‘a                OFFICE      OF THE    ATTORNEY     GENERAL   OF TEXAS
                                            AUSTIN
     GROVERSELLERS
     ATrO”NWGCNLIAL



Aon.John C. Marbur@c
county Attarno~
PaTotto County
LaOrange, Tcxam
Dear     Slrr                  oplnlon MO. o-7147
                               Ret     Uhetthm recmiptr of mchool
                                       dirt&et 8umt k depomited
                                       ln rchool depomltory aad
                                       related mttelr




               "I have Jurt ~eceiv
          froa the COuzeJ SuperlIlt

          14 to l8slrt t
         vho  indicate



                                                    c recelptr the
                                                    during tb rchool
                                                 total amount allotted.
                                           Ural Aid rchool dimtrlcta
                                   e and loaal maintenance tax
                                              These depoalts do not
                                 at reported OQ in the Deposlto~'r
                                  a copy of vNch 1~ rent to the
          State   Departmnt       of Sducatlon.
                  "Deporltlng ncelptr (a&m01 money) in rpeclal
          lccouatr ir illegal bocaumr the Depomltory mrt    ra-
          port and account for all lohool ronor. But,    it 11
          papeat&,      tbore rmcrlptm am          deducted fra the awkmt
                                                                    659

Hon. John C. Mrburger -             Page   2


       oi state aid to vNoh             ths district is entitled.
               'Therefore, the quertlon vNoh ve 001 ask
       is   this   - isa7a meadlag school district pa7 bus
       tMB8pOFtatiOB      l~EIS~S,  all or part of a teacherto
       ralaw, etc.. for the recalvlng school district?
             "For exuple, the LUbaBge Indepetient School
       District (the reoelvlng dlstrlct) transports all
       grader above the fifth of the Eolmn School Dls-
       trict (sends   dlstrlct~8M mbs brlilnble to thou
       811 tlmlduaatlaml faellltle8 orfered to its mm
       pupilr. In retum, or a s l amslderatlaa, ths
       ROU    ComMB School Dlstriot pa78 b7 van-ant
       #l%O.OO to L&ramge for this rerrlce.    L&range,
       it it deporitr thi8 Peeeipt to ltr Available School
       fuad (ths memo7 Is paid b7 Iiolmn fror its Avall-
       able School fund and/or it8 Looal ~inteMnc8 tax
       fund) or its Local Maintenance tax fund, till have
       $lggO,OO deducted from it8 allotted Rural Aid




              "Rov - if Bolman r7 pa7 part of one teaoher's
       salar7 and/or a portion of ths garollne, 011 and
       repair bills, etc. iOr th8 -range Independrnt
       School District,  this sum of )lg90.00 vi11 not appear
       as a receipt  in the LaDrange Independent School
       District's port&m of the hpositor7'r ABBual 8tat8-
       mnt.    It vi11 on17 appear as a di8bursemnt b7
       Holrsr to an lndlvldual for SOlViCe rendered for the
       Rolmn colmoo School Dlstrlot iB the Deposltor7'r
       B       Statemat aridtNs practice vlll perult   all
       our Rural Aid Dirtriot: to aontlnue to quallf7 for
       State Aid rons7. . . .




          The above oonaluder ttm question propounded to 7ou
b7 the Count7 Superinteadait, and four requert and opiaion
t&NN         WEitiBUO8   a8   fOllOWI
don. John C. Marburger - Page 3


