Untitled Texas Attorney General Opinion ( 1967 )

Honorable Martin Elchelberger Opinion No. M-33
District Attorney
McLennan County Courthouse Re: Whether the Commissioners
Waco, Texas Court of McLennan County
can consider a bid for
county depository ac-
companied by a cashier’s
oheck, but not a certified
check, as rovlded for in
Article 25t5, V.C.S., and
Dear Mr. Elchelberger: related questions.
You have requested the opinion of thla office re-
garding the above question, and in this connection you have
submitted the following facts:
“Pursuant to advertisement for bide for
County depository purauant to Article 2544,
V.A.C.S., the County Commissioners Court of
McLennan County met on the first day of Its
term on February 13, 1967. Bids from a
number of banks were received, and opened,
prior to 1O:OO A.M. on aald date, in public
meeting. Only two of said bids were ac-
companied by a certified check, as provlded
by Article 2545, V.A.C.S. Theae uere the
bide of Westvlew National Bank and The Flrrtt’
National Bank of Waco, the present depository.
The bid of Weatvlew National Bank did not
contain a statement showing the financial
condition of the bank, a8 provided for by said
article, but a written statement was fur-
nished by We&view National Bank during that
day. The bids of the other banks, Including
The Citizens National Bank of Waco and the
National City Bank of Waco were accompanied
by cashler’a checks rather than certlfled checks.
After discussion of the bids, the Commissioners
did not officially adjourn the meeting, and
the Commissioners Court reassembled Wednesday
- 142 -
HOC. Martin Elchelbergerr Page 2 (M-33)
morning, February 15, 1967, for further con-
sideration oc the bids.
"By letter dated February 13th'and delivered
to the County Judge, The First National Bank
of Waco,stated Its position that; as it was
the only bank which had made a bid accompanied
by both a certified check and a'statement of
condltlon,~its bid was the only bid received
meeting the legal requirements.
"On Tuesday, February lath, one of the
other bidders, The Citizens National Bank of
Waco, filed a certified check In connection
with It& bid.
"The Commissioners assembled on Wednesday,
February 15th, at which time the National City
Bank of Waco delivered to the Commissioners
Court a certified check in connection with Its
bid. The Court heard arguments by representa-
tives of various banks, and, on that date,
February 15$hr adopted by a three to one vote
a motion to award the bid to the National City
Bank of .Waco, as the highest bid.,"
Eased upon the foregoing fact situation, you asked
the following questions:
"(1) Could the Commlssloners~Court of
McLennan County consider a bid for County
depository accompanied by a cashier'8 check
but not a certified check, as provided for
In Article 2545?
"(2) After bids have been received and
opened on the first day of the term of the
Commissioners Court, as provided for In
Articles 2545 and 2546 V.A.C*S., could the
Commissioners Court legally consider and
award the bid-to a bank which delivered to
the Commissioners Court a certified check
In connection with this bid on a day after
the first day of said term, to wit, on
Wednesday, February 15, 1967, prior to the
passage of said motion?
- 143 -
I
Hon. Martin Elchelberger, Page 3 (M-33)
't(3) Under the above facts, can the
Commlsaloners Court legally select the
National City Bank of Waco as depository
and enter Into depository contract with
It under Article 2546 V.A.C.S. upon said
bank's cornlying with the provisions of
Article 25 t:
7 V.A.C.S.?"
The selection of county depositories Is provided
for and regulated by statute. Articles 2544-2558a, V.C.S.
The requisites of the application of those bank8 applying
to be deal nated as county depository are prescribed by
Article 25&5 which reads In part as follows:
II. . .aaid application ahall state the -
amount of paid up capital stock and permanent
surplus of said bank. . .a statement showing
the financial condition of said bank at the
date of said application which shall be delivered
to the County Judge on or before the first day
of the term of the Commissioners Court at which
the selection of the depositories Is to be made.
Sald application shall also be accompanied by
a certified check for not less than one-half of
one per cent of the county's revenue for the
precedly year as a guarantee of good faith
. . . .
In Bowle County v. Farmer's Guaranty State Bank, 289 S.W.
