Honorable Fred Erisman
Criminal District  Attorney
Longview, Texas
                                                                     .
Dear Sir:                     Attention:    Ur. Mike Anglin
                              Opinion No. O-2880
                              Re: Are the relief     orders issued
                                    in the months of July, August,
                                    and September, when no cur-
                                    rent funds were available    nor
                                    any provlsign  for their pay-
                                    ment made by the commissioners'
                                    court, a legal obligation    of
                                    the county?
         Your recent request for an opinion of this Depart-
ment upon the above stated question has been received.
            We quote from your letter      as follows:
           "Your opinion    is requested    upon the following
    question:

           'During the last fiscal   year, the Commissioners1
    Court of Gregg County made an appropriation          in its
    budget for the relief     of paupers.    This approprlatlon
    was exhausted, and thereafter     the Commissioners'
    Court declared an emergency amending its budget, and
    set aside another appropriation       for the relief    of
    paupers.     At the time this second appropriation        was
    made, a written contract was given to various mer-
    chants in the County whereln they agreed to supply
    groceries    and merchandise upon relief    orders given
    them by certain designated persons, which persons
    were dlslgnated    by the Commissioners'    Court as County
    Relief Workers.     When this second appropriation
    was exhausted, the workers continued to issue relief
    orders, which relief     orders were honored by the
    merchants, and some three thousand dollars        worth of
    groceries    were charged to Gregg County during the
    months of July, August, and September, 1940, upon
    these relief    orders.
            "The appropriations   maae for    this   purpose   had
                                                                   ..




Honorable   Fred Erisman,   page 2         o-2880


    been expended, and there were no current funds with
    which to pay them. At the beginning of the new fls-
    cal year, October 1, 1940, these relief  orders were
    ordered paid by the Commissioners’ Court, and re-
    fused by the Auditor.
          “Are the relief orders issued in the months of
    July, August, and September, when no current funds
    were available  nor any provisfon  for their payment
    made by the CommlsslonerstCourt,   a lsgal obligation
    gf the County?
           “It appears that no notice was given the mer-
    chants that the money had been expended, or at least
    that they were lead to believe,    that they would get
    their money from Gregg County when they Issued these
    rsllef    ardors. Such belief  on the part of the mer-
    chants may have arisen by reason of the fact that
    they had signed a COntraCt agreeing to furnish Gregg
    County with groceries   upon the recsipt   of relief orders
    issued by authorized uorkers.
           “Article  11, Soctian 7, Constitution      of the
    State of Texas, prohibits     the creation    of a debt
    unlsss provision    is made at the tims of creating      the
    same for levying and collecting      a sufficient    tax to
    pay the lnterost    thereon and provide at least 2s as
    a sinking fund.     Oti oourts have uniformly held that
    the creation    of a ‘debt” within ths meaning of the
    constitution,    must be such a debt that is not payable
    out of funds on hand, or funds which the party to the
    contract reasonably contemplate will be under the
    Immediate control     of the Commlssloners’ Court.
           “However, in the present instance,  the merchants
     furnished the groceries  which were accepted by the
     county and fed to Its indlgont citizens,   and the
     County having accepted the beneflts   of the contract,
     Lt would seem unjust that it should so accept them
     and not pay for them.
          “Leading case on this proposition Is Sluder v.
     City of San Antonio, by the Commission of Appeals,
     2 s. W. 2d, p. 841, wherein many cases are cited,
     announcing the principle  as follows:
           “‘The rule thus firmly established   by the Courts
     of this State rests upon the obligation    of a munlci-
     palitg to do justice   when it has received money, pro-
     P-Q,     or services of another.  Under such clrcum-
Honorable   Fred Erlsman,   page 3          o-2080



