May 16, 1967 

Hon. William W. Day Opinion No. M-75 

County Attorney 

Calhoun County Re: Whether Calhoun County Is 

Port Lavaca, Texas inhibited by law from withdrawing funds from the county 

depository, upon which the 

depository refuses to pay 

interest, for the purpose 

of purchasing interestbearing United States GovernDear Mr. Day: ment Bonds. 

Eiy letter, and accompanying brief, you have 

requested an opinion from our office. We quote from 

your letter as follows: 

“The question we are asking is: ‘IS 

Calhoun County Inhibited by any law from 

withdrawing surplus funds from the county 

depository upon which the depository refuses 

to pay Interest for the purpose of purchasing 

interest-bearing United States Government 

Bonds?’ The reason that this request Is 

Imperative is because our local depository 

takes the position that, having accepted 

their bid, we are Inhibited by our advertlsement and contract from purchasing United 

States Government Bonds on a go-day basis 

because their contract provides that they 

will only pay us Interest on time deposits 

In the amount of $10,000 OP over which 

remains on deposit for a go-day period. . . . 

“Today, because of the unexpected necessity of providing Jury fees In a pending 

criminal case for some 100 venlremen, our 

allotted funds have become exhausted and we 

have had to cash In and lose Interest on one 

$10,000 certificate owned by the jury find, 

and the bank, on request, has refused to pay 

Interest on the unneeded excess In less than 

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Hon. William W. Day, Page 21 (M-75) 

$10,000 units and there are no other funds 

available for a go-day period which we could 

employ for re-Investment in another $10,000 

time deposit, We have no recourse other than 

our former procedure, the purchase of United 

States Government Bonds If we desire to save 

the lost interest. It would meet our obllgatlon to keep our funds Invested for interest.” 

In addltion to your letter and brief, you have 

enclosed a copy of the notice to take blds, and the bid by 

two different banks, and some additional information for 

our consideration. 

We have analyzed the information submitted, and 

conclude that the agreement between Calhoun County and 

the depositor does not prevent the county from withdrawing 

“time deposit’ money for any use authorized by law. 

We note~the agreement Incorporates Article 2547, 

Vernon’s Civil Statutes, as part of the agreement. Article 

2547 is quoted, in part, as follows: 

“The condition of the personal bond or 

bonds, or contract for securities pledged, 

fif the depository ban&7 shall be conditioned 

e . -for the payment upon presentation of 

0 a .a11 checks drawn upon any ‘time deposit’ 

account, upon presentation, after the explratlon of the period of notice reouired in the 

case of ‘time deposits’. e 0 -” (Emphasis 

added.) 

It is clear that “time deposit” money may be wlthdrawn by a county from the depository, If the depository 

Is given the required notice of the forthcoming withdrawal. 

The withdrawal can be made for any lawful and authorized 

purpose 0 

Article 12693-3, Vernon’s Civil Statutes, authorizes 

all political subdivisions of the state to invest year-end 

balances in U.S. Bonds and Securities. This article applies 

to counties - Attorney General’s Opinions No. 0-5278 (1943), 

and No. v-1182 (1951) o 

Based upon an analysis of the facts as submitted, 

and the above quoted article, It is our opinion that Calhoun 

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Hon. William W. Day, Page 3, (M-75) 

County may withdraw "time deposit" money after giving the 

required notice, and Invest such surplus money In United 

States Government Bonds as provided by Article 126gj-3, 

Vernon's Civil Statutes. 

Calhoun County is not prohibited by law 

from withdrawing surplus funds from the county 

depository and Investing such withdrawn funds 

in U.S. Government Bonds and Securities as 

authorized by Article 126gj-3, Vernon's Civil 

Statutes. 

Prepared by James C. McCoy " 

Assistant Attorney General 

JCMcC:sck 

APPROVED: 

OPINION COMMITTEE 

Hawthorne Phillips, Chairman 

W. V. Geppert, Co-Chairman 

John Reeves 

Alan Minter 

Dyer Moore 

Gordon Cass 

STAFF LEGAL ASSISTANT 

A. J. Carubbl, Jr. 

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