Court Opinion

ID: 4137985
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:31:13.682437+00
Date Added: 2024-06-11T14:37:45.063620
License: Public Domain

Haroh 16, 1949

Hon. Robert S. Calvert
Comptroller OS Public Aooounts
Austin, Texas            Opinion No. V-787.

                                Re:    The legality    OS accepting
                                       drainage and navigation
                                       district    bonds as soouri-
                                       ty to be pledged by a
                                       bank to act as a oounty
                                       depository.
Dear Sir:
             Reference is made to your recent           request     rhioh
reads    in part as follows:
              “Please advise this department whether
        or not Drainage and Navigation District        Bonds
        may be classed as municipal bonds, and, there-
        fore,  be acceptable    as security to be pledged
        by a bank selected     as a County Depository,    as
        provided for in Article     2547 Vernon’s Annota-
        tea Civil   StatutesOn

           The pertinent        portion   of Article    2547, V. C.
S ., ia 69 r0ii0w8:
                “(0)    In lieu’of    such personal bonds or
        surety bonds as above specified,          said banking
        corporation,      association    or individual     banker
        so selected      as county depository,     may pledge,
        and said depository        bank is authorized to
        pledge with the Commissioners’ Xhart            for the
        purpose of securing such county funds, secur-
        ities     of the following     kind, in an amsunt
        equal to the amount of such county funds on
        deposit      in said depository     bank, to-wit:
        bonds and notes of the United States,             securl-
         ties of indebtedness        of the United States,
        and other 8VidenCet3 of indebtedness           of the
        United States, when said evidences           of lndebt-
         edness are supported by. the full faith and
         credit     of the United States of America, and
Hon. .Robert       9, Calvert,   Page 2   (V-787)

         other bonds or other evidences of indsbtsd-
         ness which are guaranteed as to both prinol-
         pal and intsrsst    by the United States Govern-
         ment, bonds of the Stats of Texas, or of any
         county, city,    town, independent school dis-
         trict,   common school district,   or bonds issued
         under the Federal Farm Loan Act, or road dls-
         triot bonds, bonds, pledges or other securi-
         tlss issued by the Board or Regents of the
         University   of Texas, bank aocsptanoes of banks
         having a oapital stock of not leas than Five
         Hundred Thousand ($~OO,OOO.OO) Dollars,      note8
         or bonds secured by mortgegea     insured and de-
         bentures issued by the Federal Housing Admin-
         istrator   OS ths.United States Government,
         shares or share accounts of any building and
         loan association     organized under the laws of
          this state,   provided the payment of such
         shares cr share acoounta is insured by the
         Federal Savings E Loan Insurance Corporation,
         and in ths shares or share acoounts of any
         Federal Savings & Loan Association      domiciled
          in this state, provided the payment of such
          shares or share accounts is insured by the
         Federal Savinaa & Loan Insurance Corooration:
          and bonds issued by munioioal corporations       in
          Texas, . . . v (Emphasis added. )
                  In the case of Danoy v. Wells,    8 S. 91. (26)   198,
 (writ    rer.)     ‘it Is stated:
                “Step by step we advanoe to the’position
         that this navigation district       is a public mu-
         nicipal    corporation,   and in its nature cannot
         be dissolved      or have its powers out down or
         destroyed in any private suit or litigation,
         lxcopt in a dirrot suit brought by the sover-
         eign stat.     that gave lt life.     The trial judge
         based his order granting      a temporary injunc-
         tion solely upon the’ theory that the act vlo-
         lated both state and Federal Constitutions,
         and declined      to pass upon any preliminary
         quartions     either raising   the juriadlotlonal
         qusstlon,     plras in abatement,   or general or
         speoial lxssptions.
                  wFrom what has been said
                                         it will be aeon
          that appsllrnt  18 a runlolpal oorporation  with
          so nuch sovorrlgn power oonferred   upon it to
                                                                       163
_   .
        Bon. Robert S. Calvert,    Page 3   (V-787)

             do the things   the law imposes    upon it.   . . .*
                    In the case of Harris County Drainage District
        v. City   or Houston, 35 S, W. (2d) 118, we Sind the tollow-
        ing:
                    “Thus we see that under the Constitu-
             tion authority    is given to the Legislature
             to provide for the creation      of such drain-
             age districts    as the one in question here,
             and, when created,     they a tand upon the same
             footing   within their proper spheres, as coun-
             ty, preoinct,    or other such political   and
             established    subdivisions   of the state . . .
             and are pub110 corporations.       . .‘. n

                   Similarly  a water improvement district    has
        been regarded as a ~municipality~within    the meaning OS
        Section 53 of Article   III of the Texas Constitution.
        Cameron County Water Improvement District    No. 8 v. De
        La Vergne. Engine Co., 93 F (2d) 373 (CCA 5%       1938)
        And an independent school district   has likewise been
        held to be a “munioipalityn   under that section.     Har-
        lingen. I. S, D,.v. C. ii. Page & Bro.
                   In view of the foregoing,   it IS our opinion
        that Drainage and Navigation District    Bonds may be
        classed as municipal bonds within the meaning of Article
        2547 aupra; and may be pledged as security     by County De-
        positories  under the provisions   of the Act.

                    Drainage and Navigation Dia trict    Bonds
              are municipal bonds within the meaning of
              Artiole    2547, V. C. S., and may be pledged
              as security     by County Depositories  under the
              provisions    of the Aot. Dancy v. Wells, 8 S.
              W. (2d) 198.      Harris County Drainage District
              v. City of.Houston,~ 35-S. W. (2d) 118.
                                                                .
                                            Yours -very truly,

         APPROVED                      ATTORBEYGENERALOF TEXAS

                                       BY&ZAzL
                                             Assistant