Untitled Texas Attorney General Opinion ( 1951 )

I
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113
THE .~TTOIRMCY GZNEWAI.
OFTEXAS
April 6, 1951
Eon. John R. Lindsey 0p1nion Bo. V-1166
lty Attorney
c county Re: Authority of the com-
1 Jacksboro, Texas mIsslonerst court to
choose the county de-
pository under the sub-
Dear Sir: mitted facts.
You have requested an opinion concerning the
authority of the ``mml~sloners~ court In selecting the
county depository. The facts as stated In your request
are substantially as follovs:
The Commlssionersf, Court of Jack County re-
cently published notice that at ten o’clock A.M. on
Monday, February 12, 1951, it would receive bids from
banking Institutions desIrlng to be designated as coun-
ty depository for county and school funds for the en-
suing two years. Two banks located in Jack County filed
proposals which were substantially the same vlth the ex-
ception that the first bank agreed to carry county war-
rants up to the amount of $l25,OOO.OO vithout interest,
while the second bank agreed to carry such warrants up
to the amount of $100,000.00 without interest. The Com-
missioners’ Court voted to accept the proposal of the
second bank, and the first bank now insists that, as the
designation was to be made on competitive bidding, Its
bid would have to be accepted If It filed a legal pro-
posal. Both bids were In proper form and complied with
the requirements of Article 2545, V.C.S. For a number
of years the warrants of Jack County have never exceeded
at any one time the amount of $100,000.00. At the Com-
missioners’ Court hearing, no evidence of the quallfi-
cations of either bank was discussed other than the fact
that the accepted bank had handled the money for the
last two years and the CommIsslonerst Court had had no
cause to be dlspleased with the service.
Upon this state of facts, you ask the follow-
Ing question:
‘Is the Commissioners @ Court of Jack
County bound to accept the First Rational
114 Bon. John R. Lindsey, page 2 (V-1166)
Bank of Jacksboro as the depository of
county funds since its proposal was to
carry warrants without interest to $l2'5,-
000.00, whereas the accepted bsnk agreed
to carry warrants without Interest only
to the amouut of $100,000.00?’
The selection of the county depositor by the
ccamlsslonersl court la regulated by Article 2’516, V.C.
S. For many years following Its enactment in 1905, this
article provided: “It shall be the duty of the commls-
sloners court a . . to select as the depository of all
funds of the county the banking coppopatlon, associa-
tion or Individual banker offering to pay the largest
rate of interest per armum for said funds; provided,
the conrmissloners court may Peject any and all bids.”
In Hurley v. Cltlzensq Nat. Bank, 229 S.W. 663 (Tex.Civ.
-ordIng
APP. 92 of the statute,
the court Gefused to Interfere with the action of the
commissioners I court in naming as the county depository
a bank which offered to pay 4 per cent interest on
county deposits in preference to a bank which offered
to pay 6-l/8 per cent interest. The opinion stated:
‘We have arrived at the conclusion
. . . that it was not the Intention of the
Legislature to compel the commissioners’
court. of a county to select as the deposl-
tory of county funds the banking corpopa-
tlon, association, or individual banker
‘offering to pay the largest rate of ln-
terest per annum for said funds.’ On the
contrary, It is our opinion that it was the
intention of the Legislature to vest In the
ccenulssloners 1 couPt a discretion In making
such selection for county funds, and that
unless the ccxmissloners’ court, In making
such selection for county funds, should
abuse that discretion by acting fpaudulent-
ly or arbitrarily or vith some other lm-
proper motive, its actions in selecting a
depository for county funds cannot be re-
viewed or controlled by any other court .’
(229 S.W. at 664-5.)
See, also, Hurleg v. Camp, 234 S.W. 577 (Tex.Civ.App.l92l,
error ref .) .
In 1937, Article 2546 va3 amended in several
respects. Acts 45th Leg., R.S. i937, ch.484, p.1298. The
.
