Untitled Texas Attorney General Opinion ( 1945 )

. .
Grover Sellers Arisaxw ILI. -B-EXAS
.J
Hon. John R. Shook Opinion No. O-6962
Criminal District Attorney Re: Legality of proposed
Bexar County issuance of time warrants
San Antonio, Texas from the Permanent Improve-
ment Fund in payment for
Attention Mr. S. Benton Davies new construction and improve-
ment, of certain existing fa-
cilities at the Robert B.
Dear Sir: Green Hospital.
We .acknowledge receipt of your opinicn request of
recent date and quote ~from your letter as ,follows:
“We are enclosing herein a copy of a letter
submitted to us by Hon. Charles W. Anderson, County
Judge of Bexar County, Texas, on the 26th day of
November of this year,, which letter carried with it
a copy of a contract between the Bexar County Commis-
sioners’ Court and Dewar, Robertson ,& Pancoast, et al,
bond houses, of date November 7, A.D.,‘,1945.
“We call your attention particularly to that
part of the County Judge’s letter which reads as
follows:
“‘The Commissioners’ Court on today passed an
order authorizing end instructing me to request the
Criminal District Attorney of Bexar County to ask
the Attorney General of Texas for an opinion as to
the legality and validity of ‘said Permanent Improve-
ment Fund Time Warrants proposed to be issued by
Bexar County,; the proceeds of which are to be used
in payment ?for such new construction and improve-’
ment of certain existing facilities at said Robert
B. Green Hospital as well as for the purchase of
certain new equipment at said, institution.‘.
“In accordance with this request above quoted
and for the reason that when the Refunding Bonds are
issued to take up the Time Warrants proposed to be
issued it will become the duty of the Attorney Gen-
eral to approve such issues, we are forwarding these
communications to you with the request that you
Hon. John R. Shook, page 2 (o-6962)
render us an opinion answering the questions
propounded in Judge Anderson’s letter.
“In addition to the matter referred to in
Judge. Anderson’s letter, we desire to ask the
following questions:
“I. Can the Commissioners Court legally
enter into a contract with the bonding companies
prior to the time any contract has been, let for
the improvements contemplated and prior to the
time Time Warrants are issued in liquidation of
the indebtedness of the County for the perform-
ance of the coqtract for improvements; and, can
the County at this time and prior to the issuance
of said warrants bind itself to refund the Time
Warrants into bonds?
“II. Does the contract here in question cre-
ate any liability on the part of the County to
the bonding companies?
l’Your usual prompt attentions to matters sub-,
mitted to you will be greatly apprehi&ted.~8
In ,1913,the Legislature of Texas authorized the es-
tablishment of county hospitals and provided for the election
for bond issues and the issuance of bonds for the cost of the
erection of same and provided revenues for maintaining and man-
aging said hospitals.
This Act has been brought forward in Vernon’s Anno-
tated civil Statutes as Articles 4478-4493.
Article 4478, reads as follows:
“The commissioners court, of any county shall
have power to establish a county hospital and to
enlarge any existing hospitals for the care and
treatment of persons suffering from any illness,
dlsease or injury, subject to the provisions of
this chapter. At intervals of not less than twelve
months, ten per cent of the qualified property tax
paying voters of a county may petition such court
to provide for the establishing or enlarging of a
county hospital, in which event said court within
the time designated in such petition shall submit
to such voters at a special or regular election the
P
Hon. John B. Shook, page 3 (o-6962)
proposition of issuing bonds. in such aggre-
gate amount as may be designated ,+i said
petition for the e’stablishing or enlarging of
such hospital. Whenever ‘any ,such proposit$on’
shall receive a madority of the vo,tes of the
qualified property tax payers voting ,at such
election, said commissioners court shall es-
tablish and maintain such hospital and shall~
have the following powers:
“1.. To purchase and lease real property
therefor,~ or acquire suchreal property,,and
easements’therein, by condemnation proceedings.,
“2. To purchase or erect all necessary
buildings, make all necessary improvements and
repairs and alter any existing buildings, for
~the use of said hospital-. The plans for such
erection, alteration, or repair shall first b’e
approved by the State Health officer, if his
approval is requested by the said ‘commissioners
court.
