Untitled Texas Attorney General Opinion ( 1943 )

. .
ORNEY GENERAL
0wT~xAs
Ronorable Arthur B. Knickerbocker
Adjutant General of Texas
Austin, Texas
Dear Sir: Opinion No. o-569.5
Re: Right of Adjutant General
on behalf of State to
enter into lease rental
contract with the Texas
National Quard Armory
Board.
Reference is made to your letter of October 25, 1943,
to which you attached the proposed lease contract to be,ex-
ecuted by you, and'to your letter of November 5, 1943, sup-
plementing your request. Your letters are as follows:
"You are delivered herewith a proposed contract by
and between the Texas National Guard Armory Board as lessor,
and the State of Texas as lessee, to be executed by me.
"You will note that Paragraph 7 provides that the
lessee (State) promises to pay an installment of $6,200.00
on or before October 31, 1943, and 22 other installments of
$3,100.00 each, for 22 consecutive months, aggregating a
total of $74,400.00 for the biennum. The 48th Legislature
made no provision for the payment of this sum of money, or
any other amount by the Adjutant General.
"Will you kindly let me have the answers to the
following questions: %
"1. Do I have the legal right, as Adjutant General
of Texas, to bind the State of Texas, under the law, to pay
to the Texas National Quard Armory Board for the time con-
templated by the proposed contract the aforesaid sum of
money?
"You will note that Item 4, page 234, of the appro-
priation made by the 48th Legislature for the use and
benefit of the Texas National Guard Armory Board for each
- .
Honorable Arthur B. Knickerbocker - page 2 (O-5695)
year of the next biennium provides for $&O,OOO.OO to
pay rentals on property leased by said Board to the
State of Texas under authority of law.
"2 D Would the Texas National Guard Armory
Board have the right to pay the installment of$6,,200,00
on or before October 31, 1943, and 22 other installments
of $3,100,00 each, as contemplated by the above referred
to paragraph of the prop,osedcontract, out of the afore-
said appropriation made to the Armory Board.,for and in
behalf of the State of Texas, shou1.dIexecute the proposed
agreement as Adjutant General for the State of Texas.
“3 D In the event this proposed contract was made,
or any contract entered into by and,between the parties
proposed, would the lessee have the right to take the
proceeds of the lease and apply the same to the payment
of an indebtedness of any character, or would it be necessary
for the aforesaid Texas Nationa, Guard Armory Board and the
State, by the Adjutant General, to pay the proceeds of such
rental contract into the Treasury of the State of Texas, as
is generally provided by law."
Your supplemental inquiry of November 5 is as follows:
"Does the Adjutant General have any discretion as to
whether he will or will not sign a contract with the Armory
Board
a As a matter of fact?
I 1 As a matter of law?
b
"Will you kindly incorporate your reply to the above
inquiries in your answer to questions submitted on the afore-
said date?"
In connection with the three questions in your origin-
al letter which we will consider first in this opinion, the
provisions of Article 589013,Vernon's Annotated Civil Statutes
must be looked to in determining the authority of the Texas
National Guard Armory Board to sub-lease the property in
questionto the State and your authority to execute such lease
as agent of the State. The provisions of this Article
applicable to your questions are as follows:
"Section 2. The Board hereby created shall be and it
is hereby constituted a body politic and corporate. It
. .
Honorable Arthur B. Knickerbocker - page 3 10-5695)
shall succeed to the ownership of all property of, and all
lease and rental contracts entered into by, the Texas Nation-
al Guard Armory Board that was created by pri,orstatues and
all the obligations contracted or assumed by the last
mentioned Board with respect to any such property and con-
tracts shall be the obligations of the Board created by this
Act. With this exception, no obligation of said former
Board shall be binding upon the Board hereby created. It
shall be the duty of said Board to have charge of the ac-
quisition, construction, rental, control, maintenance and
operation of all Texas National Guard Armories, including
stables, garages, rifle ranges, hangers and all other proper-
ty and eauipment necessary or useful in connection therewith,
and the said Board shall possess all powers necessary and
convenient for the accomplishment of such duty, including,
but without being limited thereto, the following express
powers: . O e
"(f) To acquire, by gift or by purchase, for use as
building sites or for any other purposes deemed by said Board
to be neceqsary or desirable in connection with or for use
of units of the Texas National Guard, property of any and
every description, whether real, personal or mixed, incl,uding,
but without limitation on the foregoing, leasehcid estates in
real property, and hold, maintain, sub-lease, convey and ex-
change such property, in whole or in part, and/or to pledge
the rents, issues and profits thereof in whole or l.npart;
also, to acquire, by gift or purchase or by construction of
the same, furniture and equipment suitable for Armory purposes
and to hold, maintain, sub-lease, convey, 'and exchange such
furniture and equipment, in whole or in part.
