Court Opinion

ID: 4144012
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:40:14.064247+00
Date Added: 2024-06-11T14:34:29.519299
License: Public Domain

IEXEA~~TORNEY           GENERAL
                     OF     TEXAS

Honorable W. M. Tucker
County Attorney
Collingsworth County
Wellington, Texas

Dear Sir:                Opinion NO. o-2376
                         RE: Liability of county treasurer for
                              school funds over which treasurer
                              does not have control - Investment
                              of school funds.

        Your request for oplnlon has been received and care-
fully considered by this department.  We quote from your let-
ter of request as follows:

         "Question No. 1. Where County School Superin-
    tendent used public school fund8 for the purchase
    of bonds, where said County School funds are handled
    Independently by the County School Superintendent,
    and said funds d,oes not pass through the hands of
    the County Treasurer should there be a shortage in
    the County Superintendents account or if said bonds
    should be worthless, or defective in any manner,
    would the County Treasurer, the said Viola Hudson,
    be liable under her official bond for any such short-
    age, or defects in said bonds so purchased by said
    County School Superintendent?   Under Art. 1704 R.V.S.

        "Question No. 2. Is the County School Superin-
    tendent authorized to invest the Public School funds
    in bonds, without the sanction of the CommFssioners
    Court of his County, when said school fund is car-
    ried ln the School Depository, and handled exclu-
    sively by the County School Superintendent independ-
    ent of the County treasurer."

        We understand from your letter that Collingsworth
County has a duly selected and qualified county depository and
that the school funds are in said depository.

        Article 1704, Revised Civil Statutes of Texas, reads
as follows:

        "The county treasurer before entering upon
Honorable W. M. Tucker, page 2          o-2376

    the duties of his office, and within twenty days
    after he has received hi8 certificate of election,
    shall give a bond payable to the county judge of
    his county, to be approved by the commissioners
    court, in such sum as such Court may deem neces-
    sary, conditioned that such treasurer shall faith-
    fully execute the duties of hi8 office and pay
    over according to law all moneys which shall come
    into his hand8 as county treasurer, and render a
    true account thereof to said~ court at each regu-
    lar term Of Said court."

        Article 3942, Revised Civil Statutes of Texas, reads
a8 fOllOWS:

        "The treasurers of the several counties shall
    be treasurers of the available public free SChOOl
    fund and al80 Of the PerItIanentCOUnty School fund
    for their respective counties.   The treasurers of
    the several counties shall be allowed for rnceiv-
    ing and disbursing the school fund8 one-half of
    one per cent for receiving, and one-half of one
    per Cent for disbursFng, said COIImIiSsiOhst0 be
    paid out of the available 8ChOOl fund of the
    county; provided, no commis8ion8 shall be paid
    for receiving the balance transmitted to him by
    his predecessor, or for turning over the balance
    in his hands to his successor; and provided, that
    he shall receive no commLssFons on money trans-
    ferred."

        Article 2828, Revised Civil Statutes of Texas, read8
as follows:

        "The terms 'county treasurer' and 'county
    treasury' as used in all provisions of law relat-
    ing to 8ChOOl funds, Shall be construed to mean
    the county depository.  The commissioners court
    shall file with the State Department of Education
    a copy of the bond of said depository to cover
    school funds. No commission shall be paid for
    receiving and dlsburslng school funds."
         Article 2829, Revised Civil Statute8 of Texas, read8
FL8 fOllOW8:
        "WithIn twenty days after the receipt of a
    certificate of its selection, the County Deposi-
    tory shall execute a good and Sufficient bond,
    payable to the County Judge, in amount equal to
.   .

        Honorable W. M. Tucker, page 3         o-2376

            the probable amount of available School Fund,
            which may be on deposit at any one time, and of
            the, permanent County Fund, to be estimated by
            the County Superintendent, and shall be condi-
            tioned that the depO8itOry will faithfully per-
            form its duties under this title, and safely keep
            and faithfully disburse the School Fund accord-
            ing to Law, and pay 8UCh warrants as may be drawn
            on Said fund by competent authority; provided, in
            lieu of Said bona, such depO8itOry may secure Said
            School Fund8 in the same manner a8 is now provl-
            ded by law for qualification a8 County Depository.

                "Sec. 1-A. In the event depositories have
            been Selected at the time of adoption of the above
            provision, such depO8itorieS may, at option, se-
            cure Said School Fund by approved securities other
            than by personal bona."