115
Hon. John R. Lindsey, page 3 (v-1166)
language quoted above Yas omitted, and In its place ve
find the folloving wording of the present statute:
“It shall be the duty of the Canrmis-
sloners Court . . . to select those appll-
cants that are acceptable and who offer
the most favorable terms and condltlons
for the handling of such funds and having
the power to reject those whose management
or condition, in the opinion of the Court,
does not warrant placing of county funds in
their possesslon. . . .’
It is to be noted that the Legislature omit-
ted the provision that the commissioners’ court “may
reject any and all bids,” one of the provlslons vhlch
had been relied on in Hurley v. Citizens I Rat. Bank as
Indicating an intention to invest the commlssloners’
court with a discretion in the selection of the deposi-
tory. However, the Legislature retained the provisions
of Article 2550 which Inferentially give the comlsslon-
ers 1 court the power to reject all bids.
We must determine whether by the enactment of
the 1937 amendment the Legislature divested the comis-
sloners * court of discretion in acting on bids. The
emergency clause of the amending act reads:
‘The fact that under the Banking Act
of 1935, as passed by the Congress of the
United States, any deposits of public funds
made by or on behalf of the county or city
in any State or Rational Bank that is a
member of the Federal Reserve System and
which funds are subject to withdrawal up-
on demand will not be permitted to draw In-
terest, and the fact that under the present
laws governing the depositing of such public
funds, all such funds are required to draw
interest necessitates a revision OfOur
present laws on this subject creating a
emergency and an Imperative public neces-
sity that the Constitutional Rule requlrlng
bills to be read on three several days in
each House be and the same is hereby sus-
pended, and this Act shall be In full force
and effect from and after its passage, and
it Is so enacted.”
RCQ. John R. ILMsey, page 4 (v-ll66)
It Is shovn by the emergenoy clause above quot-
ed that the purpose of the 1937 amendment was to provide
a different standard to #de the cammissioners t court ln
Its 8elsctlon of a comty depositary, alnoe the banks
could no longer allow interest m county funds subject
to withdrawal upon demand. The method of selecting a
county depository, hwever, was left unchanged. WM.16
the oommlssioners t oourt no longer has the express pover
under this article to reject any and all bids, It is
given the power to reject those applicants %hose man-
agement or condition, ln the opinion of the Court, does
not warrant placing of county funds in their possession.”
Ue find nothing in the 1937 amendment which deprives the
comlssloners~ couH of dlscretlon In determining which
applicant offers the most favorable terms and conditions
for the handling of county funds. To ths contrary, the
language quoted above expressly recognizes that the com-
missioners I court is to have a discretion in the rejec-
tion of applicants. Aa stated in Burley v. Cltlzens I
Rat. Bank, su ra, this discretion cannot be interfered
with unless + e commlssloners I court should abuse that
discretion by acting fraudulently or arbitrarily, or
with some other improper motive.
You have not stated any facts or clrc~stances
which would indicate that the Conrmisslonersl Court of
Jack County has abused Its dlscre+.?.on in the present case.
We agree with your conclusion that the canmlssloners t
court had the discretion to reject the bid submitted by
the First Rational Bank and to accept the one submitted
by the other bank and that the burden of showing an abuse
of dlsoretlon rests upon the First Rational Bank.
SUMMARY
In selecting a depository for county
fuuds, the commissioners’ court may exercise
Its discretion in determining which appll-
cants ‘offer the most favorable terms and
conditions for the handling of such funds,”
and its action is not subject to review un-
less an abuse of discretion is shovn. Ar-
ticle 2546, V.C.S.; Hurleg v. Citizens’ Rat.
Hon. John R. Lindsey, page 5 (V-1166)
Bank,, 2:' ;,w.663 (T.sx.C~V.A p. 1921);
Hurl ey ~JQ ?34 S.W. 577 fTex.Civ.App.
m, error reI-. 1.
APPROVEI): Yours very truly,
J. C. Davis, Jr. PRICE QANIEL
County Affairs Dlvlslon Attorney General
Jesse P. Luton, Jr.
Reviewing Assistant +L&g$ed<@f
Charles D. Mathews
First Assistant
rnv %rw&
JR:mw Mary K. Wall
Assistants