Honorable Martin Elchelberger Opinion No. M-33

DistrictAttorney McLennan County Courthouse Re: Whether the Commissioners Waco, Texas Court of McLennan County
can consider a bid for county depositoryaccompaniedby a cashier’s oheck, but not a certified check, as trovlded for in Article 25 5, V.C.S., and Dear Mr. Elchelberger: related questions.

You have requested the opinion of thla office regarding the above question
, and 

### in this connectionyou have submitted the following facts:

“Pursuantto advertisement for bide for County depositorypurauant to Article 2544, V.A.C.S., the County CommissionersCourt of McLennan Countymet on the first day of Its term on February 13, 1967. Bids from a number of banks were received, and opened, prior to 1O:OO A.M. on aald date, in public meeting. Only two of said bids were accompaniedby a certified check, as provlded by Article 2545, V.A.C.S. Theae uere the bide of WestvlewNational Bank and The Flrrtt’ National Bank of Waco, thepresent depository. The bid of Weatvlew National Bank did not contain a statement showing the financial condition of the bank, a8 provided for by said article, but a written statementwas furnished by We&view National Bank during that day. The bids of the other banks, Including The CitizensNational Bank of Waco and the National City Bank of Waco were accompanied by cashler’a checks rather than certlfled checks. After discussion of the bids, the Commissioners did not officiallyadjourn themeeting, and the CommissionersCourt reassembledWednesday

-142-HOC. Martin ElchelbergerrPage 2 (M-33)

morning, February 15, 1967, for further considerationoc the bids.

"By letter dated February 13th'anddelivered to the County Judge, The First National Bank of Waco,stated Its position that; as it was the only bank which had made a bid accompanied by both a certified check and a'statement of condltlon,~

its bid was the only bid received meeting the legal requirements.

"On Tuesday, February lath, one of the other bidders, The CitizensNational Bank of Waco, filed a certified check In connection with It& bid.

"The Commissionersassembled on Wednesday, February 15th, at which time the National City Bank of Waco delivered to the Commissioners Court a certified check in connectionwith Its bid. The Court heard argumentsby representatives of variousbanks, and, on that date, February 15$hr adopted by a three to one vote
a motion to award the bid to the National City Bank of .Waco,as the highest bid.,"

Eased upon the foregoing fact situation,you asked the following questions:

"(1) Could the Commlssloners~ Court of McLennan County consider a bid for County depositoryaccompaniedby a cashier'8 check but not a certified check, as provided for In Article 2545?
"(2) After bids have been received and opened on the first day of the term of the CommissionersCourt, as provided for In Articles 2545 and 2546V.A.C*S., could the CommissionersCourt legally consider and award the bid-to a bank which delivered to the CommissionersCourt a certified check In connectionwith this bid on a day after the first day of said term, to wit, on Wednesday,February 15, 1967,prior to the passage of saidmotion?

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Hon. Martin Elchelberger,Page 3 (M-33)

't(3) Under the above facts, can the CommlsalonersCourt legally select the National City Bank of Waco as depository and enter Into depository contractwith It under Article 2546V.A.C.S. upon said bank's cornlyingwith the provisions of Article 25 7 V.A.C.S.?"

t:

The selection of county depositories Is provided for and regulatedby statute. Articles 2544-2558a,V.C.S. The requisites of the application of those bank8 applying to be deal nated as county depository are prescribedby Article &

25 5 which reads In part as follows:

II

. . .aaidapplication ahall state the - amount of paid up capital stock and permanent surplus of said bank.

