Untitled Texas Attorney General Opinion

585
OFFICE OF THE ATTORNEY GENERAL OF ‘TEXAS
AUSTIN
Bonor6ble fohti A. .E6ml1twt
Dirtriot kttorney
&dahor , T6mir
Darr blrt
lrtter or J U 6@6k QU' OQinlOn
otate4 ClVll
in Lfotley~Ootmty
586
in COunQCtiOn cith the fOr4gOiag qqqst~Oa8, YOU 6th6h
a 1stt5 ;r to you from zon. R. A. Seay, County Clerk, Lotley
CollntY.Texas, stating oertain fact6 in oonneotlon with th18
trM6ihOn. Lowever, lnaaffiuah
a6 thl6 oplnlon wl,ll turn
squarely upon a oonstructfon of the above mentioned lnatrumont,
oOnSidar46 rrom it8 row corner6, and the materlal fcOt8 appear
In said instrument, we quote same in heeo rerba, omitting iomal
parts:
"EE5ZhS, Cn Octot.er1, 1909, iuanah, ho& & Paoiflo
Railway Conqany, a corporation organized and OXlStilI&
under the laws or the State of Texa6, exeauted and de-
livered to Coxconwealth Trust Colepeny,a corporation
organized and exlatlng under the law6 or the State 0r
k'issouri,SE ~rue.tee,,(St.km16 union Trust Company;
a corporation or the etafe or ~laooflri,Suco4611or
Trustee) a oertain mortgage and deed ai trust covering
and lmluding.the 11li8ot Tt%ib’Oad of the mortgagor
0xtt3neing rrom amiuh, Enrdeesn County, 9ku.66,in a
rresterlyand southm-eater1 direction through the
C6uutle6 or Ifardemsn and E ottle ln the State of %x46
to the Southwest line of seld,Cottle County, and from
Aaae, Eardemen County, Texas, In 6 northwesterly dir-
eotion to the Red River, together rith oertaia other
property in said lg6tlrmnnt deioribed, r4tar4nC4 bore
being tade to 6aid mortgage und deed of trqt an4,to
the reoord tharaor ror 6 full aad complate description
of the propCrt)rcovered thereby, 46 ~411 c6 the te%-6@;,
aondltlona and aOVi6iOlIP of 6aid mortgage atiddeed of
trust; and
ViEsBIPAS,the 66ld mortgwe Wa6 ereautcd tq aeoure
(~0authorized issue of bond8 in the 6166ot $SO,OoO per
mile or oo6!pletedroad, or 60 muoh thereof a6 the Bail-
road Commission of the State of %exae may ironitfrmoto
tima authorits ana al&w, to be known as its First
Mortgage 81x Per Gent Gold Cougwn Bonds, to bear bate
the 1st day of October, 1900, and to be payable the 1st
day or Gctobar, 1939, with interest at the rate of ti
p4r acnum and pursuant to th6.t4l7&6Of mid mOZt#Ja&4
end deed it tru6t bonda eggregetlng t&e prlnclpal cum
or fji%,B15,~000~00 have been 4~13'i66U4d and are now cr\rt-
8tiUtding and are held by Ce&tr&cial
?ianowr &z&k and Trust
Company, a owpgration arganised aed existing under the
&rue of the State of ktw York, aa Trustss under the
Prior Lien Zortgage 0r St. %oul8-&n F-01640 Ralluray
ccmpany, dated July 1, 1916.
tori. Jobn 2’. imt<on, page 3
wEci:,fi-li.iiXFORF.,
ror vnlusble aonaidoration to It
paid , &a&ah, Aem k.PaaIfIe kallwsy Coa;panyhereby de-
alar08 tht said b0Ad6, aggra$atIAg the priAeipa1 8rta
or 92,91~,000.00, aonetltuts a Yalld~,Unp‘aldand sub-
elating indebtedness or the said Bai2way Campany and
the principal of Said indebtedness, toeeth6r rith
iAt0reSt theraon accrued end to aaarue, shall be pay-
able on the demand or said Central &mover Bank emd
Trust Company, 86 ~rustse as aror06eId, Or Its SUc-
aessor8 IA truet, and/or It8 or their aSSI~ee~, and
the debt and lien evidenced or areatsd by said bond8
and mid mortp,agaand deed of trU6t are hereby renewed
and extended and continued IA full foroa and effect
aooordl% to the tenor, erra and reading of 8aid
bond6 and geld mortgag6 and deed of trtmt,. whlek
martgage and deed or trust shall 8tand a8 #moUrlty for
the payment of said debt OA the U-Ad of safd Gantral
&mover Bank and Trust Company, a8 Trostse a8 afore-
said, or it8 Moces8or8 IA tmt, u?d/or~Its or their
e188lgntm3,aacordlng to the tern6 or said bond8 aad
said gortgage and deed or tru8t and the prorielaiu of
this in6tmmeUt."
