Untitled Texas Attorney General Opinion ( 1946 )

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871
.OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Honorable Arthur B:\%nlokerbocker
Adjutant General of Texas
Austin, Texas
Opinion X0. O-7199
Be: Legal status Guard
Post Erohanges
Dear General:
Attaohed here
the Rar Asaete Colporat
sion, Fort 'ilorth, Texas
on the status of Texas
submit to this
e with the at-
ence referred to contains a
nsumer Goods Division,
xas State Guard Post Ex-
reek, Texas, in which Mr.
have been advised by our General
opinion from the Attorney General, or other com-
petent authority, that the State Guard Post XX-
changes are lnstrumentallties of the State.
*It was our thou&t that inasnuah as the Amy
Post Exahanges and the ETavyShip Serviae Stores
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Iron .’ Arthur B. ,ICniokerboaker - Page 2
were.eligIble to make purchases of surplus prop-
erty for subsequent resale, the same ruling would
apply to the State Guard Post Exohanges.
“Ii you will submit this question to the State
Adjutant, Brig dier General Arthur B. Kniokerbooker,
he oan request % ruling from the Attorney General,
and if favorable, we shall be glad to oomply with
your previous requsst for purohases of surplus
property,
n* + *n
In a subsequent letter you stats that “this Depart-
ment has Issued no Rules,~ Regulations, or’orders governing
Post Exohanges of the Texas State Guard.”
The Texas .State Guard,.*as the same is. organized and
functioning under our statutes, (Vernon’s Ann. CIv. Stat.,
Art. 5891e, as amended by the 48th Legislature, (1943)) Is
en Inatrumentelity or the State ot Texas. Sea. l(a) insofar
as pertinent ia as roilows:
Whenever any pert of the National Guard of
this State is in eotive Federal service, the
Governor is hereby authorized to organize and
maintain within this State during suoh period,
under suoh regulations as the Seoretary of ‘Nar
or the United States may presoribe ror thefr or-
ganization; standards of training, instruotion
and.dIsoIpline, suoh military roroes as the
Governor may deem neoessary to defend this
State. Suoh foroes shall be oomposed or or-
fioers appolnted and oommisaionsd and assigned
by the Governor OF under his authority, to hold
oifioe and essignmsnt during the pleesure of the
Governor, end suoh able-bodied male oitizens of
the State and suoh able-bodied residents of the
State vho shall have dealered their Intention
to beacme oltizens of the United States, as
shall volunteer for service therein, supple-
mented, If neoessarg, by men of the reserve
militia enrolled b drart or otherwise es pro-
vlded by law. * * g*
Seo6 2(a) deolares:
873 i
!
Hon. Arthur B. ,KnIokerbocker- Page 3
*The Governor la hereby authorized to pre-
aorlbe rules end regulations not inconsistent
with the provisions of this Aot governing the
enlistment, organization, edministratIon, unl-
forms equipment, maintenance, oomorand, training
and 6 i soipline or suoh roroes; provided auoh
rules end regul~tlone, In so far es he deema
preotloable end desirable, shall oonrorm to ex-
isting law governing and pertaining to the
Netlcnel Guard and the rules and regulations
promulgated thereundert*
Sea. 4 prescribes:
“For the use or suoh ioroes, the Governor is
hereby authorized to requisition rrom the Seore-
tery of War such arms and equipment as may be in
possession of, and oen be spared by, the War De-
partment; and ,to make available to suoh foroes the
feoIlIties of State armories end their equipment
and such other State premises and property es may
be available. Authorization is hereby provided
ior sohool authorities to permit the use oi school
buildings by the Texas Defense Guard; provided fur-
ther that County Commissioners Courts, oity euthori-
itlea, oommunltles, and civic and patriotlo organl-
zetions are empowered and authorized by this Aot
to provide runas, armories, equipment, material,
transportation, or other appropriate servioes or
raoIlities, to the Texas Derense Guerd.”
Seo. 5 contains the following:
“(a) Upon the request (i the Governor of
another State, the Governor of.thIs Stat9 may, In
his dfsoretion, order any portion oral1 or suoh
foroes to aaeist the military or police roroes of
such other State, who are eotually en,Seged Ins de-
fending suoh other State. Suoh foroes nay be ,re-
oalled by the Governor et his dIsoretlon.n
These provlalone or the atatute make olear the b gls-
letive intention to oreete and constitute such body a govern-
mental agency In the discharge of its authorized duties.
However, the status of Post Exohenges is quite 6
dirrerent question. Sane oourts have held that an Amy Post
874
Hon. Arthur B. Knickerbooksr - Page 4
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Exohenge is not an instrumentality or department or the
federal government, Peovle v. Standard Oil Co., 22 P. (26)
2 (Calir. sup. ct., 19331, reversed on other grounds, 291
lip”. 2421 Keene v. United States, 272 Fed. 577 (Clrc. Ct.
