Untitled Texas Attorney General Opinion ( 1970 )

EEEATTOWNEY GENERAL
OFTEXAS
Hon. William W. Day Opinion No. M-592
County Attorney
Calhoun County Re: Authority of West Side
Courthouse Navigation District in
Port Lavaca, Texas 77979 Calhoun County to use an
out-of-county depository
when there are two banks
in such county, and re-
Dear Mr. Day: lated questions.
In your letter requesting an opinion from this office,
you submit the following facts which we quote as follows:
"There are two banks in the County of
Calhoun--the First National Bank and the First
State Bank and Trust Company. The First National
Bank was the successful bidder for the depository
for Calhoun County.
"The West Side Navigation District operates
In Calhoun County and Is a governing body with
its principal office in Calhoun County and all
of its commissioners are required to be residents
of Calhoun County. The West Side Navigation Dis-
trict in the past years has been using an out of
county bank as its depository. The First National
Bank has presented me with a request that the West
Side Navigation District be informed by my office
that their depository is the same as tht County's
unless they wish to take separate bids.
With regard to these facts you submit the following
questions:
"1 . Can the West Side Navigation District
use an out of county depository when we have two
banks In the County?
-2820-
Hon. William W. Day, page 2 (M-592)
"2. Must the West Side Navigation District,
if they do not let their depository out for bids,
use the same depository as Calhoun County?"
The statutes which pertain to the selection of de-
positories by navigation districts are Articles 8221, 8244, 824&a
and 8263e, Section 40, Vernon's Civil Statutes. These statutes
generally provide that the selection of depositories by navigation
districts shall be, where applicable, in accordance with the pro-
visions of the statutes relating to county depositories. The
matter of the selection of county depositories is governed by
Articles 2544-2558a, Vernon's Civil Statutes, With respect to
these statutes, It was stated by the Court in Cave v. Montgomery,
274 S.W.2d 855 (Tex.Civ.App. 1954, no writ) at page &b the
following:
I,
. . . The law, in effect, requires the
Commissioners Court of a county to select a
county depository every two years at its
regular February term following each general
election, or as soon thereafter as wisdom,
prudence and prevailing conditions will
justify such action. If a county has no
bank, or no suitable bank, within its limits,
the Court may negotiate with one or more banks
In adjoining counties to be Its depository and
may under such circumstances exercise its
sound judicial discretion in selecting its
county depository and seeing that its county
funds are lawfully secured. Hurley v. Citizens'
Nat. Bank of Sour Lake, Tex.Civ.App., 229 S.W.
663; Hurley v. Camp, Tex.Civ.App., 234 S.W. 577;
Coffee v. Borger State Bank, Tex.Civ.App. 38
S.W.2d 187. If the Commissioners Court of a
county receives no applications for a county
depository at Its regular February term or if
all applications are declined by the Court, the
Court may, as provided for in Article 2550,
enter into a pledge contract with one or more banks
in the county or in an adjoining county to be its
county depository, provided its funds are there
secured as required by law, in which event no
further notice is required."
In exercising its discretion in the selection of a bank
as the county depository, the Commissioner's Court’s decision is
-2821-
Hon. William W. Day, Page 3 (M-592)
final In the absence of a gross abuse of such discretion.
Citizens State Bank of Roby v. McCain, 274 S.W.2d 184 (Tex.
Civ.App. lY54, no writ).
On the basis of the foregoing authorities, you are
advised in answer to your first question that the West Side
Calhoun County Navigation District may, in its discretion,
designate an out-of-county depository in an adjoining county
If the statutory procedure for the selection of county deposi-
tories has been followed.
As previously noted, the selection of a county deposl-
tory is regulated by statute. Article 2544, Vernon's Civil
Statutes, provides as follows:
"The Commissioners Court of each county
is hereby authorized and required at the February
Regular Term thereof next following each general
election to enter into a contract with any banking
corporation, association or individual banker In
such county for the depositing of the public funds
of such county in such bank or banks. Notice that
such contracts will be made by the Commissioners
Court shall be published by and over the name of
the County Judge, once each week for at least
twenty (20) days before the commencement of
such term in some newspaper published in said
county; and if no newspaper be published therein,
then in any newspaper published in the nearest
county. In addition thereto, notice shall be
published by po;ting same at the courthouse door
of said county.
Consequently, in answer to your second question, you
are advised that if the West Side Calhoun County Navigation Dls-
trict designated an out-of-county depository without complying
with the notice provisions of Article 25514,Vernon's Civil Statutes,
and the other applicable statutes pertaining to the selection of a
county depository, such designation would be invalid. Nevertheless,
we find no authority which would require the West Side Calhoun
County Navigation District to designate the same depository as
Calhoun County.
SUMMARY
The West Side Calhoun County Navigation
District may, in its discretion, designate an
-2822-
Hon. William W. Day, page &(M-592)
out-of-county depository In an adjoining county
if the statutory procedure for the selection of
county depositories has been followed.
If the West Side Calhoun County Navigation
District designated a use of county depositories
without cornlying with the notice provisions of
Article 25sp
4, Vernon's Civil Statutes, and the
other applicable statutes pertaining to the
selection of a county depository, such deslgna-
tlon would be Invalid. Nevertheless, no authority
is found which would require the West Side Calhoun
County Navigation District to designate the same
depository as Calhoun
C. tiRT-IR
General of Texas
Prepared by Ivan R. Williams, Jr.
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chairman
W. E. Allen, Acting Co-Chairman
Dan Green
Jimmy L. White
Fisher A. Tyler
Sarah Phillips
MEADE F. GRIFFIN
Staff Legal Assistant
NOLA WRITE
First Assistant
ALFRED WALKER
Executive Assistant
-2823-