    I




        .



                                                                                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
