Case Information
*1 . . 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 *2 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 the improvements contemplated and prior to the for 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 bond issues and the issuance of bonds for the cost of the for the election 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. 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 *3 Hon. John B. Shook, page
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 court. is requested by the said ‘commissioners
“3. To cause to be assessed, levied and collected, such taxes upon the real and personal property owned in the necessary county as it shall deem _. * 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.” 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 tuberculosis for patients suffering from
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, tom submit 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 It was doctrine in this State, and has been from an early time. ;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 .NN;p;Q.et 1 Court of sloyd County, et al. v.
al., 142 S.W. 37; Allen v... Abernathy,. et al., Sometime after these decisions, the’ ,Leglslature author- ized the issuance of, bonds for coluthousesj jails,~public roads, etc. in the case of Lasater v. Lo,pez, 217 S.W. 373,
Later, 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 thority enactments which gave the, commissioners! court au-
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 is drawn with great clarity. refused. this distinction 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 *6 Hon. John R. Shook, page
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 City of Lubbock v. Gee. L. Simpson,
of the authorizlng,law. 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 25 S,.W.(,2d) 34-Tex.Jur., School District 672; Henrietta In- dependent School District VI Garrett & Company, 25 S.W.(2d) 317. .,
. . .
Hon. John R. shook, page
We have been unable to find any statutory require- ments setting out the method for the sale pf bonds other than 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 wit R in the discretion is our opinion that it 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 GENERAL OF TEXAS By /s/ Claud 0. Boothman Claud 0. Boothman, Assistant APPROVED JAN 10, 1946
/s/ Csrlos C. Ashley
FIRST ASSISTANT ATTORNEY GEEERAL
APPROVED: fX&EI~~OI?C~TEE
BY:
COB:EPrwb