually on amounts
exacted from patrons for gas, electric and
water accounts.
"Sec. 2. Failure to comply with the above
Section shall subject the Utility Company
violating said provisions to Indictment and
prosecution and upon conviction to a fine
of not less than One Hundred ($100.00) Dollars
for each offense."
The Kentucky court treated the obligation to pay annually
as being analogous to a demand note, and held that It was not
necessary for the company to seek out Its depositors each year
and thrust upon them an interest payment.
It should be noted, however, that the Kentucky law did
not contain the specific directive that payment be made each year.
For this reason, the Kentucky case is not in point.
In this reconsideration of Letter Opinion of March 26,
1936, referred to above, we have limited outselves to the first
two questions answered. Those two answers and any other opinion
in conflict herewith are expressly overruled and it Is the
opinion of this office that Interest Is to be paid annually
whether demanded by the depositor or not and that it Is not
mandatory upon the persons, firms, etc., requiring service
deposits, to pay the prescribed six per cent Interest on the
first day of January of each year.
We hold that payment may be made after the first day of
January of each year on some date reasonably close to the first
day of January and upon a regular business day.
.
Mr. William J. Murray, Jr., page 5 (WW 1217)
SUMMARY
Interest is to be paid annually whether de-
manded by the depositor or not. It is not man-
datory that the persons, firms, etc., requiring
service deposits, pay the prescribed six per
cent interest onthe first day of January of each
year. Such payments may be made upon a business
day reasonably close to the first day of January.
To the extent of its conflict with this opinion,
Letter opinion to Hon. W. S, Bussey, Chief
Weights and Measures Division, Department of
Agriculture, dated March 26, 1936, filed in
Book 370 at page 937. Attorney General's Opinion
files and other oplnjorn.Lnconflict herewith,
are overruled.
Very truly yours
WILL WILSON
Attorney General
Assistant
HB/fb
APPROVED:
OPINION COMMITTEE
Henry Braswell, Chairman
J. C. Davis
Vernon Teofan
Pat Bailey
Ben Harrison
REVIEWED FOR THE ATTORNEY GENERAL
By: Leonard Passmore