Untitled Texas Attorney General Opinion ( 1959 )

Honorable William J. Burke Opinion No. WW-646
Executive Director
State Board of Control Re: Questions relating
Austin, Texas to Engineering Fee
for Design of Filter
Systems for Swimming
Pools in three State
Parks for the State
Dear Mr. Burke: Parka Board.
You have requested an opinion of this office in
regard to questions you have predicated upon the following
facts:
On or about October 1, 1957, the State Parks Board
requested the Board of Control to select an architect and/or
engineer to design swimming pool filter systems for the
Abilene, Bastrop and Lockhart State Parks.
Roger L. Erickson, consulting engineer and architect,
was selected and a contract entered Into whereby he was to
prepare plans and specifications for the filter systems.
Upon completion of plans and specifications for the filter
systems, Mr.,Erickson received partial payment for his
services at the rate provided for in his contract. Payment
was based upon vouchers which showed on their face an esti-
mated cost of $30,200 for the three filter systems.
Bids were called for by the Board of Control and were
opened and tabulated on August 20, 1958. The low bids re-
ceived for the filter systems, based on Mr. Erickson's plans
and specifications, totaled $70,471.00. The appropriation
available to the State Parks Board was $32,194.00, therefore,
the bids were rejected by the Board of Control.
After the bids were rejected, Mr. Erickson forwarded
to the Board of Control, at the request of the Board, his
final pencil estimates which totaled $77,035.00 for the three
filter systems.
Honorable William J. Burke, page 2 (``-646)
After rejection of the bids, Mr. Eriokson received
warrants from the Comptroller of Public Accounts for
additional engineering fees calculated on the basis of the
lowest bona fide bid received. The vouchers upon which
these warrants were Issued were approved by the State Parka
Board, but were not approved by the Board of Control. Mr.
Erickson still holds these warrants at this time.
The questions you submit are as follows:
"1. In view of the fact that the
lowest bona fide bid received would over-
run the available funds and, therefore,
no award could be made, la an engineering
fee based on the lowest bona fide bid re-
ceived a legal obligation accruing to an
engineer and payable on that basis?
"2. In view of the fact that Mr.
Erickson now has in his possession war-
rants issued payable to him that were
based upon the lowest bona fide bida re-
ceived, should Mr. Erickson now return
those warrants to the Comptroller for
cancellation?"
In considering your first question, we look to the
appropriation bill by whioh the expenditures for filter
systems were authorized. In the General and Special Laws,
55th Legislature, Regular Seaaion, 1957, House Bill No.
133, we quote from the appropriations to the State Parks
Board line items Nos. 25, 29, and 57:
"25. Abilene State Park For the years ending
Aug. 31,1g58 Aug.31,1959
b. Improvements, includ-
ing 15 concrete Picnic
units, and filter eys-
ternfor swimming pool ......$9.894 $1,000
"29. Bastrop State Park
b, Improvements, includ-
ing filter system for
swimming pool, repair
of 11 cabins, rest
rooma, tables and
grill8 q....................$9,800 $3,765
Honorable William J. Burke, page 3 (``-646)
For the years ending
“57. Lockhart State Park Aug.31,1958 Aug.31,1959
b. Improvementa,
Including con-
struction of
filter and cir-
culating system
for pool, garage
and storeroom,
fencing of swimm-
ing pool area, 10
picnic tables and
grills, and the
construction and
equipping of play-
ground area. ........ $12,500 $5,625”
