Court Opinion

ID: 4138971
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:42:24.96113+00
Date Added: 2024-06-11T14:33:55.030025
License: Public Domain

OFFICE   OF   THE   ATTORNEY    GENERAL   OF   TEXAS
                                AUSTIN

Honorable Pat R. Hobo
County Attorney
:SaileyCounty
Euleshoe, Texas
Dear Sir:                      Opinion X0. 3-7343
                               Re: Deposit of bend proceeds
                                    in County deposWo,ry.
                                                   /
          ~Liehave received your letter of October \23,\,1946,
which ;\re
         quote, in part, as follows:        _.-.x_
                                                I_ / 'i
                                                  ‘,'; /
           "tpecial Road District 1-A of daif*.County,;
     Texas, consisting of about thre+Kourths ofthe      \
     total area of Dailey County, ,i-ssued\,~k625,00i3.L;D,
                                                          ,>
     in road bonds, said bonds beincdated October l>,      %...,
     1946. These bonds were                          of, ,_<
     constructing                                        "
     said District. The bonds ha&been     sdd and the
     Road District now,h'aX,themoheyfromthe    sale of
     the bonds in hand. MuS,eshoe'StateBank, the County
                                               he bond or se-
                                               are unable at

                       f the fact that labor and materials
                         secure at this time the Commis-

    seems&j"limit such investments to bonds sold prior
    to April 12, 1943. Please advise us whether or not
    we can invest the proceeds from the sale of Road
    States obligations, in lieu of depositing the funds
    with a bank without lal>rful
                               bonds or security deposits."
                                                              ..

Nonorable Pat R. Bobo - Pace 2

          Article 7523, Vernon's Annotated Texas Statutes, pra-
vides as follows:
         "After approval and registration as provided by
    law relative to other bonds, such bonds shall continue
    in the custody and control of the Commissioners1 Court
    of the oounty in which they were iasusd, and shall be
    by said court sold to the highest and beet bidder for
    cmsh, either in whole or in parcels, at not less than
    their par value, and the purchase money therefor shall
    be placed in the county treasury of such county to the
    credit of the available road fund of such county, or of
    such politicai subdivision or road district of such
    Cc~~~~ip~s2~~ac~~selb:a~;I:*,Acts 19.6, 39th Leg.,lst

          This statute, it is seen, provides in positive language
for the deposit of the proceeds of the road district bonds in
the county treasury (i.e., county depository under Articles 25&l+.,
et seq., V.A.C.S.).
          Article 2547 provides for the filing of bonds or the
pledge of securities by the county depository, and fixes the
amount thereof.
          Artiale 2543 provides for an additional bond when
"aftsr,the creation of a county depository . . . there shall ac-
&e‘to   the county or any subdivision thereof, an9 funds or
moneys from the sale of bonds or otherwise . . ."-The article pro-
vidds.for writtendemand by the Commissioners' Court upon the de-
pository, and further, that: "Upon the failure of such deposi-
tory to furnish such additional bond within thirty'(30) days
from the date of such demand, the Commissioners Court may cause
suoh special funds to be withdrawn, upon the draft of the county
treasurer from such depository, and cause the same to be depoei-
ted in soms solvent National bank or State bank whose combined
capital stock and surplus is in excess of such special fund, and
to leave the same or so much thereof as may not have been expen-
ded with such National bank or State bank of last deposit, until
such time that such county deoo5itory ray have filed with the
Commissioners' Court the requ%re:!additional bond, when such
special fund or so much thereof as shall not have been expended
shall be forthwith returned to and deposited with such county
depository." The article furth,:,provides: "This requ:~rin;.; of
such additional or special bond shall be optionai uith such Com-
missionerc' 'Jourt."
 Bonorable Pat R. Bobo - Page 3

           It would first seem that Article 2548 would answer
 all questions in whlah you are interested,for it makes provi-
 sion for an additionalbond, for the deposit of the speoial
 funds in other banks if the depository falls to furnish the
 additlonal bond, and further provldes that the requirement of
 an additionalbond ia optlonal with the Commlsslonerr~Court.
 Howover, Artiole 2547 wa8 amended in 1933 (Aotr 1933, 4Srd Leg.,
 ah. 66).  In setting the mount of the bond of the depository
               provldesr ... said bond or bonds to be in an
,,3he:ca$sndment
'enOk& equal to the estimated highest dally balance of nuah
 oounty as determined by the Commis8ioners'Court, suoh estUsa-
 ,ted'dailybalsnoe to be In no event leas than seventy-fiveper
 c+int~ofthe highest dally balanae of said oounty for the next
 preaedlng year, less the amount of bond funds reoeived and ex-

           It must have been the Intent of the Legislature that
 the underscoredpsrt of Article 2547, as anmnded, would have a
 mend&tory effeot. This Is evident because under Article 2548
 the Commissioners'Court already had the authority to requti an
 additionalbond, but the exercise of the authority was expressly
 optional, The underscoredpart would, therefore,be pointless
 nnless it is given a mandatory effect. Moreover, it is our
 opinion that the language used clearly shows that this effeot
 was the one intended by the Legislature.
           Artiole 2548, insofar as it provldea that the requiring
 of an additional bond Is optdt~nal,confliots with the later eat;
 therefore,that part of Artlole 2548 was repealed.
           It follows that your first question should be answered
 as follows; The bond proueeds should be plaaed in the oounty
 de ository to the credit of the road district. Under Artiale
    8, as modified by Article 2547, as amended, the Commlssloners*
 25fs
 Court, at its first meetlng after such funds are deposited, or
 as soon thereafter as prautlcable,muat make written demand for
 ad additionalbond (or pledge) to oover the amount of such bond
 proceeds. If the bank falls to furnish the additional bond
 within thirty days of the demand, the funds may be withdrawn
 and deposIted in a liatlonslOP State bank as outlined in Artiale
Honorable Pat R. Bobo - Page 4

2548.  Ii the depositorym&es it known prior to the expiration
of
- - thirty
   the    .. days that it will not furnish the bond, then the
runds m8y tnereupon be withdrawn and deposited 8s Indicated In
the prooeding sentence. In other words, the county does not have
to wait the thirty days If it Is alear that the depository will
not furnish the bond.
          We have said above that it is our opinion that the optional
part of Article 2548 wes repealed by the 1933 amsndment;there-
fore, lf.the oounty depositoryfails to furnish the additional
bond, then it is our further  opinion that the Commlsalonera~Court
must aeleot another depository (See Artioles 2947 and 2556). If
no appliaations8re subtitted,then the Commissioners'Court
should proceed under Artiole 2550. The bond proceeds should
thereupon be deposited in the depository so selected.
           As to your second questlon. we have held In several opln-
ions that under Artlole 708b, Vernon's Annotated Texas Statutes, the
proceeds of munloipaI bonds Issued or sold after  April 12, 1943,
m8y not be invetsed incbllgatlonsof the United States. In Opln-
Ion Ro. O-7393 we held that the proceeds of county rosd bonds
issued In,1946 couldwt be so invested. That opinion Is appllca-
ble to the questlon under consideration,and 8 copy of the opinion
1s enclosed foqr$ourconsideration. Based upon this opinion, you
are advised that your question is answered in the negative.     .
                                 Very tn%y yours
                              ATTORREY CD?.RERAL
                                              OF TRXAS

enal.
l3WS-al-mrJ
APPROVEQ)   xwv   1,   1946
/a/ Orover Sellers
ATTORNEY GEI03RALOF TEXAS
APPROVD OPIIiIONCOmT!ll?.E
                         BY /a/ B. W. B, CRAIRMAN