Case Information
*1 Xoh. T, B. Warden, Me&r
State Board of Control .Austin, Texas Ilo: Whether the Board of
"' 6 Control is authorized under Artiols 5160, : v. c. so, to aooept a .'~ .( payment bona in lieu
of wsatisraotorg evi- denoe" that all bills for labor and materials " fuaished the oontno- tor.have been paid+ '~ D&r Sir:
The basis of your request ?or an'epinion is an Interpretation of the last paragraph of Article 5160, ~’ T. 0, 9.) whioh proridsa as follons:. :. ' rurther thst arter oomple- .' vroviaea
: tlon and aooeptsnca of completed project all moneys due. contractor under da con- track shall be hold the State or its ocuntles or school dlstrlote or other sub- division thereof or any municipality un- til such a time that satisfaotory evidence is submitted and affidavits made by the oontractor thst all just bills for labor an% material under this contract haa been paid in rull by the oontmo$or~” . . . :.. ., Acoordia to your letter, you construe the pro-
vision for "satisfactory evidencea to require %ceiptea furnished by the oontraotor to show that the ma- bills” terials and labor have been rully paid for. You further say that this interpretation results in hardship upon numerous ,contrsotors because of their inability to iur- nish receipted bills for every item pur0bssea whioh goeg into every project. You give as an example of the heraship rsrerrea to, the roilowing set cb facts:
WA contractor purohaaes and pays far The concrete made' a oar load of cement. . .
from this oar load of cement &y go into as many projeots as there are sacks of oement in the car lead, and it would thers- fore follow that the contractor would be raqnimd to have as many reoeipts showin& 'that the oar load of cement had been paid for. The efieot .ot this requirement has 0clusea many competent contractors to re- fuso to bid on any State project.* In oonnection with the above quoted statute and related feats, you ask two questions: (1) Whether it would be possibla to take a payment bona executed by a contractor as prinaipal ana a solvent surety company to.proteot labor and material men after acceptance of the completed projeot. If the payment bona is possible you ask us to prepare the necessary form for such bond, ,(2)’ In the event the use of a payment bond is an im- possibility, what is the meaning of the term "satisfao- tory evidencan as used in the quoted part or the Arti-’ 0187 determine whether in any case
We shall first the Pinal payment of funds may be made to the oontmo- tor without his submitting satisfactory evidence and his making affidavits that all past bills for labor and 'material under the contraat hnve been paid in full by the oontmator.
In addition to orrering proteotion to furnish- ers of labor and materials, this statute has been held in E&public National Bank & Trust Company v. Massaohu- setta Banking & Trust Company, 68 P (2%) k&5, Frank- lin Broa. v. Standard Mfg. Company, 78 S. W. (26) 29&, error dismissed, to operate as additional security for the surety on the performanoa bond. In each oase the public body (being the State in the latter case) was held liable to the surety on the perrormanoa bond for payments made by it on labor and material claims where final payment was made by the publio body to the con- tractor prior to the time allowed for filing such claims under Artiole 5160 and without requiring the oontra'otor to furnish the required evidence and affidavits Of sat- isfaotion of suoh bills. It thereiore appears that the Board of Control would be acting at its and the State's peril in releasing the funds under any circumstances other than as authorized Article 5160. This it is not authorized to do. We do not mean to hold that a payment bona may not also be accepted; but we find no *3 authority to require it, nor to accept it in lieu of‘the requirements of Article 5160.
Since we have concluded that a payment bond cannot be substituted for the prooedure under Artiale 51.60, this brings us to your question as to the mean- ing of the term "satiafaotory evidenoew as used in the quoted section of Article 5160. In Volume 1 of Jones Ccmmentaries on J8videnoe, pages 25 ana 26, wsatisfao- tory evidencew is aerinea as rollows:
11 . . D By satisraotory evidence, whioh~ is sometimes called suffioient evidsnoe, is intended that amount of prool.whioh ordinari- ly satisries an unprejudiced mind beyond rea- sonable doubt. The circumstances which will amount to this degree of proof can never be. previously aarinea; the only legal test or which they are susceptible is their suiii- oianoy to satisry the mind and conscience of a cOtmuon man; and so to convince him that he would venture to act upon that conviction, in matters oi the highest concern and impor- tanoe to his own interest e e .
"That 8via8nce is deemed satisractory which ordinarily produces moral oertainty or conviotion in an unprejudiced tina . . ." While most of the authorities cited speak of "satisfactory evidence" in connection with evidence in- troduced in litigation, nevertheless, the definitions .are to our minds consistent with the standard which
should be applied by you in connection with your res- ponsibilities under Article 5160. This same meaning has been expressed many times by the Courts. For a series of such delinitions, sea Words and Phrases, Vol* ume 38, page 266, et seq.
The meaning of the term "satisfsctory svi-
dence* is broad in its scope, and as stated "can never be previously aerined,w It does not maan on8 specirio kind 0r evidence as applied to a psrtioular situat%on; it can mean other kinds of evidence -- any that "sat- isfies an unprejudiced mind beyond reasonable doubt." Applying these rules to the example stated in your let- ter, "setisfaotory evidanoe" as used in the statute can- not be aOnrinad to a single construction as "receipted
E&n. T. B. Warden, Page Ic, V-321, ' bills." That is straining the rule -- rendering it too
inflexible to embrace such situations as you have out- lined. This is not to say that receipted bills am not satisfaotory evidence. It is, or should be in most in- stances. But where oiroumstanoes am different and un- usual, other evidenoe aould be just as desirable and work no hardship upon one who bears the burden of proof. The rule is not made to lax the requirements, but is laid down as a Klexible guide under which, with proper and reasonable application render varying circumstances, justice oan be obtained,
Under the two aeoisions first referred to here- in, the funds required to be held constitnte a trust fund and the liability of the State arises upon a misapplica- tion of such funda, oontmry to the statute. since the term *satisieotory eviaenoe * is not susceptible of exaot aerinition, it necessarily follows that the Board or Con- trol must exercise sound discretion in each situation as it arises.
1. A payment bond executed by a oon- tractor operating under the provisions of Artiale 5160, V. C. S., msy not be 6Ocepted by the Board or Control in lieu of satisiao- tory aridence and affidavits that all just bills for labor and materials hsve been paid. *Satisfactory evidence" of such pey- 2. ment is such evidenos as convinoas the Boara of Control that the obligations for all labor ana material have been satisfied by the oon- tractor.
Yours very truly ATTOBWBY GIIIWRAL OF TEXAS APPROVED: .:. jz& t&i?i?~;y p-d. Gzy+@J Charles Bi Crenshaw
ATTORNEY GENRRAL.
Assistant.
CRC: jmo