Court Opinion

ID: 4134591
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:52:09.062395+00
Date Added: 2024-06-11T14:21:44.496216
License: Public Domain

May 16,    1967

Hon. William W. Day              Opinion    No. M-75
County Attorney
Calhoun County                   Re:     Whether Calhoun County Is
Port Lavaca, Texas                       inhibited    by law from with-
                                         drawing funds from the county
                                         depository,     upon which the
                                         depository     refuses    to pay
                                         interest,    for the purpose
                                         of purchasing      interest-
                                         bearing    United States     Govern-
Dear Mr. Day:                            ment Bonds.

            Eiy letter,    and accompanying        brief, you have
requested   an opinion     from our office.         We quote from
your letter    as follows:

             “The question        we are asking is:        ‘IS
      Calhoun County Inhibited            by any law from
      withdrawing      surplus      funds from the county
      depository     upon which the depository           refuses
      to pay Interest        for the purpose of purchasing
      interest-bearing        United States       Government
      Bonds?’     The reason that this request             Is
      Imperative     is because        our local   depository
      takes the position          that, having accepted
      their bid, we are Inhibited             by our advertlse-
      ment and contract         from purchasing      United
      States Government Bonds on a go-day basis
      because    their    contract      provides   that they
      will   only pay us Interest           on time deposits
      In the amount of $10,000 OP over which
      remains on deposit          for a go-day period.         . . .

              “Today, because of the unexpected      neces-
      sity of providing      Jury fees In a pending
      criminal     case for some 100 venlremen,     our
      allotted     funds have become exhausted     and we
      have had to cash In and lose Interest         on one
      $10,000 certificate      owned by the jury find,
      and the bank, on request,       has refused   to pay
      Interest     on the unneeded excess    In less than
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.   .-
         -

         Hon. William    W. Day, Page 21 (M-75)

               $10,000 units and there are no other funds
               available     for a go-day period   which we could
               employ for re-Investment      in another    $10,000
               time deposit,       We have no recourse    other than
               our former procedure,      the purchase    of United
               States    Government Bonds If we desire       to save
               the lost    interest.    It would meet our obllga-
               tlon to keep our funds Invested        for interest.”

                     In addltion  to your letter   and brief,   you have
         enclosed   a copy of the notice  to take blds,    and the bid by
         two different    banks, and some additional   information   for
         our consideration.

                     We have analyzed  the information  submitted,  and
         conclude   that the agreement between Calhoun County and
         the depositor    does not prevent   the county from withdrawing
         “time deposit’   money for any use authorized    by law.

                      We note~the     agreement Incorporates   Article  2547,
         Vernon’s    Civil  Statutes,     as part of the agreement.    Article
         2547 is    quoted,  in part,     as follows:

                       “The condition   of the personal      bond or
               bonds, or contract     for securities      pledged,
               fif   the depository   ban&7 shall be conditioned
                e . -for the payment upon presentation           of
                0 a .a11 checks drawn upon any ‘time deposit’
               account,    upon presentation,    after    the explra-
                tlon of the period    of notice    reouired    in the
               case of ‘time deposits’.       e 0 -”     (Emphasis
               added.)

                    It is clear that “time deposit”    money may be wlth-
         drawn by a county from the depository,    If the depository
         Is given the required  notice  of the forthcoming   withdrawal.
         The withdrawal  can be made for any lawful and authorized
         purpose 0

                       Article   12693-3,   Vernon’s   Civil   Statutes,    authorizes
         all political      subdivisions    of the state     to invest    year-end
         balances    in U.S. Bonds and Securities.           This article     applies
         to counties - Attorney         General’s   Opinions   No. 0-5278 (1943),
         and No. v-1182 (1951) o

                   Based upon an analysis          of   the facts   as submitted,
         and the above quoted article,    It       is   our opinion   that Calhoun

                                        - 342 -
Hon. William   W. Day, Page 3,      (M-75)

County may withdraw "time deposit"     money after  giving   the
required   notice,   and Invest such surplus  money In United
States   Government Bonds as provided    by Article 126gj-3,
Vernon's   Civil   Statutes.

            Calhoun County is not prohibited       by law
     from withdrawing     surplus   funds from the county
     depository    and Investing    such withdrawn funds
     in U.S. Government Bonds and Securities         as
     authorized    by Article    126gj-3, Vernon's   Civil
     Statutes.

Prepared by James C. McCoy           "
Assistant Attorney General
JCMcC:sck

APPROVED:
OPINION COMMITTEE

Hawthorne Phillips,    Chairman
W. V. Geppert,   Co-Chairman

John Reeves
Alan Minter
Dyer Moore
Gordon Cass

STAFF LEGAL ASSISTANT
A. J. Carubbl, Jr.

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