It is well settled in Texas, that the contract of
an agent or agency of the State made In excess of an
amount appropriated by the Legislature is void and no sub-
sequent action of the Legislature may validate a claim
arising thereunder. Such a claim, not having been pro-
vided for by pre-existing law, is prohibited by Section 44
of Article III of the Constitution of Texas. Ft. Worth
Calvary Club, Inc. v. Sheppard, Comptroller, 125 Tex. 339,
83 S.W.2d bb0 (1935); Nichols v. State, 32 S.W. 452 (Tex.
Civ.App. 1895, error ref.) The bids, based upon the plans
and specifications of Mr. &.ckson, were called for, re-
ceived, opened and tabulated prior to the time the 1959
appropriation became available. Therefore, the total sum
available under pre-existing law at all times here in ques-
tion was $32,1'#.00, and a contract for the expenditure of
a sum in excess of this amount would be invalid,
Mr. Erickson's contract, called an "Engineering
Agreement" by the parties thereto, provided in part as
follows:
“4. Paym``",sheeP````~t~et~a``ea``~:~oe``,
on account of
subject to the provisions of Article 3 hereof:
"Upon completion and approval by the Owner
of preliminar studies, a sum equal to twenty
per cent (20%T of the basic rate computed upon,
a reasonable estimated cost;
Honorable William J. Burke, page 4 (ww-646)
"Upon completion and approval by the
Owner of specifications and general working,
drawings, a sum sufficient to increase the
payments to fifty per cent (50s) of the basic
rate based on a reasonable estimated cost;
"Upon awarding of the contract, or if
no contract is awarded within ten (10) days
of opening of bids, a sum sufficient to in-
crease the payments to seventy-five per cent
(75%) of the basic fee, based on the lowest
bona fide bid. (Emphasis ours)
"It is understood that the above-mentioned
estimated cost shall, in no event, exceed the
amount of the appropriation (from whatever
source) for the work."
Mr. Erickson bases his claim for compensation on
the above underlined clause of his contract in spite of
the fact that the lowest bona fide bid exceeded the
appropriation available and no contract for the filter
systems could be entered into.
In considering the legal consequences of the
contract and the facts presented, we must of necessity
be governed by the basic fact that Mr. Erickson was not
dealing with an individual but with an agency of the
State which was limited in its authority to make ex-
penditures.
In Volume 6, Corpus Juris Secundum, Architects,
Section 14, page 310, it is stated as a general rule:
"Where plans are required for a
building not to aost more than a certain
SW, or are accepted on condition that
it can be erected for a given amount,
there can be no recovery by the architect
unless the building can be erected for
the sum named, or at least for a sum sub-
stantially within the limit, unless the
increased cost is due to special circum-
stances, or to change of p;ans by the
owner's directions. (Rnphasis ours)
E2nmersonv. Kneezell,'66 S.W. 551 (Tex.Civ.
Dudley v. Strain, 130 S.W. 778
tF%.%?&p. 1910); Capitol Hotel Co., Inc.
.. ,
Honorable William J. Burke, page 5 (~-646)
et al v. Rittenberry, 41 S.W.2d 697 (Tex.
c A 1931 W it dismissed); Stratton v
C:E; %*Detroit,r246 Mich. 139, 224 N.W. b49
(1929).
Quoting further from the same source and page,
we find:
"Where the architect knows or should
know of the authorized 11 it the rule
applies, although he is dtal;ng with a
legislative committee or with a municipar-
s (Emphasis ours) Clas v. State, 196
Wis. 430, 220 N.W. 185 (1928) Brickle v.
England, 25 Del. 16, 78 Atl. i38 (1910).
The Wisconsin Supreme Court, in Clas v. State, 220
y;, ;85 (19281, a case where the bids based on the archi-
13plans exceeded the appropriated amount, denied that
the architect was entitled to any compensation and, on page
185, had this to say about the limiting nature of an appro-
priated sum on a state agency and those dealing therewith:
II
. . . the expenditure of the public
moneys . . . is strictly limited to the
sums appropriated by the Legislature for
a given purpose. . . . it is incumbent
not only upon the department to take cog-
nizance thereof and to act in accordance
therewith, but every individual or cor-
poration transacting business with the
department is legally governed thereby,
whether a contract provides for it or not."
(Emphasis ours)
Regardless of whether or not Mr. Erickqon had actual
knowledge of the amount of the appropriation for the filter
systems involved, such appropriation8 are a matter of public
record and the authority OE the agencies with which he was
dealing was limited thereby, therefore, he was bound to know
or should have ascertained the amount of such appropriation.
