§ 31.010.Turnover by Financial Institution

A protection for the institution caught between a creditor and its own customer.

The position is a hard one. A bank served with a turnover order holds accounts under contracts with its customer and duties of confidentiality; complying risks a claim from the customer, and refusing risks contempt.

The institution shall be provided and may rely on a certified copy of the order or injunction of the court, or a certified copy of the order appointing a receiver together with certified copies of the documents establishing the receiver’s qualification, the sworn affidavit, and the bond.

Two things follow from "shall be provided and may rely on". The institution is entitled to receive the papers, and it need not look behind them.

The receivership route requires more documents for a reason. A receiver is a stranger asserting authority over someone else’s account, and the qualification, affidavit and bond are how that authority is proved.

An institution that complies is not liable to the judgment debtor, a party claiming through the debtor, a co-depositor, or a co-borrower.

The last two categories are the notable ones. A joint account holder who is not the judgment debtor may have their own claim to the funds, and this protects the institution from that claim — leaving the co-depositor to pursue the creditor or the debtor rather than the bank.

The institution may recover reasonable costs, including copying costs, research costs, and, if there is a contest, reasonable attorney’s fees.

That reflects the real burden. Searching for a customer’s assets across accounts takes staff time, and without recovery the cost of another party’s judgment would fall on the institution.

"Financial institution" is defined broadly — state and national banks, savings and loan associations, savings banks, credit unions, foreign banks and agencies, and trust companies.