"(g) To construct buildings on any of its real property,
whether held in fee simple or otherwise, and to furnish and
equip the same and to hold, manage and maintain all of said
property and to lease to the State of Texas, o D
"(h) From time to time, 3 borrow money, and to,i~ssue
and sell bonds, debentures and other evidences of indebted-
ness for the purpose of acquiring one or more building sites
and buildings, O O "and to be secured as follows: Sy a pledge
of, and payable solely from, the rents, issues and profits of
all of the property of the Board; or by a pledge of, and pay-
able solely from the rents, issues and profits, of the proper-
ty acquired or constructed by the Board, o D I
"(i) To execute and deliver leases, or sub-leases in
the cpsr or bui1dinp.qlr-ate? unon leraehold statutes n~cnuired
by the Board, demising and leasing to the State of Texas through
. .
Honorable Arthur B. Knickerbocker - page 4 (O-5695)
the Adjutant General, who shall execute the same for said
State, for such lawful term as may be determined by the
Board, any building or buildings and the equipment therein
and the site or sites therefor, to be used for Armory and
other purposes and to renew such leases 01"sub-leases from
time to time; provided, however, that if at any time the State
of Texas shall fail or refuse to pay the rental reserved in
any such lease or sub-lease, or shall fail or refuse to lease
or sub-lease, any such building and site, or to renew any
existing lease or sub-lease thereon at the rental provided
to be paid, then the Board shall have the power to lease or
sublease such building and equipment and the site therefor to
any person or entity and upon such terms as the Board may de-
termine. D . The annual rental (which may be made payable in
such installments as the Board shall determine) to be charged
the State of Texas for the use of such property leased OP sub-
leased to it by the Board shall be sufficient to provide for
the operation and maintenance of the property so leased or sub-
leased, to pay the interest on the bonds, debentures or other
evidences of indebtedness, if any, issued for the purpose of
acquiring, constructing or equiping such property to provide
for the retirement of such bonds, debentures or the other
evidences of indebtedness, if any, and the payment of the
expenses incident to the issuance therecf, as well as the
necessary and proper expenses of the Board not otherwise pro-
vided for."
The Act as amended by the 45th Iegislature in 193'7,was
brou$ht before the Supreme Court in the case of Texas National
Guard Armory Board vs, M&raw> 126 S. W. (2nd) 627,, SOP the
purpose of determining its constitutionality. The Armory
Board, by original mandamus proceedings, sought to compel the
Attorney General to approve the record concernirlgthe bonds
executed by the Board. In this case the Attorney General in
questioning the validity of the Act raised, among others, the
following objections.
"First, The following sub-paragraphs of section 2 of
said Act (Vernon's Annotated Civil Statutes, Article 58 Ob,
Section 2), are void for unconstitutionality in that (i3
authorizes the creation of a debt on behalf of the State in
violation of Section 49, Article III of the Constitution of
Texas (Vernon's Annotated Civil Statutes) and (g), (h),
and (i) taken together constitute the giving or lending and
a Dled&t? of the rrpait of the State in violation of Section 50
of said Article; and (i) in so far as it authorizes thenBoard to
fix and determine the rentals to be Daid bv the State is a dele-
ation of le islative authorit in violation of Section 1 of
f rticle 2 anj!iof Section 1 of 1rticle 3 of said Constitution.
”
Honorable Arthur B, Knickerbocker - page 5 (o-5695)
"Third, That the Board is without authority to
acquire OP hold sites for armoryI buildings or to pledge
the revenues from buildings ereci,edthereon if the title in
said Board is by way of a long term leave and not in fee
simple absolute,
"Fourth. That, whether or not the third proposition
be true, the Board is without authority to lease to the
State of Texas any buildings it may erect on the sites held
by the Board on long term lease since to do so would be a
subleasing not contemplated or authorized in said~Act.
"Fifth, That the leases of the Board to the State of
Texas, which the said Act contemplates to be made, can not be
validly executed by or in behalf of the State of Texas from
which it follows that any pledge such as is contained in the
said indenture, of the rents to be derived from leases to the
State would be void and without effect,"
Mrgr.
Justice Sharp wrote the majority opinion upholding
the validity of this Act and answered all questi.onsraised by
the Attorney General. The holding of the Court is found in
the following two paragraphs:
"This Act places the burden on the Board to do whatever
is necessary to carry out its objects and purposes, and such
contracts or leases are to be made Ithrough the Adjutant
eneral for such lawful terms as may be determined by the
is
oerde' The Board is authorized to acquire sites for armory
purposes, hy g*ft or purchase, and to pledge the rents or
profits thereof, and to execute bonds, debentures and other
evidence of indebtedness therefor, payable solely from the
rents, issues and profits thereof; and it is expressly agreed
that said bonds OP other evidences of indebtedness shall not
constitute nor be deemed a debt of the State of Texas, nor is
the credit of the State of Texas pledged for the payment .
thereof.
