IEXEA~~TORNEY GENERAL 

OF TEXAS 

Honorable W. M. Tucker 

County Attorney 

Collingsworth County 

Wellington, Texas 

Dear Sir: Opinion NO. o-2376 

RE: Liability of county treasurer for 

school funds over which treasurer 

does not have control - Investment 

of school funds. 

Your request for oplnlon has been received and carefully considered by this department. We quote from your letter of request as follows: 

"Question No. 1. Where County School Superintendent used public school fund8 for the purchase 

of bonds, where said County School funds are handled 

Independently by the County School Superintendent, 

and said funds d,oes not pass through the hands of 

the County Treasurer should there be a shortage in 

the County Superintendents account or if said bonds 

should be worthless, or defective in any manner, 

would the County Treasurer, the said Viola Hudson, 

be liable under her official bond for any such shortage, or defects in said bonds so purchased by said 

County School Superintendent? Under Art. 1704 R.V.S. 

"Question No. 2. Is the County School Superintendent authorized to invest the Public School funds 

in bonds, without the sanction of the CommFssioners 

Court of his County, when said school fund is carried ln the School Depository, and handled exclusively by the County School Superintendent independent of the County treasurer." 

We understand from your letter that Collingsworth 

County has a duly selected and qualified county depository and 

that the school funds are in said depository. 

Article 1704, Revised Civil Statutes of Texas, reads 

as follows: 

"The county treasurer before entering upon 
Honorable W. M. Tucker, page 2 o-2376 

the duties of his office, and within twenty days 

after he has received hi8 certificate of election, 

shall give a bond payable to the county judge of 

his county, to be approved by the commissioners 

court, in such sum as such Court may deem necessary, conditioned that such treasurer shall faithfully execute the duties of hi8 office and pay 

over according to law all moneys which shall come 

into his hand8 as county treasurer, and render a 

true account thereof to said~ court at each regular term Of Said court." 

Article 3942, Revised Civil Statutes of Texas, reads 

a8 fOllOWS: 

"The treasurers of the several counties shall 

be treasurers of the available public free SChOOl 

fund and al80 Of the PerItIanent COUnty School fund 

for their respective counties. The treasurers of 

the several counties shall be allowed for rnceiving and disbursing the school fund8 one-half of 

one per cent for receiving, and one-half of one 

per Cent for disbursFng, said COIImIiSsiOhs t0 be 

paid out of the available 8ChOOl fund of the 

county; provided, no commis8ion8 shall be paid 

for receiving the balance transmitted to him by 

his predecessor, or for turning over the balance 

in his hands to his successor; and provided, that 

he shall receive no commLssFons on money transferred." 

Article 2828, Revised Civil Statutes of Texas, read8 

as follows: 

"The terms 'county treasurer' and 'county 

treasury' as used in all provisions of law relating to 8ChOOl funds, Shall be construed to mean 

the county depository. The commissioners court 

shall file with the State Department of Education 

a copy of the bond of said depository to cover 

school funds. No commission shall be paid for 

receiving and dlsburslng school funds." 

Article 2829, Revised Civil Statute8 of Texas, read8 

FL8 fOllOW8: 

"WithIn twenty days after the receipt of a 

certificate of its selection, the County Depository shall execute a good and Sufficient bond, 

payable to the County Judge, in amount equal to 
. . 

Honorable W. M. Tucker, page 3 o-2376 

the probable amount of available School Fund, 

which may be on deposit at any one time, and of 

the, permanent County Fund, to be estimated by 

the County Superintendent, and shall be conditioned that the depO8itOry will faithfully perform its duties under this title, and safely keep 

and faithfully disburse the School Fund according to Law, and pay 8UCh warrants as may be drawn 

on Said fund by competent authority; provided, in 

lieu of Said bona, such depO8itOry may secure Said 

School Fund8 in the same manner a8 is now provlded by law for qualification a8 County Depository. 

"Sec. 1-A. In the event depositories have 

been Selected at the time of adoption of the above 

provision, such depO8itorieS may, at option, secure Said School Fund by approved securities other 

than by personal bona." 

