                 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
