Untitled Texas Attorney General Opinion

HE o~x=Y GENERAI,
OFTEXAS
December 31, 1957
Honorable Henry Wade Opinion No. iiW-341
District Attorney
Records Building Re: Whether or not the County of
Dallas, Texas Dallas Child Support Clearing
Account Funds and the County
of Dallas Juvenile Department,
Child Support Division Hold-
ing Account Funds are secured
under the bond of the County
depository banks when deposited
with said banks without first
passing through the hands of
Dear Mr. Wade: the County Treasurer.
The following is extracted from your opinion No.
57-18 (dated August 22, 1957).
"You have requested the opinion of this office as
to whether or not the following described funds are
prevented from being secured by the collateral deposited
by the four county depository banks by reason of the fact
that such funds do not pass through the hands of the
County Treasurer:
1. ;;uEg,of Dallas Child Support Clearing
;
2. County OS Dallas Juvenile Department, Child
Support Division Holding Account;
(You have indicated that the funds deposited
in these accounts are originally deposited in
the Mercantile National Bank at Dallas, as
clearing house bank for the four depositories,
and distributed to all of such depositories)
. . e a . . . . . . . . . . . ..e . . . . . . .
"We are advised that in the selection of the county
depositories, the Commissioners' Court of Dallas County,
as provided in Article 2547, R.C.S., accepted a pledge of
securities from each depository bank, rather than the
execution of a bond to secure the funds deposited with
Honorable Henry Wade, Page 2 (WW-341).
them. The conditions of the pledge agreement of each
ccllntydepository are set forth In pledge agreements
executed by each of them substantially as follows:
'The conditions of the above contract are such
that, whereas, the above bounden pledgor
(Denosltory Bank) was on the 25th day of
February, A.D. 1957, duly and legally chosen
by the Commissioners Court of Dallas County,
Texas, as County Depository for said county
for a period of two years ending,slxty,.,days
from the time fixed by law for the next
selection of a depository, upon its bidding
and agreeing to pay the County of Dallas
interest on "'time deposits'" on daily
balances kept in said depository of said
County of Dallas at the rate of per contract
Per cent per annum, said interest payable
monthly.
'NOW, THEREFORE, if the above bounden pledgor
(Depository Bank) shall faithfully do and per-
form all the duties and obligations devolving
on it by law as the county depository of Dallas
County and shall upon presentation pay checks
drawn on it by the county treasurer of Dallas
County, Texas; on "'demand deposits'" accounts
in such depository; and all checks drawn upon
any "'time deposit"' account upon presentation,
after the expiration of the period of notice
required in the case of "'time deposits,'" and '
shall faithfully keep sabd::countyfunds, and
account for same according to law, and shall
faithfully keep and account for all funds be-
longing to the county which are deposited with
it under the requirements of Article 2547, Vernon's
Annotated Revised Civil Statutes, and shall
Include State funds collected by the tax collec-
tor, &nd shall pay the interest at the time ana
at the rate hereinbefore stipulated on "'time
deposits"; and shall, at the expiration of the
term for which it has been chosen, turn over to
its successor all the funds, property, and other
things of value, coming into its hands as deposi-
tory, then and In that event this contract is to
be and become null and void and the securities
above shall be returned to the pledgor, other-
wise to remain in full force and effect, hereby
specially authorizing the Commissioners' Court
of Dallas County, Texas, to sell at public or
private sale, with or without notice to the
pledgor, the securities, or any part thereof,
Honorable Henry Wade, Page 3 (WW-341)
and apply the proceeds of sale to the satlsfac-
tion of any indebtedness arising by virtue of the
violation of any or all the conditions of this
contract.
'The above provision Is given in addition to
any remedy the pledgee may have In any suit
;;n;tht;on this contract in any court in this
.
"We are assuming that the value of the securities
pledged is sufficient in amount to cover the funds mentioned
In your inquiry, and this opinion IS limited to a conslder-
ation of the security of these funds by reason of the nature
thereof. Although the language used In the pledge agree-
ments substantially conforms to the statutory requirements
set forth In Article 2547, the deposits mentioned In your
letter are not specifically described in the pledge agree-
ments as being secured.
