                     January 12, 1962


Honorable Shelby Ii.Blaydes     Opinion No. WW-1241
matrlct Attorney
Fort Stockton, Texas            Re: Whether a County
                                    Auditor would be in
                                     violation   of   \I3
                                     oath-under Article
                                     1619, Vernon's Civil
                                     Statutes, in certain
DearMr. Blaydea:                     stated fact alfuatlons.
            You have requested an opinion of thla office In a
letter which sate out a group of questions and f'actsand which
reads In part as follows:
         '1. A Countp Auditor owns a few shares of
     stock In Qulf oil Corporation, Standard ml COW
     pany of New Jersey, . . . me county purchases
     011 and gas on bids from one or more of the dis-
     tributors oi'theae varloulrcompanies . . . Under
     that fact situation would the County Auditor as
     owner of stock In the company that was the suc-
     cessful bidder be violating hie oath that he will
     not be personally interested In any contracts
     with the county?
          "2: In yearn past, the county haa always
     selected the bid of a slagle.bauk located at
     the oounty Beat as county depository. The
     County'Audltor In y-car8past by urcharrehas
     aaquitisda total of leas than 55JJ
     stock of this particular bank. . :'.giyEi
     again was selected by the Commlerloners as
     county depository. Under this set of circumstances
     la there any violation or the oath of the county
     auditor am set out In Article 1649.
          “3. Awume the came eet or facts ae est.
     'out in paragraph 2, except now the county auditor
      one year priorto the last reelectionof county
      depository . . . has beqn elected to the Board
      of Dlrectore of the . . . bank. Under this q et
      of clrcumstancee,18 there any vlolatlon ol the -
      oath of the county audltor,under that statute?
Honorable Shelby H. Ilaydes, page 2 (WI-1241)

           "4. Under the facts set out in paragraph 3
      above, 'Isthere any statute which disqualifies
      the county auditor from serving as a director of
      the bank selected as county depository while he
      also serves as county auditor?

          "5. Is there any statute that would dla-
      qualify the county auditor from serving as a
      director of a bank?
          "6. Is there any statute by which the
      county auditor-would be disqualified to own
      stock in
               a.   the bank
               b.   the 011 companies   under question l?"
          The questions which you raise necessitatea reading
orArticles 1649 and 2364. Vernon's civil Statutes. Article
1649 reads in part as hollows:
          ?The Auditor shall within twenty days of
      his appointment and before he enters upon the
      duties of hia office make bond . . . He shall
      further include in his oath that he will not.be
      personally lnterested in any contracts with the
      county.U
         Article 2364,.Vernon's Civil Statutes, in referring
to contracts w&th the county, reads In part as follows:
            'No member or the commissionerscourt or any
      county oSSicer shall be either directly or in-
      &-sot      zntereated in any such contract.'
      (Empha% ahpplled.)
            .Thu~.it.appeara'thatthe answer to your first ,four
questions depends on nhether.a county auditor who is a
stockholder or director   in ilrst, an oil company from which
the county purchases oil and gasoline on.bids, and.secondly,
a bank nhich ia the county depository by virtue    of the receipt
and acceptance of bide, violates the prohibition against a
county officer havlng a financial intereat in contracts with
the county.    We are ol the opinion that such interests of the
county auditor are proh$b%ted by these atatutea.
         The duties of a county auditor are prescribed by
qtatute. He has the general nupervision over all the books
and records of all the officea of the county having'authority
Honorable Shelby H. Blaydes, page 3 (W-1241)


to receive and collect money or property i'orthe county
(Article 1651, Vernon's Civil Statutes, et seg). Among
other things, he has the duw under Article 1 55, V.C.S., to
inquire Into, Inspect, and count the cash in the hands o? the
county treasurer or deposited by him in the banks. 'Under
ArtiCleS 1658 and 1659, V.C.S., he has the duty tq receive
bids for materials and euppliee for the county. .15 Tex.
Jur. 2nd 287. 288. Counties, Sec. 59. He is clearly a
"county officer" within the ineanlngof that term. bmerican