. .a statement showing the financial condition of said bank at the date of said applicationwhich shall be delivered to the County Judge on or before the first day of the term of the CommissionersCourt at which the selectionof the depositories Is to be made. Sald application shall also be accompaniedby
a certified check for not less than one-half of
one per cent of the county's revenue for the precedly year as a guarantee of good faith

. . . .
In Bowle County v. Farmer's Guaranty State Bank, 289 S.W. 451 (Tex.Clv.App.1926, error ref.) It was held that the commissioners court was without authority to select a bank as county depositorywhose bid waa accompaniedby a cashier's check rather than a certified check. In reaching this conclusion the court reasoned that the purpose of requiringa certified check was to add the llablllty of someone other than the bidder to secure the county for damages upon the failure of the bidder to give bond as required by Article 2547. A cashier's check la drawn by a bank upon itself and binds no one else. Upon the authority of this case, you are advised that the CommissionersCourt of McLennan County la not authorized to consider an application to be designatedas county depositorywhich Is accompaniedby a cashier's check rather than a certified check.

The selection of a county depository Is a matter which rests within the sound discretion of the commissioners court; It8 decision In this respect la final and will not

-144-Hon. Martin Eichelberger,page 4 (M-33)

be disturbedby the courts In the absence of gross abuse. Hurley v; Camp; 234 S.W. 577 (Tex.Civ.App.1951, error refused); Hurley v. CitizensNat.
no history Bank, 229 S.W. 663 (TexXlv.App. 1921,
(Tex.Clv.AAp.1954, no history).

;,CitlzensState Bank v. McCaln, 274 S.W.2d 184 The commissionerscourt is not required to accept any oftthe applications filed; it may reject them all and readvertlae for bids as authorizedby Article 2545, or, under the authority of Article 2550, It may designate any one or more banks within the county or an adjoining county. Coffee v. Eorger State Bank, 38 S.W.2d 187 (Tex.Clv.App.1921, no history).

In Hurley v. CitizensNat. Bank, supra, threebanks submittedbids and the commissioners court selected the bank

. ..._--

____ offering the lowest rate of Interest rather than-thehighest. The decision of the commlsslonerscourt was upheld even though at that time Article 2546 stated that It was the duty of the court to select the application offering to Day the hinhest in,terest

rate. In Coffee v=. Borger State Ba;lkisupra,-two banks within the county submittedapplicationsand one bank within an adjoining county submittedan application. The court thereupheld the action of the commissionerscourt in selecting the application of the out of county bank.

The cases just cited and discussed clearlywould sustain the selectionof the National City Bank of Waco as the McLennan County depository If its applicationhad been accompaniedby a certified check rather than a cashier's check. Yet, the failure of the National City Bank of Waco and the CitizensNational Bank of Waco to accompany their applicationwith a certified check did not comDe1 the commisaloners court to designate the First National Bank of Waco as the county depository. Coffee v. Borner State Bank, 38 S.W.2d 187 (Tex.Civ.App.1921, no history); Hurley v. CitizensNat. Bank, 229 S.W. 663 (Tex.Clv.App.1921, no history). There are no facts stated In your letter of requestwhich would compelus to conclude that thencornmlaaloners court abused Its discretion In allowing the applicants to perfect their applicationsby substitutinga certified check for the cashier's check originally submitted. However, If either the requirement of Article 2545 that the applicationand certified check be delivered to the county jud e 2542 on the day specified, or the requirement of Article that the selection of the county depositorybe made on the day there specified,be mandatory, then therewas no room for the exercise Of discretionand the designationof

-145-lion. Martin Elchelberger,page 5 (~-33)

the commlasloneracourtmust be held Invalid. The answer to your second and third questions dependsupon themandatory nature of the time requirement of Articles 2545 and 2546.

While theprovisions of Article 2545 state that the application, statementand certified check are to be delivered to the county judge on or before the first day of the term at which the selectionof the depositories la to be made and Article 2546 states that the applicationsare to be opened at ten,o'clockA.M. of such day and a county depository selected, there Is no declaration In these statutes that an application filed after such date~maynot be consideredor that the selectionof a depositorymade upon some other datewould be void. To this extent these statutes are directoryand notmandatory. The general rule In conatrulng statute8 of thla nature la stated in Federal Crude Oil Co.
v. Yount-Lee 011 Co., 122 Tex. 21, 52 S.W.2d 5b S.W.2d 61: (193 2) at 52

"Those&ectlona which are not of the G essence of t e thing to be done, but which are given with a view merely to the proper, orderly and prompt conduct of the business, and by the failure to obey the rights of those interested will not be prejudice regarded as mandate?? ! , are not commonly to be and If the act la performed, but not In the time r In the precisemode indicated, It will still be sufficient,If that which Is done accomplishes the substantialpurpose of the statute."

