January 12, 1962 

Honorable Shelby Ii. Blaydes Opinion No. WW-1241 

matrlct Attorney 

Fort Stockton, Texas Re: Whether a County 

Auditor would be in 

violation of \I3 

oath-under Article 

1619, Vernon's Civil 

Statutes, in certain 

DearMr. Blaydea: stated fact alfuatlons. 

You have requested an opinion of thla office In a 

letter which sate out a group of questions and f'acts and which 

reads In part as follows: 

'1. A Countp Auditor owns a few shares of 

stock In Qulf oil Corporation, Standard ml COW 

pany of New Jersey, . . . me county purchases 

011 and gas on bids from one or more of the distributors oi' theae varloulr companies . . . Under 

that fact situation would the County Auditor as 

owner of stock In the company that was the successful bidder be violating hie oath that he will 

not be personally interested In any contracts 

with the county? 

"2: In yearn past, the county haa always 

selected the bid of a slagle.bauk located at 

the oounty Beat as county depository. The 

County'Audltor In y-car8 past by urcharre has 

aaquitisd a total of leas than 

stock of this particular bank. 

55JJ 

. :'.giyEi 

again was selected by the Commlerloners as 

county depository. Under this set of circumstances 

la there any violation or the oath of the county 

auditor am set out In Article 1649. 

“3. Awume the came eet or facts ae est. 

'out in paragraph 2, except now the county auditor 

one year priorto the last reelection of county 

depository . . . has beqn elected to the Board 

of Dlrectore of the . . . bank. Under this q et 

of clrcumstancee, 18 there any vlolatlon ol the - 

oath of the county audltor,under that statute? 
Honorable Shelby H. Ilaydes, page 2 (WI-1241) 

"4. Under the facts set out in paragraph 3 

above, 'Is there any statute which disqualifies 

the county auditor from serving as a director of 

the bank selected as county depository while he 

also serves as county auditor? 

"5. Is there any statute that would dlaqualify the county auditor from serving as a 

director of a bank? 

"6. Is there any statute by which the 

county auditor-would be disqualified to own 

stock in 

a. the bank 

b. the 011 companies under question l?" 

The questions which you raise necessitate a reading 

or Articles 1649 and 2364. Vernon's civil Statutes. Article 

1649 reads in part as hollows: 

?The Auditor shall within twenty days of 

his appointment and before he enters upon the 

duties of hia office make bond . . . He shall 

further include in his oath that he will not.be 

personally lnterested in any contracts with the 

county.U 

Article 2364,. Vernon's Civil Statutes, in referring 

to contracts w&th the county, reads In part as follows: 

'No member or the commissioners court or any 

county oSSicer shall be either directly or in- 

&-sot zntereated in 

(Empha% ahpplled.) 

any such contract.' 

.Thu~.it.appeara'that the answer to your first ,four 

questions depends on nhether.a county auditor who is a 

stockholder or director in ilrst, an oil company from which 

the county purchases oil and gasoline on.bids, and.secondly, 

a bank nhich ia the county depository by virtue of the receipt 

and acceptance of bide, violates the prohibition against a 

county officer havlng a financial intereat in contracts with 

the county. We are ol the opinion that such interests of the 

county auditor are proh$b%ted by these atatutea. 

The duties of a county auditor are prescribed by 

q tatute. He has the general nupervision over all the books 

and records of all the officea of the county having'authority 
Honorable Shelby H. Blaydes, page 3 (W-1241) 

to receive and collect money or property i'or the county 

(Article 1651, Vernon's Civil Statutes, et seg). Among 

other things, he has the duw under Article 1 55, V.C.S., to 

inquire Into, Inspect, and count the cash in the hands o? the 

county treasurer or deposited by him in the banks. 'Under 

ArtiCleS 1658 and 1659, V.C.S., he has the duty tq receive 

bids for materials and euppliee for the county. .15 Tex. 

Jur. 2nd 287. 288. Counties, Sec. 59. He is clearly a 

"county officer" within the ineanlng of that term. bmerican 

Being a "county offloer" the question resolves 

ltslef Into whether the holding of stock In the various 011 

companies and the bank Is a su??lclent “interest” in a 

contract with the county aa is prohibited under the various 

statutes. In Attorney QBneralss Opinion O-878 (1939), this 

office held that such would be the case, and that a stockholder's Interest, regardless of how nominal or small the 

amount of such stock held happened to be, would be a financial 

interest. ..The opinion reads in part: 

'The fact that the municipal officer la a 

atookholder, or an offlcar, ln the corporation 

with whom the coatract le made constitutes such 

an lnterest'la the contract as to taint It with 

Illegality . . . Dillon on Municipal Corporations, 

supra; McQlllan on Mublclpal Corporations, 2nd 

Edition, Vol. 2, p. 217, and Vol. 3, p. 945; 44 

C.J. 93 . e ." 

