   OFFICE    OF   THE   ATTORNEY     GENERAL    OF     TEXAS
                            AUSTIN




                                               trlct     conrt.

                                                  27, ls40, a-
for aA0 opixdcn                                   tho dove srptionea
mbfatit mxttw,



                                       wt08rUlpsr
                                       0 failure of tao
                                        a litm upn hi.6




            a#wmant , ln orrsot # dbor%inater the
            lam of the bank to the Lien armted to
            secure the fedoral agency insofar 80 tha
            bank’s lijrais 8 lian 011 the
            lnc1ta%r an qgremt    on the
            ii-     Coxd8doner   not to
farmrinthollmofh%stool8ad8toak
duringtheeodngcropyJlu.      Th+Cam-
zdssloa3r is oi the opisma th8t it ir to
the bestlatcuostoi   thobaak ta aaouto
the agroemaxlt.
          '(2) ?ha baa& bold8 a llm n
stoekot *ralne1e8s     than tw asmunt   or
its a&at, nrd the ommr of the stock, tind-
ing a prcohasorsho Lowi11lngt0     m    8
tnir pie0 ror the stock, popose* to ml1
th38tQck;mb~       y the pwweds   of t&e
sala to his debP , lorting the balmae of
t& MobtodPeas     still owl@ the bfusk. It
zill b3 necessary for the Ccudsslomr,
%ithW 0xpoa61~ or by iaplit%Btiotl,   to ro-
lwse tha lien of thebankupon     the stock
sold..
          O(3) The saao eituation 38 that
a&ailed la PQM;TO~    (2) abow, quite  ofton
arises sit& ref3roneo to real obtote loeoo
3'33rail-01s or 0 prt Of the lard GocUr-
ing the Mabtoclr#Po is sold cn3 the ysooml.s
aj@led oa the debt, the ComAsslaner Being
requimd to axwute 0 prtlal or full re-
lease of t&S lien.
           '(4) B&ore the clo&.ng of the
 baaitaqzim3s      alieaupnperscmaltf
 uxbr ,c pledged contra& coatpinzzrg a PO+-
 -.wof Sal0 allthorixbg thobaaktooOll
 tha peruaoslty at public or ipri~ate SC&~.
 ThO Coxiiaosion3rrizYlsa person who is
 willing to bti the rowmnablo value o?
 tha poperty at the Bale clnddGcidea to
 persilt the Fojerty  to bo strwk d'S to
 tm tbiml party arxlersuch bid.
                   O(s)
                  Tlaebank holds P lien apm
  Live etock a~3 the dabtor, tithout axq
  epoeifio ~setiaent that the stock is to bo
  taken la ~ollat.%on   of th debt alqly
  turns the stock in to the coudrirfonor uml
  indicat3s that be is xm*1~~&0&
  In tha truleaotlon.
  anoppetunltyto    Eelltbb rtoetforo
         reason8blsralne ant decide8to Bakethe
          sale.
              s(O) Tho dabtor, as in vsgra#
         (8) abow, turzm the stock i8 to the M
         butspeclxiasll;l8psesthstth@Csmlsr
         iona? is to Ml1 tho stockend rpply the
         poceads to the debt,leatinE; thennprid
         bskuiae still osiag.
                 ‘~6ZlStSCtiOll6     SUch 66 6bofO OUtl%lld
          usurlw      inr0i~0    ~popsrty  or 86ui  YO~UO,
          and If    the Cousdssioner 3.6 rrqulrad       in
          ev$ry aase to rp lo to the court or tbo
          jl.l&gs
                far autho4 ty to mrry out the m
          posals, a consldersblo portion of tEe
          ta1uo Gf tizap-opert7 invOlTetlx4.11be
          uood in oaurt costs* It i6 t&S desire
          of      this      Dc+prrrtwnt     to   exaraise         every       jre-
          caution lal;allymmesssq,     but at the
          6;iE8 t.iW, not t0 USS1eS61Y VMte   th0 M-
          sots in its Umds by sm          unnoowsafy
          court          costs.

               *In tLe~lFC;btof IJioakavc, I respeot-
          fully suhalltthe follosiry qnestioar
                    ml8 it ncae*a8ay, under tie lav, for
                  the Co~dcwr       tcropol;r'
                                             to tha Dis-
                  trict court for uuthGrit7 to cs.rT7
                  but iug or all Gr Lb0 prSpcsal6 as
                  outlined la rsaragraphsx~~&srerl (1) to
                  (5) abow@

