AGO 1949-51 No. 183.

• Case Date: December 19, 1949
• Court: Washington

Washington Attorney General Opinions 1949. AGO 1949-51 No. 183. December 19, 1949[Orig. Op. Page 1]PRIVATEVETERANS - BONUS BONDS - NEGOTIABILITY.Bonds issued under the World War II veterans bonus act may be made negotiable by an act of the legislature.State Finance Committee Legislative Building Olympia, WashingtonCite as: AGO 1949-51 No. 183Attention: Mr. Ernest Minor, Secretary Gentlemen: In answer to your verbal request as to whether the bonds authorized by section 7, chapter 180, Laws of 1949, may be made negotiable by an act of the next session of the legislature, it is our conclusion that the legislature may make these bonds negotiable. ANALYSIS Section 7, chapter 180, Laws of 1949, authorizes the sale of limited obligation bonds of the state to be repaid from a fund designated the War Veterans Compensation Bond Retirement Fund into which shall be paid the proceeds of certain taxes on cigarettes. The act expressly provides that they shall not be a general obligation of the State of Washington, but shall be payable from the proceeds of the cigarette taxes in the manner prescribed in the act. The Negotiable Instruments Act, chapter 149, Laws of 1899 [Rem. Rev. Stat. 3392, et seq.] defines the conditions that make an instrument negotiable. Section 1 of that chapter reads in part: "An instrument to be negotiable must conform to the following requirements: * * * "2. Must contain an unconditional promise or order to pay a sum certain in money; * * *" Section 3 of the same act provides: [Orig. Op. Page 2] "An unqualified order or promise to pay is unconditional within the meaning of this act, though coupled with - "1. An indication of a particular fund out of which reimbursement is to be made, or a particular account to be debited with the amount; or "2. A statement of the transaction which gives rise to the instrument. "But an order or promise to pay only out of a particular fund is not unconditional." The bonds authorized by chapter 180, Laws of 1949, are, like state and municipal warrants, non-negotiable, because of the fact that they are payable from a special fund...