I 

. 

THE .~TTOIRMCY GZNEWAI. 

OFTEXAS 

April 6, 1951 

Eon. John R. Lindsey 

lty Attorney 

0p1nion Bo. V-1166 

1 

c county Re: Authority of the comJacksboro, Texas mIsslonerst court to 

choose the county depository under the subDear Sir: mitted facts. 

You have requested an opinion concerning the 

authority of the ~~mml~sloners~ court In selecting the 

county depository. The facts as stated In your request 

are substantially as follovs: 

The Commlssionersf, Court of Jack County recently published notice that at ten o’clock A.M. on 

Monday, February 12, 1951, it would receive bids from 

banking Institutions desIrlng to be designated as county depository for county and school funds for the ensuing two years. Two banks located in Jack County filed 

proposals which were substantially the same vlth the exception that the first bank agreed to carry county warrants up to the amount of $l25,OOO.OO vithout interest, 

while the second bank agreed to carry such warrants up 

to the amount of $100,000.00 without interest. The Commissioners’ Court voted to accept the proposal of the 

second bank, and the first bank now insists that, as the 

designation was to be made on competitive bidding, Its 

bid would have to be accepted If It filed a legal proposal. Both bids were In proper form and complied with 

the requirements of Article 2545, V.C.S. For a number 

of years the warrants of Jack County have never exceeded 

at any one time the amount of $100,000.00. At the Commissioners’ Court hearing, no evidence of the quallfications of either bank was discussed other than the fact 

that the accepted bank had handled the money for the 

last two years and the CommIsslonerst Court had had no 

cause to be dlspleased with the service. 

Upon this state of facts, you ask the followIng question: 

‘Is the Commissioners @ Court of Jack 

County bound to accept the First Rational 

113 
114 Bon. John R. Lindsey, page 2 (V-1166) 

Bank of Jacksboro as the depository of 

county funds since its proposal was to 

carry warrants without interest to $l2'5,- 

000.00, whereas the accepted bsnk agreed 

to carry warrants without Interest only 

to the amouut of $100,000.00?’ 

The selection of the county depositor 

ccamlsslonersl court la regulated by Article 2’5 1 

by the 

6, V.C. 

S. For many years following Its enactment in 1905, this 

article provided: “It shall be the duty of the commlssloners court a . . to select as the depository of all 

funds of the county the banking coppopatlon, association or Individual banker offering to pay the largest 

rate of interest per armum for said funds; provided, 

the conrmissloners court may Peject any and all bids.” 

In Hurley v. Cltlzensq Nat. Bank, 229 S.W. 663 (Tex.Civ. 

APP. -ordIng 92 of the statute, 

the court Gefused to Interfere with the action of the 

commissioners I court in naming as the county depository 

a bank which offered to pay 4 per cent interest on 

county deposits in preference to a bank which offered 

to pay 6-l/8 per cent interest. The opinion stated: 

‘We have arrived at the conclusion 

. . . that it was not the Intention of the 

Legislature to compel the commissioners’ 

court. of a county to select as the deposltory of county funds the banking corpopatlon, association, or individual banker 

‘offering to pay the largest rate of lnterest per annum for said funds.’ On the 

contrary, It is our opinion that it was the 

intention of the Legislature to vest In the 

ccenulssloners 1 couPt a discretion In making 

such selection for county funds, and that 

unless the ccxmissloners’ court, In making 

such selection for county funds, should 

abuse that discretion by acting fpaudulently or arbitrarily or vith some other lmproper motive, its actions in selecting a 

depository for county funds cannot be reviewed or controlled by any other court .’ 

(229 S.W. at 664-5.) 

See, also, Hurleg v. Camp, 234 S.W. 577 (Tex.Civ.App.l92l, 

error ref .) . 

In 1937, Article 2546 va3 amended in several 

respects. Acts 45th Leg., R.S. i937, ch.484, p.1298. The 
. 