Cooper v. City of Derby 83 Conn. 40, 75 A. 140 (1910);
Xorgan & Slattery v. Ciiy of New York, 114 A.D. 555,
100 N.Y S btl (190b) Pierce v. Board of Education, 125
Misc. 5&-% N Y Su p; 788 ffi d 1 21b App.Div.
787, 214 N.Y. supp: 90E [1926j;'Cla?t. Gate, 196 Wis.
430, 220 N.W. 185 (1928); See Bernstein et al v. City of
Honorable William J. Burke, page 6 (``-646)
?%%i?- 143 App.Div.
New York,Dickey, 74 Tex.
543,
61,127
11 N.Y.Sup
S.W. 10t9 987
(1889).
(1911);
Indeed the last paragraph of that portion of Mr.
Erickson's contract quoted above apprises him of the
fact that there is some appropriated amount limiting the
project. The burden was on him to find out what it was.
In view of the foregoing authorities, it Is our
opinion that where an architect contracts with an agency
of the State to furnish plans and specifications for some
objective for which the amount to be expended Is governed
by .a Legislative appropriation, the architect shall be
deemed to have knowledge of the amount of the appropria-
tion and the law will imply, as a condition in his con-
tract, that the objective be capable of accomplishment
within the appropriated amount by use of the plans and
specifications furnished or else he is not entitled to
compensation for his work. We do not mean to say that
there would not be Instances where the architect would
be allowed to make minor revisions to bring the plans
and specifications within the appropriated amount and thus
fulfill his contract, but where this can not be done, the
architect has not complied with the contract. Such is the
situation in the case at hand.
Mr. Erickson furnished plans and specifications
upon which the lowest bids received totaled $70,471.00.
The amount appropriated was less than one-half this amount,
to-wit
Mr *
Ericke3;'194.00. Indeed the pencil estimates made by
at some date unknown, but which were not given
to-the Board'of Control until after bids were received, came
to a total of $77,035.00. The bids were well within the
pencil estimates of Mr. Erickson, but were far in excess of
the appropriation to the State Parks Board for the filter
systems; so far in excess that minor revisions could not
bring the plans and specifications within the appropriated
funds. Therefore, it is our opinion, that since the lowest
bona fide bid received was greatly in excess of the appro-
priation available and no legal contract could be let, Mr.
Erickson did not fulfill his contract and no legal obliga-
tion based on the lowest bona fide bid accrued to him.
Consequently, your first question is respectfully answered
in the negative.
The answer to your second question follows as a
matter of course from our answer to your first question.
Since Mr. Erickson did not fulfill the condition in his
Honorable William J. Burke, page 7 (``-646)
contract implied by law, no legal obligation arose
thereunder. Therefore, in our opinion, the warrants
now,in the possession of Mr. Erickson should be re-
turned to the Comptroller for cancellation since they
were not issued in payment of a legal claim or obliga-
tion. Your second question is, therefore, answered in
the affirmative.
SUMMARY
Where an architect is employed to
prepare plans and specifications
for filter systems for swimming
pools located in three State parks,
he Is required by law to know or
ascertain the amount appropriated
to the State Parks Board for that
purpose. Where the lowest bona
fide bid, based upon the plans and
specifications submitted, was
$70,471.00 and the amount of the
appropriation to the State Parks
Board was $32,19&.00, no legal
contract for the filter systems
could be entered into and the archi-
tect Is not entitled to a fee based
on the lowest bona fide bid under
these circumstances. Warrants now
in the possession of the architect
for an engineering fee based on a
low bona fide bid which exceeded the
appropriation are not in payment of a
legal obligation and should be re-
turned to the Comptroller for cancella-
tion.
Yours very truly,
WILL WILSON
Attorney General of Texas
wos:zt:rm
Honorable William J. Burke, page 8 (``-646)
APPROVED:
OPINION COMMITTEE
Geo. P. Blackburn, Chalrman
Robert T. Lewis
C. Dean Davis
J,.Arthur Sandlln
Henry Go.draswell
RFXIEWED FOR THE ATTORNEY GENERAL
BY: W, V. Geppert