These yIrst Mortgage Sir Per Csnt Gold Co~poa 3ondl USE+
or%glnally lseued Oetebsr 1, 1909, by 'the ??mnah, A&me a; Pad@
Fuilway Company ia the prinalpal sum o? $2,9l@J3QO.O0, sod the
kOrtga@ O? deed oi tMUt 8e8lZdZk(t thi0 bond iiX8U6U68,.,Of,GOUSW4,
not atamped, as a coadItlon~prere~oleite to mgiatration,.boeaim
the 8tatuta levying the excise stantp tax upon 8Uch Instfawnt
bad not been -acted. In this coBAsUtioA, SUbdiYiSlOA (a) 'of
IvcIolo 70470, 88 emeAdad, VerAon' knnotrtsd CLYil Statutes,
contains the r0ii0uing p``ovisor
" . and, providiag fktber that, 0XGept It8to’
rm&aie or 6xtsnslon6 0r aaorued iatereutt,the
proV1810nS or thl8 8sctIoA shall FhOtapply tO in6tX'Q-
tents given Ln renewal or cxtcnslans or Instr.UmAt8
theretolore stanipedunder the prwIa$ane of this Act
or the one amended ha-by, and shall not ctpplf$0
instrmeeriteg;iY0A IA the rerunding of eztetihg bond8
or ObltgatIons Where t&O prNWdIA& IE8trPoMAt Of
rreauritywas stcr~ in accordsracewith this bo% or
the ona ~aerendsd hereby5 . . .(I
This ?epartmaAt bad ocaasion reaantly to eomW-%ae the-
lbwa pFt3Yi8t# IA Opinion
X0. G-1962 to HostorableDan ri:;'&M.s#n,
Ci~+tlDistrict ~ttorn6y,ioaton, lkxa8, and held that .Mt8AeIon
fion.JohrzA. Eemllton, page 4
ggreem4At8, in tte form ordinarily and aosmonly t)xe~uted, sxtund-
lag the refituritg~date
of a aeoured Indebtedness not *theretofore
stampeb under the provl6Ionr of thla AGtm roul¬ be exempted
fcom the inaldenae of th16 tar. Tfiisopinion present6 a oGmp2ete
antper to your rirst question, ena we, therelore, e``l06e a
oopy or mm for your cxemlnatton.
16 the ln8trument dascrlbad IA your letter and attashed
Gorreepondenae and reproduoed hereinabove, en lnetrummt *'given
In rexmwal or extennioa" Or 4 bonded or eeaured lnaabtedn688~,
%ot theretofore etaEp6d under the pmvI6iOna Or this A&," 80
as to be subject to the exciea or privilege tax lcvied by sub-
division (a) of article 7047e, Vernon*e Annotated Civil Watuter,
oan8idered in GOnnaatiOn dth the above tjuotd pZ’iJYf803 %9li8
i8 8ubstantiall.y ;yGUr 8GGOd GUeStion, and the one which We
find thi8 Opinion till SOlOly turn upon.
It oonolueIvsly appdara tram the *Wh6F6a8611mot.thl8
j.n8truaant that the original bond& indebt6dne88, aeoured by a
mortgage or deed or trust upan d68Ol'lbedprOpertie or then:
Quenah, Aoma k PeGifiG ~Ballwaycompany, is epah llecuredobllh-
tlon a8 woald now come within the scope and purview o? sub-
dlvloIoa (a) ot ArtlGle 70476. Vernon*6 motated Civl2 Btatute8,
1evyXeg en exoP86 or prirllegs tax in a graduated emeuet %n all
note8 and obl+&atione 8eeured by chattel.mortgage, 6oed of trust,
keohaniaY8 lien OOntraot, vMd4r*8 uea, 00n6$tiQnal 8ul68 Gen-
treat sad all $nritrumentsof a 8Imllar nature rhiah arc‘-llWd
or reaorded 'inthe orrloo or the aciupty dPerk sniderthe &bglitre-
tion &PO 0r this %at&.a It further appears that suah iadobted-
nee8 matured Octobet 1; lOSO, and the imtrument in question
here was WGGUtG& Oatobsr 8, 1959. The operative portion of the
instrument reolte8 that, ror a valuable oonelderatlon, the *ail-
war GOS#My %ereby aea&rer that said bonds, aggregating the
prinaipal sum of.&,916,000.09, OOAStitUtO a valid, ti$ald and
8tlbsiatiA~iAd~btednO66 of *he said railway cgretpfmy and the
prlnalpal or said Imlebtedners, together with ititerastthareon
aaartaedand to eGaru8, 8hell be wable 011the demnd of said
Central Eauovetr Bank and '.kst Comp~ eta. The instant
further prwldee that "the rlebbcand llen erldanaed or craated
by said bonds an6 said 6mtgage 6nd deed of trust are hereby
r4w6w8a aud sxtended and oontlnued in rrtu roroe amd eiieat sob
-to thb tenor, eirsrt and readlq or aal4 boadeW etG.