           A fw words             Tith    Z’espOOt    to    th3     notut’s          ati   8SIEWal
powrs   of the ii*          Comilssi~~!~ rfll not bo emis,. 38
th a c o ntr a r y, sudb l sktewnt   will fumisb the key to the
jmb10ss,ima others Of a skilpr naturrt,subr.dttsdin your
-P-7.
          The StrteBaakingCossids(LIomr is a State officer
6xidsb7 1s~ su~lmtSm&at     ad tnst@MtOr ef the State's
bankIng system of Texas. (WV. Cit. Stat., ArtAcls 347)
iiais clotksd ritb the pcmr of tisitrtioa    of State banklag
lnstltutloM, 81th authorit to C&OS8 orp 1lutitut10n riolot-
ing t&o lama ot Lt10 State, SS S@t tSPt&  in the St8tUt36.  Be
iebr Los mda the liquidator of olosedbanks cOsdx& lat.0his
                                                                                 2c




haml8, (8eY. CiY. Itam., Art. 3tl))       8xaept       ln   tlloae a88eE
uilcreheroluntaril7rsCerstbe satter to theAtt~Cea-
*al for julsdal 11puidrt1on.(BOY. CiY. stats ., Art. 370).
          LB t&O WttW   Of liQUid8ttrgSUOb 8 blUik.thO
C0mtAeel0uw is euthorited to eo11est PINS,    claims, end
debto dua to su6h inSOlrS8t bank8 aXadpsriSX% such rats as
are nee?nsary to oormerro its 8eHts and baslwms, ud to
1iqdlbt.e the aftdrs of rmab hmlmnt            b-.'         (Rsr.Civ.
8Lats.,Art. 463).
          It will be borw In odrd flut the autharit~     of
theBuWngComzlseionerbe10~        tehiub~tirtoo       of his
~podtion a6 a state 05?16w axl net w tirtus OS al?y aoFt
of appointmnt~     ug ooptf as aFeeelv*   0rU@dater,
(Lain OIuuary Co838 of l.ns01relseypoowdlngs.
         TheCo~Joaaracts       uponhis emninitirtiraaod
irrbependentl7
             of tbe crders of tbe court, exoept onl7 In
thoso illSt&8lCSSUhb-ro t&s St8tUt3 ha6     6ps0iii6Sd1j        WW@.P0d
the approval cf' t&e District Court of the county wherein the
insolvent bank i8 loeatod. Zhis 118a5tation  upon his other-
sisa coupleta power, %nsofar as ft is jmrtlmnt to 7am in-
qu&rbs, is found la Artlole484 of th7 statutes,as follov~~
               sUgon ths ordsr oi!the Dlstriat
          court of the oeuut~la which aroh
          bsnkls    loeated,it in session of
           the jadgo thereof, if %a rraatL,
           the Corrndsdonw ray sell or eom-
           pound all bad or doubtful debt6,
           6a3d a67 sell real or psrsowl pco-
           pert7 OS such banka on such tsror
           as the aourt sbsll direot, RX@ un-
           derlike OllderOt Said OOUTt,or
           the jud&e thereof, bo aq sell or
           ooupouml   bd   or doubtful   stMk-
           holders' tb6MsswntS fbndssll
           stockholders* ussasswnts levied
           ageinatstookbolders of sxacbben%
           OPsuchtermsest.beCem%sh8l1
           dlroet. a0 SOOb OPdOr 6htil  b0
           enterea or sale sad0 vltheut8o-
           ties 0x3 t~eardng.~
           A6 8 liquidator of t&bMk,             the   COnr JisdOnW       is l
 tFustee, t&e dapofitors, other erediters end the stooMxoldere
($8 8 ssar;o) t&e ‘uoasliCiSPt66 , ylJhsncohs   my do every-
thing wcesaaa-y to ooaearve the asaets of rho bzmk. (536
Zsll~~ bmkka 8nd i&&in&, Vol. Vt * 6311). ?lot w        k
this tLw general rule, but it is &he statutoq rule ia
‘KQxu, ILS sho%fnb7 &tic10 483 oi the StStUtQ6    ObWe qUOt-
od. Of cowe,     say sot uf his In thr aonsarvatioa of t&a
au&s    in his lmrub is subjeor to tha expcou rememtion
of the sLatuto contalnsd ln Artfcle 464 pit& reaps& te
tb~ a110 of assets, the c-s            oc aoxqs-odse of dabts
tiethe bank sxi t&b like.
                        a0        c~~OQSr’6                 8OtS    pith     X%MqeOt       t0   tbf3    CoI)-
somrtion                OS    Lhe     oreots$n        hi.6
                                     should be thOs@ which    ha!XlS
a sauna axl fair osslci%l useretio?J surgests to him as
fha       &roper         tXl6h.XWS        ona    oifiai%l          Courmd.        ms   dutiee          Era
those that  aoulS ba extwcis~ b7 80 orddmrily tubIrf3twm-
alL’iLr
      C;UltloUS,oo@blo poreon oCoupg*     his offIcIa1 ml-
tion.   such oipio2ol  wts  cl hi6 are       end em wt.
                                       i’i.zaal
subject tc appeal or rwiw     by amy other tHb#lklOrWtlFt
sbatso~?ar    It- io only t&a abuse of bls pouers that muid
                        l

