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.