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                      E             RNEY         GENERAL
                                           XAS




                                June 30, 1969


        Honorable Jesse James                Opinion No. M- 423
        State Treasurer
        Capitol Building                     Re:    Whether Article 3272a,
        Austin, Texas 78711                         V.C.S., authorizes the
                                                    State Treasurer to ex-
                                                    change common stock that
                                                    has escheated under said
        Dear Mr. James:                             Article.
                  In your recent letter to this office you requested
        our opinion as to whether you have authority to exchange certain
        common stock which has escheated to the state pursuant to Article
        3272a, Vernon's Civil Statutes.
                  The stock in question is 999 shares of Amerlcan-
        Amicable Life Insurance Company. The Gulf Life Holding Company
        of Jacksonville, Florida, has made an exchange offer to American-
        Amicable stockholders whereby one share of Gulf Life Holding
        Company common stock will be issued for two and one-half shares
        of American-Amicable common stock. The prospectus in which Gulf
        Life made the exchange of'fercontains the following statement:
                       'There is currently only a very
            limltei &   very restricted ma'rketfor American-
            Amicable Life Insurance Company Common Stock.
            You should consider carefully whether you wish
            to continue to hold stock in a company for which
            there is only a limited and restricted market,
            and with respect to which any market which does
            exist may be affected when we discontinue our
            present practice of continuing to accept shares
            of American-Amicable Life Insurance Company for
            exchange on a voluntary basis.'"
                  The transaction about which you inquire does not arise
        from a merger or consolidation of the two corporations. It IS
        simply an offer on the part of Gulf Life Hold.ingCompany to
        Issue one share of its stock for each two and one-half shares
        of American-Amicable stock tendered to it.
            The only authority whlch,the State Treasurer has with
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Mr. Jesse James, page 2 (M-423)


regard to the disposition of personal property, other than
money, which has been delivered to him under Article 3272a,
is found In Section 5 which reads as follows:
          "(a) All abandoned property other than
     money delivered to the State Treasurer under
     this Article which has been escheated and the
     title thereto vested In the State of Texas
     shall be sold by the State Treasurer to the
     highest bidder at public sale In whatever
     city in the State in his judgment affords the
     most favorable market for the property Involved.
     The State Treasurer may decline the highest bid
     and reoffer such property for sale If he considers
     such bid insufficient. He need not offer any
     property for sale, If, In his opinion, the
     probable cost of sale is'in excess of the value
     of the property.
          "(b) Any sale held under this Section shall
     be preceded by a single publication of notice
     thereof at least three (3) weeks in advance of
     sale in an English language newspaper of general
     circulation in the county where the property Is
     to be sold, which shall be paid for at the rate
     provided in Article 29, Vernon's Civil Statutes.
          "(c) The purchaser at any sale conducted
     by the State Treasurer pursuant to this Section,
     shall receive title to the property purchased,
     free from all claims of the owner or prior holder
     thereof, and of all persons claiming through or
     under them. The State Treasurer shall execute
     all documents necessary to complete the transfer
     of title."
          It does not appear from your letter of request that
the offer in question was received as a result of the procedures
set forth in Section 5. However, in view of the facts before
us, this does not become material because the transaction cannot
be considered to be a sale. While It Is true that in its broad-
est sense a sale includes a transfer of property from one person
to another for a valuable consideration, there Is a distinction
in law between a sale and an exchange. If property belonging to
one party is transferred to another and in return he receives
property belonging to the other party without having placed an
agreed monetary value on the properties, the transaction Is an
exchange rather than a sale. 24 Tex.Jur.2d 433, Exchange of
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        Mr. Jesse James, page 3 (M-423)


        Property $2. As we understand the facts, the offer in question
        is made without regard to the value of the two stocks. In our
        opinion, the transaction would constitute an exchange rather
        than a sale. We flnd no provision of Article 3272a which would
        authorize the State Treasurer to make an exchange of personal
        property delivered to him pursuant to said Article and there-
        fore advise you that you cannot accept the offer made by Gulf
        Life Holding Company.
                               SUMMARY
                  Article 3272a, V.C.S., does not authorize
             the State Treasurer to exchange escheated cor-
             porate stock for stock of another corporation
             pursuant to an exchange offer. Such property
             may only be disposed of by following the sale
             procedures of Section 5 of Article 3272a.
                                      Ve




        Prepared by W. 0. Shultz
        Asslstant Attorney General
        APPROVED:
        OPINION COMMITTEE
        Kerns Taylor, Chairman
        George Kelton, Vice-Chairman
        Roy W. Mouer
        Michael Stork
        John Grace
        Arthur Sandlin
        Hawthorne Phillips,
        Executive Assistant




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