Honorable J. W. Edgar Opinion MO. M-777

Commissionerof Education Austin, Texas Re:

Dear Mr. Edgar: Ray theAnthony Independent School District select as its depositorya bank located inthat portion of the town of Anthony which is located in the State of New Mexico; that portion of the town of Anthony locatedadjacent thereto, and in Texas, is in the District.

In your recent letteryou request this office to render an opinion on the following question:

"Under the facts submitted, legally may the Anthony IndependentSchool District change its current depositoryand select
as a depository, in lieu thereof, a(nationa1) bank in Anthony, New Mexico?"

The facts submitted in your letterare that the town of Anthony Is in the northwest corner of El Paso County and extends into New Mexico. The Anthony IndependentSchool District boundaries,generally speaking, are coterminouswith thatportion of the townwhich is in Texas. The only bank in Anthony is located in that portion of the town that extends into Mew Mexico. The current depository for the school district is located in El Paso, Texas, and its two-year period to serve as such depository ends August 31, 1971. The school district'sboard of trustees has voted to make the First National Rank in Anthony, New Mexico its depository, provided the same is legallyacceptable. It is our further understanding that the Anthony IndependentSchool District selects its depositorypursuant to Article 2832,Vernon's Civil Statutes.

-3782-Honorable J. W. Edgar, page 2 (M-777)

here, are The provisions of Article 2832, which are applicable

set out in part b,elow:

"Inany independentdistrict of more than one hundred and fifty (150) scholastics,whether it be in a city which has assumed control of the schoolswithin its limits, or a corporation for schoolpurposes only, and whether organizedunder GeneralLaw or c~reatad by SpecialAct, the treasurer of the school fund ,&all .be that person or corporationwho.offers s,atisfactory

bond and the best bid of interest on the average dally balances or time deposits for the privilege of acting
as such treasure,r.The treasurerwhen thus selected shall serve for a term of two (2)years and until his successor shall have been duly selected and qualified and he shall be required to give bond in an ,amountequal to the estimatedamount of the total receipts coming annually Into his hands, when such bond is a personal bond;

. . .'
The only qualificationsfound In Article 2832 regard-

_. ... _. _ . ing the eligibility or one to serve as treasureror aepository for funds of a school districtare that such treasureror depository be a person or corporationand that such person or corporation be able to offer satisfactorybond and the best bid of interest on the average daily balances or time deposits. Said Article containsno limitations thatwould require the treasurer or depository to be locatedwithin a particular geographical area.

In the case of Donna IndependentSchool District v. First State Bank of Donna. 227 SW 974 (Tex.civ.App. 1921
no writ) f lsingArticle 2771 (nowArticle

%e Court I di 2832) and Its applicztio?% the selection of a school district's depository said:

"It Is clear from the law that the discretion is vested in the board of trustees of the selectionof a depository. No one else is vestedwith that discretion, and when that discretionhas been exercised and a depositoryappointedno one can question the authority of the boardwithout

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Honorable J. W. Edgar, page 

### 3. (M-777)

clearlyproving an abuse of the discretion."

A review of other statuteswhich govern the selection of depositories for state, countyand city funds reveals that such statutes contain requirements that said depositories be locatedwithin a particular geographicalarea. See Articles 

### 2526,et. seq., 2544 et. seq., and 2559 et. seq.,Vernon's Civil Statutes. Also the new School DepositoryAct, Chapter 23, Subchapter E, Texas Education Code,which is permissive and optionalwith each school district in that it can elect to be governed by the provisions of said DepositoryAct or continue to select its depository in accordancewith Article 

### 2832, contains such a geographical limitation. It is the opinion of this office, therefore, that the Legislature by omitting a geographical restriction in Article 

### 2832,evinces an intent that such a limitation shouldhave no application, either actual or implied, to the selection of a school district's depositorypursuant to saidArticle.

Since we can find no other authority that would prohibit the Anthony IndependentSchool District from selecting the First National Dank in Anthony,New Mexico to be its depository, it is the opinion of this office that said school districtmay make such bank its depositor provided the bank meets the other requirements of Article 2632.

In regard to your inquiry as to whether the Anthony IndependentSchool District can terminate its present depository contractprior to its expirationdate, it is the opinion of this office that Attorney General's OpinionNo. 

### 0-3837 (1941)answers this question in the negative.

We are mindful of the rule announced in Re ublic Rational Bank of Dallas v. C. H. Langdeau, 

### 371U. 

### ?G?FiF-83

. . 0 g L Ed 2d 

### 523

. . to the effect that national'banks may be sue; only in those siate courts in the countywhere the banks are located. This means, of course, that the school district couldnot successfullymaintain a suit against the bank in the Texas courts. This is a factor that the school board would want to consider in exercising its discretion in the selection of a depository, However, we think that the presence of this factorwould not, in itself, amount to an abuse of discretion in the selectionof the depository in the state of New Mexico.

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SUMMARY
The Anthony IndependentSchool Districtmay select as Its depositorypursuant to Article 

### 2832,Vernon's Civil Statutes, a national bank located in that portion of the town of Anthony which is located in the State of New Mexico; however, said school districtmay not terminate its present depository contractprior to the date said contract expires.



# YOP G very truly,

General of Texas Prepared by Ed Esquivel Assistant Attorney General

APPROVED: OPINION COMMITTEE

Kerns Taylor, Chairman W. E. Allen, Co-Chairman

James McCoy Jerry Roberts Scott Garrison Harriet Burke

MEADE F. GRIFFIN Staff Legal Assistant

ALFRED WALKER ExecutiveAssistant

NOLA WHITE First Assistant

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