The 2angOage ftl6tqu0ted, in rOZ7QOAiy~al~dwithout ~'6Qki.d
to legal prlnol``.les, tend.6to Gharaet&ise tha ~isstmuaanta8 en
extension or r(ms*al agreemeut, while the wards quoted prior
589
thereto Indicate only an Intent on the Oart of tbs 6iortgagor
railway oompany to eclaiow1ebg4the Jnetnees aod validity of
the bonded InUabte&neas and lien 604u.ring se.mc~,
agnolng to
pay aam on dcmanb. But the zwo mp&pia, in rarerena to
the bonds, of the words "are hereby renewed and extended,"
or t&e designation of thZ6 Instr\nnentas an extension agree-
m4nt by tbs parties thereto or Interested official6 hime, till
not 6&a it awh, either in sub6tance or form. It IS not WI@
t&c partis oall an Instrumnt but what it aotually Is In the
eye6 of the law which till control, and we must therefore resort
to the euthorltles upon this queutlon.
The rule may be @morally etatad that 4~ extsrrrrlon or
rineral of not46 snil the liens ssourlng 6~4, r46t6 io hontraot
an& mmns that which take6 #a84 when the debtor and omlitor
~a44 an agrseamit, upon a valuable conaidaration, for the
sturlty or the debt on a day subsmmmt to that provided In the
0~1ninsl 4ontraot. lratI0nslBank or ~06m4r04 ~4. Ics6.n4p, 08
'293 8S 0. g 568g'El.kHorn 3-k k !&get Co., et al ~6.
$&kg&n:, 30 s. ,;. (24) 066; '&apb4llPlver Timber Go. Lttl.,
is. Vi~rliii, 66 ?cd. (2d) $98, 108 A.L.R. 965; sh@A,Tdon va. &la&.
Cotton seed Froduat6 Co., 81 Ltea.'tE!al) 1691 O'l)anloats. WllIr,
et al, l29 So. 4401 Slottow v6. Jiullfnr. Co., 129 60. 5991
84``4nS vs. Habeta, et al, 199 5, E. 284.
‘In the~oaea ot &t&ail Bank ai Comaerae tar &may,
uupra, our ytrpreme Court, in pat%6I.ng
upon tpe iegotirbtllty of
a proadlrsorynote aontalning a prorl6lon with rerareneo to 4x-
ten6Ion agreessente,6814:
*It 044m6 to u6 the extension 6m6nt Is that whloh
takea g3.604 when the debtor anb aradltor aeke an agree-
e4nt upon 8 valuable eon6l4eIWtlti for the pryzwnt or
the debt un 6m day 6tibsaqaentto that ~rerioualy
6tIpolatau.'
The 04648 of Gai@b'slliiIverTImbsr Go. vs. Bierhue a&xl
Ske~ldonv6. &ia6. Cotton haed Produbt6 00.~ both suprn, Involved
4 oon6trw3ti0n or the wozd +464w81* appearing IO an dot or
OonSr466 levying ,an 4xalse 6tanrptax upon a0 orate ssoarItI46
gad providing that every renewal Ilpbe tax4d 46 4 new
triersorahail
lsbue. The instrument before the court In 4riohor th~464 Oansi.
wau In the ntltm of a sup lanisntslindentur4 or mortlbageext&-
it& the tLgleof the mturl ey of thtiorI&.~l bon4 I~IIM),but a4t
being a rsnswal thersor, in the a,ea64.taata new Indantaw 'ordeed
or trust eat areout6d In lieu of the orlslnal. It was he16 that
the inatrumeats fnvolved rrems"r4imw&6* beoeuea they ron?i8slne&
the es6entiaZ ooadltIoa6 of ab artenrlon OS tkrsmaatn&tp aat.4of -,
th4 orlgUa1 Ias+Puaent.