"In our opinion, this Act does not violate any of the
provisions of the Constitution, and we find adequate grounds
on which to base its validity."
In connection with your request, that part of the
appropriation act of the 48th Legislature to the Texas
Honorable Arthur B. Knickerbocker - page 6 (o-5695)
National Guard Armory Board, relating to the questions here,
is set out below:
"TEXAS NATIORAL GUARD ARMORY BOARD,
Beginning
Sept. 1, 1943 E$"$l, 1945
Maintenance and Miscellaneous:
4, Armory rentals, including
headquarters, offices and
motor vehicle storage; avail-
able either to pay rental
contracted to be paid by the
Armory Board, or to pay rentals
on property leased by said board to
the State of Texas under authoritv
of law _ _ _ _ _ _ _ _ _ - $40,000,00 $40,000,00"
We consider this appropriation to be applicable to
lease contracts such as is presented here. A total of forty
thousand ($40,000.00) dollars for each year of the beinnium
is made available as is stated in the Act:
.or to pay rentals on property leased bx said
board to-the State of Texas under authority of law.
In accordance with the provisions of Article 5890b,
it is the opinion of this department that the first two of
yaw? questions should be answered in the affirmative,
In response to your third question, we find that the
Act provides that the rents and profits derived from such
leases may be pledged to secure indebtedness incurred by
the board, and that they may be used to pay necessary ex-
penses not otherwise provided for, Therefore, it is our
opinion that the Armory Bond is to receive the money derived
from such rental contracts.
Having answered the o,uestionsin your letter of
October 25, 1943, in the affirmative, we will attempt to
answer the questions in your letter of November 5, 1943,
which are as follows:
"Does the Adjutant General have any discretion as
to whether he will or will not sign a contract with the
Armory Board
.
Honorable Arthur B. Knickerbocker - page 7 (o-5695)
II
a
b
As a matter of Fact?
As a matter of Law?
In the consideration of this question, we look to the
history of the Act creating the Texas National Guard Armory
Board.
During the early days of the present National Adminis-
tration, the Congress of the Unites States, while consider-
ing the Federal Emergency Relief Appropriation, was requested
by the War Department to "ear mark" a portion of their %nds
to be used for the construction of National Guard Armories
in the several States upon the advice and approval of the War
Department. The Texas allotment was tentatively set at six
million dollars. The Congress acted favorably on this re-
quest. The funds were to be used under the direction
of the Public Works Administration, whose regulations required
State sponsorship of Armory Projects, and grants to the
several States were contingent on a substantial contribution
of them.
Following this, the 44th Texas Legislature, Acts of
1935, created the Texas National Guard Armory Board, making
it the duty of the Board to have charge of the construction,
rental, control, maintenance and operation of all National
Guard Armories in Texas. The emergency clause of this Act,
after stating the availability of these Federal funds, said:
11. D .and the further fact that the State of Texas is
now paying annually one hundred thousand ($lOO,OOO.OO) dollars
or more for armory rentals; and the further fact that there
is at this time no specific board created by the laws of Texas
authorized to cooperate wit,hthe Federal Government for the
purpose of securing said allotment."
This Act was amended by the 45th Legislature, 1937,
Chapter 366, Page 740, and was codified in VernonPs Annotated
Civil Statutes as Article 589013.
The Act as amended has been quoted from freely in this
opinion. However, it should be noted that in Section 2 of the
Amendment the word "acquisition" was added. In addition to
the duty of having charge of the construction, control, etc.
of all armories, it was to have charge of the acquisition of
all Texas National Guard Armories.
In addition, as quoted from heretofore, it was autho,r-
lzed to borrow money, issue bonds and other forms of
Honorable Arthur B. Knickerbocker - Page 8 (C-5695)
indebtedness, pledging the rents and profits as security,
lease to the State, and other powers not necessary to
mention here.
The Act was again amended in 1939, but the changes
are not important in this discussion,
It was the Act as amended in 1937 that was before
the Supreme Court. This question presented here was not
specifically decided by the court i,nthe opini,onit rendered,
However, we have carefully examined the file of this case
in the Attorney Ceneralts office and when considering it
and the opinion of the court together, we find the question
was indirectly presented and inferentially included,in the
opinion.
The Texas National Guard Armory Board in its brief
and argument to the Supreme Court sai.din connection with
this power of the Board to lease the armories to t,heState:
"What is presented here is a statute which attempts
to authorize the creation of an obligation on the part of
the State and it must be determined whether or not such an
obligation is a debt prohibited by the Constifution.
