              OFFICE   OF THE A-l-l-ORNEY    GENERAL   OF TEXAS
                                   AUSTIN




j@. D. C. Greer


Dear   sir:




          We acknowledge reoelpt af yo
upon the folkd.ng facttar




                                              filed with the Dopart-
                                              totallng 4226,432.&L
                                      tiy h86 dd88a   the cmi8-
                                      sremmion ral&.+sesof osrtpln
                                      th8 above mmiint aggreg8tlag
                                00.00, vhlah he till sut’ren&r to
                                e Departaent vlll.pay to the aon-
                                 th.   diff~~~8   b4JtV*8n th6i tt.l88l
                        mimalnlng uwelecrsed alelm, oondi-
                       Deparhaant can pay ana the cantraator
       accept such paylrrent
                           vlthout re~udioe to the right OS
       th63oontractor to presetcuteL m olalm agalmt the De-
       partluentfor aaaltlonal ooIAp8MatlQn, graving out of
       the oonstruction OS tlm projecrt,erd wlthmt pnjudiecr
       to the rights of the Dsparbwnt undm the oontraot to
       lnterpoce ang UeSenmem to Qua payment to muoh ~l.alm
Beno~able D. c. meer,     gage 2



    whloh it nov has. The claim referred to is ID the
    approximate amount ot $590,000.00 Sor eddltlonal oom-
    peneation, filed by the contra&or upon ccmpletlon OS
    the pro&at.
              "In this oonnootlon you are referred to Section
    33 Of the Contra&       SpOifiWitiOn8, which reeds as SOI-
    lovat
         "'9~ or nbout the flrrt day of the iuonththe En&-
    neer vi11 ertiuste the valw of materlalr delivered et
    rite end vork done. Y1thS.nfifteen deya thereafter
    ninety per 08nt of the value thue detenelned 1888 PI%-
    tiow ?Rp8Pte shall be paid to the Contractor.
         "'When the emount8 80 re8erv.d rhall equal five
    per oeat of tke total OS the oontpaot pins the prob-
    able mount of any liquideted damages apparently ao-
    amaulated monthly estimates thereaSter vlll be paid in
    sull. The rohedule pa-teemto be emplajed In making
    partial payment8 8hall be determined W the Eaglnee~.
          "IIf &tring the progresr OS the vork it appear8
     that the Contractor's bills for material* and labor are
    not being paid, the Oimer e&all have the right to vfth-
    hold Srcn8the Contrastor monthly papaents 8ufSfulaat
    8~~8 to protett ItaelS sgsLa8t ell lon8es SroanpQa8ible
    lz$i~bgz    to 8pplp the oata 8~  to the payment of
               . Payseatr of monthly s*tlpster UFO agreed
    not to be aa admlr8ion by the Ovaer tht the work 18
    a-    or that it8 qwntity or qw.lity I8 cutisfactory,
    nor a releare of betaContrastor fron msponrlbllity  in
    reapeat thereof, but 8wh release 8ball ooaur only with
    maal paymeat.
              @uotia
                   the Cont*actQr fail to eon&et8 the work
     vithin the t3.m epeeilied, the Owner ahall not be ob-
     liged to make any payments on monthly or partial esti-
     8mtes after the datee 8peolffea for oorapletlonwtll
     the Contractor r$all deliver to the I&n&.neerthe vrit-
     ten eaa*ent of the Cozxtreotor~8Bwety eovaring every
     suakipartial payment peraittfng *u&i ~ymenta to be
     ma& tithout aSSeating the validltb of th@ bond.
          "Wptm ooraplstlonof the QntlrQ work of the oma-
     treat and aooeptanoe thereof, in vAt3.q by the CRmer,
Honorable D. 0. &em-,   Page 3


     k&b ranalder due the Contraotor shall be paid, vhich
     shall be the total cmtpensatlon less ~MVIQW  payments.
         "'The total compensation shall be dete,zM.nedby
    the final aotual number OS 8OeOptable units classIfYed
    In the proposal and bid r-t the unft prices and lump
    prices bid, plus any allovanoe or added payments, less
    an.yamounts of liquidated damages OP other deductions.
             "Before the final ssyment is made, the Contractor
     shall   ahov the Ovner satI*Saatory evlcbnoe that all Just
    liens, olslms aad d8manda OS his employees, and of par-
    tie* from uhcm msterIal* used in the eonatructlonof the
    vork may have been pumhared or procured, are Sully
    rat18SIedd,and that the struoture Is fully relsared from
    all such llena, claim and demands.
         "'The aoceptance by the Cantraotor of payment of
    the final estlmatr shall operate as and shall be a re-
    lease to the Owner, the Engi.neerand all agents thereoi,
    frcm all Olaims or llablllty ua&er tb# QontraOt for
    everythIng done or Suralmhed, either relating to the
    vork tlw uader the oontraot or Sor w    aot or neglect
    of 8ald Dvner, Engineer, or any of their agents or em-
    ployees related to or Oonuected vith the Oontraot.
         "%Q paymeats, either partial or f-1,    are to be
    redo for nny nmterla2.whioh is to be tued Sor Salswork
    0~ #ant, but payment Is to be made only Sar materlalr
    uhloh are left permanemtly in the fltt.lshetl
                                               structure
    aad fom a part of It.!
         "The Hlghvay cQlmsis*1onhas e.spre**edits willlag-
    nose to pay to the aontzwtor thedlffexwnce bstussn the
    SInal esttnvte aud the unreleased Labor urd material-
    mom elalms, as requested by the ttQnt.motOr,if it Oaa
    be done vlthout prejudice to the rights of either party,
    as SbQV8 stated.
         "Will you please adviue me If, in your ~pinian, the
    Hlghvay Cml*sIon,   under the above qwtsd eeetioa of
    the Coatract SwelfLeatiQns and vlthout prejudloe to the
    rlghta of either party to the uontraot, may pay to the
    aontractor the dlfSerenc8 betvesn the emount of mosey
    Cue the contraotor under the PInal eatlmate eMx the labor
fIon@rableD. C. Qreer, Page 4


