Court Opinion

ID: 4136819
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:17:55.936767+00
Date Added: 2024-06-11T14:37:44.333155
License: Public Domain

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                        THEAYTORNEY                        GENERAL
                                         OF     TEXAS

                                           June 14,       1957

         Honorable   J. W. Edgar                   Opinion       No.   w-161.
         Conunissioner   of Education
         Texas Education    Agency                 Re:     May the Andrews Independent
         ji.Jstin, Texas                                   School District   select   as
                                                           its depository   a bank which
                                                           has as a stockholder,    direc-
                                                           tor or officer,   an individ-
                                                           ual who is also a member of
                                                           the Board of Trustees    of
                                                           said district?    And related
         Qear Dr. Edgar:                                   question.

                        We quote    from your    letter    of    May 24th,     as follows:

                          “The Board of Trustees    of the Andrews Inde-
                  pendent School District,      pursuant to Article      2832,
                  is engaged in the selection       of a school  district
                  treasurer,    either a bank depository     or person as
                  tre:-lsurer,  for the next biennium beginning      Septem-
                  ber 1, 1957,

                         “Two bids have been received      in connection
                  therewith     (see enclosed   copies);  one from William
                  C. Young, who seeks to be chosen as a personal
                  tr.ea.surer for the district      and who will    depoolt the
                  school    funds in Commercial State Bank at Andrevs, of
                  which he Is :an. executive     officer;  one from First    Na-
                  tional    Bank at Andrews which seeks to be chosen as
                  depository     bank treasurer   for the district.

                         “The district     superintendent     advises  that the
                  president     of his school    board is a stockholdrr       in
                  said First Nat ional Bank.         Further,   the presldrnt      of
                  the school     board is a director      and stockholder;      the
                  vice-president      of the school    board is presldant       and
                  stockholder;     and two other school board members are
                  stockholders     in said Commercial State BUc.”

                       The questions      to   be answered       by this     offlca   may be
         stated     as follows:

                       1.    May the Andraws Independent  School    District    select
         as Its     depository   a bank which has as a stockholder,      director     or
Honorable    J. W. Edgar,    page   2    (~-161)

officer,    an individual    who is     also   a member of the    Board    of
Trustees    of said district?

            2. May said school district,        pursuant to         iirticle     2832
of Vernon’s   Civil Statutes,    select    an lndivid,oal     as    school     tre:s-
crer whea such individual     proposes     to deposl,:    school      funds held
by him i:. :z bink vhich hzs :::, stockholder,      officer    or     director      who
is :aiso ti member of said school      board.

               We underst.:!~nd from your letter         thrit the President     of
the School Board is ,,Astockholder               in the First N:.tional     B;nk of
Andre;.! s , 2nd thcit four members of the School Board .ire stockhold-
ers and/or cfficers         of the Commercial State Bznk of Andrevs.                It
is clearly       contrzy    to   ;ublic    policy   and  hence   un1awf.A   for  A
school     district    to select      2s its depository       a bank in whi.ch ,a mem-
ber of the school         board is interested        either    LS a stockholder,
officer     or director..       Attorney General’s       0 inions   O-5158 (194j),
0-7’514 (1946).       O-2656 (194C);       140 A.L.R. 3 c 5.     You are accordingly
:;dvised that ne:ther         of said ban’ks, under the f:cts          stated,   c>in
qualify     2.s the school      dspository.

             With reference      to your second question,       we understand
thtit Willi.am C. Yolung has filed         a bid with the School Bozd         to be
appointed     school  treasurer.       Mr. Young is an executive      o,ffioer    of
the Commercial State Bank, but is not a member of the Bozd                    of
Trustees.      His bid states      that if he is appointed      he will    deposit
,311 s-h,001 funds in the Cormnerci;ll State Bz:nk.           The appointment
of ill; individual    us schooi     tre,lsurer  is a.uthorized   by Article
28311.
             It is well settled    in Tex:is that if ;i public       offici,;l
dire&ly    or indirectly     has a pe-uninry    interest    in a contr.,ct,     no
m;tter   how honest he m;!~ybe , and although he may not be Influenced
b:- the interest,    such a contract    is ;g;inst     public  policy.      Mevers,
ct., ~1 v. WAker.    et ‘;l, 276 S.W. 305.

             It has been consistently          held thn:t it is not contr:;ry
to public    policy   for an Independent        contractor   who has been
:--warded i? p?lblic  contract    to purchase materials       or supplies  from
c.3concern   in which a member of the bo;ird or agency .awardlng the
contract    had a pecuniary     interest.       140 A.L.R. 358; Attorney     Geh-
eral’s   Opinion No. 0~~306 (1940).            This rule,   however,  Is sub-
ject to the importlint       qualification      that there must be no .-.$ree-
ment either     exuress   or aDlied       to make such purchases     prior to
the time the contract        is entered     into.

             In our opinion  a school board may appoint             an individual
as school    treas,urer and the fact that such treasurer             deposited
-   I

i

        Honorable    J. W. Edgar,     page   3   (~1-161)

         school   funds in ci bank in whl.ch members of the school board
        are interested      2s stockholders,      officers     or directors,    would
        not render the appointment         per se void a,s a matter of law.
        However, there must be no agreement,              either   express   or implied
        pi-for to such zppoi.ntment that the funds will be so depo.sLted.
        The existence      of such ;in agreement involves          :> fact question
        :rhich we cannot determine        but must leave for the determinetion
        of the S-ho01 Board.        We do feel     impelled      to state,   however,
        tbi2.t tte ;+iritten bid submitted by Mr. Young is strongly               suggest-
        ive of such a prior       understanding.        We think that if there be
        such -.n under& ;;;tiin,: ‘between Mr. Young :tnd the School Board,
        or between hr. Yoxg        and the blink, that his appointment would
        be ::ontr2ry    to public   policy    :ind constitute      :n effort   by the
        School Bozrd to do by indirection            that which the law will not
        permit it to do directl;‘.

                      It is clearly   contrary   to public     policy   and
              hence unlawful      for :I school   district    to select   as
              its depository      a bank in which a member of the
              school    board is interested     either     as 2 stockholder,
              cfficer    or director   e

                      The &.ncirews Independent         School 3ist;rict     may
              appoint an individual             as school treC>surez gursudnt
              CC, .-Fticle    2832 XXI, the treasurer          so :ippointed   m,ay
              :e?osit     school      funds 1.n 5 b,.ink in which members of
              the school       hoc.rd a.re i.nterested     ei.ther i:s stock-
              holders,     off.i.:ers     or directcrs,    provided     there is
              no :i:iderstsndi.ng        or ,.:greement prior    to the appoint-
              ment that the fun,ds will be so deposited,.                  The ex-
              istence     of such h:i cnderst ending or agreement in-
              volves    a f:jct question         which must be resolved       by
              the school board.

                                                 Yours   very    truly,

                                                 WILL WILSON
                                                 Attorney General         of   Texas

        LF’:zt:wb
                                                 ByL* @/
                                                    Assist ant
Honorable     J.   W. Edgar,   page 4   (~~-161)

APPROVED:

OPINION COMMITTEE

H. Grady Chandler,  Chairman
Jas. H. Rogers
Jack Goodman
John H. Ninton, Jr.

REVIESIEDFOR THE ATTORNEYGENERAL

BY:
            Geo.   P. Blackburn