GERALD C. MANN 

Honoreb&e J; F. Holubec 

Ctititg~Auai~or 

Lavaca County 

Hallettsville, Texas 

Dear 3lr: Opinion No. O-5010 

Re: Can the commissioners' court of a 

county legally pay to a Depository 

for county and school funds an amount of money as a service charge 

to the bank acting as such Depository, and other related questions? 

Your letter of December 8, 1942, raquest'ng the 

opinion of this department on the questions stated',therein 

reads in part as follows: 

"Please give me your opinion on the following: 

"'Can the Commissioners Court of a county 

legally pay to a Depository for County and School 

Funds an amount of money as a service charge to 

the Bank acting as such Depository, and if so, 

can such money be prorated to the various funds 

of the County and the funds of the various School 

Districts, or must such payment, if permitted to 

be paid, be taken out of the General Fund of the 

County? 

"Explanatory wish to state that in Lavaca 

County we are confronted with a peculiar situation 

and that is that we are not apt to get a bid for 

County ana School Depository for 194X-44 as no 

bank desires to be depository because they all 

claim it means a loss to them because of the restrictions placed upon banks by the Federal Government in making loans, and further the fluctuating market on securities that they will be 

compelled to put up as security for the County 

and School Funds, which may likely result in a loss 

to them. 

"The laws,relating to County Depository are 

Art. 2544, 45-46-47, etc. 
Konorable J. F. Holubec, page 2 O-5010 

"Art. 2550. Deposits not applied for: 

"Under this 1ast~Article it says that the 

Commissioners Court shall have the power, and it 

shall be their duty to deposit the funds of the 

County with any one or more banking corporations, 

etc.-- Any bank,or banking cbncern receiving Deposits under this Article, shall execute a bona in 

the manner and form provided for depositories of 

county funds, etc. 

"The Article seem8 very simple, but there is 

no way in compelling a Bank under the circumstances 

of Art. 2550 to execute a bond. 

"The biggest objection that the Banks have Is 

the enormcius work necessary in keeping the School 

Funds. 

Chapter 2,.Title 47, Vernon's Annotated Civil Statutes contains the statutes pertaining to county depositories. 

Article 2549 (Vernon's Annotated Civil Statutes) provides in 

part: 

,I OS... All county depositories shall collect 

all checks, drafts and demands for monev so deposited 

with them by the county and when using due diligence 

shall not be liable on such collections until the 

proceeds thereof have been duly received by the aepository bank, provided that any expense incurred in 

collection thereof by the depository, which'ths depository is not allowed or permitted to pay or absorb 

by reason of any act of Congress of the United States 

or any regulation by either the Board of Governors 

of the Federal Reserve System or the Board of Directors 

of the Federal Deposit Insurance Corporat$on, shall be 

charged to and paid by the county. . . . 

It is a well established principle of law that 

commissioners' courts are courts of limited juriscliction, 

in that their authority extends only to matters pertaining 

to the general welfare of the respective counties and that 

their powers are only those expressly or impliedly conferred 

upon them by law, that is, by the Constitution and statutes 

of the state. 

We have been Unable to find any statute or constitutional provision authorizing the commissioners' court of a 

county to legally pay to a county depository any amount of 
Honorable J. F. Holubec, page 3 o-5010 

money as a service charge to the bank acting as such depository, except any expense incurred in collection of such proceeds by the depository, which the depository is not allowed 

or permitted to pay or absorb by reason of any act of Congress 

of the United States or any regulation by either the Board of 

Governors of the Federal Reserve System or the Board of Directors oft the Federal ,Deposit Insurance Corporation, Article 

2549, supra, expressly provides that such expenses so incurred shall be paid by the county. Therefore, in view of the 

foregoing statute your first question is respectfully answered 

in the negative, subject to the exception heretofore mentioned. 

This opinion is not to be construed that the above mentioned 

expenses are's service charge, but is to be construed as merely holding that the county Is authorized to pay such expenses. 

As we have answered your first question in the negative your second question contained In the first paragraph 

of your letter which reads: 

II 

. . . can such money be prorated to the various funds of the County and the funds of the various School Districts, or must such payment, if permitted to be paid, be taken out of the General Fund 

of the County?" 

requires no answer. 

Article 2550, Vernon's Annotated Civil Statutes provides: 

"If for any reason no applications are submitted by any banking corporation, association or 

individual banker to act as county depository or 

in case all applications shall be declined, then 

in any such case, the Commissioners Court shall 

have the power, and it shall be their duty to deposit the funds of the county with any one or more 

banking corporations, associations or individual 

bankers in the county or in the adjoining counties 

in such amounts and for such periods as may be 

deemed advisable by the Court. Any bank or banking 

concern receiving deposits under this Article shall 

execute a bond in the manner and form provided for 

depositories of county funds with all the ConditiOns 

provided for same, the penalty of said bonds to be 

not less than the total amount of county funds deposited with such bank or banking concern. Acts 

1905, p. 393; Acts 1917, p. 19; Acts 19% 44th 

Leg., p. 394, ch. 152, 8 1; 1 Acts 1937, 45th Leg., 

p. 1298, ch. 484, 9 1.” 
Honorable J. F. Holubec, page 4 O-5010 

It will be noted that under the provisions of the 

foregoing statute where no applications are submitted by any 

banking corporation, association or indiviaual banker to act 

as county depository or in case all applications are declined, 

then in any such case, the commissioners' court shall have 

the power, and it shall be their duty to deposit the funds 

of the county with anyone'or mores banking corporations, associations or individual bankersin the county or in adjoining 

counties in such amounts and for such periods as may be deemed 

advisable by the court. Said statute further provides in 

part "Any bank or banking concern receiving deposits under " 

this Article shall execute a bond in the manner and form provided for depositories of county funds with all the conditions 

provided for same, the penalty of said bonds to be not less 

than the total amount of county funds deposited with such 

bank or banking concern." 

It is our opinion where any banking corporation, 

association or individual banker accepts any county funds 

as authorized by Article 2550, supra, said banking corporation, association or indiviaual banker is required to execute 

the bond or bonds mentioned therein. Where such banking corporation, association or individual banker acts as county depository for the public funds of a county the law imposes 

upon them all the duties of a fully qualified and regularly 

appointed county depository (New Ansterdam Casualty Company 

v, First National Bank of Gilmer, Texas, et al., 134 S. W. 

(2) 470; Sullivan v. City of Galveston, 17 S. W. (2) 478, affirmed Texas Commission of Appeals, 34 S. W. (2) 808; Fidelity 

and Deposit Company of Maryland v. Missouri State Bank, 44 

Fed. (2) 19). 

Where there has been no selection of the county aepositorg for trust funds, Section 14 of Article 2558a, Vernon's 

Annotated Civil Statutes, provides in effect that each county 

or district clerk having the custody by law of any money, evidence of debt, script, instrument of writing, or other legal 

proceeding, shall seal up in a secure package the identical 

money or other article received by him and deposit the same 

in some iron safe or bank vault. 

Trusting that the foregoing fully answers your inquiry, we are 
--- - 

Honorable J. F. Holubec, page 5 O-5010 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By s/Ardell Williams 

Ardell Williams 

AssIstant 

AW:mp:wc 

APPROVED DEC 21, 1942 

s/Gerald C. Mann 

ATTORNEY GENERAL OF TFXAS 

This Opinion Considered And Approved In Limlted Conference