Case Information

*1 . . . .

. . . . ..o OFFICE OF THE ATTORNEY GEN&?AL OF TEXAS AUSTIN

mall t mad.8

Ronoxeble Charles E. Baughma, page 2 Bond for torm Widilkg Aia&st 2otli,

that attar obtain’8 a9 a rerult of en agremat or doal, of a olelm ther8uador Is not 8tutejd uatll after August ZOthi and a settlammt of tlm olalm ln made, of the Bonding Ccnpans 00 WOUIU tint reduce the liability tie haul provided ior through the atteohiq of a cntlfloate OaPrping the ~~ooisiona set out herein. *In tins would the Deprbaont be justified in aoaept-

&.tg th8 aortifiCati8 bearing kkHh’13hit6tiO~ 8tated hOr8in.T The legisletlon with rbieh we are primarily concerned in answering the various questions pro ouudsd lo Houeo BQl X0&99, Aotn tl18 45th Le~alature (Artlola ii fib, Varnoa*r Civil 8tr ttIbW), ~OU88 Btil EO. 557, A028 Of bbs 45th L@titUrO (Artitie 1287.1, Vernon's Civil Statuteu), tid timate bill So. 24, Aok of the 45th Legielattzzs, 18t 0.6. (Article 1287-2, Vemon*e C1~i.l Statutes). *

On aooqoat of the llea@ih of the Aetazre~ ahall sot bat me out in tall, ,bat shall attempt to &to the substanao thereof a8 la prtln&xt to the matters la qaeotlon heso.‘

Art1018 II& prcrriaea @Lat 0110 *hall not be a &ii3.# ia sittru fruits qnless .hs applies to Oaamlsaiamr of'AgL\ibul- tas for license a@ moh,~reoalvrs mmh Ueenm, a&¶ film llaQ .lmr approved a'five Thowend Dollar bond roqulred by the A&' ibis bond, ooodltione% an rsqulred by law, guaranteea the payment by the dealer of fruft puTohaeed QII or&t, t?ndekr Berma ot' tha lew aad th8 bond anyone deelfng 'wltb suoh'Ueeune% dealer my maintain aotion on snme~. Article 1287-l oonta5.m aub&aw tlally the sama prorlalo~~s, k8 ertlawit to sattera~hrse~lnmlveAt U+lore In vqpt8blu. emsept t&t said ertlcls 26 pp ! Soable 1287-2 prwldss t&u anp,perma who oomes withlg w of titicla the olaaaUloatlons set out in both lleb and AHl6l.a iirtldle 12d7-1:

lionarable Charles P. Rsu@man, page 3

faithful portonnanoe under both Of said Aata shall be '! liabls ror only one lioe~e fee or !nVoIIty-iit8 ($25.00).’ Dollars, and his llaense ahall raflsat as tact that he ie lloenasd thereby to handle both oltrua frutts and V8&+tabl8&"

After oarcrful examination of the oartlflaste aa quott@ in your lettar, we mmatxue the language to mean that thr algi,nal bond and the renewal thereor ahall be oonsldored as one oontiausd obligation under whlah the bondfag aompany Is liablefor %sfa~l.oa- tione.ocourbing durin& the tam of tie bond and the renswal period onl$ up to ths limit of tho Uablllty set forth in the lea6 of the the liability of t&he bonbisg aolapany shall ti&t be bond, and that in adUltion to the orlg$nal bcpnd. In othm woTd8, th8 aggre@&te af :liablllt~ea wkicih tight obtain uadtpr &ha bond axpirw'wudt 20, 19l,2,.an% thp axtsnda% bond &plrlag August 20, 1913, oannoa.qaead $5rocxwo~

Ths obrioas aifieot of tha provision in the renewal

o&$lfloata, wari It taXId, would be~$o lIu&t the llabillty of ~Tihhs bonding uoqmny to an 9xtmt not ruthorlaad ~bp tho atatutaa.

