Untitled Texas Attorney General Opinion ( 1971 )

Honorable J. W. Edgar Opinion MO. M-777
Commissioner of Education
Austin, Texas Re: Ray the Anthony Independent
School District select as
its depository a bank
located inthat portion
of the town of Anthony
which is located in the
State of New Mexico; that
portion of the town of
Anthony located adjacent
thereto, and in Texas, is
Dear Mr. Edgar: in the District.
In your recent letter you request this office to
render an opinion on the following question:
"Under the facts submitted, legally
may the Anthony Independent School District
change its current depository and select
as a depository, in lieu thereof, a(nationa1)
bank in Anthony, New Mexico?"
The facts submitted in your letter are that the town
of Anthony Is in the northwest corner of El Paso County and
extends into New Mexico. The Anthony Independent School Dis-
trict boundaries, generally speaking, are coterminous with
that portion of the town which is in Texas. The only bank
in Anthony is located in that portion of the town that ex-
tends into Mew Mexico. The current depository for the school
district is located in El Paso, Texas, and its two-year
period to serve as such depository ends August 31, 1971. The
school district's board of trustees has voted to make the
First National Rank in Anthony, New Mexico its depository,
provided the same is legally acceptable. It is our further
understanding that the Anthony Independent School District
selects its depository pursuant to Article 2832, Vernon's
Civil Statutes.
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Honorable J. W. Edgar, page 2 (M-777)
The provisions of Article 2832, which are applicable
here, are set out in part b,elow:
"In any independent district of more
than one hundred and fifty (150) scholas-
tics, whether it be in a city which has
assumed control of the schools within its
limits, or a corporation for school pur-
poses only, and whether organized under
GeneralLaw or c~reatadby Special Act,
the treasurer of the school fund ,&all .be
that person or corporation who.offers
s,atisfactorybond and the best bid of in-
terest on the average dally balances or
time deposits for the privilege of acting
as such treasure,r. The treasurer when
thus selected shall serve for a term of
two (2) years and until his successor
shall have been duly selected and quali-
fied and he shall be required to give bond
in an ,amountequal to the estimated amount
of the total receipts coming annually Into
his hands, when such bond is a personal
bond; . . .'
_The
. ..only
._ . qualifications
_ found In Article 2832 regard-
.
ing the eligibility or one to serve as treasurer or aepository
for funds of a school district are that such treasurer or de-
pository be a person or corporation and that such person or
corporation be able to offer satisfactory bond and the best bid
of interest on the average daily balances or time deposits.
Said Article contains no limitations that would require the
treasurer or depository to be located within a particular geo-
graphical area.
In the case of Donna Independent School District v.
First State Bank of Donna. 227 S.W. 974 (Tex. civ. App. 1921
no writ) f%e Court I di lsing Article 2771 (now Article
2832) and Its applicztio?% the selection of a school dis-
trict's depository said:
"It Is clear from the law that the
discretion is vested in the board of
trustees of the selection of a depository.
No one else is vested with that discretion,
and when that discretion has been exercised
and a depository appointed no one can ques-
tion the authority of the board without
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, .
Honorable J. W. Edgar, page 3. (M-777)
clearly proving an abuse of the discre-
tion."
A review of other statutes which govern the selec-
tion of depositories for state, county and city funds reveals
that such statutes contain requirements that said depositories
be located within a particular geographical area. See Articles
2526, et. seq., 2544 et. seq., and 2559 et. seq., Vernon's
Civil Statutes. Also the new School Depository Act, Chapter
23, Subchapter E, Texas Education Code, which is permissive
and optional with each school district in that it can elect to
be governed by the provisions of said Depository Act or con-
tinue to select its depository in accordance with Article 2832,
contains such a geographical limitation. It is the opinion of
this office, therefore, that the Legislature by omitting a
geographical restriction in Article 2832, evinces an intent
that such a limitation should have no application, either ac-
tual or implied, to the selection of a school district's
depository pursuant to said Article.
Since we can find no other authority that would pro-
hibit the Anthony Independent School District from selecting
the First National Dank in Anthony, New Mexico to be its de-
pository, it is the opinion of this office that said school
district may make such bank its depositor provided the bank
meets the other requirements of Article 26 32.
In regard to your inquiry as to whether the Anthony
Independent School District can terminate its present deposi-
tory contract prior to its expiration date, it is the opinion
of this office that Attorney General's Opinion No. 0-3837
(1941) answers this question in the negative.
We are mindful of the rule announced in Re ublic
Rational Bank of Dallas v. C. H. Langdeau, 371 U. ?G?FiF-83
. . 0 g L . Ed . 2d 523 to the effect that national'banks
may be sue; only in those siate courts in the county where the
banks are located. This means, of course, that the school
district could not successfully maintain a suit against the
bank in the Texas courts. This is a factor that the school
board would want to consider in exercising its discretion in
the selection of a depository, However, we think that the
presence of this factor would not, in itself, amount to an
abuse of discretion in the selection of the depository in the
state of New Mexico.
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Honorable J. W. Edgar, page 4 (M-777)
SUMMARY
The Anthony Independent School Dis-
trict may select as Its depository pursuant
to Article 2832, Vernon's Civil Statutes,
a national bank located in that portion of
the town of Anthony which is located in
the State of New Mexico; however, said
school district may not terminate its
present depository contract prior to the
date said contract expires.
YOP
G very truly,
General of Texas
Prepared by Ed Esquivel
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chairman
W. E. Allen, Co-Chairman
James McCoy
Jerry Roberts
Scott Garrison
Harriet Burke
MEADE F. GRIFFIN
Staff Legal Assistant
ALFRED WALKER
Executive Assistant
NOLA WHITE
First Assistant
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