TEXE ATNBRNEY GENERAL
OP TEXAS
Honorable J. w. Edgar Opinion No. M-304
Conxnissionerof Education
Texas.Education Agency Re: Legality of acceptance of
201 East 11th Street personal bond signed by of-
Austin, Texas 78711 ficers or others of a bank-
corporation in satisfaction
of bond security requirement
under Article 2832, V.C.S.,
Dear Dr. Edgar: and related questions.
Quoting from your letter requesting an opinion on
the above stated matter, we set out your first question as
follows:
"1. Where a bank-corporation, as distin-
guished from a person, pursuant to Article 2832
is selected by an independent school district
as its depository (treasurer), legally may the
corporation tender and/or this Agency honor in
satisfaction of the bond security requirement
rsonal bond sig.iedby officers of that bank
'Zr*as sureties?"
._ By its terms, Article 2832, Vernon's Civil Statutes,
uses lpersonl and 'corporation" synonymously,in reference to a
"treasurer" who is required to be secured by bond. .The first
paragraph provides, in part.:
"Inany independent district . . . the
treasurer of the school fund shall be that
who offers satisfactory
of interest on the:aver-
age daily balances or time deposits for the
privilege of acting as such treasurer. The
treasurer when thus selected shall serve-r a
term of two (2) years and until his successor
shall have been duly selected andqualified and
he shall be required to give bond in an amount
Gual to the estimated amount of the total re-
ceipts coming annually into his hands. when
such bond is a personal bond;rovided, that
-1479-
Hon. J. W. Edgar, page 2 M-304)
when a bond is executed by a surety company
or is a bond-other thana persona% bond, such
,. bond shall be in an--amountequal,to.the highest
dai-iy'balance-for'the-~current-biennium,
to be
determined.bythe governing body of such sdhool
district . . .' (Bmphasis added.)
The statutory bond thus provided for must be II
. .
read, construed, and enforced in.connection with, Andyaccording
to, the statute pursuant to which it is given, and to be
interpreted according to the purpose.and meaning of the legis-
lative enactment." 8 Am.Jur. 709; Bonds, Sec. 4.
As used above, "treasurer" includes both persons and
corporations, and.such,treasnrer may'give,.a~"personal bond" in
fulfillment.of the statutory.,.requirements.'Thus;,~a~bankofficer
may legally ~give a personal.bond;--obligatingeither.his own
assets or those of the bank;insatiefaction of the bond re-
quirements of Article 2032. The-provisions'of the statute con-
template the giving of such a "personal bond" as distinguished
merely from one "other than personal," that is,~a "surety bond."
Either type bond is a "satisfactory bond," provided given in an
amount as.plainly prescribed by'the statute.
Using a different approach,.~whatis meant by."personal
bond* as it is used in Article 28321 The word *personalm may
include.either a human individual or a corporation, a corporate
entity being regarded as a person for legal purposes. 32 Words
and Phrases, 307, 308, under *Person.*
A *bond*, in-the present context, means a sworn
promise in writing that, upon the-failure of the'treasurer to
fulfill the terms of the contract undertaken,.certain funds
may be looked to for compensation~of-.,theschool district for
any damage caused by such failure,,ofperformance. 5A Words and
Phrases, 121, under 'Bond." Therefore, a "personal bond," as
used in Article 2832 is a sworn statement-inwriting by.a person
(or persons) representing either himself or a corporation which
he is authorized to contract for; that promises designated asset1
will be available to compensate the school district in question
should the treasurer contracted with fail to properly fulfill hi&
duties. So, the same result foll~owsas above, that a bank office
may legally execute a personal bond in favor of the school dis-
trict to secure the proper performance of duties by the treasure1
of said school district.
your second question reads:
- 1480 -
Hon. J. W. Edgar, page 3 (M-304)
"2., What responsibility, if.any rests in
this Agency to ascertain the,financial worth
of the surety(ies) signing a personal bond?"
In reference to the bond-to,,begiven, the second
paragraph of Article 2832 reads.;in part, "It shall.be approved
bv the school board.and the.State.Ueuartment of Education
.'.&all & notified of the'treasurer-bk the president-of-the school
board filing a copy of said bond in-said.department;"‘.(Emphasis
added.) This language clearly.does not plaoe'any.reaponsibility
on the Agency to ascertain the financial worth of the surety.
As no other-mention is made of the Agency in Article 2832 it
is clear that no.such duty is imposed.by the statute.
The third question you pose is:
- w.
3. Assuming query No. ~1~is answered, Yes:
Where pursuant to Article 27~86d,a.school dia-
trict invests proceeds realized from sale of
school bonds in time deposits.of,its bank-
corporation,.depositorywhich.is covered only '.
by a ersonal bondi.are such proceeds properly
secur&rotected7"
To quote from the relevant-portions of Article 27866,
Vemon's.Civil Statutes:
"From and after the.effective-date of this
Act, any school district within-the'state which
has or may have on hand any-sums-of money which
are proceeds rece,ivedfrom the isaue.and sale ~of
bonds of.-anysuch school distriot'i'eitherbefore
or after,the effective date of-this Act, which
. proceeds'are not immediatelyneeded,for the pur-
poses for which such bonds were-issued and sold,
may, upon order of the board of.trustees of such
school district, place the proceeds of such bonds
on interest~bearing time deposit;secured in the
manner provided in Article 2832;Revised Civil
Statutes. with a state or national bankina
corporation within this state; or invest