Title: Opinion File 64-5 thru 64-12
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/WL00003223/00001
 Material Information
Title: Opinion File 64-5 thru 64-12
Physical Description: Book
Language: English
 Subjects
Spatial Coverage: North America -- United States of America -- Florida
 Notes
Abstract: Buddy Blain's Collections - Opinion File 64-5 thru 64-12
General Note: Box 14, Folder 2 ( Opinion File 1961-1971 - 1961-1971 ), Item 11
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
 Record Information
Bibliographic ID: WL00003223
Volume ID: VID00001
Source Institution: Levin College of Law, University of Florida
Holding Location: Levin College of Law, University of Florida
Rights Management: All rights reserved by the source institution and holding location.

Full Text






piear emL 7,-b t9



mh... ,.llT 1t 4a10




, *Il1lt Illwasrely


IN sto In""Q u" IN W
OW. 0. Blb LnS
I IbftC Bl1I pI" MU.lM.,lliii
IA" all-lrrtli-o





646






Re: Southwest Florida Water Management District -
Deposit of Funds in bank where Board member is
Stockholder or Director

Section 18.10 et seq F. S. makes provision for the establish-
ment and regulation of state depositories and Ch.' 136, F.S. makes
provision for the establishment and regulation of county deposi-
tories, for the deposit of public funds by state and county officers,
boards, commissions, bureaus, departments, institutions and agencies.
During the last session of the legislature, Section 18.10 and Section

136.02 were both amended to provide that state, county or municipal
officers or members of public boards or bodies may hold stock or be

an officer or director of a bank without disqualifying such bank

S 'as a depository of state, county or municipal funds.

Chapter 63-114 amended Section 18.10, Florida Statutes, by
adding subsection (4) which reads as follows:

The fact that a municipal officer or a state
officer, including an officer of any municipal
or state agency, board, bureau,commission,
institution and department is a stockholder or
an officer or director of a bank will not bar
such bank from being a depository of funds
coming under the jurisdiction of any such
municipal officer or state officer, provided
it shall appear in the records of the municipal
or state office that the governing body of such
municipality or state agency has investigated
and determined that such municipal or state
officer is not favoring such banks over other
qualified banks. (emphasis mine)
Chapter 63-112 amended Section 136.02, Florida Statutes, by
adding subsection (5) to read as follows:

" (5) The fact that a county or municipal officer
or member of a public board or body, including
a county school officer and an officer of any













district within a county is a stockholder or an
officer or director of a bank will not bar such
banks from qualifying as a depository of funds
coming under the jurisdiction of any such county
or municipal officer, provided it shall appear in
the records of the state or county agency that
the governing body of such agency has investigated
and determined that such county officer or member
of a public board or body as aforesaid has not
favored such bank or banks over othe qualified
banks and that there is no violation of Section (1)
of Section 136.02.

In connection with an annotation upon the question of a public

officer's relation to a corporation as an officer or stockholder

as constituting interest within statutes or the rule of common

law, against a public officer being interested in a contract with

the public, in 140 A.L.R. 344-361, the annotator concludes that

the general rule is that the interest of a public officer as a

stockholder in a corporation entering into a contractual relation

with the public is a prohibited interest in the transaction within

the common-law principle against such an interest based on public

policy, and the statutes declaratory of the common law. That a

stronger case of interest exists where public officers are not

only stockholders but also officers of the corporations with which

the public has attempted to enter into a contract. This view is

in accord with that expressed in 43 American Jurisprudence Public

Officers, Section 300, pages 107-108 where the commentators state:

300. Interest in Contracting Corporation. The ,
general rule is to the effect that the interest of
a public officer as stockholder in a corporation
entering into a contractual relation with the public
is a prohibited interest in the transaction within the
meaning of statutory provisions in substance prohibiting
a public officer from being interested directly or in-


-2-





64-g






directly in any contract with the public, and of the
common-law principle against such interest, based on
public policy, of which such statutory provisions are
the concrete expression. A stronger case of interest
exists where public officers are not only stock-
holders but also officers of corporations with which
the public has attempted to enter into a contract.
The interest of the parties in such cases is clearly
within the meaning of provisions prohibiting public
officers from being interested directly or indirectly
in contracts with the public. The fact that personal
moral turpitude or dishonesty is not involved in the
case, or that the state may have made an advantageous
contract and suffered no loss by reason thereof, has
been said to be immaterial.

Similar warnings appear'in 67 Corpus Juris Secundum, Officers,
116, page 406, which reads in part:

"A public officer is a public trust and the holder
thereof may not use it directly or indirectly for
a personal profit; and officers are not permitted
to place themselves in a position in which personal
interest may come in conflict with the duty which
they owe the public. .

This rule appears to have been followed in the past by the

courts of Florida. Lainhart v. Burr, 49 Fla. 315, 38 So. 711, text

714; Stubbs v. Florida State Finance Co., 118 Fla. 450, 159'So.

