Texas Attorney General Opinion: GA-0341 Page: 3 of 5
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The Honorable Jana Duty - Page 3
definition of "money," it is because they are negotiable instruments that represent and are readily
convertible to cash. We initially consider whether either is a negotiable instrument. The Act does
not define the phrase; the only statutory definition is found in Business and Commerce Code section
3.104:
(a) Except as provided in Subsections (c) and (d), "negotiable instrument"
means an unconditional promise or order to pay a fixed amount of money, with or
without interest or other charges described in the promise or order, if it:
(1) is payable to bearer or to order at the time it is issued or first
comes into possession of a holder;
(2) is payable on demand or at a definite time; and
(3) does not state any other undertaking or instruction by the person
promising or ordering payment to do any act in addition to the payment of
money ....
TEX. BUS. & COMM. CODE ANN. 3.104(a) (Vernon 2002); see also id. 3.106, .108, .109
(describing "unconditional promise or order," "payable on demand or at definite time," and "payable
to bearer or to order"); TEX. GOV'T CODE ANN. 311.011 (b) (Vernon 2005) (directing that phrases
that have acquired a technical meaning, including by legislative definition, must be construed
consistently with that meaning); State v. Kaiser, 822 S.W.2d 697, 700 (Tex. App.-Fort Worth 1991,
pet. ref'd) (stating that a court will look to a particular profession to ascertain a phrase's technical
meaning). "Words making a promise or order payable to bearer or to order are the most
distinguishing feature of a negotiable instrument ... ." U.C.C. 3-104 cmt. Though it is not
apparent from the definition, a negotiable instrument must be capable of being transferred from one
holder to another. See TEX. BUS. & COMM. CODE ANN. 3.201,.203 (Vernon 2002). Negotiability
is a question of law. See Cartwright v. MBank Corpus Christi, 865 S.W.2d 546, 549 (Tex.
App.-Corpus Christi 1993, writ denied).
Although we find little case law considering the negotiability of either savings bonds or
prepaid credit cards, several federal appellate courts have referred to savings bonds as nonnegotiable.
See United States v. Carr, 706 F.2d 1108, 1112 (11 th Cir. 1983) (recognizing that savings bonds are
"nonnegotiable instruments"); United States v. Cyphers, 604 F.2d 635, 637 (9th Cir. 1979) (noting
that savings bonds are nonnegotiable); Lee v. United States, 363 F.2d 469, 475 (8th Cir.) ("We are
here concerned with non-negotiable United States Series E Savings Bonds, which require the
signature of the owner for cashing ... and which cannot be legally transferred or negotiated in any
manner"), cert. denied, 385 U.S. 947 (1966). The federal Securities and Exchange Commission and
the Internal Revenue Service similarly have stated that savings bonds are not negotiable. See SEC.
& EXCH. COMM'N, 41 S.E.C. Docket 1114, Release No. 34-36096, 1988 WL 999988, *15 n.51
(1988) (citing a statement of the Department of the Treasury, Bureau of Public Debt, which issues
savings bonds, that savings bonds "are not negotiable and cannot be assigned"); INTERNAL REV.
SERV., TECHNICAL ADVICE MEMORANDUM 6409309710A, 1964 WL 13948 (1964) (stating that aI&
(GA-0341)
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Texas. Attorney-General's Office. Texas Attorney General Opinion: GA-0341, text, July 21, 2005; (https://texashistory.unt.edu/ark:/67531/metapth275237/m1/3/: accessed May 7, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.