Untitled Texas Attorney General Opinion ( 1949 )

I . - * ENERAI. May 10, 1949. Hon. Raymond E. Hagee Opinion MO. v-826. County Attorney Calveston County Re: The applicabl1ity of stat- Galveston, Texas utes prescribing bonds for sale of real estate to es- tates of decedent8 and Suardlans when the flducl- ary is a oorporqtion qual- ified to aat nlthout bond under Article 4982 of Chapter 16. Dear Mr. Magee: Your request for an opinion IWadS, In part, as fO11OW8: "The County Judge has addressed a OORIN- nioation to me asking for an opinion constru- ing several probate statutes. "The question In my mind involves the " appllcabllltY of the statutes prescribing bonds for sale of real estate to estates of decedent8 and guardlanm where the fiduciary Is a corporation quallfled to aot without bond under Article 4982-86. . e . "He ha8 applications pending by a bank which Is quellfled to act as guardian by com- pliance ulth requirement as to deposit of se- curities with the State Treasurer in which they Seek authorIt to sell a8 Admlnlrtrator without bond. "Re has the same question in an estate of a ward whose guardian Is a Trust Company qualified in compliance with the requirement a8 to deposit of securities. "The questions which he wants clarified are: Ron. Raymond E. Magee, page 2 (V-826) "1. May the admlnlstrator be authorized to sell without complying with quoted Article 35760 "2 . May the guardian be authorized to sell without complying with quoted Article 42011" Artlales 4982 and 4983, V.C.S., provide: "Apt. 4982 . . . "Any person or association of persons, any State banking corporation or any other domestic corporation, or any corporation or- ganized under the laws of any other State, provided such foreign corporation complies with the laws of this State relating to ln- surance other than life, may exercise the fol- lowing powers by complying with the provisions of this subdivision: "1. Qualify as guardian, aurator, execu- tor, administrator, assignee, receiver, trus- tee by appointment of any court or under will, or depositary of money In court, without alv- lng bond as such. "2. Become sole guarantor or surety In or upon any bond required to be given under the laws of this State, any other statute to the contrary notwithstanding." (Emphasis add- ed throughout.) *Art. 4983 . . . "Those Included In the provisions of this subdlvlslon shall: "1. Deposit with the State Treasurer fifty thousand dollars aonsistlng of cash, treasury notes of the United States, or gov- ernment, State, county, municipal OP other bonds, notes, or debentures, secured by first mortgages or deeds of trust, or mortgages or deeds of trust on unencumbered real estate In Texas worth at least double the amount loaned thereon, or such other fir8t class securities HOIt, Raymond E. Magee, page 3 (V-826) as the Comlssloner may approve. Said bonds or securities shall not be received or held at a rate above par, but Ii their uarket val- ue Is less than par they shall not be held above their actual market value. The State Treasurer shall require any such depositor to replace any securities 80 deposited on wh%ch the interest shall not be paid within six months after maturity, by other securities equal In amount to those removed, upon which the interest ha8 not been defaulted. The funds 80 depOSitedshall be prlBarily liable for the obll~atlens of the depositor in any Capaolty herein luthorlmd, and shall not be liable for &my other debt or obllgtior of the depositor until all 8Uoh tl'U8t1iabllitle8 have been discharged. “2. SatiStj the C@mSSiOtNr Of it8 801- vency . The Commissioner shall Issue any such depositor, when SatiSfled It Is solvent and has made the required deposit, a oertifloate 8hOWiry;8UCh facts. "3. Uaintain a prem.lumreserve of the amount required to reinsure all outstmding risks, to be determined by taking fifty per cent of the premluu o? all unexpired risks that have la88 than one Jsar to run, ad a pro rata of all gross prerium on risks that have more than one year to run. "4. File with the Comlrslsaer, within sltty day8 after the first day of each Jmuua- ry, a report 8wCrn to br it8 presideat and searetarJ or by two of its prlneipal liiio er s, as to the surety and bond burlnerr (Lone by the 8am during the preceding year. '5. Pay taxes on It8 surety and bond buzm78 a8 required of other surety oompa- It was held In Attorney