Article 2549, Revised Civil Statute8 of Texas, read8 

a8 fOllOW8: 

"As soon as Said bond be given and approved 

by the Commissioners Court, and the Comptroller, 

an order Shall be made and entered upon the minutes of Said Court designating such banking corporation, 

association or individual banker, as a depO8itOry 

for the fund8 of Said county until Sixty (60) days 

after the time fixed for the next selection of a 

depO8itOry; and thereupon, it Shall be the duty of 

the county treasurer of Said county ltnmediately 

upon the making of 8uCh order, to transfer to Said 

depO8itOry all the fund8 belonging to said county, 

a8 well as all funds belonging to any district or 

other municipal subdivision thereof not selecting 

it8 own depOSitOry, and immediately upon receipt 

of any money thereafter, to deposit the same with 

Said depO8itory t0 the credit Of Said county, diStrict and municipalities. It Shall al80 be the 

duty of the tax collector of such county to deposit 

all taxes collected by him, or under his authority, 

for the State and 8UCh county and its various di8triCts 

and other municipal subdivisions, in such depository or depositories, as soon as collected, pending the preparation of hi8 report of such COlleCtion and settlement thereon. The bond of such 

county depository or depositories Shall Stand a8 

security for all 8UCh funds. Upon such fund8 being deposited as herein required, the tax collector and sureties on his bond, shall thereafter be 
Honorable W. M. Tucker, page 4 o-2376 

relieved of re8pOnsibility of its safe-keeping. 

All county depositories shall collect all checks, 

draft8 and demand8 for money so depOSited with 

them by the county Andy when using due diligence 

Shall not be liable on 8UCh collections until the 

proceed8 thereof have been duly received by the 

depO8itory bank, provided that any expense incurred in collection thereof by the depOSitOry, which 

the depO8itory 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 Corporation, shall be charged to and 

paid by the county. All money collected or held 

by any district, county or precinct officer in 

such county, or the officer of any defined district or subdivision in 8UCh county, including the 

fund8 of any municipal or quasi-municipal subd,ivision or corporation which ha8 the power to select 

its own depository, but has not done 80, Shall be 

governed by this law, and shall be deposited in 

accordance with its requirements, and shall be 

considered in fixing the bona of 8UCh depOSitory, 

Andy shall be protected by 8uCh bona; and all warrants, checks, and VOUCher8 evidencing 8uCh funds 

Shall be Subject to audit and countersignature as 

now or hereafter provided by law." 

Article 2557, Revised Civil Statutes, reads as fol1OWS: 

"The county treasurer shall not be responsible 

for any loss of the county fund8 through the failure 

or negligence of any depository; but nothing in this 

Act shall release any county treasurer for any 1088 

resulting from any official mi8COndUCt or negligence 

on hi8 part, nor from any responsibility for the 

funds of the County until a depO8itOry shall be 

selected and the fund8 deposited therein, nor for any 

misappropriation of such fund8 by him." 

Article 2663, Revised Civil Statutes, read8 a8 fol1OWS: 

"On the first of each month, the State Superintendent shall prorate to the several counties, 

cities and towns and 8ChOOl district8 constituting 

separate school organizations, according to the 

scholastic! population of each, the available school 
. . 

Honorable W. M. Tucker, page 5 O-2376 

money collected during the preceding month and 

then on hand as shown by the certificate issued 

that day to him by the Comptroller, and Shall 

thereupon certify to the Comptroller the total 

sum prorated to each; and such certificate shall 

be authority for the Comptroller to draw his 

warrant in favor of the Treasurer of each such 

county, city or town or 8ChOOl district for the 

amount stated in Such certificate. He shall receive from the State Treasurer all warrant8 80 

drawn, and Shall transmit such warrants to the 

respective treasurer in favor of whom they are 

drawn." 

The term "treasurer" 

clearly mean8 

a8 USed in Article 2663, supra, 

"county depository." See Article 2828, supra. 

This department held in an opinion written by Han; 

Scott Gaines, Assistant Attorney General, dated June 9, 1931, 

addressed to Mr. S.M.N. Marrs, State Superintendent, that a 

county depository being selected, 

2829 and approved, 

bona furnished under Article 

said bank as Selected beCOme8 the depository 

for all school fund8 of Said county, lncludlng State and county 

available 8ChOOl fund and permanent county SChOOl fund. This 

opinion held further that the CUStOdY of bonds and other securities a8 investment8 of permanent school fund will be with 

county treasurer and that 8UCh responsibility was covered by 

the county treasurer's general bond. 

We call your attention to the following language, 

found In the footnotes under Article 2828, Vernon's Annotated 

Texas Civil Statutes, Vol. 8, page 298, to-wit: 

"Under Const. Art. 16, 0 44, providing that 

the Legislature shall prescribe the duties of the 

county treasurer, who shall have such compensation as may be provided by law, the Legislature, 

notwithstanding this article, had power t0 pass 

Act 318t Legislature, c. 12, transferrlna the custody of such fUnd8 to the county dePOSitOrie8, 

thus relieving the countv treasurers of am liability for such fund8 80 deDosltea.... citing 

Horton vs. Rockwall County, (Clv. App) 149 SW 

297 .'I (Underlining ours) 

The case of Horton vs. Rockwall County, Supra, holds 

that the county treasurer is not entitled to a commission for 

receiving and disbursing 8ChOOl funds. The following language 

of the court in that case , pertinent to your inquiry, 18 called to your attention, to-wit: 
. . 