       materirlmerm claims rema-     unpeld and urmelea8ed.
       Also, will you plee8e advi8e me if It till be neoee-
       aory to obtain the aomant. of the contractor13 sure-
       ty to any much arrangement if, in your opinion, it
       OaA be made.”
          %‘heoontraat in question WAS sxeouted unber authority
of Houee i-3111
              9. Forty-third Leginleture of Texao, Fourth Celled
sesuicm, Chnpter 32, Page 78. said bLl1 agsc%flaally authorize8
the St&e Highway Commlrsion to &wisp, supervire sad aarutruat
m to oontraot for the derigning, 8UperV18ioIiand the COA8tE'Ua-
tlan of suah bridge8 and the approaeher thereta.
          It 18 fUl%~UAttsl that til hW8 lfhbh  8Ub818t at t&O
tlae and plaoe of the maw    of a aontract and where it Ls to
be periarwd,  enter into and forn 6 part of it, a8 if they oera
expre88ly referred to or incorporated in its temao. Winder
Brothem vs. Sterling et al, 12 S. W. (2d) 127.
               A8     noted   in   JOSW   l%QllWt,   01&l    iA   the 8M) Of $2Z!6,432.-
gibave been fil~vitht~~~~DepartPrent~~lnst              the oontrao-
   . Artlole 5160, 8Upm. a8 ameuadadby tb Forty-first     tigi8b-
ttwe, page 481, Chapter 226, seation 1, pmouldes In part ~8 Sollovar

               'Provided further that after completion and %a-
       ceptanoa af eo@leted project al;lMonet due eentrae-
       tar under mid oantraat aha= be hold by the State
       or it8 oouAti68 or 8ohuol dkstrfotll OF other mibdl-
       ri8lon8    thereof or any maalolpallty unt1.leueh a time
       that aat%efeetarj eoldmoe 16 sukultted and affldavita
       m&e by the contraotor that all just     billa for labor
       and material wader th&8 aontraot ha8 b8eA paid ln full
       by the aomtraotor."
          In the ease of Republic RatLoml l32uikaad Trust Company
V8.   I&b8Sr. 8.
             & IAS. CO., 68 Fed. (2d) 448, the Clmult Court of
Appeals, speaking through Justiae SSbley# in dZsaussiag 8aid Arti-
ale 5160, saldr
            *The Act Of 1929 + * l 8melidedthe bond etatuts
       md dealt only vlth the final paymnt, requlrin& it
       to be vlthheld Abt in part to ooveg any porttoular
       claln, but eAtire until 8 raquired affidavit la nab.'
               Artlale 66741x,supm,            pmvfdas      In part $6 follovs~
ganozlsbleD. C. Qmer,              Page   5

              'And fipsl mgaQnt&Un     AOtbeaadb   until it
         la                     of money dw for sag labor,
            8hOVn that all 81a118
         wtiFial8 or Oquip?iOAtfUrA%.rhedfor the pUrpo8e Of
         such iarprovement8made under Amy suoh w&root   have
         been paid."
                Ill   the   W8Q Of wb8tOA     t WOrka V8. &JAM~      57 3. x.
(2d) 258, the aowt            held that Artlele 5160 and Artlule   &67&n vere
in par1 materio.
          'PhQeffeot of tba8e statute8, themfam,      i8 that U~OA
the aompletlon and acoeptanoe of a pub110 work woh a8 highway
OP br5dge OaAstrUctioA, the f-1   payment dw tha crontraatorfor
mob vowk 8hal.l not be made until lfflda vit8   and other 8ati8faa-
tory proof 18 made by the oontreutor that all Obipr8 have bWA
p*ia*

          !l%e vriter ha8 been lnSoxwed by the State IUghway Depart-
wnt that on %ovembsr 23, 1939, the aontraator wa8 notified Jm
aitlng, a8 provided in the aontraet, that the projeot had been
oompleted and wae thereby aaaepted.
                YOU are thOrOfOlr8adV180d that it i8 the OpiAbbA Of thi8
department that the State %t.ghvsyCCQIU~~SI~OA
                                             irrnot authoF~6ed to
pay ovor to the oontractor the tllfforenoebetween the emaunt due
and     the   FwalAhg       lanreloa8od   alalm.

          IA vi4811 0r our an8ver a8 above 8fA@d,     it 18 not w008-
mwy for ,us: to tmmfer your qwstiw     a8 to whether or not it la
AaaaraarJ.~toobtain the aaAs:en~t af the aoAtroetQr’8    8urety mdor
any 8wh arrangemeat.



                                                      YQum veFy truly