"However, on the date of execution of the pledge agree-
ments, February 25, 1957, there was in effect a statutory pro-
vision for the security of funds collected by county officers
In their official capacity, which are deposited in the county
depository by the County Treasurer. Article 1656a, R.C.S.,
which provides for this security, reads In part as follows:
'The County Auditor in counties having a pop-
ulation of one hundred ninety thousand (190,000)
or more according to the last preceding or any
future Federal Census shall prescribe the system
of accounting for the county and the forms to be
used by the District Clerk, the District Attorney
and all county and precinct officers and by all
persons In the collection and disbursement of
county revenues, funds, fees, and all other
moneys collected in an official capacity whether
belonging to the county, Its subdivisions or pre-
cincts, or to, or for the use or benefit of, any
person, firm or corporation; . . . All of the fees,
commissions, funds, and moneys herein referred to
shall be turned over to the County Treasurer by
such officer as collected, and such money shall be
deposited in the county depository in a special
fund to the credit of such officer and draw interest
for the benefit of the county, which funds, when so
deooslted in such depository, shall be secured by
the bond of such depository. . . .' (Emphasis added)
'The Attorney General of Texas, in his Opinion WW-86,
dated April 5, 1957, has ruled that the amendment to this act,
which purported to manditorily require the deposit of such
Honorable Henry Wade, Page 4 (Ww-341).
funds by the County Treasurer, was unconstitutional,
but that the act was effective ,a8 originally enacted,
and that such funds should be deposited with the County
Treasurer when required by the County Auditor.
"In construing the pledge agreements which were
given under the authority of a statute, It is presumed
that the intention of the parties was to execute the
agreement as the law required, and the statute consti-
tutes a part of the agreement as if incorporated in it.
Crane County vs. Bates, 90 S.W. 28 243 (Opinion Adopted
by Supreme Court); New Liberty Common School District
vs. Merchants and Planters Bank, 273 S.W. 330, (Writ of
Error Dismissed); American Surety Company va. Tarbutton,
248 S.W. 435 (Writ of Error Refused); 10 Tex. Jr. 316.
"We will consider the . . . . bank accounts men-
tioned in'your letter separately:
1. County of Dallas Child Support Clearing Account
We are advised that the funds deposited in
this account represent payments made for the
care and welfare of specifically named children,
which payments are made to the Chief Probation
Officer of Dallas under orders of our District
Courts, to be disbursed promptly by payment
from the Chief Probation Officer to named indi-
viduals.
Unless the procedure prescribed by 1656a is
adopted, it is our opinion that the moneys
deposited in this account do not constitute
a deposit secured by the pledge agreement.
In the event, however, that the procedure
prescribed in said article be adopted, the
funds would then be secured as specifically
provided by that article.
Count of Dallas Juvenile Department, Child
2* &t-i%visron Holding Account
We are advised that the funds deposited in this
account constitute support payments which have
been made to the Chief Probation Officer under
order of the District Courts In those situations
where the named obligee has not been located for
payment by said Chief Probation Officer. There
are also deposited to this account sums of money
ordered to be paid by District Courts to named
individuals for restitution of damages caused
by juvenile dellnq,uents'..
Further, this account
Honorable Henry Wade, Page 5 (w-341).
represents money to be disbursed by the Chief
Probation Officer in providing for the welfare
of wards of the county.
As the funds deposited in this account are
largely to be used in making payment for the
use and benefit of named individuals, It is
our opinion that the principal part of such
account is not secured by the pledge agree-
ment of the depository bank unless the pro-
cedure established in Article 1656a is adopted;
and In the event that such procedure be adopted
and required by the County Auditor, such %c-
count would be secured under the terms of the
pledge agreement as set forth In said article."
In our opinion the foregoing is a correct statement
of the law and aa euch is adopted as the opinion of this
office.
SUMMARY
Funds of the County of Dallas Child
Support Clearing Acco,untand County of
Dallas Juvenile Department, Child Support
Division Holding Account are not sec,ured
under the bond of the County depository
banks, unless these funds are deposited
through the County Treasurer, or there is
an express contractual agreement with the
County depository banks to that effect.
Very truly yours,
WILL WILSON
Attorney Genera1400fTexas
By
GC:mg Jr. .I
APPROVED:
OPINION COMMITTEE
Geo. P. Blackburn, Chairman
J. C. Davis, Jr.
John Reeves
Leonard Passmore
Milton Richardson
REVIEWED FOR THE ATTORNEY GENERAL
By: James N. Ludlam