Oeneral's OPlnlOn Ho. 2541 under date of January 11, 1924, -. (Opinions of Attor- ney General, 1922-1924, page 306) construl Art1c1es 540 to 545, Revised Civil Statute5 of 1911 now Artia1er Hon. Raymond E. Magee, 'page 4 (v-626) 49?? and 4983) that_.since -. . the laws of the _ -. . State . . of _Texas aumorize ana perPut mate mm8 ana maze Dau ana trust companies to act a8 guardlan~admlnlstrator, etc., without bond, National bank associations doing business In Texas nay be authorized and empowered by the Federal Rersrve Bo8xd to perform suah powers and functions in TOX88. Following this op'lnion,it was held In Attorney t3eneral's Opinion Ilo.O-5929 that where a State or a National bank complies with the deposit requirements of Artiolea 4982 aad 4983, it ha8 met the full requirement8 of law and may functiolain such fiduciary eapaclty wlth- out a bond. It was further held in this opinion thr ti 1 a01 required the execution of a l8ale68 bond ref8idiess of whether or not the bank actually executed a general' bond and regardless of the fact whether the bank had made the required deposit under the term8 of Article 4983. SUbSeqUent to the above mentioned Attor- nej aeneral's Opinions, Artioles 3576, 4201, and 4216, V.C.S., have been amended so as to provlde the following: 'et. 3576 . . . Vhenever any property of an estate Is ordered to be sold by the county judge, such order shall be entered upon the rinutee of the uourt, Shall describe the property to be sold, the time and Dlace of sale, and the terms of said sale,-and shall re&lre the ex- ecutor or admlnlstrator to file a good and sufflolent b d Subject t the approval of the court, $ if the sure&es on said bond are naturiiilpersons, same shall be In an a- mount equal to twice the amount for which suoh real estate 18 sold, but If the surety on said bond Is either a dOBeSt or for8ign cerpora- tion permitted t0 do bUslne88 in thi8 State for the purpose of ls8ulng surety, guaranty, or Indemnity bonds guaranteeing the fidelity of executors, admlnlstrators and guardians, same shall be equal to the amount for which 8UCh real estate 1s sold, plus any additional sum the court shall find necessary and fix for the protection of said estate; provided that where the sale of Such real estate is nade to the owner or holder of a secured clalr against the estate the sale of the real estate securing suah claim, and.ls In full Hon. Ramond E. Magee, page 5 (V-826) payment, liquidation and satisfaction there- of, no bond shall be required except for the amount of cash, If any, actually received by auch~executor or administrator in exoesa of the amount necessary to pay& liquidate and satisfy such claim In full. "Art. 4201 . . . "An order for the sale of real estate shall state: (1) The property to be sold, g%v- lng such desoriptlon of It as will Identify it. (2) Whether it 1s to be sold at pub110 auction or at private sale, and If at public auction, the time and place of such sale. (3) The neoeaslty 8nd purpose of such sale. (4) That no sale made by the guardian pursuant thereto shall be confirmed nor shall the tlt- le of the ward to such real estate pass to the purchaser unless and until It shall first be found and determlned by the court, by an order duly made and entered to that effect kh t the guardian's general b d If the s&e- 11:s thereon are natural oers:iia:la In an amount equal to double the value of the per- sonal property then on hand, Including the amount for which said real estate may be sold, plus such additional sum as may, In the opln- Ion of the court, be neoessary to protect the estate of the ward, and that the sureties on such bond are solvent; but if the surety or sureties qn,aald bond 8re either a domestic or foreign aqrporatlon or corporations permitted to do buSine88 in the State for the purpose of issuing surety, guaranty, or lndemlty bonds, mmxanteelns? the fldellts of auardlana. the to protect the estate of the ward as above required, an additional bond shall be filed In accordance with the above requirements. However, where the sale of such real estate 18 made to the owner or holder of a secured Hon. Raymond E. Hagee, page 6 (v-826) claim against the estate and the same la of the real estate securing such claim and la In full payment, liquidation, and satisfaction thereof, only the amount of cash, If any, ac- tually received by such guardian In excess