          "In connection vlth tNs request, I vlsh to
     refer 7ou to your Opinion lo. O-6931, and it ap-
     pears to me that the authority thsreln cited ansvers
     tNs question. In addition I am also herevlth en-
     closl~g a 0097 of an opinion that the depository
     received from its attorne7, vNoh u7 also be help-
     ful in ansvering the above questions.
          *You am further advlmed that  the First IIatloBal
     Unk of L&r-e     is the dul7 #elected and qualified
     County Deposlto~,aml fbrtherthttha      Ldtmnge In-
     depeldent Sohool Distrlat levies axnloolleotr a
     maintenance tax for the purpose of supplemefit~
     the Availabls School Pund rscelved from the State and
     CouBt7.
          "You am further advised th&t The ?lrat !?atlonal
     Bank of LaDrange la also the dul7 selrcted and qual-
     ified deposltorJ for the L&range IBdepend&nt School
     District.
          *In ldcCorke1v. District Trustee8, etc., 121 S.W.
     (26) 1048, (no vrlt) it van held that a quasi public
     corporation, such as a 8chool dlstrlct, vNch oven
     special dut7 to ths public, ms7 not enter into m7
     contract not express17 authorlaed b7 lav or necessarll7
     implied from povers expressl7 granted. The same case
     also holds that
               "'The statute does Bot luthorlse bfndlng
          cantracts betveen ths trustees of the tvo
          dlstrlcts under ths clrcumstaBcesof said case,
          as contrxts am ordlrurll7 understood.* SO8
          also Thompson v. Elmo InbOpOBdOBt School
          District, 269 S. U. 86.
           "Therefore, l? the above is true, the Bolmn
     School Dlstrlct could not oontract vlth the I&range
     School District for the payment   b7 the Holman School
     Dlrtrlot or the bill8 O? tb    LaD-0    Mao01 DlStrlet,
     vhether vlth or vlthout CoBrideratioB. I? It is slid that
     the OOBSidOratiOn  for ths payment of thse bills ID in-
     8tructloB of ths Holvn ptalls, then certain17 the
     LaDrange School Dlstrlot is Ircelvlng rbluabl8   aonsld8ra-
     tlon and certain17 must be reported as receipts as la
                                                                661

                                                                           “
BOB.   John C. Marburger - Page )4

                                                                       1,
       required b7 5. B. 167, 49th Laglslature,Regular
                                                                       c
       Scsslon, being Article 2, Seotlon 1 of said Bill
       as it appears on page @I2 0r Volume 5, Vernon'8
                                                                       i
       Texas Session Lav Service, vNch article and section             .
       1s quoted in full in your Oplnlon Ro. O-6931. said              +
       Bill specl?lcall7 requlras that the LaDrange School
       District is required to report. . . . mlscellaneou8
       receipts. It appears to ms that if the LaOrange
       School Dintriot vere not required to report such
       payments, evea I? legal, thsB it vould be possible
       to evade ths real purpose of the Rural Aid Lav. As
       I understand the Rural Aid Lav, its purpome is to
       assist all schools in need, and in order to dotemine
       tNs, said school districts mat report their total
                   as vell as their total reaelpts, a&iii
       dl ?erence.vlll represent their need, vNch the State
       =F='
       attempts to satisfy. I? ths above mentioned pa7msnts
       or receipts made by the Holmsn School District for
       the LaOrange School District vere not required to be
       reported, it seems to me that the LsGrsnge District
       vould not be reporting all receipts, because after
       all, the L&range Dlstrlct 8ould certalnl7 be re-
       celvlng the benerlt 0r payments made for and in Its
       behalf.
            *I did not get to search ths authorltles as
       thorough17 as I vould have liked to, but it strikes ms
       that the Rural Aid Lav attempt0 to help schools l.nnoed,
       and therefore, for the schools to be fair vith tr
       State, the7 should be required to report a 1 recel ts
       vhether they am received direct17 or lndu
       possible, ve vould also like to have your OpiniOB on
       whether or not the deposltor7 Is authorized to make such
       payments, and for this purpose and for the othsr ques-
       tions submttted, I am herevith enclosing the above
       msntioned cop7 of the opLnion rendered to the depository.
             “So please let us have 7our oplnlon on ths above
       matters  at the earllest possible dat8.'
         We quote from thr opinion of    ths   attorne7 for the bank
vNch 7ou sent us, as ?ollovsl
            "You have asked our oplnlon on certa%n questiQII8,
       hrelnafter  set out, lrl8lng out 0r the r0ii0wkg    fact
       sltuatlon.  The LaOraage Independent School   Dirtriot
       has offered for deposit 8 varrant papble to it, issued
                                                                   662