The above general principle of law applies, of course, with 

equal Porte to county o??lol~ls as well as municipal o??lclals. 

Neither Is the prohibition of the statutes clrcumvented by the mere fact that p county auditor In this situation 

as such does not have direct voting power as to the awarding 

of such contraotu with the county. In Attorney @eneral*a 

Opinion V-381 (1947), this office held that a county auditor 

was definitely within the statutory prohibitions In regard 

to county contracts. He has the statutory duty to receive 

bids for materisle and rupplles and au such has a part 

in the contract proceaa. He haa the additional duty to 

'Inquire Into, count, and Inspect* the funds of the county 

on deposit In the depoeltozy bank. The fact that an officer 

takes no direct part in the actual act o? letting the contract 

la lmmaterlal. See Attorney C+eneral*s Opinion O-878, aupra. 
Honorable Shelby H. Blaydes, page 4 (WW-1241) 

In addltlon, we point out that Article 2364, Vernon's 

civil Statutes, clearly prohibits any county officer from 

having Indirect;~ l;erri; l..t&a;;;ounty contract, directly or 

"any county officer with voting 

erlvileges on the aw!rdlng of the contract," but Bays 

an county of?lcer. In Attorney General*8 Opinion 

slm ly 

o-62 f; 0

(19x4) relating to a county officer being a bank director, 

it was pointed out In part: 

"It Is not a question whether the particular 

contract thus forbidden is hurtful. It might, on 

the contrary, be actually beneficial, but the law 

will not permit an Inquiry lnto the actual consequences of the transaction. 

sound public policy." 

It Is contrary to 

In Attorney '&?neralls Opinion O-2980 (1941), this 

office held that where a County Judge of a county Is a 

director and stockholder of a bank, such bank could not be 

a county depository. The opinion reads In part: 

I It Is well settled in Texas that if 

a pubild ~??lclal, directly or lndlrebtly has a 

pecuniary interest in a contract, no matter how 

honest he might be, and although he may not be 

Influenced by the Interest, such a conttgot Is 

against public policy. Meyers. et al v. Walker, 

276 S.W. 305; city of Edknburg v. ellls, XJ s . N . 

26 99.” 

With the foregoing general principles in mind, we 

are o? the opinion that the fact that the county auditor holds 

stock or Is a director In the,011 companies and bank, violates 

the etatutory prohibitions outlined herein. Consequently, 

your firat four questions may be answered as ?ollows: 

1. The county audlto? Is prohlblted by law 

from owning stock, no matter how small the Interest 

In an oil company wi.th which the county has contractual dealings. 

2. The .county auditor is prohibited by law 

from owning stock or being a member of the 

Board of Directors of any bank which serves as 

the county depository. 

3.and 4. The county auditor thus violates his 

oath.under Article 1649, Vernon*s Civil Statutes, 

by owning stock In an oil company with which tht 

county contract.8 and also by belng a stockholder 
Honorable Shelby H. Blaydea, page 5 (W-1241) 

or member of the Board of Directors In a bank 

which Is the county depository, and It la Immaterial 

that the bank 1s the only one located at that particular place. 

Further, In regard to your last'two questions, we 

art unable to find any statutes which would disqualify the 

.county auditor from owning stock or being a director In 

either an 011 company or a bank I? the county does not 

contract and do business with such organizations. Your 

last two question8 are thus answered negatively. 

SUMMARY 

(1) The county auditor la prohibited by law 

from owning stock in an 011 company with which 

the county has contractual dealings. 

(2) The county auditor Is prohibited by law 

irom owning stock or being a director cf a 

bank whlah serves as the county depository. 

(3) The county auditor la not prohibited 

from owning stock In a batik or 011 company with 

which the county has no business dealings. 

Very truly yours. 

EBS:dhs:kh 

APPROVZD: 

OPINION COMKITTEE: 

w. v. Qeppert, chairman 

J. Arthur Sandlln 

Llnward Shlvers 

Riley Eugene Fletcher 

WILL WILSON 

- Ae;i+iant 

REvIEwBDFORTiU3ATTORNEYWNERAL 

BY: Houghton Brownlee, Jr.