The purpose of theprocedurespreecrlbedby the statutes relating to the aelection of a county depository la to secure to the county a safe, reeponalbledepository for its funds with a return of Interest for the use thereof. Time Is not of the eaaence In the accomplishmentof these ends; therefore, they should not be sacrificed to the strict compliancewith the time requirements of these statutes.

In Koneckyv. City of Yoakum, 35 S.W.2d 492 (Tex. Clv.App. 1931) affirmed 52 S.W.2d 240 (Tex.Comm.App.1932) It was contended that the designationof a city depository
was void because the designationwas made during themonth of June Instead of July as requiredby Article 2559 and the notice of Intentionwas given by letter rather than publlcatlon. In upholding the designation of the city depository the court there stated at 35 S.W.2d 498:

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Hon. Martin Elchelberger,page 6 (~-33)

"Article2559 provide% no penalty and Imposes
no forfeiture In case of ai,non-compliance with Its literalprovlslons. There Is no declaration In the act that, If the.deelgnatlonof a depository la made at a time other than at a regularmeeting In July of eao@year, as stated in the act, such" deslgnatlon.'ahould be void.

. . . T he provlslona

P of the statute declaring.

. .the t me formaking such designation.

. .lsdirectory only and not mandatory.

. . .men a formality Is not absolutely necessary for the observanceof justice, but, Is Introduced to facilitate Its observance,' Its omission,unless there la an annulling clause In the law, will not annul the act."

The statutes thereunder considerationare .analogousto those pertaining to the designationof a county depository; the statements of the court.ln that case apply with equal force to the nature of the requirementsof Articles 2545 and 2546 relating to the timewithin which the acts specified therein
are to be performed.

In our opinion,,ltwas within the discretionof the CommlsaloneraCourt of McLennan County to allow the Citizens National Bank of Waco and the.NatlonalCity Bank of Waco,to replace the cashier's check which accompanied their reaptictlve

applicationswith a certified check, even though the certlfkd checkwas not delivered on'the first day of the term at whlch.'acounty depositorywas to be selected. It was also within their discretion to defer the selection of the dep<ory to a!dtiJr other than the first day of the February term.

There are no‘facts In your letter of requestwhich show that the CommlsalonersCourt of McLennan Cointy abused lta.dlacretlon In allowing the aubstltutlon~ofthe check8 In que~stlon

or in selectinga depository on~aday other than that specifiedby Article 2546; therefore, In answer to your second and third questions,you are advised that, under the factspresented, the commlaalonera court could, In the exercise of Its discretion, consider the applications of allfour banks and select the National City Bank of Waco
as the county depository.

- 147 -Hon. Martin Elchelberger,page 7 (~-33)

An application for a county depository contractmay not be consideredwhen It la accompaniedby a cashier's check rather than
a certified check as requiredby Article 2545, V.C.S. However, since the times within which the acts specified In Article 2545, V.C.S., and Article 2546,V.C.S., are to be performed
are not mandatory, In the absence of facts which constitute an abuse of discretion, It 18 within the discretionof the commlsslonera' court to allow an applicant to replace a cashier's check.witha certified check after the first day of the February term of court and award the county depositorycontract to such applicant.

VT truly yours,



# . . &%e=

C. MARTIN General of Texas
Preparedby W. 0. Shultz AssistantAttorney General WOS:sck

APPROVED: OPINION COMMI'ITEE

Hawthorne PhIllIps,Chairman W. V. Geppert, Co-Chairman R. L. Lattlmore John Reeves John Ranks Ralph Rash Qordon Caaa

STAFF LEGAL ASSISTANT A.. J. CARUBBI, JR.

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