                                                          I_..

         TEE      A-IITO~Y           GENERAL
                      OF%-EXAS
                     Aus-ruw   1,. TEXAS




Honorable Tom Moore, Jr.       Opinion No.   ww-502
District Attorney
Waco, Texas     -              Re : Interpretation of Section
                                    1 Article 3926, Vernon's
                                    Civil Statutes, regarding
Dear Mr. Moore:                     fees of County Judges.
          We have received your letter of Augusts 5, 1958,in
which you request our opinion on the following question:
          "The estate of the late Madison Cooper
     of this County consisted, among other things,
     of several hundred thousand dollars in various
     stocks and bonds. During the course of admin-
     istration of the estate, the executor sold
     some of these in the amount of $5l5,114.%.
     This money was later invested in other stocks
     and bonds. Our County Clerk has assessed a
     fee of * of one per cent against the proceeds
     of these sales under Article 3926, V.R.C.S.
     The attorney for the estate disputes this
     charge and we have been,asked to seek your
     opinion. . . .I*
          You included with your request a copy of the execu-
tor's verified account for final settlementwhich reflects the
properties inque,stion included corporate stocks,and stock
rights, corporate bonds municipal and other political subdi-
vision bonds, certificaces of deposits,and United States Govern-
ment Bonds. You desire to-know if the county Judge, under Sec-
tion 1 of Article 3926, Vernon's Civil Statutes,,may tax a com-
mission of one-half of one percent upon the funds realized from
the sale of such properties when'such funds are later used to
purchase similar properties.
          Section 1 of Article 3926 reads as follows:
          "The county judge shall also receive the
     following fees:
          "1. A commission of one-half of one per
     cent upon the actual cash receiuts of each execu-
     tor, administrator or guardian, upon the approval
                             ,,,’




Honorable Tom Moore, Jr., page 2    (W-502)


     of the exhibits and the final settlement of the
     account of such executor, administrator or
     guardian." (Emphasis added)
          We have assumed that such securities were held.by
the testator as part of the corpus of his estate at the time
of his death, and, further, that such securities (the ones
later sold) were held by the estate when the executor quali-
fied. Since we have no information before us on how the se-
curities were originally inventoried upon probate of the will,
nor what values were assigned thereto, we can give you only
what we consider to be the general principles applicable~here.
          In Attorney General's Opinion V-398 (1947), it was
determined that when a personal representative cashes United
States Government Bonds, he is merely exchanging one form of
government obligation for another, and that, therefore II.. .
such sums should be classified as cash on hand at the time of
the'death of the testator, and the County Judge is not entitled
to any fees under Article 3926 on said SLUIL~~Such opinion cites
as its authority Terrill v. Terrill, 189 S.W.2d 877,writ re-
fused, which reached such result on the question of cashing Sav-
ings Stamps, United States Post Office. Such is the rule when
these obligations are cashed, as distinguished from being sold.
          In Attorney General's Opinion O-5654 (19431,it was
determined that cash received as "liquidating dividends" was
taxable under Section 1 of Article 3926   The amount there un-
der consideration was in excess of the inventoried value of
stock owned in a lumber company and such opinion was concerned
only with the amount so received in cash. The cash received
represented increase accruing to the estate during the course
of administration. We feel such opinion correctly states the
law applicable to the question there under consideration. There
is,l.anguagein such opinion however, that might be construed
as holding that the County 3udge would be entitled to such com-
mission on all money collected when property constituting origi-
nal corpus of the estate is sold for cash, even if the arnomwz
received equaled or was less than the inventoried values.
do not feel such an expanded construction of the opinion Would
be a correct statement of the law. Opinion O-5654 relies in
part on Goodwin v. Downs, 280 S.W. 512, (Comm.App.) which is
authority for the proposition that all funds received by the
representative pursuant to completion of the descendent's con-
tract would be so taxable and not just that amount representing
profit to the estate. We do not believe such case controls the
question of the conversion of a portion of the corpus of the
estate into another form of asset.
Honorable Tom Moore, Jr., page 3    (WW-502)               24,:!?
                    '.                     '..

           The case of ,McCroryv. ichi a C un v 261 S W.2d
 867 establishes that the words n!ctuat cazh ie&eiptsP*as used
 in kticle 3926 ~do.notcontempleitea commission'to be paid on
any and all money that may be collected by the executor:
           "We believe that the expression %ctual cash.~
      receipts' has a more restricted meaning than 'cash
      actually received'. In the first expression, 'ac-
      tual cash' describes 'receipts' while in the sec-
      ond, 'actually recelvedl:ldescri&esIcash'.;~Cash
      may be.,capital,. or the..corpusof anestate,, while
      the word Irecelpts' is synonymous with lincchpe:l,
      'issue', "product' 'yield' 'returns' and.,tpro-
      ceeds ' .. . .' And the term fproceeds&as been $e-
      fined as I,.. . '#theamount proceeding or accruing
      from some,possession or'transaction.! a :. .,.!I:_.
          ho,   see m‘v.      Harvg;y,26 S.W.2d.288, which states:
           "      It is thought the term 'actual cash
     receipts; %iould be held to specifically describe
     money received by the executor other.than the cash
     or cor~u  of the estate which was on hand when the
     testator died, because the words used point to and
     imply that meaning, . . .I1 (Emphasis added)
          In the case of &llbert v. Hine5, 32 s.w.2a   876, the
following statement is made which we feel accurately disposes
of the question here under consideration:            .     /'.
          *'We,therefore, hold that the claim for war
     risk insurance was a Dart of the Corvus of the es-
     tate, and, when thi; claim was later,a verted. into
           and-paid to the guardian, its status;~
          Of the COrDUS of the ward's estate‘ was un-
     changed, and no commissions to the guardian could
     be allowed thereon." (Emphasis adaed)
          In addition, the &Crorv   case cited.above, states:
          "It would be the same estate in a different
     form, and would be only once receiveLtl
          We, therefore, conclude that when assets constituting
a portion of the original corpus of an estate are sold the
cash received therefor is not such "actual cash receipts" as
would be taxable with a Judge's commission under.Section 1 of
Article 3926, if the money received did not exceed the inven-
toried value of such assets. The same rule would apply to the
sale of Vnited States Government bonds and obligations, as
                                ,Y.




 Honorable.Tom Moore, Jr., page 4,      (m-502)

.distinguished from the cashing of such obligations. Cash re-
 ceived representing ,increase,bver the inventoried value of
 such corpus would,,of course, have accrued during administra-
 tion and would be taxable.

                               my,                 .‘,
            Under.Section 1 of Article 3926 Vernon's :
       Civil Statutes, when securities constituting
       original corpus ,of the estate are 'soldby an
       e'xecutor,the County Judge .may receive commis-
       slons on only that portion of the cash so re-
       ceived which represents increase over the in-
       ventoried value of the'securities; the same
       rule applies when United States obligations are
       sold, as.distinguished from cashed.
         .(,
                                  ?o&s very truly,,
                                 ., '.
                                  WILL WILSON
                                  'AttorneyGeneral of.Texas




 TIMc:st:wb
              :                        Assistant

 APPROVED:
 OPINION COMMITTEE               .,I

 Geo. Pi Blackburn, Chairman
 William E. Allen
 Jack Goodman
 Leonard Passmore
 REVIEWED FOR THE ATTORNEY GENERAL
 BY:     W. V. Geppert