                Article 2549, Revised Civil Statute8 of Texas, read8
        a8 fOllOW8:

                "As soon as Said bond be given and approved
           by the Commissioners Court, and the Comptroller,
           an order Shall be made and entered upon the min-
           utes of Said Court designating such banking corporation,
           association or individual banker, as a depO8itOry
           for the fund8 of Said county until Sixty (60) days
           after the time fixed for the next selection of a
           depO8itOry; and thereupon, it Shall be the duty of
           the county treasurer of Said county ltnmediately
           upon the making of 8uCh order, to transfer to Said
           depO8itOry all the fund8 belonging to said county,
           a8 well as all funds belonging to any district or
           other municipal subdivision thereof not selecting
           it8 own depOSitOry, and immediately upon receipt
           of any money thereafter, to deposit the same with
           Said depO8itory t0 the credit Of Said county, diS-
           trict and municipalities.   It Shall al80 be the
           duty of the tax collector of such county to deposit
           all taxes collected by him, or under his authority,
           for the State and 8UCh county and its various di8triCts
           and other municipal subdivisions, in such deposi-
           tory or depositories, as soon as collected, pend-
           ing the preparation of hi8 report of such COlleC-
           tion and settlement thereon. The bond of such
           county depository or depositories Shall Stand a8
           security for all 8UCh funds. Upon such fund8 be-
           ing deposited as herein required, the tax collec-
           tor and sureties on his bond, shall thereafter be
Honorable W. M. Tucker, page 4          o-2376

    relieved of re8pOnsibility of its safe-keeping.
    All county depositories shall collect all checks,
    draft8 and demand8 for money so depOSited with
    them by the county Andywhen using due diligence
    Shall not be liable on 8UCh collections until the
    proceed8 thereof have been duly received by the
    depO8itory bank, provided that any expense incur-
    red in collection thereof by the depOSitOry, which
    the depO8itory is not allowed or permitted to pay
    or absorb by reason of any act of Congress of the
    United States or any regulation by either the
    Board of Governors of the Federal Reserve System
    or the Board of Directors of the Federal Deposit
    Insurance Corporation, shall be charged to and
    paid by the county. All money collected or held
    by any district, county or precinct officer in
    such county, or the officer of any defined dis-
    trict or subdivision in 8UCh county, including the
    fund8 of any municipal or quasi-municipal subd,ivi-
    sion or corporation which ha8 the power to select
    its own depository, but has not done 80, Shall be
    governed by this law, and shall be deposited in
    accordance with its requirements, and shall be
    considered in fixing the bona of 8UCh depOSitory,
    Andy shall be protected by 8uCh bona; and all war-
    rants, checks, and VOUCher8 evidencing 8uCh funds
    Shall be Subject to audit and countersignature as
    now or hereafter provided by law."

        Article 2557, Revised Civil Statutes, reads as fol-
1OWS:

         "The county treasurer shall not be responsible
    for any loss of the county fund8 through the failure
    or negligence of any depository; but nothing in this
    Act shall release any county treasurer for any 1088
    resulting from any official mi8COndUCt or negligence
    on hi8 part, nor from any responsibility for the
    funds of the County until a depO8itOry shall be
    selected and the fund8 deposited therein, nor for any
    misappropriation of such fund8 by him."

        Article 2663, Revised Civil Statutes, read8 a8 fol-
1OWS:

        "On the first of each month, the State Super-
    intendent shall prorate to the several counties,
    cities and towns and 8ChOOl district8 constituting
    separate school organizations, according to the
    scholastic! population of each, the available school
.   .

        Honorable W. M. Tucker, page 5          O-2376

            money collected during the preceding month and
            then on hand as shown by the certificate issued
            that day to him by the Comptroller, and Shall
            thereupon certify to the Comptroller the total
            sum prorated to each; and such certificate shall
            be authority for the Comptroller to draw his
            warrant in favor of the Treasurer of each such
            county, city or town or 8ChOOl district for the
            amount stated in Such certificate.  He shall re-
            ceive from the State Treasurer all warrant8 80
            drawn, and Shall transmit such warrants to the
            respective treasurer in favor of whom they are
            drawn."

                The term "treasurer" a8 USed in Article 2663, supra,
        clearly mean8 "county depository."  See Article 2828, supra.

                This department held in an opinion written by Han;
        Scott Gaines, Assistant Attorney General, dated June 9, 1931,
        addressed to Mr. S.M.N. Marrs, State Superintendent, that a
        county depository being selected, bona furnished under Article
        2829 and approved, said bank as Selected beCOme8 the depository
        for all school fund8 of Said county, lncludlng State and county
        available 8ChOOl fund and permanent county SChOOl fund. This
        opinion held further that the CUStOdY of bonds and other se-
        curities a8 investment8 of permanent school fund will be with
        county treasurer and that 8UCh responsibility was covered by
        the county treasurer's general bond.

                We call your attention to the following language,
        found In the footnotes under Article 2828, Vernon's Annotated
        Texas Civil Statutes, Vol. 8, page 298, to-wit:

                "Under Const. Art. 16, 0 44, providing that
           the Legislature shall prescribe the duties of the
           county treasurer, who shall have such compensa-
           tion as may be provided by law, the Legislature,
           notwithstanding this article, had power t0 pass
           Act 318t Legislature, c. 12, transferrlna the cus-
           tody of such fUnd8 to the county dePOSitOrie8,
           thus relieving the countv treasurers of am li-
           ability for such fund8 80 deDosltea....   citing
           Horton vs. Rockwall County, (Clv. App) 149 S.W.
297 .'I (Underlining ours)
                The case of Horton vs. Rockwall County, Supra, holds
        that the county treasurer is not entitled to a commission for
        receiving and disbursing 8ChOOl funds. The following language
        of the court in that case , pertinent to your inquiry, 18 call-
        ed to your attention, to-wit:
                                                            .     .