-..,The statute6 p6rt$.uen~ to this quea+Wn apwl~mlly state bhat ;%&I lla~~o,Isau8~ Ir~aooprdawe wlth their pre'+Idau ahallA8~ In foraa and W.eat for a" arlod's~ onb am yaar,~ ('krtlala llSb, Ssetlon 6 and ScMlon l!t; irbIoX,s 12874, metion L) And llka- d88, .ilI OQidOn Of tbia ~8~rbMUlt, the89 8t8tUtW OC&lt=- Blat8 that 8 band tif.$5,@0.00 8haU be In affoot durl.nlt tha afreatlva srlod of $he llaimaa au Iaaitied, not 6 bond whIah may be b l& sued dth Uabllltlaa arlaing wda a prior pnrlod. Wader the wording of the catantlon~aartIfloate here uudst oou- aIdsratIOn If llablllty obttilaod tmdar th8 band ln en anmat #g,OOO.bO ths rirst year 'and not diaooraed until the aso~d y&r, thul,thqughthe dealer hd pa+3 tihs preaitlsior the mooad year* hia or8dlbwa wauld hats ao priitootion for the SaOCnU year under the bond far tha raaaaqthat penalty of the band would be eOi8plot8~ exbsiuated by,SIabllItiir arIsIng under the band for 31 such a&se t&* &nd pear prcsmiun would be the fIrat year. l;ab&the dealer ior JW pob~&bI6rt a&atw8r those nich whm ifi Public latereat, ap'wall be tha atotutoo thssnualraas aec3wsaw~y da&&d 8 bond fre$l .br a,? 8U6h llmi$ati?na. Y

!l!hsra are obher &aaoa$, we think, * eertlfloate bearlngtlm attemptad ll&atIon ~ahm0.d not be aaseptad. A ftmUa- men&l rule' to bs appltlsd ~Zn~detemal&Iag the,ralldAty of prwIalaa8 oi statutory bond8 as the bond herb Qader oowIdsratIon le to .asoortaIn the prorfalana art the ~t~$upfr ox statutes prereorlbIn$ the oolldftlona of thsbor$. Xi the atstute statatea Uo not psrmit the llmitatfona aq@ht to be ;asds a part of the b+d, thea

Hoaorabla CharlwE.Baa@hawx, pass 4 nwh 1ImItatIoaa a,are not authorlted are mid. The uamo or

Globe IpdaanIty 4ampaay v. Barnsr, 288 8.W. 121, use on. In rpfiloh the plaintiff 8ought to hold a surety upoi,a publio aontraotm*s statutory bond liable for the ,porabaee prloa of DIatOI'i41 ftWSIlQhQ& th@ aontraetaa: v&m-i the obligatloae of the band ekpeaifiot&ll~ QXQII&VtQd tha rtrret~ fro= suoh liablllt~.

The ComIssIon of Appealu held in that sass tbat It was m#aI- isat that the bond was lntardml as a caapllanoe dth the #&atute and that the obligatlona l@osed by statute would be read into th4 bond. a that 4~0, fod#?3 Otti9 spQ0r, 6p4&1& rOr the fksc&sfC%, s&St

"'Far minor purpose to lfplit that llabllrty Irk rsplyplant to t&e major purpose to ossout~ the bud 60 a8 to 4nab.l.Q the eontraotor to prooOe6. Tha attamhd UmItatlon 1s In riolatloa or the statute. and tharerore void. 'rhe atatute will be road Into the bond aa thou@& 'its terms had been striatlp oomglied w~C]S.~ [aqphepla ours) Slmo It Ia.our opiulon that tha attwspted UmitatIon in eXt6miW OU&‘tifl~Wt4 here under Oadde?StiOn is l%O% it 3.6 the rwth4r OpIaIon aathorlzsd or pel¶&tQd by rtatiute or this dspartmmt that srras~la 10 d, ror the89 rea8eru t

~ thQ 0awls~1elwr Agrlaultur* rou.l& not be $l*tIfi@8 In

aooeptlng ma4.

Yours vary truly &%RliBY GmRAL OF '&KM3 ltuP:co

h?TItWB)~AaC 10, 1942

(Eiitgked) GZ?ALD c. l,rnmJ

hTTOQ?ET OlOlneRAL OF TEXAS