          Being a "county offloer" the question resolves
ltslef Into whether the holding of stock In the various 011
companies and the bank Is a su??lclent “interest” in a
contract with the county aa is prohibited under the various
statutes. In Attorney QBneralss Opinion O-878 (1939), this
office held that such would be the case, and that a stock-
holder's Interest, regardless of how nominal or small the
amount of such stock held happened to be, would be a financial
interest. ..Theopinion reads in part:
         'The fact that the municipal officer la a
     atookholder,or an offlcar, ln the corporation
     with whom the coatract le made constitutes such
     an lnterest'la the contract as to taint It with
     Illegality . . . Dillon on Municipal Corporations,
     supra; McQlllan on Mublclpal Corporations, 2nd
     Edition, Vol. 2, p. 217, and Vol. 3, p. 945; 44
     C.J. 93 . e ."
The above general principle of law applies, of course, with
equal Porte to county o??lol~lsas well as municipal o??lclals.
          Neither Is the prohibitionof the statutesclrcum-
vented by the mere fact that p county auditor In this situation
as such does not have direct voting power as to the awarding
of such contraotuwith the county.   In Attorney @eneral*a
Opinion V-381 (1947), this office held that a county auditor
was definitely within the statutory prohibitions In regard
to county contracts. He has the statutory duty to receive
bids for materisle and rupplles and au such has a part
in the contractproceaa. He haa the additional duty to
'Inquire Into, count, and Inspect* the funds of the county
on deposit In the depoeltozybank. The fact that an officer
takes no direct part in the actual act o? letting the contract
la lmmaterlal. See Attorney C+eneral*sOpinion O-878, aupra.
Honorable Shelby H. Blaydes, page 4 (WW-1241)


              In addltlon, we point out that Article 2364, Vernon's
civil    Statutes, clearly prohibits any county officer from
Indirect;~ l;erri; l..t&a;;;ounty
having                                   contract,   directly or
                                   "any county officer   with voting
erlvileges     on the aw!rdlng   of the contract," but Bays slm ly
 an county of?lcer.          In Attorney General*8 Opinion o-62 f;0
(19x4)     relating to a county officer being a bank director,
it was pointed out In part:
             "It Is not a question whether the particular
        contract thus forbidden is hurtful. It might, on
        the contrary, be actually beneficial, but the law
        will not permit an Inquiry lnto the actual conse-
        quences of the transaction. It Is contrary to
        sound public policy."
           In Attorney  '&?nerallsOpinion O-2980 (1941), this
office held that where a County Judge of a county Is a
director and stockholderof a bank, such bank could not be
a county depository. The opinion reads In part:
           I       It Is well settled in Texas that if
       a pubild ~??lclal, directly or lndlrebtly has a
       pecuniary interest in a contract, no matter how
       honest he might be, and although he may not be
       Influenced by the Interest, such a conttgot Is
       against public policy. Meyers. et al v. Walker,
       276 S.W. 305; city of Edknburg v. ellls, XJ s .N .
       26 99.”
          With the foregoing general principles in mind, we
are o? the opinion that the fact that the county auditor holds
stock or Is a director In the,011 companies and bank, violates
the etatutory prohibitions outlined herein. Consequently,
your firat four questions may be answered as ?ollows:
            1. The county audlto? Is prohlblted by law
        from owning stock, no matter how small the Interest
        In an oil company wi.thwhich the county has con-
        tractual dealings.
            2.   The .county auditor is prohibited by law
        from owning stock or being a member of the
        Board of Directors of any bank which serves as
        the county depository.
            3.and 4. The county auditor thus violates his
        oath.under Article 1649, Vernon*s Civil Statutes,
        by owning stock In an oil company with which tht
        county contract.8 and also by belng a stockholder
Honorable Shelby H. Blaydea, page 5 (W-1241)


      or member of the Board of Directors In a bank
      which Is the county depository, and It la Immaterial
      that the bank 1s the only one located at that par-
      ticular place.
           Further, In regard to your last'two questions, we
art unable to find any statutes which would disqualify the
.county auditor from owning stock or being a director In
 either an 011 company or a bank I? the county does not
contract and do business with such organizations. Your
 last two question8 are thus answered negatively.
                          SUMMARY
          (1) The county auditor la prohibited by law
      from owning stock in an 011 company with which
      the county has contractual dealings.
          (2) The county auditor Is prohibited by law
      irom owning stock or being a director cf a
      bank whlah serves as the county depository.
          (3) The county auditor la not prohibited
      from owning stock In a batikor 011 company with
      which the county has no business dealings.
                               Very truly yours.
                               WILL WILSON




EBS:dhs:kh                   - Ae;i+iant

APPROVZD:
OPINION COMKITTEE:
w. v. Qeppert, chairman
J. Arthur Sandlln
Llnward Shlvers
Riley Eugene Fletcher
REvIEwBDFORTiU3ATTORNEYWNERAL
BY: Houghton Brownlee, Jr.
