Court Opinion

ID: 4134363
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:49:18.126742+00
Date Added: 2024-06-11T14:15:39.448204
License: Public Domain

TEXE ATNBRNEY    GENERAL
                   OP TEXAS

Honorable J. w. Edgar                Opinion No. M-304
Conxnissionerof Education
Texas.Education Agency               Re:   Legality of acceptance of
201 East 11th Street                       personal bond signed by of-
Austin, Texas 78711                        ficers or others of a bank-
                                           corporation in satisfaction
                                           of bond security requirement
                                           under Article 2832, V.C.S.,
Dear Dr. Edgar:                            and related questions.
          Quoting from your letter requesting an opinion on
the above stated matter, we set out your first question as
follows:
         "1. Where a bank-corporation, as distin-
    guished from a person, pursuant to Article 2832
    is selected by an independent school district
    as its depository (treasurer), legally may the
    corporation tender and/or this Agency honor in
    satisfaction of the bond security requirement
        rsonal bond sig.iedby officers of that bank
    'Zr*as       sureties?"
  ._      By its terms, Article 2832, Vernon's Civil Statutes,
uses lpersonl and 'corporation" synonymously,in reference to a
"treasurer" who is required to be secured by bond. .The first
paragraph provides, in part.:
          "Inany independent district . . . the
     treasurer of the school fund shall be that
                           who offers satisfactory
                           of interest on the:aver-
     age daily balances or time deposits for the
     privilege of acting as such treasurer. The
     treasurer when thus selected shall serve-r   a
     term of two (2) years and until his successor
     shall have been duly selected andqualified and
     he shall be required to give bond in an amount
     Gual to the estimated amount of the total re-
     ceipts coming annually into his hands. when
     such bond is a personal bond;rovided,   that

                            -1479-
 Hon. J. W. Edgar, page 2 M-304)

      when a bond is executed by a surety company
      or is a bond-other thana persona% bond, such
,.    bond shall be in an--amountequal,to.the highest
      dai-iy'balance-for'the-~current-biennium,
                                              to be
      determined.bythe governing body of such sdhool
      district . . .' (Bmphasis added.)
           The statutory bond thus provided for must be II
                                                           . .

 read, construed, and enforced in.connection with, Andyaccording
 to, the statute pursuant to which it is given, and to be
 interpreted according to the purpose.and meaning of the legis-
 lative enactment." 8 Am.Jur. 709; Bonds, Sec. 4.
           As used above, "treasurer" includes both persons and
 corporations, and.such,treasnrer may'give,.a~"personal bond" in
 fulfillment.of the statutory.,.requirements.'Thus;,~a~bankofficer
 may legally ~give a personal.bond;--obligatingeither.his own
 assets or those of the bank;insatiefaction of the bond re-
 quirements of Article 2032. The-provisions'of the statute con-
 template the giving of such a "personal bond" as distinguished
 merely from one "other than personal," that is,~a "surety bond."
 Either type bond is a "satisfactory bond," provided given in an
 amount as.plainly prescribed by'the statute.
           Using a different approach,.~whatis meant by."personal
 bond* as it is used in Article 28321 The word *personalm may
 include.either a human individual or a corporation, a corporate
 entity being regarded as a person for legal purposes. 32 Words
 and Phrases, 307, 308, under *Person.*
           A *bond*, in-the present context, means a sworn
 promise in writing that, upon the-failure of the'treasurer to
 fulfill the terms of the contract undertaken,.certain funds
 may be looked to for compensation~of-.,theschool district for
 any damage caused by such failure,,ofperformance. 5A Words and
 Phrases, 121, under 'Bond." Therefore, a "personal bond," as
 used in Article 2832 is a sworn statement-inwriting by.a person
 (or persons) representing either himself or a corporation which
 he is authorized to contract for; that promises designated asset1
 will be available to compensate the school district in question
 should the treasurer contracted with fail to properly fulfill hi&
 duties. So, the same result foll~owsas above, that a bank office
 may legally execute a personal bond in favor of the school dis-
 trict to secure the proper performance of duties by the treasure1
 of said school district.

           your second question reads:

                            - 1480 -
    Hon. J. W. Edgar, page 3 (M-304)

             "2., What responsibility, if.any rests in
        this Agency to ascertain the,financial worth
        of the surety(ies) signing a personal bond?"
             In reference to the bond-to,,begiven, the second
   paragraph of Article 2832 reads.;in part, "It shall.be approved
   bv the school board.and the.State.Ueuartment of Education
.'.&all & notified of the'treasurer-bk the president-of-the school
   board filing a copy of said bond in-said.department;"‘.(Emphasis
   added.) This language clearly.does not plaoe'any.reaponsibility
   on the Agency to ascertain the financial worth of the surety.
   As no other-mention is made of the Agency in Article 2832 it
   is clear that no.such duty is imposed.by the statute.
             The third question you pose is:
           - w.
              3. Assuming query No. ~1~is answered, Yes:
        Where pursuant to Article 27~86d,a.school dia-
        trict invests proceeds realized from sale of
        school bonds in time deposits.of,its bank-
        corporation,.depositorywhich.is covered only '.
        by a ersonal bondi.are such proceeds properly
        secur&rotected7"
              To quote from the relevant-portions of Article 27866,
    Vemon's.Civil Statutes:
              "From and after the.effective-date of this
         Act, any school district within-the'state which
         has or may have on hand any-sums-of money which
         are proceeds rece,ivedfrom the isaue.and sale ~of
         bonds of.-anysuch school distriot'i'eitherbefore
         or after,the effective date of-this Act, which
.        proceeds'are not immediatelyneeded,for the pur-
         poses for which such bonds were-issued and sold,
         may, upon order of the board of.trustees of such
         school district, place the proceeds of such bonds
         on interest~bearing time deposit;secured in the
         manner provided in Article 2832;Revised Civil
         Statutes. with a state or national bankina
         corporation within this state; or invest <he
         proqeeds of such bonds in bondsof.the United
         Statesof America or in other.obligations of
         the United States z America, as may be de-
         termined by the board of trustees of the school
         district; . . . ." (Emphasis added.)

                               -1481:
Hon. J. W. Edgar, page 4 (R-304)

          The article clearly provides for three alternative
methods of securing such deposits; one of such alternatives
being the method discussed in regard to.,-your
                                             first question,
infra. Therefore;;your third question-is answered in the af-
firmative;.such deposits may be.secured by a personal bond.
                        SUMt4ARY
         A bond signed by a bank officer, or
    other persons so authorized, either as an indi-
    vidual or authorized agent oftthe bank, may
    legally satisfy the security,requirement of a
    personal bond under Article 2832, V.C.S. No
    duty evolves upon the Texas Education Agency
    to ascertain the financial worth of the surety
    on such bond, and such bond is; also, sufficient
    to fulfill the requirements of security for funds
    deposited pursuant to Article 2786d, V.C.S.
                                      yc;zYtruly your8,

                                              Qiz5E
                                               C.
                                              ~General of Texas
Prepared by Bill~Corbusier
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Hawthorne Phillips, Chairman
Kerns Taylor, Co-Chairman
Robert Crouch
Sam Xelley
l4alcol.m
        Quick
Soott Garriaon
John Fainter
A. J. CARUBBI, JR.
Executive Assistant

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