TEXE ATNBRNEY GENERAL 

OP TEXAS 

Honorable J. w. Edgar Opinion No. M-304 

Conxnissioner of Education 

Texas. Education Agency Re: Legality of acceptance of 

201 East 11th Street personal bond signed by ofAustin, Texas 78711 ficers or others of a bankcorporation in satisfaction 

of bond security requirement 

under Article 2832, V.C.S., 

Dear Dr. Edgar: and related questions. 

Quoting from your letter requesting an opinion on 

the above stated matter, we set out your first question as 

follows: 

"1. Where a bank-corporation, as distinguished from a person, pursuant to Article 2832 

is selected by an independent school district 

as its depository (treasurer), legally may the 

corporation tender and/or this Agency honor in 

satisfaction of the bond security requirement 

rsonal bond sig.ied by officers of that bank 

'Zr*as sureties?" 

._ By its terms, Article 2832, Vernon's Civil Statutes, 

uses lpersonl and 'corporation" synonymously,in reference to a 

"treasurer" who is required to be secured by bond. .The first 

paragraph provides, in part.: 

"Inany independent district . . . the 

treasurer of the school fund shall be that 

who offers satisfactory 

of interest on the:average daily balances or time deposits for the 

privilege of acting as such treasurer. The 

treasurer when thus selected shall serve-r a 

term of two (2) years and until his successor 

shall have been duly selected andqualified and 

he shall be required to give bond in an amount 

Gual to the estimated amount of the total receipts coming annually into his hands. when 

such bond is a personal bond;rovided, that 

-1479- 
Hon. J. W. Edgar, page 2 M-304) 

,. 

when a bond is executed by a surety company 

or is a bond-other thana persona% bond, such 

bond shall be in an--amount equal,to.the highest 

dai-iy'balance-for'the-~current-biennium, tobe 

determined.bythe governing body of such sdhool 

district . . .' (Bmphasis added.) 

The statutory bond thus provided for must be II 

. . 

read, construed, and enforced in.connection with, Andy according 

to, the statute pursuant to which it is given, and to be 

interpreted according to the purpose. and meaning of the legislative enactment." 8 Am.Jur. 709; Bonds, Sec. 4. 

As used above, "treasurer" includes both persons and 

corporations, and. such,treasnrer may' give,.a~ "personal bond" in 

fulfillment.of the statutory.,.requirements. 'Thus;,~a~bank officer 

may legally ~give a personal.bond;--obligating either. his own 

assets or those of the bank;insatiefaction of the bond requirements of Article 2032. The-provisions'of the statute contemplate the giving of such a "personal bond" as distinguished 

merely from one "other than personal," that is,~a "surety bond." 

Either type bond is a "satisfactory bond," provided given in an 

amount as. plainly prescribed by' the statute. 

Using a different approach, .~what is meant by."personal 

bond* as it is used in Article 28321 The word *personalm may 

include.either a human individual or a corporation, a corporate 

entity being regarded as a person for legal purposes. 32 Words 

and Phrases, 307, 308, under *Person.* 

A *bond*, in-the present context, means a sworn 

promise in writing that, upon the-failure of the'treasurer to 

fulfill the terms of the contract undertaken,. certain funds 

may be looked to for compensation~of-.,the school district for 

any damage caused by such failure,,of performance. 5A Words and 

Phrases, 121, under 'Bond." Therefore, a "personal bond," as 

used in Article 2832 is a sworn statement-inwriting by.a person 

(or persons) representing either himself or a corporation which 

he is authorized to contract for; that promises designated asset1 

will be available to compensate the school district in question 

should the treasurer contracted with fail to properly fulfill hi& 

duties. So, the same result foll~ows as above, that a bank office 

may legally execute a personal bond in favor of the school district to secure the proper performance of duties by the treasure1 

of said school district. 

your second question reads: 

- 1480 - 
Hon. J. W. Edgar, page 3 (M-304) 

"2., What responsibility, if.any rests in 

this Agency to ascertain the,financial worth 

of the surety(ies) signing a personal bond?" 

In reference to the bond-to,,be given, the second 

paragraph of Article 2832 reads.; in part, "It shall.be approved 

bv the school board.and the.State.Ueuartment of Education 

.' .&all & notified of the' treasurer-bk the president-of-the school 

board filing a copy of said bond in-said.department;"‘. (Emphasis 

added.) This language clearly.does not plaoe'any.reaponsibility 

on the Agency to ascertain the financial worth of the surety. 

As no other-mention is made of the Agency in Article 2832 it 

is clear that no.such duty is imposed.by the statute. 

The third question you pose is: 

- w. 3. Assuming query No. ~1~ is answered, Yes: 

Where pursuant to Article 27~86d, a.school diatrict invests proceeds realized from sale of 

school bonds in time deposits.of, its bankcorporation,.depository which.is covered only '. 

by a ersonal bondi.are such proceeds properly 

secur&rotected7" 

To quote from the relevant-portions of Article 27866, 

Vemon's.Civil Statutes: 

. 

"From and after the.effective-date of this 

Act, any school district within-the'state which 

has or may have on hand any-sums-of money which 

are proceeds rece,ived from the isaue.and sale ~of 

bonds of.-any such school distriot'i'either before 

or after,the effective date of-this Act, which 

proceeds'are not immediatelyneeded,for the purposes for which such bonds were-issued and sold, 

may, upon order of the board of.trustees of such 

school district, place the proceeds of such bonds 

on interest~bearing time deposit;secured in the 

manner provided in Article 2832;Revised Civil 

Statutes. with a state or national bankina 

corporation within this state; or invest <he 

proqeeds of such bonds in bondsof.the United 

Statesof America or in other.obligations of 

the United States z America, as may be determined by the board of trustees of the school 

district; . . . ." (Emphasis added.) 

-1481: 
Hon. J. W. Edgar, page 4 (R-304) 

The article clearly provides for three alternative 

methods of securing such deposits; one of such alternatives 

being the method discussed in regard to.,-your first question, 

infra. Therefore;;your third question-is answered in the affirmative;.such deposits may be.secured by a personal bond. 

SUMt4ARY 

A bond signed by a bank officer, or 

other persons so authorized, either as an individual or authorized agent oft the bank, may 

legally satisfy the security,requirement of a 

personal bond under Article 2832, V.C.S. No 

duty evolves upon the Texas Education Agency 

to ascertain the financial worth of the surety 

on such bond, and such bond is; also, sufficient 

to fulfill the requirements of security for funds 

deposited pursuant to Article 2786d, V.C.S. 

yc;zY truly your8, 

Qiz5E C. 

~General of Texas 

Prepared by Bill~Corbusier 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Hawthorne Phillips, Chairman 

Kerns Taylor, Co-Chairman 

Robert Crouch 

Sam Xelley 

l4alcol.m Quick 

Soott Garriaon 

John Fainter 

A. J. CARUBBI, JR. 

Executive Assistant 

-1482-