April 23, 1990 

Honorable Tim Curry 

Criminal District Attorney 

200 West Belknap Street 

Fort Worth, Texas 

Opinion No. JM-1162 

Re: Status of trust funds 

76196-0201 held by a district clerk 

(RQ-1816) 

Dear Mr. Curry: 

You ask seven 

in regard to funds . . _ 

questions about a district clerk's duty 

held in trust by him until final disposition oy a coun . Your first question is "What funds are 

included within the definition of 'trust funds' in chapter 

117 of the Local Government Code?" 

This office has previously answered this question in 

Attorney General Opinion H-183 (1973). That opinion considered the definition of a "trust fund" for purposes of 

article 2558A, V.T.C.S. (now found at chapter 117, Local 

Government Code). 

We stated: 

A trust is an equitable obligation under 

which the trustee is required to deal with 

the trust property for the benefit of the 

beneficiaries who have a vested interest in 

the trust funds. Any funds fitting this 

definition are trust funds and, if in the 

possession of the county or district clerk, 

may be deposited in the county depository for 

tNSt funds. 

. . . . 

We believe that any money deposited in court 

to satisfy the result of a legal proceeding 

or to await the result of a legal proceeding falls within the scope of 5 11 (now, 

55 117.052, 117.053, Local Government Code). 

Attorney General Opinion H-183 (1973) at 846, 848. 
Honorable Tim Curry - Page 2 (JM-1162) 

That opinion determined that civil court deposits, 

probate court deposits, and child support payments paid 

through the clerk's office would be classified as trust 

funds. You ask specifically about interpleader funds, 

supercedeas deposits, funds paid in satisfaction of 

judgments, cash bonds, minor#s trust funds, and deposits in 

eminent domain proceedings. 

Interpleader funds are, of course, deposited in a court 

to await the court's determination of ownership. Thus, 

interpleader funds are included in the scope of chapter 117. 

m Sellers v. wis County, 483 S.W.ld 242 (Tex. 1972). 

Similarly, supercedeas deposits are paid to suspend the 

execution of a judgment pending appeal, which is also a 

legal proceeding and thus within chapter 117 of the Local 

Government Code. &G Saena r v. Pro kG 232 S.W.2d 106 

(Tex. Civ. App. - Austin 195:, writ refsd): 

Funds paid in satisfaction of judgments are paid as the 

result of a legal proceeding, and as stated in Attorney 

General Opinion H-183, those funds are included within the 

chapter 117 provisions of the Local Government Code. We 

note that funds paid in satisfaction of a judgment may not 

be paid into court without the order of the court. Iowa 

Mtu, 313 S.W.2d 897 (Tex. App. - 

l-ks~on l&8): Texas & P.R. Co. v. Walk=, 57 S-W: 568 (Tex. 

1900). 

You ask about wcash bonds," which we understand to be 

cash deposited in lieu of bonds. These funds are, we think, 

generally of the same nature as interpleader funds and 

supercedeas deposits and, thus, fall within chapter 117 of 

the Local Government Code. See. e.o., Rules App. Proc. Rule 

46(b). 

We find no statutory provisions relating to %inor ‘5 

trust funds." However, under the terms of chapter 142 of 

the Property Code, funds awarded to a minor or an incapacitated person who has no legal guardian are paid into the 

registry of court. mber v. Southern Nat'1 Life Ins. Co,, 

326 S.W.2d 715 (Tex. Civ. ADD. writ 

ref'd). These trust funds 

- San Antonio 1959, 

&e also within the scope of 

chapter 117 of the Local Government Code. Any funds 

deposited with the clerk under this chapter are deposited 

under court order and may be invested for the benefit of the 

minor by order of the court. Prop. Code 5 142.004. 

a 6 S.W.2d 796-(Tex. 

See 

McClendon v. aa , Civ. App. - Waco 

1928, writ dism'd). 

Eminent domain proceedings are also "legal proceedings," and cash deposited to reimburse a property owner 
Honorable Tim Curry - Page 3 (JM-1162) 

is generally included in chapter 117 of the Local Government 

Code. &? fitv of San &&nio v. Bura 65 S.W.2d 408 (Tex. 

Civ. App. - San Antonio 1933, no wgit). However, the 

condemnor of real property may, under section 21.021(d), 

direct that the eminent domain deposit be placed in an 

account of its own choosing. 

Your second through fifth questions regard the necessity of depositing trust funds in separate accounts or 

interest bearing accounts. Chapter 117 of the Local Govenment Code contains no express requirements that funds 

deposited in a court be placed either in separate accounts 

or in interest bearing accounts. Of course, the first duty 

of the clerk is to follow the instructions of the court that 

directed him to hold the funds. &8 WcLennan Co. v. Amer, 

at'1 Ins. Co,, 457 S.W.2d 597 (Tex. Civ. App. - Wad.0 1970, 

writ ref*d n.r.e.). We note that the county commissioners 

court and the county auditor have some discretionary 

authority regarding funds held by the clerk for the benefit 

of others. The exercise of that authority could invest the 

clerk with additional duties in regard to those funds. 