590
eon. John a. k%c.Ilton,pa.4 0
It will thus be 604n frO&s the ndjudieatad ces4a In thla
8nd other jU~f6di4tiO66 thet 4Xt4~sfOU Or payment of en obllga-
tIon rents In agreement or parties, by which, for a cohnldera-
fioc, the obllgee p2’&1u448 himcalf from takInpSe&ion Ugain68
&U&r during the period or 4Xt4liEfOli; the tI6Nior paymant Is
po6tp0n4d and'e new en6 dirrerent maturity urto is rIx4d than
the orIgiMl .inatrPrcent b4sr6. The eontut or the prorlro under
4~6id4?6tiOn here do46 not S4QUil'4any other Or diffter45t
~onrtruction to be phacd upon the words %m4wnl or ertsnaion
of iM8XWEtn86* than that acaordsd it, not only by the above
d&4I61066 but by the ordinary ocoeptatlon OC the terms. The
tnstrumnt under examination here 16 not either a renew61
sgSO4&4lit, an sxten6Ion agreement, or a ranewel and sxt4n6lon
6ggry)4mnt,In the @On84 .whIoh the tsglslature must h4va Intended,
b&U64 am4 I6 not 8 r4nnewnl or the origin81 Isdenture or deed
Q$ tI'llEt, LLOr iS th4 lSC&tUSity date Or the bond6 seOur4d theruby
~wtendad rmm October 1, 19Sb, to any future date.
Will4 the purpoesa
__ _ which promsted
.. t.he~ exsautlon
_ -. Of thl6
~PstlTWL46~al-0 606l4WMt ODEOPT4, mere om 44 no aout that Its
only 4fr44t Is to aaknowladge the ju6ta486 or the orI.glnal
bonded Ind4btednsS6 and to 40nrmith4 *slIdlty 0r the 114x&664-
.eUriBg66S4, 60 66 to toll the Statute ot LltitatI&s lor the
rled 0r on4 day, under Art&314 W59, Vernon*6 knnotntsd Civil
&8it46. It I8 appar4ntly an atbempt to ooaply'wIth the term6
or Art1014 bb?%?, ``Z’J.XOXI’S AnnotSt4d. CiVil %i!BtUt46, being 4x4-
d&e& and 44kn0vf14di344 with the 6t6tuto'ryroim6lltlea, but that
Et&U84 el4arly eOn8~p~f46 the r4gI6tmtIOn Qf inEtrtznsnt64x-
t4lMffmgth4 date Of IEiitUTit~ Or the drigiaal fXld4bt8d&l866, and,
In raot, I6 ths typ4 0r renew61 or art4riaion Instr654nt 406t46k
p&&d by the proviso h4r4 oonaldered. spite tru6 the inatrum4nt
here 4X84tIdE the period of llmltatIon during vrhloh malt rpaybe
broryht by on4 day, and to that extsat and ror th6t purpose,
may be aaid,,by irclplieatfoa of law, to extaad th4 deed of trust
or Indenturs seourlng 6~. Cherry VS. Corbnn, et al, 119 1. V.
(ed) 111. But th16 n?arslygo46 to the zem4dy and Is a pelts 4
dlirsrent thlaa,irum an lnot~rumentwhleh r4rlWis s oontraat
between the partIe to altsr their substentfoe rlg&ta, bg 6iwi6g
go;& the, fate when the rlpkt or the oblige4 te am firet
.
The toregoihg eE6wer to your 644ond qtm6tZon render6 un-
6404666~ a?3r 8REWer to DUS- thi@ QU40ti~.
YOU ain ae~ordlaglg ed*l44d.that the inatrw646t Q4S4rlbad
and df8QuU64d in this opinion i6 no8 ,euah a rensra~ or ertsn6Ion
br the orIg1nal 1nd4bt4&466 an4 llsn r4r4m4d tO tberrln, 6s to
be sabjeot to t&e aroise stamp tax levied by eubdirl#lon (e);
mlole 7047~1,Vernon~e Annotated Cirll &atutsr, considered in
connectionrlth the pro~luo tbersin, end the eueloeed opinion
of thf8 Department aonstruing&am.
%mting the roregolng rul3.yanewera your inc,uisy,
we
lr .
Your8 very truly
A'JTOFX.EY
GFJURa OF TMAs