527, text 528; State Board of Adminis. v. Pasco County, 156 Fla. 27,
22 So. 2d 387; City of Stewart v. Green, 156 Fla. 551, 23 So. 2d,

831, text 834; City of Miami Beach v. Benson, Fla., 63 So. 2d 916,

text 920; Fruchtl v. Foley, 84 So. 2d 906, text 908, Watson v. City

of New Smyrna Beach, Fla., 85 So. 2d 528, text 549; and State v.
Hooten, Fla. App. 122 So. 2d 336, text 340,
Relying on these authorities, the Attorney General in an

_ opinion, issued on August 24, 1961, as Op. Atty. Gen. 061-132 advised
*


-3-





6q4-9






the Lee County Mosquito Control District that where a Stockholder

or Officer of a banking institution or business corporation doing

business in this state becomes a member of the governing Board of

a mosquito control district or other public district, he had grave

doubts whether the district could transact business with such bank

or corporation. He specifically said:

"From the above and foregoing it appears that the
validity of a contract between a public officer and
a bank, of which the said officer is either a stock-
holder or an officer, is of questionable validity
in this state, because of the bank interest represented
by its stockholder or officer who is also the con-
tracting public officer. A stronger case against the
validity of the contract seems to arise where the
contracting officer is also both a stockholder and an
officer of the bank in question. This same rule
appears to have been generally applied where the
( stockholder or officer is a member of a contracting
board or agency instead of the lone contracting
officer.

"These observations lead to a negative answer to the
above question, where the transaction between the
bank and the officer or board member who is also a
stockholder or officer of the said bank."

In a subsequent opinion addressed to the State Comptroller on

June 11, 1962, and designated as Op. Atty. Gen. 062-81 the Attorney

General modified kis earlier opinion to the extent of ruling that

where a minority stockholder of a banking or similar institution,

becomes a public officer or member of a governmental board or agency,

such officer, or the Board of which he is a member, may deposit

public funds under his or its control or jurisdiction with such

banking or similar institution. However, he warned the Comptroller

f that:
"We have in the above and foregoing spelled out the
rules to be applied when determining when a public

.-4-













officer, who is a minority stockholder in a
banking institution, may deposit public funds
under his control in a banking institution in
which he is a stockholder; we do not here
apply the said rules to directors of a banking
institution who are also public officers. We
consider their position of control is clearly,
manifested by their dual managerial positions
which renders their banks or similar institutions
ineligible to receive deposits."

Each of the above opinions were issued by the Attorney General

prior to the adoption of the 1963 amendments to Section 18.10 and

136.02 permitting state, county or municipal officers or members
of public boards or bodies to be Stockholders or officers of

banks without impairing the right of the bank to serve as a

depository of public funds. In an opinion issued on October 4, 1963,

as Op. Atty. Gen. 063-118 the Attorney General informed the State

Superintendent of Public Instruction that: "All prior Attorney

General's opinions, including 062-81 and 062-132, are modified

to the extent they may be in conflict with the 1963 amendment to

Section 136.02 F.S."

However, caution must still be exercised by a Board, District

or other public agency in depositing funds in a bank having a member or

officer of such board as a Stockholder or Director. The 1963 amend-

ment to F. S. 18.10 requires the governing body of a municipality or

state agency to investigate and determine that such bank is not being

favored over other qualified banks merely because its member or officer

is a.Stockholder or Director. The 1963 amendment to F. S. 136.02

also forbids a county officer or member of a public board or body to


-5-













favor a bank where he is a stockholder or director over other banks.

In opinion No. 063-84 addressed to the Clerk of the Circuit Court

of Bay County on July 26, 1963, the Attorney General cautioned:

"The obligations placed on the board of county
commissioners and the board of public instruction
in not showing favoritism to a particular bank
over other banks where several have qualified as
county depositories were pointed out in Chapter
63-122, Laws of Florida, wherein the Legislature
stated that a county officer who is also an officer
or a stockholder in a bank would not prevent said
bank from qualifying as a county depository so long
as the depositing board determines that the bank
seeking to qualify'was not favored over such other
qualified banks within the county."

Although Southwest Florida Water Management District funds may

now be deposited in banks where Board members own stock or serve as

" Directors, a disproportionately large deposit in such bank would

appear to be a patent violation of 1963 amendments. An obligation

is imposed on the board to make certain that no favoritism or

partiality is being shown to a bank with which a member is related.


-6-










MeN to: -SI


iot .vi alms T .1
Puaghee o Materls froo ras amer
lmea SO r w at"** amei a to Sow ast a air -ot Wo me ad
at feu s IV -ali h SIM Sad^ h Is htemem, for
irrs t am ar q as. e n I te
us" tana S t We Sofet etm OW aflt Wetat book
fr amr ms.
%a t402. p"blm is is e 0t Wthe nDat uhrs Is a mnetar at
a t* m toi pttl bv pasl La Mat bteawI thaa ba SeOr
-ak In wo arse.

















/

/


.. ,'tl.*




University of Florida Home Page
© 2004 - 2010 University of Florida George A. Smathers Libraries.
All rights reserved.

Acceptable Use, Copyright, and Disclaimer Statement
Last updated October 10, 2010 - - mvs