January 12, 1962

HonorableShelby Ii. Blaydes OpinionNo. WW-1241 matrlct Attorney Fort Stockton,Texas Re: Whether a County Auditor would be in violation of \I3 oath-underArticle 1619, Vernon's Civil Statutes, in certain DearMr. Blaydea: stated fact alfuatlons.

You have requestedan opinion of thla office In a letterwhich sate out a group of questionsand 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 countypurchases 011 and gas on bids from **one or**  **more of**  the distributorsoi'theae varloulr companies

. . . Under that fact situationwould 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 countyhaa always selected the bid of a slagle.bauk located at the **oounty Beat**  **as** county depository. The County'AudltorIn y-car8 past by urcharre

has aaquitisd

a total of leas than stock of this particularbank.55JJ

. :'.giyEi again was selectedby the Commlerlonersas 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?HonorableShelby H. Ilaydes, page 2 (WI-1241)

"4. Under the facts set out in paragraph3 above, 'Isthere any statutewhich disqualifies the county auditor from servingas a director of the bank selected as countydepositorywhile he also serves as county auditor? "5. Is there any statute that would dlaqualify the county auditor from servingas a director of a bank? "6. Is there any statuteby which the county auditor-wouldbe disqualifiedto own stock in

a. the bank

b. the 011 companies under question l?" The questionswhich you raise necessitatea reading

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

### 1649reads in part as hollows:

?The Auditor shall within twenty days of his appointmentand 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 contractswith the county.U Article 2364,.

Vernon's Civil Statutes, in referring to contractsw&th the county, reads In part as follows:

'No member or the commissionerscourt 

### or any county 

### oSSicershall be either directly or **in-** &-sot zntereated in (Empha% ahpplled.) any such contract.'
.Thu~.it.appeara'that the answer to your first ,four questionsdepends 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 depositoryby virtue of the receipt and acceptanceof bide, violates the prohibitionagainst a county **officer** havlng a financial intereat in contractswith the county. We are ol the opinion that such interestsof the county auditor **are** proh$b%tedby these atatutea.

The duties of a county auditor are prescribedby q tatute. He has the general nupervisionover all the books and 

### recordsof all the officea of the county having'authorityHonorableShelby H. Blaydes,page 3 (W-1241)

to receiveand collectmoney or property i'or the county (Article1651, 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 treasureror depositedby 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. .15Tex. Jur. 2nd 287. 288. Counties,Sec. 59. He is clearlya "countyofficer"within the ineanlng 

### of that term. **bmerican**

Being a "countyoffloer" the question resolves ltslef Into whether the holding of stock In the various 011 companiesand the bank Is a su??lclent “interest” in a contractwith the county aa is prohibitedunder the various statutes. In Attorney QBneralss Opinion O-878 (1939), this officeheld that such would be 

### the case, and that a stockholder's Interest, regardlessof 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 constitutessuch an lnterest'la

### the contractas to taint It with Illegality

. . . Dillon on MunicipalCorporations, 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 

### countyo??lol~ls as well as municipal o??lclals. Neither Is 

### theprohibition of the statutesclrcumventedby the mere fact that p county auditor 

### In this situation as such does not have direct voting power as to the awarding 

### of suchcontraotu

with the **county.** In Attorney @eneral*a OpinionV-381 (1947), this office 

### held that a county auditor was definitelywithin the **statutory** prohibitions

### In regard to countycontracts. He has 

### the statutoryduty 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 takesno direct part in the actual act o? letting the contract la lmmaterlal. See **Attorney** C+eneral*s Opinion O-878, 

### aupra.HonorableShelby H. Blaydes, page 4 (WW-1241)

In addltlon,we point out that Article 2364, Vernon's civil Statutes, clearlyprohibitsany 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 0 f; (19x4) relating to a county officer being a bank director, it was pointed out In part:

"It Is not a questionwhether the particular contract thus forbidden is hurtful. It might, on the contrary,be actuallybeneficial,but the law will not permit an Inquiry lnto the actual consequences of the transaction. sound publicpolicy." It Is contrary to

In Attorney '&?neralls Opinion O-2980 (1941), this office held that where a County Judge of a county Is a directorand stockholderof 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 lndlrebtlyhas a pecuniary interest in a contract,no matter how honest he might be, and although he may not be Influencedby 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 companiesand bank, violates the etatutoryprohibitionsoutlined

### herein. Consequently, your firat four questionsmay **be** answered as ?ollows:

1. The county audlto? Is prohlbltedby law from owning stock, no matter how small the Interest In an oil companywi.th which the county has contractualdealings. 2. The .county auditor is prohibitedby 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 violateshis oath.underArticle 

### 1649,Vernon*s Civil Statutes, by owning stock In an oil company with which tht county contract.8

and also by belng a stockholderHonorable 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 locatedat that particular place. Further, In regard to your last'twoquestions,we art unable to find any statuteswhich would disqualifythe .county auditor from owning stock or being a director In either an 011 company or a bank I? the county does not contractand do businesswith such organizations. Your last two question8are thus answered negatively. SUMMARY (1) The county auditor la prohibitedby law from owning stock in an 011 company with which the county has contractualdealings. (2) The county auditor Is prohibitedby 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: OPINIONCOMKITTEE: w. v. Qeppert, chairman
J. Arthur Sandlln Llnward Shlvers Riley Eugene Fletcher WILL WILSON

- Ae;i+iant

REvIEwBDFORTiU3ATTORNEYWNERAL BY: Houghton Brownlee, Jr.