of the amount necessary to pay, liquidate and Sat- isfy such claim In full, shall be considered together with other property of the estate in passing upon the aufflclencg of the bond as hereinabove required. (5) It shall require the sale to be made and the report to be re- turned to the court in accordance with the law." “Art. 4216 . . . "At any tWe after the expiration of floe days after the filing of a report of sale, the Court shall inquire Into the manner In which such sale was made, and hear evidence In sup- port of or against such report, and If satls- fled that such sale was fdlrls made and In conformity with the law and that the uardlan ha8 on file a good and 8ufflclent*d enera in an amount, If the sureties thereon are nat- ural persona; equal to double the value of the personal property then on hand, Including the amount for which said real estate Is being sold, plus such additional sum as may, In the oplnlon of the court, be necessary to protect the estate of the ward; but If the surety or sureties on said bond are either a domestic or foreign corporation or corporations permitted to do business In the State for the purpose of lseulng surety, guaranty or Indemnity bonds guaranteeing the fldelkty of guardians the bond shall be In an amount equal to theylue of the personal property on hand Including the amount for which said real estate may be sold plus such additional sum as In the opinion of the court may be necessary to protect the es- tate of the ward; and if and when the guardi- an's general bond has been examined by the court and found to be In the amount above re- qulred with good and sufficient sureties there- on, or if the guardlan's general bond is found to be lnsuffl~lent, then an additional bond shall be filed in accordance with the above Hon. Raymond E. Hagee, page 7 (V-826) requlreQent8; a8 evidenced by an order duly made and entered b;lthe oourt'to that effeot, the oourt shall cause to be entered a dearee ConfIrmIng such sale, and order the report of sale to be recorded by the clerk, and the proper conveyance of the property sold to be made by the guardian to the purchaser, upon compllanae by such purchaser with the terms of sale. The provisions of this Article shall be mandatory, and unless the court shall first determine that the guardian's bond is adequate and solvent as above set forth, an evidenced by an order made and entered by the court to that effect, any sale of real estate hereafter made under the provisions of this Title shall be void.* (Emphasis added.) It will be noted that Articles 4201 and 4216 now state that If the "general bond" of the guardian IS sufficient, as evidenced by an order duly entered by the court to that effect, real estate may be sold wlth- out the necessity of a "sales" bond In addition to the 'general* bond.' There is no comparable provision ulth reference to administrators. Therefore, it U.our opinion that where a bank has qualified to act as guardian or admlnlstrator by compliance with the requirements of Articles 4982 and 4983, by making the required deposit of securities with the State Treasury, such bank may act as guardian or ad- ministrator without giving a wgeneral* bond as required by Articles 4141 and 3386, V.C.S. It is our further opinion that suah bank aannot sell property as admlnla- trator without filing a speolal *sales bond as required by Article 3576. However, such bank may sell real ea- tate under the provlslons of Articles 4201-4216 as guardian wlthout filing an addltlonal *salea" bond if the court Is of the opinion that the deposit of securl- ties with the State Treasury is of sufficient value to protect the estate of the ward. SumaARY A bank uhlch has quallfled to act a6 $uardlan or administrator by compliance rith the requirements of Articles 4982 and 4983, by raking the required deposit of seourltles with the State Treasury cannot sell proPert Hon. Raymond E. Hagee, page 8 (v-826) as administratorwithout riling a special "sales" bond as required by Article 3576. However, such bank may sell real estate un- der the provisions of Articles 4201-4216, as guardian, without filing an additional "Eales" bond, if the court 1s of the opln- lcn that the deposit of securities with the State Treasury Is of sufflclent value to protect the estate of the ward. Yours very truly, ATToBlEY OAL OF TBXAS JR:bh FIRST ASSISTNW ATTORRBY OBNBRAL