BOB. JohnC.Rarbu~Re~           - Page 4



    by ths Ulncheate~ Comon School Dlstrlct lo. 17,
    in the Bum 0r f5oo.00,  to be paid out or ths Avall-
    able Fund of the Winchester District as a pa7tsent
    under its contract for tuition. You vere requested
    to deposit tNs amount In the Buslneas Admlnlstratlon
    Fund, vhtoh, I understand, has not been recognlsed
    as an account covering school ?uads, In explanation
    or that request 7ou vere advised that if the Qeposlt
    van m&is to school tunds,  thereb7 made to appear OB
    your snnual report to the State &XpOriBtOBdeBt,  the
    LuOrsnge District vould lose certain State aid. The
    Flrst Rationat Bank la depositor7 for both dlstrlcts.
         "You ask, first, vhether the bank can place a
    varrant payable to a school dlstrlot for vNch it is
    depositor7 In an bcoount other than an account recog-
    nlaed a~4 designated as ooverlng sahool ?unda; seaond,
    vhether the bank can legally pa7 a varrant dravn b7 8
     district for vNch it 1s depository,  vlthout llsblllty,
     I? the varrant la deposited by ths payee, school dls-
     trict, In some other bank,
          “Ve have had the benefit of an Approved Opinion
    No.         of the, Attorney
            o-6931               General of Texas, dated
     November 23, 1945, vhereln he rules that a Rural High
     School la required to deposit school funds in the de-
     pository bank and no other.    We have cxtenF.ed our
     search of ths statutes and authorltles     to detersline
     vhether independent school dlatrlcts    and COLUSO~school
     dlstrlcte   are subJect to the same restrlctloas.     . . .
     (citing   nupbrous luthorltles)
           n      Ye ttirefon  l.c~ of the opinion that the
     W    ai tie&x31tory is not required to inquire Into the
     valldlt7 of a varrmt, but is responsible for the pa7-
     sent 0r a varrant vhere It has knovledge or fact8
     rendering ths transaction  Improper, or vhere the varrant
     OB    Its   face   discloses   it   Is   improper.

          “The First Aatlmrl 0ank of I&range la depositor7
     for both or the districts    under considerationhere, 00
     that it could not den7 having knovledge of ths lllegallt7
     or ths deposit or a varrant 0r the one district in
     another bank. In our opinion th8 bank r7 not pay such
     varrant vlthout rirk    to ltselr. lie,therefore, snsver
     ths second question Sn the negative,
                                                               663

BOB. John C. Marburger --Page   5

                                                                        ‘I
          ‘Ys are not unavare that these trantactlons
     1sa7also lmpome llabllltles UPOB the various
     trustee8 or the oount.7superintendent,but the
     fact that the trustees 587 have to account in their
     individual capacity for iunds vNoh the7 do not
     deposit in ths authorlsed deposltorJ, or that they
     may bs liable to ths authorlsed depositor7 for ten
     per cent of the 8~   the7 failed to deposit therein,
     vould BOt avoid the fact that the depositor7 right
     also be liable. Tha depository could not use ths
     llablllt7 of an7 other person a8 a defense to an7
     claim against it.
           %e do not undertaka to render an7 oplnlon OPI
     the duties and llahlllt:es of the various rchool
     districts or their offlcere since you are lntereertcdb,,le17
     ln ths remponslbllltlesand duties of the bank. Eovov,,,.
     since it has been suggested to you that the one school dis-
     trlat pays aortain bills of the LaOx+angeDistrict, vs do
     ma7 that in our opinion, this cannot be done. The POV,,~
     of the trustees to SpSBd funds la on17 that vNah 1s
     granted b7 statute and then, la no authorltatlon of sny
     dlstriot to pay the debt8 of another."
          0plNo1.1Ro. o-6931 of tNs Department holds:
          1. It Is not legal for a school district  to depnsit
school ?unds ln an7 bank other than the school deporltor7.
          2. A school dlstrlot seeklng State aid aunt repqpt -
                                                             all
income In order to qualify for State aid.
          We enclose herevlth a cop7 of Opinion Ao. O-6931.
          ArtlCl8 II, Section 1,    Senate Bill 167, 49th Lrelmlatur8
of Texas, reads aI ?ollovsI
           "Article II, TRE APPLICATIOR FOR SlYATRAID."
           %ectloB 1. The trusteer of ths dlstrlcts
     authorlted to lpp17 for aid under the provlslons of
     tNs Aat shall soad to the State Superintendent   of
     Public Inrtructloa on font  provldad b7 said Authorltl,
     vNch font have been approved b7 the Isglslatlve
     Accouttaat, all ln?olstlon that ma7 be rewired. Yslq
     foru vi11 inolude a budget b7 vNch th8 Wunt      Of
     Sala aid to vNahe~lschool vi11 be lllglble rhall be
     deterrined. Ths w     Ott &a shovn in tald budnet vlu
                                                                 r   664




