Case Information
*1 Hon. Jesse James Opinion No. O-5820 State Treasurer Re: Construction, of S.B, No. 8 of the hustin, Texas Regular Session, 48th Legislature, amend- ing Article 4740, R.C.S., and Incidental Dear MrO James: questions o
Your request for an opinion on the above subject mat- ter, i,s as follows:
“According to the General and Special Laws of Texas, 48th Legislature, Regular Session, 1943, Life Insurance Companfe s - Deposits of Securities, Chapter s$$ S,B. NO. 8, Page An Qct to amend Article Revised Civil. Statutes of 192Fa was passed which reads, fn part, as follows:
“‘The physical of such securities Board of Insurance Cimmissioners shall be sufficient without being accompanied by a written transfer of any themas Wince this Department holds, as custodian, securi- tfes for companies under the supervision of the State Board of Insurance Commissioners, as well as the State Bankfng Department) we kindly request your opinion on the followfng questions:
“1 .D Is the above Act retroactive covering a.11 de- posits made prior %o th.is amendment, or does it app1.y only to deposits made after date of this law?
“2 0 Has there been a simi.lar amendment enacted for Senate Bi.11 No. removing the requirement of vendor’s l,ien or mortgage notes on depos- its made by companies under the supervi,slon of the State Bmkfng Department? If so9 what is the effective date of said amendment?
“3 Q Under any condition fn which transfer of 11en is required by law, does the endorsement written on the margin of vendor’s lien or mortgage notes ‘without re- course’ and signed by the company constitute a legal of lien?” *2 Article 4740 of the Revised Civil Statutes of 1925 as amended.by S.B. No. of the 48th Legislature at its Regdar Session, provides:
“Any life insurance company now or which may here- after be incor:2orated under the laws of this state may ;Is-i;osit with the Board of Insurance Commissioners for t!;e common bene_“i.t of all the holders of its policies securities of the kinds in which, by an annuity bonds, the laws of this state, it is permitted to invest or loan its ca;sitil, surplus, and/or reserves, equa.1 to tlr 1c:al reserve on all its outstanding policfss in force e which securities shall be held by said 9oard of Insurance Comni.ssioners in trust for the purpl:!se and objects herein specified. The physical of such securities to the Board of Insurance Commission- ers shal,l be sufficient without being accompanied by a t:ritten of any lien them. Any such company may deposit lawful money of the United States in lieu of the securities above referred to, or any portion thereof, and may also for the purposes of convey to said l!oard of Insurance Commis- such deposit, sioners in trust the real estate in which any portion its said reserve may be lawfully invested. In such case, the Board of Insurance Commissioners shall hold the title thereto in trust until other securities lieu thereof shall be deposited with it, whereupon it shall reconvey the same to such company. Said Board of Insurance Commissioners may cause any such securi- ties or real estate to be appraised and valued prior .to their being deposited with, or conveyed to, it 9.n trust as aforesaid, the rea.sonable expense of such ap- >raisement or val,uation to be paid by the company. Un- der the ;:rovi,s-Ins of th.is Article, registered as well as unregistered United States Government securities may be deposited.”
It is the general rule that legislative acts speak proL;)2”tivel.y ind not retrospectively, unless such retrospective featuae is c!~::.rly maniSest from the language of the Bill. We find nothing ii1 th;? above-quoted amendment that would take the case out of the ordinary rule. So that, your first question answered that the Act is not retroactive so as to cover all depo- sits made prior to the effective date of the amendment, but that it applies on.1.y to deposits made after date of the law.
We assume that your reference to S.B. No. 165 in your is to S.B. No. Chapter of the 42d Legis- second question (Rev.Civ.Stat-Art. 1524a, lature at its regular session in 1931. Vernon’s Codification) o
This Act does not purport to require (actu- ally) of the debts or obligations--sec,ur?.ties-- deposited with any corporate in the manner they-in pointed out o
There has been no ‘amendment of the Act in thi,s respect. In this connection, however, we will say thcst 1.t may have been the departmental practice of the Banking Commissioner in approving deposits \<ith trustees, under the terms of S.R. 165 to require th;zt where~ liens were ,involved a writtei~ t,?:::~nsi‘er of the iien, as ;:‘e!.l as the notes or securities themselves, should be executed. Authority to tiake such requ.iremer:ts im- plied from the statute requiring deposits, and such a prac;~Ice should be followed. See our Opinion 1Yc. O-4535.
A lien upon property 1s such hds no legal existence 5::: -l?i.$z from the debt or obligation srcured thereby. So that, mything that would operate to transfer the note or other ,fhstru- ment evidencing the debt, would operate in law to transfer the equitable it. Such e+itable transfer, however, :!ould not be adeouste to meet the St&es s requirement of deposit, Yor it would not Lbe subject to regi,stration to protect the hol.d- ers of such securi.ties agaimt the supervening right of ah inno- :e,zt purchaser of the mortgaged prosert:. Yox ?:tllrL :i:;;?r:tion is answered in the negative. The
~~‘yi;j~o:y cjc::.,;,:;it, upon :I, v$Tn,::.c;; * s lien or mortgage note of the words, “1.: 1 t;ho,- ;t recour;:f:“, has mthing t,o do with the cLuestim of the transf’::r 2 i: ‘.,!.:?n secmsing such note D It merely operates to ~-mid 1i.ibiii.t:~ of th.: endorser as ,a guarantor of payfient, but 1: does n~ot ,,f??ct the completeness of the transfer evid~enced~ by .the sigmture -, :’ the transferor. Hs :3bove explained, this trans- fer of ths not;. (as by endorsement) I:tould operate to trunsfe? the equitable title lien, bl:t not the legal. title. For these reasons, in order to transfer the legal. tit1.e to the lien, it should be done by a properly executed instrument of writing. We so heid in Cpini3n No. C-4525, dealing with a similar ques- tion of securities deposited with the Board of Insurance Comis- siohers under nrticle 4982 of the Revised Civil Statutes.
What we h:ive said about the registration of liens, how- refers only tc liens upon land. Chattel mortgage liens, ever, however, while they may not be registered in the way that are nevertheless subject to the stat- upon realty are registered, utes regulating chattel mortgages u?on personal property gener- ally, but with reference to automobiles, specifically, by com- pliance with the provisions of the Certificate of Title Act.
These suggestions thus volunteered may be of little
or no value in your particular inquiry, however, as the securi- ties thus deposited, whether with a corporate or with the State Treasurer, under the most recent amendment of the Statute (1937) have to be approved by the Banking Commissioner.
The-principles applicable are discussed in Wood v.
Sparks, S.W. (2) 361, 63 S.W. (2) 1109.
In oral explanations of your question No, 3, you have made it plain that your inquiry concerning the method of trans- ferring deposit notes concerned
deposits made by loan and brokerage companies under Senate Bill 165.
Trusting that what we have said fully answers your in- quiries, we are
Very truly yours ATTORNEY GENERAL OF TEXAS /s/ Ocie Speer BY Ocie Speer, Bssistant APPROVED FEB 21, 1944
/s/ Grover Sellers
ATTORNEY GENERALI OF TEXAS
APPROVED: t&INI~AZ'NCOM4TTEE
BY: 8
OS-MR:wb