Haroh 16, 1949
Hon. Robert S. Calvert
Comptroller OS Public Aooounts
Austin, Texas Opinion No. V-787.
Re: The legality OS accepting
drainage and navigation
district bonds as soouri-
ty to be pledged by a
bank to act as a oounty
depository.
Dear Sir:
Reference is made to your recent request rhioh
reads in part as follows:
“Please advise this department whether
or not Drainage and Navigation District Bonds
may be classed as municipal bonds, and, there-
fore, be acceptable as security to be pledged
by a bank selected as a County Depository, as
provided for in Article 2547 Vernon’s Annota-
tea Civil StatutesOn
The pertinent portion of Article 2547, V. C.
S ., ia 69 r0ii0w8:
“(0) In lieu’of such personal bonds or
surety bonds as above specified, said banking
corporation, association or individual banker
so selected as county depository, may pledge,
and said depository bank is authorized to
pledge with the Commissioners’ Xhart for the
purpose of securing such county funds, secur-
ities of the following kind, in an amsunt
equal to the amount of such county funds on
deposit in said depository bank, to-wit:
bonds and notes of the United States, securl-
ties of indebtedness of the United States,
and other 8VidenCet3 of indebtedness of the
United States, when said evidences of lndebt-
edness are supported by. the full faith and
credit of the United States of America, and
Hon. .Robert 9, Calvert, Page 2 (V-787)
other bonds or other evidences of indsbtsd-
ness which are guaranteed as to both prinol-
pal and intsrsst by the United States Govern-
ment, bonds of the Stats of Texas, or of any
county, city, town, independent school dis-
trict, common school district, or bonds issued
under the Federal Farm Loan Act, or road dls-
triot bonds, bonds, pledges or other securi-
tlss issued by the Board or Regents of the
University of Texas, bank aocsptanoes of banks
having a oapital stock of not leas than Five
Hundred Thousand ($~OO,OOO.OO) Dollars, note8
or bonds secured by mortgegea insured and de-
bentures issued by the Federal Housing Admin-
istrator OS ths.United States Government,
shares or share accounts of any building and
loan association organized under the laws of
this state, provided the payment of such
shares cr share acoounta is insured by the
Federal Savings E Loan Insurance Corporation,
and in ths shares or share acoounts of any
Federal Savings & Loan Association domiciled
in this state, provided the payment of such
shares or share accounts is insured by the
Federal Savinaa & Loan Insurance Corooration:
and bonds issued by munioioal corporations in
Texas, . . . v (Emphasis added. )
In the case of Danoy v. Wells, 8 S. 91. (26) 198,
(writ rer.) ‘it Is stated:
“Step by step we advanoe to the’position
that this navigation district is a public mu-
nicipal corporation, and in its nature cannot
be dissolved or have its powers out down or
destroyed in any private suit or litigation,
lxcopt in a dirrot suit brought by the sover-
eign stat. that gave lt life. The trial judge
based his order granting a temporary injunc-
tion solely upon the’ theory that the act vlo-
lated both state and Federal Constitutions,
and declined to pass upon any preliminary
quartions either raising the juriadlotlonal
qusstlon, plras in abatement, or general or
speoial lxssptions.
wFrom what has been said
it will be aeon
that appsllrnt 18 a runlolpal oorporation with
so nuch sovorrlgn power oonferred upon it to
163
_ .
Bon. Robert S. Calvert, Page 3 (V-787)
do the things the law imposes upon it. . . .*
In the case of Harris County Drainage District
v. City or Houston, 35 S, W. (2d) 118, we Sind the tollow-
ing:
“Thus we see that under the Constitu-
tion authority is given to the Legislature
to provide for the creation of such drain-
age districts as the one in question here,
and, when created, they a tand upon the same
footing within their proper spheres, as coun-
ty, preoinct, or other such political and
established subdivisions of the state . . .
and are pub110 corporations. . .‘. n
Similarly a water improvement district has
been regarded as a ~municipality~within the meaning OS
Section 53 of Article III of the Texas Constitution.
Cameron County Water Improvement District No. 8 v. De
La Vergne. Engine Co., 93 F (2d) 373 (CCA 5% 1938)
And an independent school district has likewise been
held to be a “munioipalityn under that section. Har-
lingen. I. S, D,.v. C. ii. Page & Bro.
In view of the foregoing, it IS our opinion
that Drainage and Navigation District Bonds may be
classed as municipal bonds within the meaning of Article
2547 aupra; and may be pledged as security by County De-
positories under the provisions of the Act.
Drainage and Navigation Dia trict Bonds
are municipal bonds within the meaning of
Artiole 2547, V. C. S., and may be pledged
as security by County Depositories under the
provisions of the Aot. Dancy v. Wells, 8 S.
W. (2d) 198. Harris County Drainage District
v. City of.Houston,~ 35-S. W. (2d) 118.
.
Yours -very truly,
APPROVED ATTORBEYGENERALOF TEXAS
BY&ZAzL
Assistant