Hon. John R. Lindsey, page 3 (v-1166) 

language quoted above Yas omitted, and In its place ve 

find the folloving wording of the present statute: 

“It shall be the duty of the Canrmissloners Court . . . to select those appllcants that are acceptable and who offer 

the most favorable terms and condltlons 

for the handling of such funds and having 

the power to reject those whose management 

or condition, in the opinion of the Court, 

does not warrant placing of county funds in 

their possesslon. . . .’ 

It is to be noted that the Legislature omitted the provision that the commissioners’ court “may 

reject any and all bids,” one of the provlslons vhlch 

had been relied on in Hurley v. Citizens I Rat. Bank as 

Indicating an intention to invest the commlssloners’ 

court with a discretion in the selection of the depository. However, the Legislature retained the provisions 

of Article 2550 which Inferentially give the comlssloners 1 court the power to reject all bids. 

We must determine whether by the enactment of 

the 1937 amendment the Legislature divested the comissloners * court of discretion in acting on bids. The 

emergency clause of the amending act reads: 

‘The fact that under the Banking Act 

of 1935, as passed by the Congress of the 

United States, any deposits of public funds 

made by or on behalf of the county or city 

in any State or Rational Bank that is a 

member of the Federal Reserve System and 

which funds are subject to withdrawal upon demand will not be permitted to draw Interest, and the fact that under the present 

laws governing the depositing of such public 

funds, all such funds are required to draw 

interest necessitates a revision Of Our 

present laws on this subject creating a 

emergency and an Imperative public necessity that the Constitutional Rule requlrlng 

bills to be read on three several days in 

each House be and the same is hereby suspended, and this Act shall be In full force 

and effect from and after its passage, and 

it Is so enacted.” 

115 
RCQ. John R. ILMsey, page 4 (v-ll66) 

It Is shovn by the emergenoy clause above quoted that the purpose of the 1937 amendment was to provide 

a different standard to #de the cammissioners t court ln 

Its 8elsctlon of a comty depositary, alnoe the banks 

could no longer allow interest m county funds subject 

to withdrawal upon demand. The method of selecting a 

county depository, hwever, was left unchanged. WM.16 

the oommlssioners t oourt no longer has the express pover 

under this article to reject any and all bids, It is 

given the power to reject those applicants %hose management or condition, ln the opinion of the Court, does 

not warrant placing of county funds in their possession.” 

Ue find nothing in the 1937 amendment which deprives the 

comlssloners~ couH of dlscretlon In determining which 

applicant offers the most favorable terms and conditions 

for the handling of county funds. To ths contrary, the 

language quoted above expressly recognizes that the commissioners I court is to have a discretion in the rejection of applicants. Aa stated in Burley v. Cltlzens I 

Rat. Bank, su ra, this discretion cannot be interfered 

with unless + e commlssloners I court should abuse that 

discretion by acting fraudulently or arbitrarily, or 

with some other improper motive. 

You have not stated any facts or clrc~stances 

which would indicate that the Conrmisslonersl Court of 

Jack County has abused Its dlscre+.?.on in the present case. 

We agree with your conclusion that the canmlssloners t 

court had the discretion to reject the bid submitted by 

the First Rational Bank and to accept the one submitted 

by the other bank and that the burden of showing an abuse 

of dlsoretlon rests upon the First Rational Bank. 

SUMMARY 

In selecting a depository for county 

fuuds, the commissioners’ court may exercise 

Its discretion in determining which appllcants ‘offer the most favorable terms and 

conditions for the handling of such funds,” 

and its action is not subject to review unless an abuse of discretion is shovn. Article 2546, V.C.S.; Hurleg v. Citizens’ Rat. 
Hon. John R. Lindsey, page 5 (V-1166) 

Bank,, 

ey 

2:' ;,w. 663 (T.sx.C~V.A p. 1921); 

Hurl ~JQ ?34 S.W. 577 fTex.Civ.App. 

m, error reI-. 1. 

APPROVEI): 

J. C. Davis, Jr. 

County Affairs Dlvlslon 

Jesse P. Luton, Jr. 

Reviewing Assistant 

Charles D. Mathews 

First Assistant 

JR:mw 

Yours very truly, 

PRICE QANIEL 

Attorney General 

+L&g$ed<@f 

rnv %rw& 

Mary K. Wall 

Assistants