                       AUSTIN     ~LTExASI


                       November 20, 1957

Veterans' Land Board            Opinion No. WW-263
General Land Office
Austin 14, Texas                Re : What procedure is necessary
                                     for the Veterans' Land Board
Dear Sir:                            to replace lost bonds?
          You advise this De artment that "the holder of Vet-
                             '76through 8885, Series 1954,
erans' Land Bonds numbered 8f;
has lost such bonds and has requested that such be replaced by
the Board", and you request our opinion relative to the pro-
cedure to be followed by the Board.
          The State of Texas, acting by and through the Veter-
ans' Land Board, issued under constitutional and legislative au-
thority 15,000 of its bonds, each of the denomlnation of one
thousand dollars, aggregating fifteen million dollars and, col-
lectively, designated as The State of Texas Veterans' Land Bonds,
Series 1954.
          The bonds were approved by the Attorney General, reg-
istered by the Comptroller of Public Accounts, and sold on the
market.
          Ten of these bonds held by the same owner are now al-
leged to have been lost. The bonds were not registered as to
ownership. Consequently, they constitute ten general obliga-
tion bonds of the State of Texas, payable to bearer in the
principal amount of one thousand dollars each, bearing 2f$ in-
terest, with coupons attached for semi-annual Installments
thereof. The principal sum not falling due until June 1, 1979,
there were at the time of issuance fifty coupons annexed to
each individual bond. Each coupon is payable to bearer.
          Section 49-b of Article III, Constitution of Texas,
is the basic law underlying the issue of bonds. The leglsla-
tive enabling act is contained in Article %21m, V.C.S.
          The applicable portion of Article !?t21mis found in
Section 3 in the following language:
          "All bonds issued under the provisions of this
     Act shall have, and are hereby declared to have, all
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Veterans' Land Board, page 2   WW-263)


     of the qualities and incidents of negotiable
     instruments under the laws of this State.
     The Board (Veterans' Land Board) is fully au-
     thorized to provide for the replacement of any
     bond which might have become mutilated, lost
     or destroyed." (Insert ours)
          Although authorizing the Veterans' Land Board to pro-
vide for the replacement of any bond which might have become
mutilated, lost or destroyed, the Act itself does not state any
method or procedure for the replacement of bonds which are ei-
ther mutilated or have been lost or destroyed. However, Section
21 of Article $21m, V.C.S., provides in part as follows:
          *The Board is hereby authorized and empow-
     ered to make and promulgate such rules and regu-
     lations under this Act as they shall deem to be
     necessary or advisable, and to enforce the same."
          It is the opinion of this office that although the Leg-
islature has not specifically provided any statutory method for
the replacement of bonds issued under the provisions of Article
%21m, V.C.S., which have been mutilated, lost oredestroyed, the
Veterans' Land Board has the power to promulgate reasonable rules
and regulations providing a method for-the replacement of any
bond which has been mutilated, lost or destroyed. In promulgat-
ing such rules and regulations, it will be necessary that the
Board provide for adequate and complete protection for the State
of Texas against the possibility that the original bonds alleged
to be lost or destroyed are presented for payment, thereby cre-
ating a double liability against the State of Texas upon a single
obligation.
          As a suggestion, we point out that any rules promul-
gated by your Board should include the following safeguards:
          If the bond or coupon is claimed to be lost or destroy-
ed, the owner shall furnish the Board:
          (1) Broof of ownership.
          (2)   Proff of loss or destruction.
          (3) Execute and file with said Board an indemnifying
bond in a sufficient amount to be approved by said Board and
the Attorney General, conditioned that the parties thereto shall
pay all and any loss or damage that may be incurred or sustained
by the State on account of the bonds and coupons so claimed to
be lost or destroyed or those issued as replacements therefor,
Veterans’    Land Board,   page 3   (Ww-263)


and conditioned  further that the applicant will hold the State
harmless and ~I.11 return to the Board, upon demand being made
theref or, such duplicate   bonds and coupons, or the amount of
money named therein.     The indemnity bond in this case should
run to the State of Texas payable to the Governor, for the
benefit of the Board and its fiscal    and/or paying agent, and
cover a period of time extended four (4) years beyond the ma-
turity date of the bonds.
             (4)  The replacement bond and coupons should be of
substantially    the same form and tenor as those originally  is-
sued, except that they will be signed by the appropriate     persons
in office   at the time of such re-Issuance.    In addition  each
bond and coupon will state on the back thereof that it 1s is-
sued in the place of such bond or coupon claimed to have been
lost or destroyed and that adequate security     for the payment
thereof at maturity is filed with said Board.
          (5) Further    each coupon and each bond shall have en-
dorsed on its face by the Board the word WDUFTJCATE”or  , “RE-
PLACEMENT”together
             ,       with the date of its issuance,
          (6)   The replacement bonds with appurtenant coupons
shall be approved by the Attorney General and shall be regls-
tered as such by the Comptroller of Public Accounts, State of
Texas e
           (7) All costs of preparing and Issuing       the new bonds
and coupons should be borne by the owner.


            Neither Article III Section 49-b, Constitution
     of Texas     nor Article  5+&m V.C.S      provides any
     speciflc’method    for the repiacemeni’of’ mutilated,
     lost or dsstroyed bonds ,issued by the State of Texas
     through the Veterans t Land Board.      The Veterans ’
     Land Board is authorized and empowered to make rules
     and regulations    to provide for the replacement of
     such bonds which have been mutilated,      lost or de-
     stroyed.
                                     Yours very truly,
                                      WILL WILSON
                                      Attorney Gen6iU   of Texas

                                       BY
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Veterans'   Land Board,   page 4   (WW-263)


APPROVED:
OPINIONCOMMITTEE
W. V. Geppert
Mrs. Marietta McGregor Payne
Milton Richardson
Richard Stone
Weyland Rivers