“3. To cause to be assessed, levied and
collected, such taxes upon the real and personal
property owned in _.the *county as it shall deem
necessary to provlae the funds for the mainten-
ance thereof, and for all other necessary expen-
ditures therefor.
“4. To issue county bonds to provide funds
for the establishing, enlarging and equipping of
said hospital, and for all other necessary perma-
nent improvements in connection therewith; to
do all other things that may be ,required by law
in order to render said bonds valid.
“5. To appoint a board of managers for said
hospital.
“6. To accept and hold in trust for the
county, any grant or devise of land, or any gift
or bequest of money or other personal property
or any donation to be applied, principal or income
or both, for the benefit of said hospital, and ap-
ply the same in accordance with the terms .of the
gift.”
Article 4493 reads as follows:
Hon. John FL Shook, page 4 (C-6962)
"Where no county hospital is now provided,for
the purpose aforesai,d, or where such provision is
inadequate,'the commissioners court of each county
which may&a ve a city with a population of'more
than ten thousand'persons, within six months from
the time when such city shall have attained such
population, such population to be ascertained by
such court in such manner as may be determined upon
resolution thereof, shall provide for the erection
of such county hospital or hospitals as may be ne-
cessary for that purpose., and provide therein a
room or rooms, or ward or wards for the care of con-
finement cases, and a room or rooms or ward or wards
for the temporary care of persons suffering from
mental or nervous disease, and also make provision
in separate buildings for patients suffering from
tuberculosis and other comnmniaable diseases, and
from time to time add thereto accommodations suffi-
cient to take care of the patients of the county.
This time may be extended by the State Board of
Health for good cause shown. Unless adequate funds
for the building of said hospital can be derived
from current funds of the county available for such
purpose, issuance of county warrantsaud script,
the commissioners aourt shall submit,, either at a
,special. election called for the purpose, or at a
regular election, the proposition of the issuance
of county bonds for the purpose of building such
hospital. If the proposition shall fail to receive
a majority vote at such election said court may be
required thereafter at intervals of .not less than
twelve months, upon petition of ten ‘per cent of the
qualified voters of said county, tomsubmit said
proposition until same shall receive the requisite
vote authorizing the issuance of the bonds."
In,the case of Seydler et al,. v. Border, et sl., 115
S.W.(2d) 702,, the Galveston Cour i? of Civil Appeals held that Ar-
title 4478 was constitutional and that same authorized counties
to issue bonds for the construction and equipment of county hos-
pitals. The court else held that the authorization of bonds
for the construction and maintenance of hospitals by county units
for care of the s&ok constituted a "public purpose" as distin-
guished from a “private purpose.” The courts of this State have
../ repeatedly held that a county cannot .issue bonds unless such
power is expressly conferred by law. Such is the established
doctrine in this State, and has been from an early time. It was
;i
affirmed in the original appeal of San Patricia County v. McClane,
44 Tex. 392, and reiterated in Robison v. Breedlove, 61 Tex. 316;
‘\~ also, in Lasater v. Lopez, 217 S.W. 376.
/ /~
Hon. John R. Shook, page 5 (o-6962)
Prior to 1903 there, wasno provision in .our statutes
for the issuance of bonds end the courts held that counties had
the implied authority to issue time warrants for the, construc-
tion of permanent improvements. Straton v., Commissioners1 Court
of Kinney County, 137 S.W. 1170,; Cowan et al. v.,Dupree, et al.,
139 S.W. 887; Commissioners 1 Court of sloyd County, et al. v.
.NN;p;Q.et al., 142 S.W. 37; Allen v... Abernathy,. et al., 151
Sometime after these decisions, the’ ,Leglslature author-
ized the issuance of, bonds for coluthousesj jails,~public roads,
etc.
Later, in the case of Lasater v. Lo,pez, 217 S.W. 373,
the Supreme Court held, that it was in the, discretion of the Com-
missioners~ Court’ whether~ they issue time warr,ants or bonds for
the construction of t,hese permanent imppove’ments,? In this opin-
ion, Judge Phillips deals at 1,ength with then Constitution and
legislative enactments which gave the, commissioners! court au-
thority to issue both warrants and bonds.
.,
In the more recent ,case of Adams v. McGill,`` 146 S.W.
