Untitled Texas Attorney General Opinion ( 1944 )

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State Board of Education of Texas
Austin, Texas
Opinion No. O-5879
Re: Are the Polk County 4% Road and
Bridge Refunding Bonds of 1936
callable under the provisions of
Articles 720 and 725 of the Re-
Gentlemen: vised Statutes of 1925.
Your letter of June 12, 1944, is as follows:
“At its meeting on June 5th the State Board of Educa-
tion was advised that the County Treasurer of Polk County had
issued a Notice of Call, in accordance with the provisions of
Article 725, Revised Statutes of Texas, 1925, of the following
described bonds now held for the account of the State Perma-
nent School Fund:
“POLK COUNTY 4% ROAD AND BRIDGE REFUNDING
BONDS, dated October 10, 1936, bearing interest at the rate of
4% per annum, original amount of issue $114,000, balance out-
standing $84,000, maturing $5,000 in each of the years October
10, 1944 to 1955, both inclusive, and $6,000 in each of the years
October 10, 1956 to 1959, both inclusive.
“Following the instruction of the Board, I desire to re-
quest your opinion on the following question:
“Are the above-described POLK COUNTY 4% ROAD
AND BRIDGE REFUNDING BONDS callable under the provisions
of Article 725, Revised Statutes of Texas, 1925?”
Investigation of the record on file with the Comptroller of
Public Accounts discloses that the October 10, 1936 Polk County Road and
Bridge Refunding Bonds, described in your letter, were issued by Polk
County for the purpose of refunding, $114,000. then outstanding of an issue
of road and bridge bonds bearing 55% mterest, issued by the county under
date of July 1, 1929, under the authority of Article 718, Revised Statutes
of Texas, 1925. The original bonds of 1929 expressly retained an option
of redemption five (5) years after their date. The refunding bonds of 1936
were issued under the authority of Article 725 of the Revised Statutes of
.1925, but these bonds did not contain an express contractual provision where-
under they might be redeemed before maturity.
Article 720 of the Revised Statutes of Texas. 1925, reads as
follows:
‘State Board of Education, page 2 (O-5879)
“All bonds issued under this chapter shall runnot
exceeding forty years, and may be redeemable at the plea~a-
ure of tha county at any time after five years after the is-
suance of the bonds, or after any period not exceeding ten
years, which may be fixed by the commissioners court.”
This Article is contained in the same Chapter of the Stat-
utes as is Article 718, under which the original bonds of 1929 were issued,
and Article 725, under which the 1936 refunding bonds were issued. The
Supreme Court has construed this Article as being applicable to bonds is-
sued under Article 725 so as to make such refunding bonds redeemable af-
ter five years from date in the event no express contractual provision for
redemption before maturity of such bonds is provided for by the commis-
sioners’ court at the time such bonds are issued. Bexar County v. Grover
Sellers, Attorney General, et al, 178 S.W. (2d) 505. This decision controls
the question submitted and you, therefore, are advised that the Polk County
Refunding Bonds described in your letter are subject to call at this time
upon reasonable notice, pursuant to the provisions of Articles 720 and 725
of the Revised Statutes of Texas, 1925.
Yours very truly
ATTORNEY GENERAL OF TEXAS
By /s/ Gay-nor Kendall
Gaynor Kendall
Assistant
GK:EP/cm
APPROVED JUN 22, 1944
/s/ Geo. G. Blaekburn
Acting ATTORNEY GENERAL OF TEXAS
APPROVED
Opinion Committee
BY /s/ BWB
Chairman