* Bon. John C. Warburger - Page 6


      include the state and county available and local
      maintenance balances browht forward        from the we-
      ceding year. state and county avallable and local
      melntenancs receiDt8 for the current Year. tuttlon
      to be collected locallf. and miscellaneous receipta.
      The expendltun vi11 iaclude salarler of teacher8
      as deterdried b7 tba #alar7 schedule stated herein,
      and a mxlru of Tvo Hundred Ten Dollars ($210.00)
      per teaaher per year in lcore6lted       schools and OBe
      XuBdred Hinet Dollars ($190.00) per teacher per year
      in uaaccredlted 8ohools for other       current expenses;
      provided that I? for either year of the blennllu ths
      Salary Aid Alloaatlon shall be lnsu??lclentto
      guarantee the said Tvo Hundred Ten Dollars ($210.00)
      and f&e IhrndredHinet     Dollars ($190.00) for CllPl’OBt
      operatIng.expeBses,the State Superintendent,vIth
      the approval    of the LeglslatIve Acoountant,    is em-
      povered to reduce all grants for that purpose proportlon-
      ately. The total amount of amwove emendlture less the
      total amount of receipt8 vi11 be the Mount of Salary Nd
      to which a school vi11 be ellalble~ provided in BO ease
      vi11 8uch amount exceed the approved amount of teachers
      salaries. The State Superintendent shall, subdect to
      the provlrlons of tN8 Aot, upon bPPrOVa1 Of tkn Legis-
      latlve Accountant grant to tb rchool an amount of aid
      am ~111, vlth state end count7 available funds, together
      with all other funds including tuition, mslntaln ths
       school for such a period aad in such e manner am
      authorized in tN8 Act; provided that 8chool dlstrlcts
      qurll?yIng for salar7 ald under the provlsloB8 of tNs
      Act 1~37use this aid either to malnteln a school in the
      horn district or to provide school ?acllltl8s for ths
      bona fide szholastlcs of ths dlstrlcts in 8om other
       school or higher rank. Ths appllcatlons sbll bs
       SVOA  to by the county   superlnteadent    or all CoaOB
       School Dlstrlcts and pre#ideBt~aBd secntar7 Of th8
       board of trustee8 of all fpdependent School Dlrtrictr
       appl7Ing for aid. sohool districts lc o ep tlBagla under
       the provloloBs of this Act shall 8&l% in the dlstrL-
       butlaa of State and county lvallable sohool vo          and
       in all other funds am herein ma7 br provided. (Pnder-
       scoring oure).
            You 8XU respectful17advIsed tht   tt   18 tbr 0piJllonor this
                                                                   I
                                                             665




    Bon. John C. krburgsr - Pqe 7



    department th&t you and the attorney for tha bank hvr
    correctly ansvered the question8 submitted.
I
                                    Very truly your8




                                                 r.-------


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