    stances,  the plainest  prlnclple    of justice  require
    that it should not be permitted      to receive and re-
    taln the benefits   of a contract    without paying the
    reasonable value thereof.     This   principle,  we think,
    is supported by the great weight      oY authority.'
          "To the same effect are West Audit Company v.
    Yoakum County, Commission of Appeals, 35 S.W. 26,
    page 404; Austin Brothers v. Montague County et al.,
    Commission of Appeals, 10 S.W. 26, page 718; Colonial
    Trust Company v. Hill County, Commission of Appeals,
    27 S.W. 2d, p. 144, and many other cases too num-
    erous to cite.
           "It is our opinion that the merchants cannot
    rely upon their original   contract,  but that since
    the County has accepted the benefits    of the contract,
    even though no provision   was made for its payment,
    there 1s an implied contract    and the County is es-
    topped from denying its liability,    and the claim of
    the various merchants for merchandise sold, delivered,
    and consumed by reason of their contract with Gregg
    County are legal claims against the Courity and that
    upon proof of the reasonable    value of the goods de-
    livered   to Gregg County, the Auditor should approve
    said claims."
           Article  2351, Vernon's Annotated Civil    Statutes,
specifying   certain powers of the commissioners'     courts
provides in part that:
          "Each commissioners'   court shall:  . . . ..(II)
    Provide for the support of paupers and such idiots
    and lunatics   as cannot be admitted into the lunatic
    asylum, residents   of their County who are unable to
    support themselves.    By the term resident as used
    herein is meant a person who has been a bona fide
    inhabitant   of the county not less than six months
    and of the State not less than one year. . . . . .I'
          The case of Galveston County v. Gresham (Clv. App.)
220 S.W. 560, among other things,   holds in effect, that
where the evidence shows that the commissioners'     court has
acted with knowledge of the circumstances   and that the
other party to the alleged contract   has innocently   placed
himself in a situation  which will cause him loss in case
the contract  is not sustained,  it may be concluded that
the county is bound thereby.
            The case of Germo Mfg. Co. v. Coleman County (Civ.
Honorable   Fred Brlsman,   page 4             o- 2880


App.) 184 S.W. 1063, holds in effect  that the ratification
or estoppel must be based upon action on the part of the
commissioners8 court.

           The case of Sluder v. City of San Antonio, supra,
among other things, holds that where a county has received
benefits   under a contract which is illegal     in that it has
not been made in conformity wlththe Constitution        or statutes,
liability   is held to exist,    also by reasonof implied con-
tract to pay the reasonable value of the benefits        which the
county may have received.       This case further holds In ef-
fect that where the contract      is void and no recovery is
permitted thereon, the courts hold that common honesty and
fair dealing requires      that a county should not be permltted
to receive    the benefits   of money, property,   or services
without paying just compensation therefor.
           In the case of Cochran County v. West Audit Co.,
10 S.W. (2d) 229, it was said irregularities           in making a
contract   employing audltors to audit the books and accounts
of the county would not defeat recovery on a quantum merult.
Where warrants are held void as being in contravention              of
the Constitution,   it Is nevertheless     erroneous to sustain
a general demurrer to a petition     alleging      acceptance of ths
goods for which the warrants were issued, ana the benefits
therefrom retained without offering      restitution       thereof.
A recovery thereon Is not in any sense a recognition             of the
validity   of the contract which the fundamental law has
made void, but rather the recovery is upon that implication
of law which imposes a duty and legal liability            to pay the
reasonable   value of the property or services         of another,
accepted and retained under circumstances          justifying    the          ‘~..
assumptlon that there was an intention        to pay.
          The case of the City of Waco v. Murray, 137 S.W.
(2d) 1062, holds in effect      that where a municipal corpora-
tion receives    the benefits   of a contract which is illegal
because It was not made ln,conformitg       with the statutory            '
or charter provlslons,      the city will be held liable   on an
implied contract for the reasonable value of the benefits
received  by it.
            In the above mentioned case the city raised the
proposition    in which it contended that since the budget
adopted for the fiscal     year in question, did not provide
for the compensation claimed by Murray, therefore,     he
(Murray) could not lawfully receive or recover compensa-
tion for the services     rendered by him. We quote from
this case as follows:
Honorable   Fred Erlsman,     page 5             O-2880