"That the expense of renting armories is a current
expense of the State is indicated by the fac.tthat the
Constitution, Art. XVI, Set, 46, makes it the duty of the
Legislature toYprovide by law for organizing and disciplin-
ing the Militia of the State in such manner as they shall
deem expedient. I'
In response ,tothis proposition and argument, the
court said:
"Finally, we held that the bonds provided for by the
Act under consideration would create no debt against the
State of Texas; nor is'the credit of the State pledged for
the payment of such bonds, or interest thereon, or any part
thereof, Such bonds would be payable solely from the rents,
issues and profits to be derived from the operation or leas-
ing of the Armory buildings; unless the Legislature in the
exercise of its power and discretion, should see fit, when
making its biennium appropriation, to include therein a suf-
ficient sum of money to pay such bonds, or any part thereof.
"The act is also assailed on the ground that the
Legislature has exceeded its Constitutional authority by
Honorable Arthur B. Knickerbocker - page 9 (O-5695
‘1
the undertaking to delegate to the Board the power to fix
the rentals to be paid by the State, and that such effort
on the part of the Legilature to delegate such power is in
violation of Section 1 of Article 2 and Section 1, of Article
3, of the Constitution.
"The general rule prevails that, unless there is
express authority given in the Constitution, the power
of general legislation may not be delegated by the Legislature.
See 9 Tex. Jur., Sec. 68, p. 493. However there are many
powers that the Legislature may delegate to other bodies, in
many instances, where the Legislature cannot itself practical-
ly or efficiently perform the functions required, there can be
no doubt of its authority to designate some tribunal to per-
form the duties required to carrv out the ourposes of such
legislature. In this State the Legislature has created the
Railroad Commission, the Live Stock Commission, the Highway
Commission, and many other agencies; and the trend of modern
decisions is to uphold such laws."
It seems that the court has, at least by implication,
held that the statute imposed a duty on the Adjutant General
to execute such lease contracts, an agent of the State, as
are presented to him by the Board under the provisions of the
Statute.
In 1935, the Supreme Court in the case of Fort Worth
Cavalry Club v, Sheppard, 83 S. W. (2nd) 660, in discussing
the power of the Adjutant General to execute leases for
National Guard Armories held that under the laws of this
State the Adjutant General had no express right to execute
lease contracts, such right was only by implication, and that
right was found in the wording of the Appropriation Act mak-
ing funds available to his department for his purpose. There-
after in 1939, the 46th Legislature amended Article 5790, V.A.~
C.S., giving the Adjutant General the express right to execute
lease contracts for armories, but this power was limited as
follows~
11e D * .and the Adjutant General shall not lease or
sublease any property for armory purposes in OP about any
municipality from any person other than the Texas National
Guard Armory Board, so long as adeauate facilities for such
armory purposes in or about such municipality are available
for renting from the Texas National Guard Armory Board."
This amendment to Article 5790, when considered with
Honorable Arthur B. Knickerbocker - page 10 (o-5695)
Article 58901,seems conflicting, However, the evident pur-
pose was to strengthen Article 58gOb by giving the Adjutant
Qeneral the express right to execute leases with the Armory
Board, since the Supreme Court had held in the Fort Worth
Cavalry Club v. Sheppard, supra, that he had no express~power
under the statutes C.odo this. we take this position since
under the provision of Article 589Ob, the Texas National
Guard Armory Board is expressly created for the purpose of
acquiring, constructing , rending, controll'ingand maintain-
ing -
all National Guard Armories in the State of Texas,
the provisions in Article 589013,Section 2,
Sub-sec!Ezfj, wherein it is provided,
II
. 0 "that if at any time the State of Texas shall
fail or refuse to pay the rental reserved in such lease or
sublease, or shall fail or refuse to lease or sublease any
such building and site, or to renew any existing lease or
sublease thereon at the rental provided to be,paid. . D"
is applicable only to the Legislature of this State, and
does not vest any discretionary rights in the Adjutant
General.
Finally, we conclude that the Legislature intended
that the Armory Board be vested with power to do all that is
necessary to provide the State with National Guard Armories.
To further this purpose, the Board was authorized to borrow
money, to pledge the rents and profits to secure such
indebtedness, such profits to be derived by ren%ing Armories
to the State within the limitation of current appropriations
made to said Board, and the Adjutant General was designated
to act as the out the purposes intended. Fur,therthat the
Adjutant General in executing these lease contracts was to
perform a mere ministerial act, and was not vested with any
discretion in the matter.
Yours very truly
JWR:mb
ATTORNEY OENERAL OF TEXAS
APPROVEDDEC 2,1943
BY
Gerald C. Mann Jack W. Rowland
Attorney General of Texas Assistant
This Opinion Considered
in Limited Conference and
Approved.