451 (Tex.Clv.App. 1926, error ref.) It was held that the com-
missioners court was without authority to select a bank as
county depository whose bid waa accompanied by a cashier's
check rather than a certified check. In reaching this con-
clusion the court reasoned that the purpose of requiring a
certified check was to add the llablllty of someone other than
the bidder to secure the county for damages upon the failure
of the bidder to give bond as required by Article 2547. A
cashier's check la drawn by a bank upon itself and binds no
one else. Upon the authority of this case, you are advised
that the Commissioners Court of McLennan County la not autho-
rized to consider an application to be designated as county
depository which Is accompanied by a cashier's check rather
than a certified check.
The selection of a county depository Is a matter
which rests within the sound discretion of the commissioners
court; It8 decision In this respect la final and will not
- 144 -
Hon. Martin Eichelberger, page 4 (M-33)
be disturbed by the courts In the absence of gross abuse.
Hurley v; Camp; 234 S.W. 577 (Tex.Civ.App. 1951, error refused);
Hurley v. Citizens Nat. Bank, 229 S.W. 663 (TexXlv.App. 1921,
no history ; ,Citlzens State Bank v. McCaln, 274 S.W.2d 184
(Tex.Clv.AAp. 1954, no history). The commissioners court is
not required to accept any oftthe applications filed; it may
reject them all and readvertlae for bids as authorized by
Article 2545, or, under the authority of Article 2550, It
may designate any one or more banks within the county or
an adjoining county. Coffee v. Eorger State Bank, 38 S.W.2d
187 (Tex.Clv.App. 1921, no history).
In Hurley v. Citizens Nat. Bank, supra, three banks
submitted bids and the commissioners court selected
. the
..._bank
--____
offering the lowest rate of Interest rather than-the highest.
The decision of the commlssloners court was upheld even though
at that time Article 2546 stated that It was the duty of the
court to select the application offering to Day the hinhest
in,terestrate. In Coffee v=.Borger State Ba;lkisupra,-two
banks within the county submitted applications and one bank
within an adjoining county submitted an application. The
court there upheld the action of the commissioners court in
selecting the application of the out of county bank.
The cases just cited and discussed clearly would
sustain the selection of the National City Bank of Waco as
the McLennan County depository If its application had been
accompanied by a certified check rather than a cashier's
check. Yet, the failure of the National City Bank of Waco
and the Citizens National Bank of Waco to accompany their
application with a certified check did not comDe1 the com-
misaloners court to designate the First National Bank of
Waco as the county depository. Coffee v. Borner State Bank,
38 S.W.2d 187 (Tex.Civ.App. 1921, no history); Hurley v.
Citizens Nat. Bank, 229 S.W. 663 (Tex.Clv.App. 1921, no
history). There are no facts stated In your letter of
request which would compel us to conclude that thencorn-
mlaaloners court abused Its discretion In allowing the
applicants to perfect their applications by substituting a
certified check for the cashier's check originally submitted.
However, If either the requirement of Article 2545 that the
application and certified check be delivered to the county
jud e on the day specified, or the requirement of Article
254 2 that the selection of the county depository be made on
the day there specified, be mandatory, then there was no
room for the exercise Of discretion and the designation of
- 145 -
lion.Martin Elchelberger, page 5 (~-33)
the commlaslonera court must be held Invalid. The answer
to your second and third questions depends upon the mandatory
nature of the time requirement of Articles 2545 and 2546.
While the provisions of Article 2545 state that
the application, statement and certified check are to be
delivered to the county judge on or before the first day
of the term at which the selection of the depositories la
to be made and Article 2546 states that the applications are
to be opened at ten,o'clock A.M. of such day and a county
depository selected, there Is no declaration In these stat-
utes that an application filed after such date~may not be
considered or that the selection of a depository made upon
some other date would be void. To this extent these statutes
are directory and not mandatory. The general rule In conatru-
lng statute8 of thla nature la stated in Federal Crude Oil Co.
v. Yount-Lee 011 Co., 122 Tex. 21, 52 S.W.2d 5b (1932) at 52
S.W.2d 61:
"Those &ectlona which are not of the
G e thing to be done, but which are
essence of t
given with a view merely to the proper, orderly
and prompt conduct of the business, and by the
failure to obey the rights of those interested
will not be prejudice , are not commonly to be
regarded as mandate?? and If the act la performed,
but not In the time !r In the precise mode indicated,
It will still be sufficient, If that which Is done
accomplishes the substantial purpose of the statute."