Section 112.002 of the Local Government Code permits a 

county auditor to require certain accounting procedures in 

regard to trust funds. As we noted in Attorney General 

Opinion H-183 (1973), "[t]he sheriff, district clerk and 

county clerk must deposit funds under procedures established 

by the county auditor." Conceivably, the county auditor 

could require that trust funds be placed in separate 

accounts "for the speedy and proper collecting, checking, 

and accounting" of the funds. 

Similarly, section 117.051 permits the county commissioners court to require that funds held in trust be placed 

in time deposits. As it applies to county depositories, the 

term "time deposit" is defined simply as 

a deposit of funds subject to a contract 

between the depositor and the depository 

under which the depositor may not withdraw 

any of the funds by check or by another 

manner until the expiration of a certain 

period following written notice of the 

depositor's intent to withdraw the funds. 

Local Gov't Code 5 116.001(3). "Time depositO' is treated 

elsewhere as the equivalent of a savings account in a 

commercial bank and is defined by other authorities to mean, 

among other things, "cash in a bank earning interest." 

Black's Law Dictionary 1330 (5th ed. 1979). See also 

Attorney General Opinion M-468 (1969). The legislature, 

furthermore, anticipated that trust funds placed in time 

p. 6136 
Honorable Tim Curry - Page 4 (JM-1162) 

deposits would earn interest. m Local Gov*t Code § 117.054 

(discussed below). A requirement that funds be placed in a 

"time deposit" would, we think, be a requirement that the 

funds generate interest. 

you have indicated that in Tarrant County the commissioners court has not required that trust funds be left in 

time deposits under section 117.051 and that the county 

auditor has not promulgated regulations under section 

112.002 regarding the deposit of such funds. We find no 

requirement in chapter 117 that trust funds either collect 

interest or that they be deposited in separate accounts. &S 

Esrris Co. Wm 507 S.W.2d 848 (Civ. App. - Houston 

[14th Dist.; 1974, writ'ref'd n.r.e.). Nor do we find any 

such requirements in the statutes relating.fo the specific 

types of funds about which you ask. Thus, we believe that 

the clerk of court has no duty to deposit such funds in 

separate accounts or in interest bearing accounts, except as 

such duty may be imposed by the court or other authority. 

Our conclusion is buttressed by the fact that statutes that 

delineate the liability of county and district clerks in 

regard to their handling of trust funds deposited in court 

do not identify the failure to deposit in separate accounts 

or in interest bearing accounts as a source of liability for 

the clerks. Local Gov't Code 9s 117.081, 117.082: Civ. 

Prac. 61 Rem. Code 5 7.002. 

In your sixth question you ask: 

Does the county have the right to receive any 

interest accrued on any funds maintained by 

the District Clerk (&, is S 117.054 of the 

Local Government Code constitutional)? 

Section 117.054 provides the following: 

(a) A county is entitled to receive a 

part of the interest earned on trust funds 

placed in time deposits under Section 

117.051. The amount received by the county 

must be reasonably related to the accounting 

and administrative expenses incurred by the 

county in handling the funds. 

(b) The county auditor on behalf of the 

commissioners court or, if there is no county 

auditor, the county treasurer, shall deposit 

the amount of compensation in the general 

fund of the county. 

Section 117.054 is derived from sections 4a and 4b of 

former article 2558a, V.T.C.S. Prior to recodification as 

p. 6137 
Honorable Tim Curry - Page 5 (JM-1162) 

C 

part of the Local Government Code, section 4a of article 

2558a directed the commissioners court to receive all 

interest earned on the time deposits of trust funds and to 

deposit such interest in the general fund of the county "as 

an offset to the expenses of handling such trust funds for 

the benefit of litigants." Section 4b authorized the same 

with respect to accumulated interest derived from trust 

funds in the custody of the district or county clerk prior 

to the enactment of section 4a in 1959. These provisions 

were declared unconstitutional by the Texas Supreme Court in 

Sellers v. Harris Co, 483 S.W.Zd 242 (Tex. 1972). The 

court held that the' statute violated the due process 

guarantees of the state and federal constitutions because 

it deprived the owner of the trust funds of a sum that was 

not reasonably related to the value of the county's services 

funds. See also Webb's 

(county's taking of interest ac&iny& ~&$~der 

(1980) 

fund 

deposited with court clerk in addition to fee charged for 

clerk's services violated Fifth and Fourteenth Amendments of 

U.S. Constitution). United 

m, 110 S. Ct. 387,%689) (user fee need note be 

precisely calibrated to the benefit received from governmental services). 