           "The city presents a proposition            in which
    it contends that since,        in the budget adopted
    for the fiscal     year 1934--1935,       a salary     of
    $60 a month or an aggregate of $720 per year
    was provided for 'building          engineer and elevator
    operator',    appellee could not, under the facts
    hereinbefore     stated,   lavfully     receive    or recover
    compensation for the services           rendered by him
    In operating the furnace and regulating               the
    radiators.     The city of Waco was et all times
    here under consideration        operated by a city
    manager under provisions        prescribing       his pow-
    ers and duty.       City Charter (1930) Sec. 15,
    Art. 61. Under the provisions            of said article,
    he was authorizedto        employ and remove all
    subordinate    employees without notice.             Appel-
    lee was such an employee.           Regardless of the
    rather vague and technical          descrlptlon      of the
    nature of his employment, as shown by the ex-
    cept from the budget hereinbefore            quoted, the
    uncontradicted      testimony showed, as herein-
    before stated, that his employment, so long as
    the same should continue,         was to operate the
    elevator   dally, with the possible           exception
    of Sundays and holidays,         and to operate the
    furnace and regulate       the radiators       if and when
    necessary to do so during the winter season.
    This arrangement seems to have continued with-
     out discussion     or controversy      for more than
     four years.     When his customary compensation
     for his services      in operating the furnace and
    regulating    the radiators      was not paid during
     the fall of 1934 as had been theretofore              done,
     he called the matter to the attention              of the
     city manager, who advised him that he would
     get the matter straightened          out and corrected.
    Appellee,    relying on such assurance,           continued
     to perform his duties in that capacity and the
     city continued to accept and enjoy the benefits
     of the same until the then current six months
     period was completed.        Incidentally,       there was
     no proof that the then current budget was reg-
     ularly prepared and adopted as provided by
     Vernon's Ann. Clv. St. art. 68ga, subdivisions
     13 to 16, inclusive.        Neither was there any
     proof of its contents other than the brief ex-
     cerpt above quoted.        Appellee's     suit, however,
     is upon an implied contract and not upon a for-
     mal contract based on that budget.              The city
     manager had authority       to discharge       him at any
                                                                        .




Honorable   Fred Erlsman, page 6             o-2880


    time and he had a right to quit at the end of
    any month. Apparently,    the city manager pre-
    ferred to have him continue to perform the
    onerous extra duties incident    to the winter
    season.   It is shown wlthout contradiction
    that on two separate occasions    he promised
    appellee that he would take the matter up and
    get it straightened  out and corrected,   and
    that appellee relied  on such assurances.
           "Our courts have held in similar cases
    that regardless    of strict   legality   or form-
    ality,   when a municipal corporation      receives
    the beneflts   of a contract     illegal  because
    not made in conformity with statutory         or charter
    provisions,   such corporation      will be held liable
    on an implied contract for the reasonable value
    of the bsneflts   received   by it.      *****ii. "

          For your Information,  we call   your attention         to
the fact that this department has heretofore    hold that         the
fiscal  year begins January l,and.ends   December 31, in
Opinions Nos. O-2324 and O-2478, and we enclose copies            of
these opinions herewith.
           In view of the above stated facts and the fore-
going authorities,   you are respectfully  advised that it is
the opinion of this Department that the claims of the var-
ious merchants for merchandise sold, delivered,-and    con-
sumed by reason of their contract with Gregg County are
legal claims against the county and that upon proof of the
reasonable   value of the goods delivered  to said county the
auditor should approve said claims.
           Trusting   that the foregoing   fully   answers your ln-
qulry,   we are
                                       Yours very truly
                                    ATTORNEY GENERALOF TEXAS
                                        By s/Ardell    Wllllams
AW:BBB:wc                                    Ardell    Williams
                                                      Assistant
APPROVED DEC 13, 1940
s/Gerald C. Mann
ATTORNEY GSNBRALOF TEXAS
Approved Opinion Committee By s/BWB Chairman