The purpose of the procedures preecrlbed by the statutes
relating to the aelection of a county depository la to secure
to the county a safe, reeponalble depository for its funds
with a return of Interest for the use thereof. Time Is not
of the eaaence In the accomplishment of these ends; therefore,
they should not be sacrificed to the strict compliance with
the time requirements of these statutes.
In Konecky v. City of Yoakum, 35 S.W.2d 492 (Tex.
Clv.App. 1931) affirmed 52 S.W.2d 240 (Tex.Comm.App. 1932)
It was contended that the designation of a city depository
was void because the designation was made during the month
of June Instead of July as required by Article 2559 and the
notice of Intention was given by letter rather than publlca-
tlon. In upholding the designation of the city depository
the court there stated at 35 S.W.2d 498:
- 146 -
Hon. Martin Elchelberger, page 6 (~-33) _
"Article 2559 provide% no penalty and Imposes
no forfeiture In case of ai,non-compliancewith Its
literal provlslons. There Is no declaration In the
act that, If the.deelgnatlon of a depository la
made at a time other than at a regular meeting In
July of eao@ year, as stated in the act, such"
deslgnatlon.'ahouldbe void. . . . T he provlslona
of the statute declaring. . .the tP me for making
such designation. . .ls directory only and not
mandatory. . . .men a formality Is not abso-
lutely necessary for the observance of justice,
but, Is Introduced to facilitate Its observance,'
Its omission, unless there la an annulling clause
In the law, will not annul the act."
The statutes there under consideration are .analogous to those
pertaining to the designation of a county depository; the
statements of the court.ln that case apply with equal force
to the nature of the requirements of Articles 2545 and 2546
relating to the time within which the acts specified therein
are to be performed.
In our opinion, ,lt was within the discretion of
the Commlsalonera Court of McLennan County to allow the
Citizens National Bank of Waco and the.Natlonal City Bank of
Waco,to replace the cashier's check which accompanied their
reaptictlveapplications with a certified check, even though
the certlfkd check was not delivered on'the first day of
the term at whlch.'acounty depository was to be selected.
It was also within their discretion to defer the selection
of the dep<ory to a!dtiJrother than the first day of the
February term.
There are no‘facts In your letter of request which
show that the Commlsaloners Court of McLennan Cointy abused
lta.dlacretlon In allowing the aubstltutlon~of the check8 In
que~stlonor in selecting a depository on ~a day other than
that specified by Article 2546; therefore, In answer to
your second and third questions, you are advised that, under
the facts presented, the commlaalonera court could, In the
exercise of Its discretion, consider the applications of
all four banks and select the National City Bank of Waco
as the county depository.
- 147 -
Hon. Martin Elchelberger, page 7 (~-33)
An application for a county depository
contract may not be considered when It la
accompanied by a cashier's check rather than
a certified check as required by Article 2545,
V.C.S. However, since the times within which
the acts specified In Article 2545, V.C.S.,
and Article 2546, V.C.S., are to be performed
are not mandatory, In the absence of facts
which constitute an abuse of discretion, It
18 within the discretion of the commlsslonera'
court to allow an applicant to replace a cashier's
check.with a certified check after the first day
of the February term of court and award the county
depository contract to such applicant.
VT truly yours,
..
&%e=
C. MARTIN
General of Texas
Prepared by W. 0. Shultz
Assistant Attorney General
WOS:sck
APPROVED:
OPINION COMMI'ITEE
Hawthorne PhIllIps, Chairman
W. V. Geppert, Co-Chairman
R. L. Lattlmore
John Reeves
John Ranks
Ralph Rash
Qordon Caaa
STAFF LEGAL ASSISTANT
A..J. CARUBBI, JR.
- 148 -