Untitled Texas Attorney General Opinion ( 1950 )

AUWTIN ii. -
PRICE DANIEL
ATTORnrEY
GENERAL
February 4, 1950
Hon. Jesse James Opinion No. V-997.
State Treasurer
Austin, Texas Ret The procedure for handling
funds of unknown stockhold-
ers deposited in the State
Treasury under Senate Bill
402; 51st Legislature, after
dissolution of domestic cor-
Dear Mr. James; porations.
Your request for an opinion is as followsi
*Please note the enclosed file with reference to
a deposit of $2.749.75, which we have just made to our
Susperse Fund # 31 - Dissolution of Solvent Corpora-
tiO8S.
.
“Heretofore deposits of this kind have been made
as above to our Suspense~Account where it remains for
a period of seiea years, after whit+ it is es&sated and
transferred to General Revenue,
*However, a new law was enacted by the 51st Leg-
islature, Regular Session - see Chapter 576,
‘This deposit was made by Baker, Botts, Andrews
and Parish of Houston for the W-K-M Company of that
city with request that it be handled under the new law.
“Under the new law it would be escheated imme-
diately. The new law also requires that the state adver-
tise the amounts and owners of the money being held by
the state.
“If this money is immediately escheated and de-
.
posited in General Revenue, it would require court ac-
tion on the part of owners in order to get their maney
from the state, Heretofore all that has been necessary
was for owners to furnish.proof of ownership.
“Pending your reply this money has been placed
in Suspense. We should like very much to have you an-
swer the following questions;
“1. Can the cost ef..4&ertiring be taken out of
thir deposit?
“2. Should the tnotsry r4main.in Suspense Ac-
cumt a reasonable l4ngtb #f tieri to see if any @r+rt,
‘VP all, is claimed by 4wn4r,s’? If so, how long s.h4uld
itremain in Suspense udil~ it ic transferredto Gen-
~erqt ~Revonue?
YYour’answ4r tt~,theee questions will be appre;
CkUed,”
2%~ statutc nscesrrry for us to construe in order te
.aaewr 131 Tex. 175, 114 S.W.Zd 216
01936) 1 thi the court had before it the statute pertaining to
funds &elaq~gct``a estate, where the parties entitled thereto did
not demand their share of the estate within six months after an or-
der approving the report of the commissioner6 of partition. The
significant provision of the statute considered by the court direct-
ed that the funds in estate cases be paid to the State Treasurer, and
not into the State TrOaSUry. The Court said1
Hon. ;esse James, Page. 7 (V-997)
“A careful anatysis of ths objdcts sought to be
attafned by the passage of these articles, 3644 to 3660.
clearly excludes the fdea that the money should be placed
in the general revenue fund and be pub)ect to payment
oaly by hgislatfve approprfations. Nor do we thfnk that
ths p?wisions of articles 4371 and 4386 of ths Revfsed
Civil Statutes, as amended, Vernon’s Ann. Civ. St. arts.
4371,4386, control this case, or that the Legislature in-
tended, by the enactment of those two articles, to amend
or change the mode of procedure described, in articles
3644 to,3660. The clear purpose of the law; as we con-
strue it, is that the treasurer shall keep a record of such
funds, and be prepared to pay claimants the amounts due
them when the law has been complied with, In other
words, the State Treasurer becomes a custodian or trus-
tee by virtue of ths articles of’the ‘statutes. Smith et al.
v. Paschal- ef al., Tex. Corn. App. 1 S.W.Zd 1086/s;,’
,~ .~.
Siinllar language is used in .thc statute tinder”+asidera-
tion, for it provides that the funds be paid .to the State Treasury and
not into the State Treasury. ‘Thus it is quis manifest that the Leg-
isla= did not intend to treat these funds as e&heated ~funds. The
fact that the Js8islature saw ‘fit to adopt part of the eschedt statute
in providfng a remedy for claimants, does not necessarily mean that
the funds are escheated to the State by the act itself and that the en-
,’ ..,:*.,
tire escheat statute applies,
,.
It is ‘observed iaat’ in the statutes adoptea bye the Legis -
lature as the necessary procedora! statutes (Arts. 3286-3287, V.C.S.)
quoted above, Article 3287 provides, “but without inteiest or costs,*’
which means without interest or dosts to the State. Sin&e the Leg-
islature in this act has directed that the State Treasurer upon re-
ceipt of the funds shall advertise in one issue of some newspaper of
general circulati6n.h Travis County that he has custody of the funds,
and prescribes the’information that the advertisement shall,contain,
but makes no speciftc provision as to compensation, we think it may
be reasonably inferred that thfs cost may be approprfately taxed a-.
gainst the funds in the same manner that the cost is taxed against
es&sated funds. This provision of the statute in regard to adi+er-
tising is for the benefit of claimants of the fund andnot the State,
hence it should,bear the cost of any precautionary measures pre-
scribed by the Legislature for the benefit of any bona fide claimants
to the fund,
We therefore answer your first question in the ~affirma-
tive. That is, the coat of advertising is to be taxed against the funds
so deposited.
Since the procedural statute here adopted fixes a mfni-
mum period of ‘time within which claimants shall file ,suft, as fn ~.
‘,.
ion. Jesse James, Pa& 8 (V-997 )
es&eat proceedings, which under the statute fs four years from
the date of the judgment, you should hold the funds, less the cost of
advertising, in suspense for a period of four years from the date
of the receipt of the funds, If at the expiration of that period no
suit has been filed as prescribed in the procedural statute adopted,
the funds should then be transferred to the general revenue. Of
course, ff in the intervening time a clafmant has filed suit as pre-
scribed by statute and should prevail, the funds will be available
without appropriation by the Legislature to pay claimants who have
judicially established their title to the funds.
SUMMARY
Funds belonging to unlocated stockholders of dis-
solved corporations paiq to the State Treasurer as pro-
vfded in Senate Bill No. 402, AC@ Slut Leg.,, R.S.’ 1949,
ch. 576, p, 1122 (Art.‘l395a, V.C.S.), should bekept in
a *uspense account for a period of four years.from the
date deposited, unless the owner or. owners of such funds,.,
establish title thereto before. the expiration of four years
from the date of deposit, Claimants may establish own-.
ershfp and title. to such funds within four year.6 from the
date’transferrhd to &theState Treasurer in the same man-
ner as provided by law ‘for establishing ownership and
‘title to escheated funds.
The cost of advertising by the State Treasurer in
‘.. the manner prescribed by Article 1395s should be charged,
against the funds.
Yours very truly,
APPROVED8 PRICE DANJEL
Attorney General
,w. v. Geppert
Taxation Division
Charles D, Mathews
Executive Assistant
By&ToCdAssistant
LPL/mwb