Untitled Texas Attorney General Opinion ( 1977 )

Honorable Harvey Davis Opinion No. H-1013
Texas State Soil & Water
Conservation Board Re: Deposit of Soil and
Temple, Texas 76501 Water Conservation District
funds in interest-bearing
accounts.
Dear Mr. Davis:
You have requested our opinion regarding whether a soil
and water conservation district may deposit its funds in
interest-bearing time accounts or purchase certificates of
deposit at banks and savings and loan associations.
Section 2 of article 165a-10, V.T.C.S., which deals with
the "deposit and withdrawal of funds" of soil and water con-
servation districts, provides:
The Soil and Conservation Funds . . .
appropriated to Conservation Districts
shall be deposited in State or National
Banks and shall be withdrawn upon ap-
proval of the Board of Supervisors of
a District by checks or orders signed
by the Chairman and Secretary of the
Board of Supervisors of the District.
Although soil and water conservation districts are not sub-
ject to most of the general statutes governing depositories,
V.T.C.S. arts. 2525-2569, those statutes do provide a basis
for defining "deposit" as used in article 165a-10, 9 2. They
clearly employ the word "deposit" to mean both time and demand
deposits, w, arts. 2525, 2546. In Shaw v. McBre, 9 S.W.2d
410 (Tex. Civ. App. -- Texarkana 1928)~ff"~~~
-_~ S.W.Zd 121
(Tex. Comm'n App. 1930, jdgmt adopted), the court, construing
provisions regulating the banking industry, stated that the
meaning of "depositors" in then-articles 475 and 475a, was as
broad as "deposit" in then-article 523, defined therein to in-
clude both demand and time deposits. Shaw v. McBride, guxa
at 411.
P. 4183
Honorable Harvey Davis - page 2 (H-1013)
Furthermore, the courts of numerous other jurisdictions
have held that the meaninq of "deposit" or "depositor" embraces
both time and demand deposits. --L&nus Cotton Gin Co. v~.Walker.
70 so. 754, 756 (Ala. 1916): _---
Isenhartv * Monty, 423zEx,-
837-38 (Coio. 1967); Bassett-.v West Haven Bank & Trust.o.,
165 A. 895, 897 (Conn. 1933); Bennett .v.-'American Bax'& Trust
co., 134 S.E. 781, 786 (Ga. 19m- ---McCormicZ.~ins~122-
-_-
N.E. 151, 154 (Ill. 19191: State ex rel.~ Carroll v. Corning
State Savings Bank, 113 N;WT-500, 502(Iowa 1907); State ex
rel. Davis v. 201 N.W. 901 904 (Neb. 1924) ;
Jones v. O'Bri~~~~-~F~F"6~~;;59 (S. Dak. 1431). On the basis
of these aluthorities. it is our-opinion that the command of sec-
tion 2 of article 165a-10, that funds of soil and water conser-
vation districts be "deposited" in state or national banks, would
permit the deposit of such funds in interest-bearing time accounts.
A "certificate of deposit," however, ordinarily signifies
a deposit payable at some future date. In effect, it repre-
sents the issuing bank's promissory note to the depositor.
Thompson v. Thompson, 236 S.W.2d 779 (Tex. 1951). A certificate
of deposit is denominated an "investment" by article 6252-5a,
V.T.C.S. See -.
_ First~National Bank in Grand Prairie v. Lone Star
Life Insurance Co., 524 S.W.2d 525 (Tex. CiviTpp. --mGr'
writ ref'd n.r.e., 529 S.W.2d 67 (Tex. 1975). We believe, there-
fore,that article 165a-10 does not authorize soil and water con-
servation districts to purchase certificates of deposit.
Neither article 165a-10 nor any other statute, permits
the deposit of district funds in savings and loan associa-
tions. In Attorney General Opinion H-723 (19751, we held
that section 6.14 of article 852a, V.T.C.S., does not in it-
self affirmatively authorize any political subdivision to
place,its funds in a savings and loan association unless that
political subdivis.ion is authorized to do so by other law.
Since we are aware of no other law with regard to soil and
water conservation districts, it is our opinion that such a
district is not at present authorized to deposit its funds
in a savings and loan association.
SUMMARY
--, ----
A soil and water conservation district may
deposit its funds in interest-bearing time
accounts in a state or national bank, but it
may not purchase certificates of deposit, nor
may it deposit its funds in a savings and
loan association.
p. 4184
Honorable Harvey Davis - page 3 (H-1013)
Very truly yours,
Attorney General of Texas
AWROVED:
Opinion Committee
klw
p. 4185