Ronorable Charley Lockhart
State Treasurer
Austin, Texas
9~ear Sir:             Opinion No. 0-23’12
                       Re: Can the described endorsement be
                            accepted by the State Treasurer?
        We acknowledge receipt of your letter of April 30,
1940, in which you state as follows:
        "Frequently Suspense Refund Warrants which
    have been issued are deposited with the State
    Treasurer by state departments with endorse-
    ment as follows: 'Redeposit by Secretary of
    State to apply on Franchise Tax of Blank Cor-
    p0rs.t
         ioc ', with the stamped endorsement of the
    Secretary of State, but without the endorne-
    ment of the corporation to which the refund
    warrant WRS issued.
        II
         Please furnish 'uswith your opinion as to
    whether or not such endorsement can be accepted
    bg the State Treasurer."
        As we understand the process of a transaction which
would involve a situation cf the kind you describe, it would
be scmewbat as follows:
        A State department may receive a remittance from a
corporation, and the department may have some doubt as to
whether the corporation owes the total, or any part, of the
amount remitted. In such case, the department so notifies
the Treasurer, who holds this money in a suspense fund. If,
subsequently, the department originally involved concludes
that part or all of the money should not have been paid by the
corporation, the said department will request the Comptroller
to issue a.warrant payable to the corporation, refunding the
amount in question. This warrant, when duly issued and proper-
ly signed, will be sent to the department in questlon, for
transmission to the corporation. But upon occasion you will
receive this warrant back from the department, with a notation
thereon somewhat as that described in your letter, quoted a-
bove.
Honorable Charleg Lockhart, page 2         o-2312


        It is apparent that the warrant, when it is returned
to you, does not carry the endorsement of the payee. You are
without knowledge, it is presumed, by what authority the de-
partment in question purports to have endorsed the warrant.
        State warrants are non-negotiable. It was so held by
the Texas Court of Criminal Appeals in Speer v. State, 58
S. W. (2d) 95 wherein the court declared:
        "The warrant issued by the state for
    $2,626.95 was not a negotiable instrument in the
    sense that It would have entitled an innocent
    purchaser of the warrant to acquire from the
    state the amount stated on the face of the war-
    rant, but such purchaser would acquire no more than
    a right to collect from the State the amount that
    it owed the appellant, namely, $1,626.95. No
    authority for the issuance of the warrant for the
    amount stated in its face or to pay the full a-
    mount of such warrant existed. No purchaser of
    the warrant, whether in good faith or not, could
    legally demand from the state the payment of more
    than the amount which was owing. See Encg. of
    Law Proc., vol. 11, p. 531; volume 7, p. 818;
    volume 36. p. 895; Corpus Juris, Vol. 59, p. 269
    8 406; Tex. Jr. vol. 11, p. 665, % 11.8."
        Since State warrants are non-negotiable, we must look
not to the negotiable instruments act, but to the law of assign-
ment for the rules governing your question. Article 569, Re-
vised Civil Statutes of Texas, 1925, provides:
        "The obligee or assignee of any written in-
    strument not negotiable by the law merchant, may
    by assignment transfer all his interest therein
    to another."
        No particular mode of assignment is prescribed. It
may be by endorsement and delivery, or may even be made orally,
First State Bank of Aransas Pass v. Fuson, 185 S. W. 1042, but
the assignee must give proof of such assignment before he can
require payment of the obligation by the debtor. Gregg v.
.JJpson, 37 Tex. 558; Aldridge Lumber Co. v. Graves, 131 S. W.
      The assignment may be made by an agent or attorney-ln-
fact of the payee, but such agency must be clearly established,
Darlington Miller Lumber Co. v. National Surety Co., 80 S. W.
238, or the debtor is not discharged by making payment to such
assignee.
        The principles here announced were recognized in our
opinion number o-1062 wherein we stated:
Honorable Charley Lockhart, page 3         o-2312


         "+ + * You are concerned with the author-
    Ity of the treasurer to recognize an endorsement
    made by a warrant company in the name of the
    payee under the authority of the previously
    dlscussed power of httorneg. There can be no
    question but that when the treasurer pays a
    warrant endorsed inthls manner, he dO8s so at
    his peril. AS pOint8d out by the court in the
    case of Willis v. Weatherford Compress Company,
    66 S. W. 472, payment to an assignee under a
    void assignment is no payment at all. There-
    fore, the treasurer should require such lnfor-
    matIon concerning the authority to endorse
    payee's name on a warrant as he feels will pro-
    tect himself. * * *"
        Replying, therefore, specifically to your question, It
is our opinion that the State Treasurer acts at his peril if
he honors a State warrant not endorsed by the pay88 unless
evidence is furnished of the authority of the agent purporting
to endorse the warrant for and on behalf of the payee.
                               Yours very truly
                            ATTORNEY GENERAL OF TEXAS


                               By s/Walter R. Koch
                                    Walter R. Koch
                                         Assistant
WRK:RS:wc

APPROVED MAY 29, 1940
s/Gerald C. Mann
ATTORNEY GENERAL OF TEXAS
Approvea Opinion Committee By s/MB   Chalrman
