Untitled Texas Attorney General Opinion ( 1961 )

wxLL WIISOS
ATZGRS~ GENE-
July 7, 1961
Mr. R. L. (Rob) Lattimore Gpinion No. VW-1084
Criminal District Attorney
Rdiz!burg, Texas Ret Whether certain.
moneys which have
been placed in the
iuterest and sinkiag
fund may be used for '
constrmtion of addi-
tional projects in the
road district ia ques-.
'Dear Mr. Lattimore: tion.
IZ your letter requesting an opinion of this office,
you state that Road District No. 11 of Ridalgo County has voted,
issued and sold certain road bonds and that when the pro-
jects under construction were substantially~completed it be-
car& apparent that the cost of the projects which had been
begun bould run soxe $ZOO,QOO.OO less than had been antici-
peed. Tou fzrther state that in October, 1960, the Comis-
ctczers * Court of Ridelgo Coaunty approved then trassfer. of 6os.e
s1;4,OGG.G0 of these surplus funds to the interest ar,d sinkir.g
fund which had been established tc service the outstanding
b~zds'mentioned above.' yoii have asked tie following questions:
"No. 1. In view of the actions reflected
by the nir.utesof the Comzissioners Court,
ray t2.x~Ccmissior.ers Court legally use
sach surplus fur.ds 'for construction of
additional projects sityin Road District
No. 117
"NO. 2 * In the eve=* Ext it is peruiissible
to use surplus funds fc.r construction of ad-
ditiozal projects under these circumtacces,
is it permissible at &>&is point to +sa.csfer
msrreTyw?;ich has
Fretriouely been transferred
to Interest and Sirking~Fund back to the
3ond Fund for ccxstruction of +3x&e addf-
tional projec*%?"
tie Rs L. (Bob) LattirMZe# page 2 (WW-1084)
YOU have also asked if the answers to the above
questions would be different if all of the roads in question
were access roads and the City of Mercedes were to dedicate
these roads and turn them over to the County as County roads.
The road bonds which you have referred to are
lRidalgo County Road District No. 11 Road Bonds, Series 1959."
These bonds were issued under the authority of Section 52 of
Article III, Constitution of Texas, and Articles 752a. et
seq.. Vernon's Civil Statutes.
It is settled law that moneys in a sinking fund may
be used for no other purpose than,the one for which it was
created. Bexar Countv Rosoital District v. Jack B. Crosby,
327 S.W.Zd 445 (Tex.Sup.Ct. 1959)~, 30-A Tex.Jur. 700.
Article 839 of Vernon's Civil Statutes provides:
*No city'or county treasurer shall honor any draft upon the
interest and sinking fund provided for any of the bonds of
such city or county, nor pay out nor divert any of the same,
except for the purpose of paying the interest on such,bonds
or for redeeming the same, or for investment in such securi-
ties as may be provided by law." This article has been held
to be mandatory. J:R. Phillips Inv. Co.. v. Road District
No.18 of Limestone County, 172 S.W.2d 707 (Civ.App. 1943, er-
ror ref.).
Since Article 839, supra, and the cited cases
make it clear that moneys in the interest and sinking fur,d
may be used only for the purpose of paying the interest on
such bonds, or redeeming the same, or for investment in se-
curities as may be provided by law, your questions must be
answered in the negative. However, when all principal of and
interest on the bonds are fully paid, then surplus moneys in
the sinking fund may be used for the purposes authorized by
Article 752a, supra.
SUMWARY
The moneys in the interest and sinking
fund my not be used for additional pro-
jects since such moneys my be used only
Mr. R. L. (Bob) Lattimore, Page 3 (WW-1084)
for the purpose of paying the interest
on such bonds, or redeeming the same, or
for investment in securities as may be
provided by law. However, when all
principal of and interest on the bonds
are fully paid, then surplus moneys in
the sinking fund may be used for the
purposes authorized by Article 752a,
Vernon's Civil Statutes.
Very truly yours,
WILL WILSON
Attorney General of Texas
By 4iiiize* .
RTL-s Assistant
cc: Mr. Robert B. McLeaish. Jr.
Edinburg, Texas
APPROVED:
OPINZON COMMITTEE:
Howard W. Rays, Chairman
W. E. Allen
Robert Rowland
W. Ray Scruggs
REVIEWED FORTBEATTORNEYGENRRAL
By: Morgan Nesbitt