(2d) 332, In which this department intervened, the court held
that under a statute authorizing a county to provide for. annual
exhibition of horticultural and agricultural products but not
expressly confirming the power to issue obligations to pay for
improvements constructed for such, purpose, the county’ had the
implied power to issue time warrants payable over a-period of
years for improvements of a Livestock and.Agricultural Ruilding.
We quote from the opinion as follows:
l1 ***IA distinction is drawn between borrowing
money and obtaining property or l,abor on credit, it
being everywhere held that a municipal corporation has
an implied power to use its credit f.or the. accomplish-
ment of any object for which it is authorized by law
to expend money. I
“In the case of Bridgers v. C~ity of .Lampasas,
Tex. Civ. App., 249 S.W. 1081. 1084. writ of error
refused. this distinction is drawn with great clarity.
The opi&on is .by that great jurist,, Judge, Key. In
the opini~on this proposition, taken from appellant’,.?
brief, was approvedr. ‘It is generally oonceded and well
established that municipal corporations~ are invested by
implication with the power to aontr~act on the general
credit of the city with respect, to such: improvements was
they are authorized to make.1 The sootion we have re-
ferred to above in Ruling Case Law was quoted from with
Hon. John R. Shook, page 6 (o-6962)
approval in the course of the opinion. The same set-
tion is cited in the case of Clark v. W. L. Pearson
& Co.+, 121 Tex. :34;39 S, W. 2d 2+31, as sustaining
the following proposition: 'The 'rule' is well estab-
lished that municipal corporations are investe~d at
least with an implied or Qicidenfal power to contract
on the general credit of the city with respect to
such improvements as they are authorized by law to
make.' Among the numerous cases cited by Judge Sharp
in support of the proposition is the, case of Lasater
V. Lopez, 110 Tex. 17~9,189, 217,s. jl.373.
"It is true that the foregoing two Texas cases
we have cited and briefly discussed,involve'the power
of cities. The case of Lasater v. Lopez,',supra, cited
by Judge Sharp, involves a county. Butwe see no'valid
reason why the reasoning doesnot apply tothe action
of a county acting within' the orbit of its authority
conferred by law. ***II
It is our understanding that the Robert B. Green Hos-
pital is a county hospital and has been duly and legally estab-
lished under the authority of Articles 4478-4493,Revised Civil
Statutes.
In view of the foregoing, it is'the opinion of this
department that, Bexar C,ounty subject to the express restrictions
imposed by the Constitution and general laws haspower to issue
time warrants in,payment for 'new construction and improvements
on the existing facilities at the Robert B. Green Hospital and
equipping same, provided that the applicable regulations relat-
ing to the issuance of such warrants be observed.
In this opinion we are not,passing on the question
of whether 'or not ,time~warrants may.be issued for the purpose of
establishing' and constructing a county hospital.
In reply to your last two questions, we have carefully
examined the contract submitted and on its face it appears to be
a legal and binding contract.
Bonds must be sold In,accordance with the provisions
of the authorizlng,law. City of Lubbock v. Gee. L. Simpson, 31
s. w. (2d) 665. Valid contracts for the sale and purchase of
bonds may be enforced when the prescribed conditions,have been
complied with. Dalla~s'Trust & Savings Bank v. Wortham Independent
School District 25 S,.W.(,2d) 174, 34-Tex.Jur., 672; Henrietta In-
dependent School District VI Garrett & Company, 25 S.W.(2d) 317.
.,
. . .
Hon. John R. shook, page 7 (o-6962)
We have been unable to find any statutory require-
ments setting out the method for the sale pf bonds other than
Article 708, Vernon's Annotated Civil Statutes, which reads
as follawsr
"Bonds shall never be sold for less than their
par value and accrued interest exclusive of commis-
sions."
In the absence of s eaific statutory provision, it
is our opinion that it is wit Rin the discretion of the Commis-
sionersg Court as to when and what type contract they enter
'into in regard to the refunding of time warrants subject to the
right of referendum as prescribed by law.
Trusting this answers your questions, we are
Yours very truly
ATTORNEY
GENERALOF TEXAS
By /s/ Claud 0. Boothman
Claud 0. Boothman, Assistant
APPROVED JAN 10, 1946
/s/ Csrlos C. Ashley
FIRST ASSISTANTATTORNEYGEEERAL
APPROVED:fX&EI``OI?C~TEE
BY: 3
COB:EPrwb