Honorable W. M. Tucker, page 6 o-2376 

"Pursuing this policy and for the purpose 

of further conserving and increasing the school 

funds particularly, the amendment to the public 

free school laws was passed, by which the management and control of the district schools were 

placed squarely in the hands of'che school trustees, including the disbursement of all funds 

raised by the issuance of bonds for the purchase 

of sites and the building of schools, with the 

additional provision that on funds raised for 

such school purposes no commission should be paid 

for receiving and disbursing same for the obvious 

reason that since the safety of the fund was secured by the depository and the labor and duty of 

disbursing it rested wlih the school trustees,2 

would be a needless expense and but curtail the 

school fund to pay an officer for receiving and 

disbursing same, when he was charged neither with 

its safe-keeping nor liable for its loss or misappropriation." (Underlining ours) 

The case of Baxter, County Treasurer, vs. Rusk County, 

11 SW 2nd 648, follows and supports the case of Horton vs. 

Rockwall County, supra. 

You are therefore respectfully advised that it is the 

opinion of this department that the county treasurer Is not 

liable under the treasurerls official bond for shortages in 

school funds over which the treasurer exercised no control and 

which have been legally and properl~y deposited in the duly 

authorized and properly bonded county depository, inthe absence 

of official misconduct or negligence on the part of the treasurer and in the absence of any misappropriation of such funds 

by the treasurer. The complete facts in each case will determine the liability in each case. 

We are not furnlshed with enough facts relative to the 

matter of defects or worthlessness of the bonds and surrounding facts to pass upon the question ofthe liability of the 

treasurer, if any, in those matters. 

With reference to your second question, we assume that 

by the term "public school funds" you refer to the investment 

of the permanent county school fund. 

Section 6, Article VII, Texas Constitution, reads as 

follows: 

"All lands heretofore, or hereafter granted 

to the several counties of this State for educa- 
- . c 

Honorable W. M. Tucker, page 7 O-2376 

tional purposes, are of right the property of said 

counties respectively, to which they were granted, 

and title thereto is vested in said counties, and 

no adverse possession or limitation shall ever be 

available against the title of any county. Each 

county may sell or dispose of its lands in whole 

or in part, in manner to be provided by the Commissioners1 Court of the county. Actual settlers 

resldlng on said lands, shall be protected inthe 

prior right of purchasing the same to the extent 

of their settlement, not to exceed one hundred and 

sixty acres, at the price fixed by said court, 

which price shall not include the value of existing 

improvements made thereon by such settlers. Said 

lands, and the proceeds thereof, when sold, shall 

be held by said counties alone as a trust for the 

benefit of public schools thereln; said proceeds 

to be invested in bonds of the United States, the 

State of Texas, or counties in said State, or in 

such other securities, and under such restrictions 

as may be prescribed by law; and the counties shall 

be responsible for all investments; the interest 

thereon, and other revenue, 

shall be available fund." 

except the principal 

Article 2824, Vernon's Annotated Civil Statutes of 

Texas, reads as follows: 

"Each county may sell or dispose of the lands 

granted to it for educational purposes in such manner 

as may be provided by the commissioners cour~t of 

such county, and the proceeds of any such~sale shall 

be invested in bonds of the United States, the State 

of Texas, the bonds of the counties of the State, and 

the independent or common school districts, road precinct, drainage, irrigation, navigation and levee 

distrI.cts in this State, and the bonds of incorporated cities and towns, and held by such county alone 

as a trust for the benefit of public free schools 

therein, only the interest thereon to be used and 

expended annually." 

The case of Boydstun VS. Rockwall County, 24 SW 272, 

holds among other things, that it is the duty of the commissioner's court to invest the county permanent school fund. 

This case also holds that the commissioners court may ratify 

an act of a county judge who without authority purchases 

bonds with the school funds. 
Honorable W. M. Tucker, page 8 o-2376 

This department has repeatedly held that the power 

and duty to invest the county permanent school fund is in the 

commissioners' court. 

Your second question is therefore answered in the 

negative. 

Very truly yours 

ATTORNEY GENERAL OF TEXAS 

BY s,fWm. J. Fanning 

Wm. J. Fanning 

Assistant 

WJF:AW:wc 

APPROVES JUNE 7, 1940 

s/Grover Sellers 

FIRST ASSISTANT 

ATTORNEY GENERAL 

Approved Opinion Committee By s/BWB Chairman