be macLad a-w by tcoourt of eqnit7.
          Fitb tieso ~-x&era1but Im¶Is~teble pInelplss
in dlxl, vo %nwer your inquirlw in t.hooraer In uhhh
you hays propcunied the&~ 00 followat
                 (1)               ma aubowtlaa      egreewat, rruob:aa mm-
Uonod         b7 7m,               clearly, if tb3 iaOtS jl?stw i.t,is One
rbich  th3 ii-     cowdasiowr    in t&o 0xaruiso oi) his an-
cLCsputJC.right and duty  of conseru~tlm  oi the auetm in
IlisIisldS*husthopowrtowke.          lfth~aaUlouab7
another            to       the    tarrisw’     SOP   the     wr*oSS         of   t#%bl~        hflp to
mke a crop, S6 rawmabl~                                nooassarj cx=holpfkl to the
Ced6&owr     io malising upoa bi6 cmn clrrir, the sribro-
sat&on irtSwor of the ow tnklng such nm loan is ea
at  of conservation suthorzEed b7 16s. uad not Is eq
SB~SO a aah of an assot of tba bank, WC Is it o e01p1
protdse or co-g        of ua iadobtodness ,due the bank.

            (2) There Is a ditfsmnue batweoa 8 debt and a
 llea respring the ps7wnt of sueb debt. Sacb 1s polerty,
 OS course, but the lien baa no separrrteexistewe &de--
 Ont of the debt, a& o8mnot be se~@&d      tbwe?roe  am3
 8old as EII asset wltbln Itself. Z?m ease pxt by you in
 Us    qu~ticn  is a mare oouvoaticxml mthtibf    qrewcnt
 of t.ilc&artAeo cowollzQa to rcm?o1ose t%Aa lfon e      apply
 thbo procrmds al tLs 6S10 to t&s debt.   TM8 is in 1Qgal
 aifsat        enfamemmt                  of the lien for the purpose of colleat-
                                                           .     -



                                                                     x


lx.& the d&t --   a thing   the Coxmirrsianaris camrmndsd
by 1~8 tC do.
                               aaid aboro ritb r3spact
                               __                   - -to
qu3st1cn    82' 1s 3150 rpy1rcama  to your qu3st1on -8.
.i3+ fact   rhat th.3 mcurlty consists of lcuxlrather than
of p.8rscnalgxoperty rzcnkes
                           no dl.ftsenw      in ulo   losttar.

           (4)  In a casd rhora tha bank asset is a noto
socurs& by a pl%lgo of collataral tto situatien is no
difforont tram that disenssad in quostlono .r and 'P
abwe~    The pledged lisn niy bo fomcloaed by t&s Cop-
I;36~ionarIn scc0rdm2.3 rith,.theterm or the plodgo
contract zd *Aa wthad on~z~ast-d   a you my,      of course.
bo POllarDd*   This is collacticn and not wls     or mqmmd-
ing 12 anydoo.

          (5) trh83-0the Cowdssioner pase3ably take8
pao~~?&co  of c#rtgiged pwprty,   as he ZXL~ 53 authorimd
to Lo by thz tams of the instrumnt,   or v?lcr> ths dabtor
mrQ    surrmdorg tha cxwtgagod property to tb3 Comdas-
ionor umier tho mortg*:6, vlthout any agroamnt Jhat3ver
as t-0tli~z&h&l of foraolosure IUXIapgllcdion of tbo
proc2#28, the Comchsionor is aut3orlzod to call and ap-
ply ti.12~~roe.mds to the debts, but h3 should follow the
tarca of the oprtgago   as to tha zi8thml of foreclosure;
tiiat is, he should re60rt to a comt formlosure xml3er
zotl;ar cc sugary z&ho5 Is authorisad by that instru-
rant .

           (6)   Hera   the debtor, howcwr, turns the mrt-
gag& projmty owr tc the Codssicner         ax& qp3ee that
the Conlssicnor    is to sell th3 sm.3 an2 amly th9 pro-
C3OCr CL* tta Labat, there is tk3 ccnmntianal   cz agr3ti
fomclo~s,      :.::I;:
                   t;;3 Colcisslonar cay pwco:~ according-
ly sithczt resort ccit&3 court for a fufUci~.lforxlosura.

            Go Gist, it is tfio o;:inicn cf this dqmrtnmt
 tbt nc court crder is mcessary,     but tie Correisr~onw
 t;ry g~0c33q in suob cases as you etate as ber~lnabcwe
 -c+btod.
                                      v-7 t-Y     P--J