192111 end oases oited. H in Standard oil
CO.‘<. Johnson, 316 U. 3. 481 (l````r~he Supreme Court
of the United States held that an Ar~y Post Xxohange Is
an ana of the Government, an integral pert ot the ‘War De-
partment, and, as kuoh, partakes or whatever immunities
the War Department m%y~ have under ‘the Constitution and
federal .statutes. As shown by the rollowing language
quoted from its opinion In that case, the Supreme Court
based its deoision upon the federal statutes and Army Regu-
lations authorleing suoh post exohanges:
*SInoe I#10 or the CaliforniaAot made the tax
inapplloable *to any uotor vehlole fuel aold to
the government or the United States or any depart-
\ ment thereof, * it was necessary ror the Supreme
Court or Oalirornie to determine whether the lung-
Qage Of this %xempt$On inoluded Stir38to OBt ex-
changes. Ii the oourtls construotion or i 10 or
the Aot had been based purely on looal law, this
oonBtruction.wOu~d have been oonolualve, and we
should have to determine whethar the statute so
oonstrued and applied Is repugnant to the Federal
Constitution. But in dcalding that post exohenges
were not 'the government of the,UnitedStates or
any department thereof,’ the oourt did not rely upon
the law of f&lIfornia. On the contrary, It relied
upon its determination conoerningthe relationship
between post exchanges and the Government of the
United States, a relationship whioh la oontrolled
by federal law. Bor poat exahenaes overate under
reaulettons or the Secretary of #ar pursuant to
federal authority. These regulations and the DMLO-
tioes under them establish the relationship between
the post exohange and the United States Government,
and together with the relevant statutory and oon-
stitutlonal provisions from whloh they derive, errord
the data upon which the legal status or the wet
exohange may be determined. It waa upon a deter-
mination of a federal question, therefore, that the
Supreme Court of California rested Its conclusion
that, by B 10, sales to post exoh+.Ig88 W8r8 not
exempted from the tax. Since this determination
or a tederal question was by 6 state court, we are
not bound by it. We prooeed to oonsider whether
it is oorreot.
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8’75
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Hon. Arthur D. Knickerbocker - Page 5
*On July 25, 1895, the Seoretary of War, under
authority of Congressional enactments promulgated
regulations providing ror the establishment of
post exohanges. These regulations have sinoe been
amended from t $me to time and the exchange has be-
oo.me a regular feature of Army posts. That the es-
tablishment $Pd oontrol of post exahanges have
been in aoaordanoe with regulations rather than
speoifio statutory direotions does not alter their
status, for authorlzed.War Department regulations
have the roroe of law,
*Congressional recognition that the aotivitlea
of post exohanges are governmental has been fre-
quent. Slnoe ,1903, Congress has repeatedly made
su&antial appropriations to be expended under the
direotion of the Seoretary or War ror construotlon,
equipment ) end maintenenoe of suitable .buildings
for post exehangee. In 1933 and 1934, Congress
ordered certain moneys, derived from disbanded ex-
ohangesto be handed over to the Federal Treasury.
And in 1936, Congress gave oonsent to state taxa-
tion of gasoline sold by or through post exohanges,
when the gasoline was not for the exolusive use of
the United States.
“The oommanding offioer of an Arny Post, sub-
jeot to the regulations and the oommands of his own
superior orrfoers, has oomplete authority to eatab-
liah and maintain an exahange. He details a post
exohange orrfoer to manage its affairs. This Offioer
and the commanding offioers of the various company
units make up a oouncll which supervises exohange
aotivitles. None of these Officers reoeives any
compensation other than his regular salary. The
object of the exohangea is to provide convenient
and reliable sources where soldiers can obtain their
ordinary n8edS at the lowest possible priCeS. Sol-
diers, their families, and oivlllans employed on
military posts here and abroad can buy at exohanges.
The Government assumes ~none of the financial obli-
gations of the exchange. But government offioers,
under government regulations, handle and are rea-
ponsible for all funds of the exohange which are
obtained from the oompanies or detaohments 005QOSing
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876
Hon. Arthur B. Kniokerbooker - Page 6
I
its membership. Profits, ii any, do not go to
individuals. They are used to improve the soldiers*
meaa, to provide various types of reoreation, and
in general to add to the pleasure and comfort of
the troops.
"From a,.ll of this, we oonclude that post ex-
ohanges as nbw operated are arms of the Government
deemed by it asaantlal for the performanoe of govern-
mental funotions. They are integral parts of the
War Department, share in fulfilling the duties sn-
trusted to it, and partake of whatever immunities
It may*h$v$vunder the Constitution and,federal stat-
utes.
Your aupplamental letter states that you have
lsaued no rules, regulations, or orders govsrning,Post Rx-
ohanges. We have found no Texas statutes on the subjeot.
lharetore, we must assume tha,t any enterprises operating
under that name are doing so without the sanotion or authority
or the State or Taxas. Zven assuming that the general stat-
utes setting up the Texas Stats Guard impliedly authorize
the Governor, through the Adjutant General of Tsxas, to
establish post .exohanges as instrumentalities of the State
(whloh question ws do not hare deolde), wo understand that
no suah action has been taken, that no regulations have
been issued by the Governor or the Adjutant General pertain-
ing to post exohangea, that the Leglalature has not reoog-
nlzed post exohanges as State aotivities, and that rvhatever
aotfon has been taken towards their astablishment has been
purely voluntary aotion on the part of individual offloera
and members of looal units of the Texas State Guard. There-
rore, having neither statutes nor regulations affording data
upon whioh the legal status of suoh post exohanges may be
determined, we must oonoluds that they are not instrumen-
talities or agenoiea of the State. of Taxes.
Very truly yours
ATTCRNEYGEIERALOF TZXAS
BY @ed$&
Assistant
RAL?jt
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