The revisor's note to section 117.054 states that the 

Sell rs opinion indicated that article 2558a was unconstitutionzl only to the extent that it deprives a person of due 

process and was still operable so long as the county 

received an amount reasonably related to the value of the 

county's services. The note cites Attorney General Opinion 

M-1198 (1972) as support for this reading of Sm. 

Section 117.054, it is noted, was drafted to reflect the 

interpretation of article 2558a in Sellers. 

With the constitutional infirmities of article 2558a 

removed, section 117.054 authorizes the county to receive an 

amount of the interest earned on trust funds that is 

reasonably related to the accounting and administrative 

expenses incurred by the county in the handling of the 

funds. However, as you note in your brief, section 117.054 

must be read in conjunction with section 117.055 of the 

Local Government Code. The latter section provides: 

(a) To compensate the county for the 

accounting and administrative expenses 

incurred in handling the trust funds for the 

benefit of litigants in civil proceedings, 

the county may collect from the nonprevailing 

party in the litigation or from the party the 

court designates a fee in an amount set by 

the commissioners court, but not to exceed 

P. 6138 
Honorable Tim Curry - Page 6 (JM-1162) 

$50. The fee is in addition to any fees the 

district clerk collects as authorized by 

statute or court order. 

(b) The county treasurer shall deposit 

the fee in the general fund of the county. 

Local Gov't Code 5 117.055 (as amended by Acts 1989, 71st 

Leg., ch. 1, 8 16, at 16). 

On first reading, sections 117.054 and 117.055 appear 

to create a conflict. Section 117.054, on the one hand, 

authorizes a county to collect from accrued interest on 

trust funds an aXCu’k "reasonably related" to the county's 

uaccounting and administrative expenses ,I while section 

117.055 appears to limit the county's charge for lqaccounting 

and administrative expenses u to an amount not to exceed $50. 

We do not believe there is any conflict between the two 

sections. Nor do we believe that the county is authorized 

to assess two charges for the same "accounting and administrative expenses." Rather, we can read the two statutes 

together by noting that the charge authorized by section 

117.054 is limited to those funds deposited in time 

deposits as ordered by the commissioners court under 

section 117.051. With this reading, we avoid the constitutional problems found in Sellers, and in w's Fabulous 

. Furthermore, we give effect to both statutes. 

As noted above, the Tarrant County Commissioners Court 

has not mandated that trust funds be deposited in time 

deposits under section 117.051. Thus, we believe that in 

Tarrant County, section 117.055 is the operative law for the 

assessment of fees for handling trust funds for the benefit 

of litigants. Of course, under that statute, it remains for 

the commissioners court to designate the fees. 

Finally, you ask: 

Can the District Clerk pass costs of establishing and maintaining trust funds back to 

litigating parties when the funds are paid 

out? 

As noted above, the supreme courts of both Texas and 

the United States have implied that a county may collect 

a fee reasonably related to the costs of depositing and 

accounting for funds that are held in trust for others. m 

sellers, si!mza: tSl+U233* 

Section 117.054 of the Local Government Code entitles 

the county to receive a part of the interest aCCNed on time 

p. 6139 
Honorable Tim Curry - Page 7 (JM-1162) 

deposits, and section 117.055 (as amended by Acts 1989, 71st 

Leg., ch. 1, f 16, at 16) allows the collection of a fee not 

to exceed $50 for handling trust funds for the benefit of 

litigants in civil proceedings. As we determined in 

Attorney General Opinion JH-434 t-861, the expense of 

handling the trust fund must have been incurred prior to the 

assessment of cost, which cannot be done until the outcome 

of the litigation. Attorney General Opinion JM-434 (1986). 

SUMMARY 

The trust funds included in chapter 117 of 

the Local Government Code include, m 

u, civil court deposits, probate court 

deposits, child support payments paid through 

the clerk's office, interpleader funds, 

supercedeas deposits, funds paid in satisfaction of judgments, other cash deposits made 

in lieu of bonds, minor's trust funds, and 

eminent domain deposits. The district clerk 

is not required to invest these funds for 

interest or to deposit them in separate 

accounts unless so ordered by the court or 

other authority. The costs of establishing 

and maintaining these trust funds are 

properly assessed against the party that 

ultimately receives them or as directed by 

the court at the time the funds are paid to 

the owner. 

MATTOX 

Attorney General of Texas 

MARYNELLRR 

First Assistant Attorney General 

JUDGE ZOLLIE STHAHLEY 

Special Assistant Attorney~General 

RENEA HICKS 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Karen C. Gladney 

Assistant Attorney General 

p. 6140