Untitled Texas Attorney General Opinion ( 1975 )

TIHIEAITORNEYGENERAI~
OF' TEXAS
AUSTIN. TgxAs 78711
July 1. 1975
The Honorable Patrick C. Batchelor Opinion No. H- 638
Criminal District Attorney
Navar ro County Re: May a person elected city
Corsicana. Texas 75110 commissioner remain pecuniarily
interested in a contract previously
entered into with the city whereby
the city sells water to him for re-
sale to rural customers?
Dear Mr. Batchelor:
You have requested our opinion regarding whether an officer of a city
may purchase water from the city for further distribution to rural clients
when the contract involved was entered into before he took office.
Article 373 of the former Penal Code was repealed by Acts 1973, 63rd
Wit., ch. 399, p. 991, § 3(a), eff. .January 1, 1974. We presume your question
concerns a fact situation which arose prior to the effective date of the repeal.
Article 373 provided in part:
If any officer of any county, or of any city or town
. . . shall become interested . . . in the purchase
or sale of anything made for o’r on account of such
county, city or town, . . , he shall be fined not less
than fifty nor more than five hundred dollars.
The penal code article, prior to its repeal, was long complemented by
a civil statute, article 988, V. T. C. S . , which ,remains in effect. Article 988
reads in part:
No member of the city council, or any other officer of
the corporation, shall be directly or indirectly interested
in any work, business or contract, the expense, price or
consideration of which is paid from the city treasury, or by
an assessment levied by an ordinance or resolution of the
city council, nor be the surety of any peraon having a con-
tract, work or business with said city, for the performance
of which security may be required, nor be the surety on the
official bond of any city officer.
p. 2807
The Honorable Patrick C. Batchelor - Page 2 (H-638)
Both statutes were discussed by the court in City of Edinburg v. Ellis,
59 S. W. Zd 99, 100 (Tex. Comm. 1933):
It is the~getieral, iule that,municipal..coritracts in
which office’+8 or kmployeis of tlie: city have a personal
interest are void . . . This rule is held to apply to mem-
bers of the city council. It has long been the public policy,
of the state to prohibit officers of a city from having a pei-
sonal pecuniary, interest in contracts with the city and.this
policy is specifically &pressed in both the penal and civil
statutes. See article 373, Penal Code, and article 988, R.
C. S. 1925. Article 373 provides that if an officer of,a city
or town shall become in any manner pecuniarily interested
in any contracts made by such city or town, or shall be-
come interested in the purchase or sale of anything made
for or on account of such city or town, he shall be subject
to a fine. Article 988 also provides that no member of the
city council or any other officer of a corporation shall be
directly or indirectly interested in any contract, considera-
tion of which is paid from the city treasury.
The foregoing rule rests upon sound public policy. Its
object is to insure to the.city strict fidelity upon the part of
those who represent it and manage its affairs. The rule
prohibiting public officers from being interested in public con-
tracts should be scrupulously enforced.
A public official must avoid a position where his private pecuniary in-
terest might conflict with his public duty. In explaining why a cotipty judge could
not receive payment for acting as attor+y,,for the county to enforce a contract
and collect indebtedness’ due, the Supreme Court of Texas observed in Ehlinger
v. Clark, 8 S. W. 2d 666,674 (Tex. Sup. 1928), that the county judge, as a member
of the commissioners court was charged with insisting that contractors with the
county properly perform their contracts, and “if, after an attorney was employed,
it should be found that the attorney was not performing his duties in a competent or
faithful manner, it would become the duty of the commissioner,@’ court, presided
over by the county judge, to relieve such attorney of his duty and employ another. ”
Similarly, in the situation your office has described, it could become the
duty of the city commission to demand that the person contracting with the city
(the city commissioner) perform his contractual obligations to the city in a manner
other than he was willing or able to do. In such an event the involved commissioner
could find his private pecuniary interests and his public duty to be in conflict. Or
his attitude toward the water policy of the city could be affected by his peculiar
personal pecuniary interest.
p; 2808
The Honorable Patrick C. Batchelor. -,.Page 3 (H-638)
The court in Meyers v. Walker, 276 S.W. 305 (Tex. Civ. App. --
Eastland 1925, no writ) applied the predecessors of the foregoing statutes
to a contract of the City of Lamesa, and in doing so observed that contracts
in their nature calculated to influence the actions of public officers - and the
effect of which is to influence them one way or the other - are against public
policy. We believe article 988, V. T. C. S., condemns such pecuniary influences
and interests whether they arise from contracts which were originally valid but
have become the source of potential conflict, or arise from those which were in-
valid in their inception because of an existing potential conflict. The pernicious
effect is the same. As noted in Delta Electr% Construction Co. V. City of San
Antonio, 437 S.W.2d 602, 609 (Tex. Civ. App. -- San Antonio 1969, writ ref.,
n. r. e. 7 . llriti is the existence of such interest which is decisive and not the
actual effect or influence, if any, .of the ‘interest . “See Knippa v.
Iron Works, 66 S.W. 322 (Tex. Civ. App. 1902, no writ); Bexar County v. H
. . 2d 126 (Tex. Civ.App. -- San Antonio 1964, wirt ref’d. n,
Former penal code article 373 spoke prospectively: “If any officer . . .
shall become . . . interested . . . “Article 988, V. T. C. S., speaks in the present.
“No members. . . shall be directly or indirectly interested. . . . ” The first is
to be strictly construed as penal statute while a rule of liberal constuction will
be applied to the second in order to effect its remedial purpose. Attorney General
Opinion M-714 (1970).
Because the contract arose prior to the election of the’city commissioner,
we do not believe former’article 373 would be applicable to the situation described,
but in our opinion, the continued pecuniary interest of the commissioner in the
contract after he took office would bring the matter within the proscription of
article 988, V. T. C. S. --And see V. T. C.S., articles 5973, 5974;Penal Code $ 39. 01.
SUMMARY
It is a violation of article 988, V. T. C. S., but not
former penal code article 373, for a person elected
city commissioner to remain pecuniarily ‘interested
in a contract previously entered into by him with the
city whereby the city sells water to him ,for resale
to rural customers.
Very truly yours,
A
Attorney General of Texas
p. 2809
The Honoiable Patrick C. Batchelor - Page 4 (H-638)
Opinion Committee
jad
p, 2810