Honorable W. M. Tucker, page 6            o-2376

         "Pursuing this policy and for the purpose
    of further conserving and increasing the school
    funds particularly, the amendment to the public
    free school laws was passed, by which the manage-
    ment and control of the district schools were
    placed squarely in the hands of'che school trus-
    tees, including the disbursement of all funds
    raised by the issuance of bonds for the purchase
    of sites and the building of schools, with the
    additional provision that on funds raised for
    such school purposes no commission should be paid
    for receiving and disbursing same for the obvious
    reason that since the safety of the fund was se-
    cured by the depository   and the labor and duty of
    disbursing it rested wlih the school trustees,2
    would be a needless expense and but curtail the
    school fund to pay an officer for receiving and
    disbursing same, when he was charged neither with
    its safe-keeping nor liable for its loss or mis-
    appropriation."    (Underlining ours)

        The case of Baxter, County Treasurer, vs. Rusk County,
11 S.W. 2nd 648, follows and supports the case of Horton vs.
Rockwall County, supra.

        You are therefore respectfully advised that it is the
opinion of this department that the county treasurer Is not
liable under the treasurerls official bond for shortages in
school funds over which the treasurer exercised no control and
which have been legally and properl~y deposited in the duly
authorized and properly bonded county depository, inthe absence
of official misconduct or negligence on the part of the trea-
surer and in the absence of any misappropriation of such funds
by the treasurer.  The complete facts in each case will deter-
mine the liability in each case.

        We are not furnlshed with enough facts relative to the
matter of defects or worthlessness of the bonds and surround-
ing facts to pass upon the question ofthe liability of the
treasurer, if any, in those matters.
        With reference to your second question, we assume that
by the term "public school funds" you refer to the investment
of the permanent county school fund.

           Section 6, Article VII, Texas Constitution, reads as
follows:
        "All lands heretofore, or hereafter granted
    to the several counties of this State for educa-
-   .   c

            Honorable W. M. Tucker, page 7         O-2376

                tional purposes, are of right the property of said
                counties respectively, to which they were granted,
                and title thereto is vested in said counties, and
                no adverse possession or limitation shall ever be
                available against the title of any county. Each
                county may sell or dispose of its lands in whole
                or in part, in manner to be provided by the Com-
                missioners1 Court of the county. Actual settlers
                resldlng on said lands, shall be protected inthe
                prior right of purchasing the same to the extent
                of their settlement, not to exceed one hundred and
                sixty acres, at the price fixed by said court,
                which price shall not include the value of existing
                improvements made thereon by such settlers. Said
                lands, and the proceeds thereof, when sold, shall
                be held by said counties alone as a trust for the
                benefit of public schools thereln; said proceeds
                to be invested in bonds of the United States, the
                State of Texas, or counties in said State, or in
                such other securities, and under such restrictions
                as may be prescribed by law; and the counties shall
                be responsible for all investments; the interest
                thereon, and other revenue, except the principal
                shall be available fund."

                    Article 2824, Vernon's Annotated Civil Statutes of
            Texas, reads as follows:

                     "Each county may sell or dispose of the lands
                granted to it for educational purposes in such manner
                as may be provided by the commissioners cour~t of
                such county, and the proceeds of any such~sale shall
                be invested in bonds of the United States, the State
                of Texas, the bonds of the counties of the State, and
                the independent or common school districts, road pre-
                cinct, drainage, irrigation, navigation and levee
                distrI.cts in this State, and the bonds of incorpor-
                ated cities and towns, and held by such county alone
                as a trust for the benefit of public free schools
                therein, only the interest thereon to be used and
                expended annually."

                    The case of Boydstun VS. Rockwall County, 24 S.W. 272,
            holds among other things, that it is the duty of the commis-
            sioner's court to invest the county permanent school fund.
            This case also holds that the commissioners court may ratify
            an act of a county judge who without authority purchases
            bonds with the school funds.
Honorable W. M. Tucker, page 8           o-2376

        This department has repeatedly held that the power
and duty to invest the county permanent school fund is in the
commissioners' court.

        Your second question is therefore answered in the
negative.

                                 Very truly yours

                             ATTORNEY GENERAL OF TEXAS

                                 BY   s,fWm. J. Fanning
                                        Wm. J. Fanning
                                              Assistant

WJF:AW:wc

APPROVES JUNE 7, 1940
s/Grover Sellers
FIRST ASSISTANT
ATTORNEY GENERAL

Approved Opinion Committee By s/BWB Chairman