          TECEATT~~WNEY'GENERAL
                      OFTEXAS




                          August 27, 1963


Mr. Harry B. Kelton, Director
Texas National Guard Armorv Board
West Austin Station
Austin 31, Texas                 Opinion No. C- 128

                                 Re:   Validity of contract between
                                       Air National Guard and City
Dear Mr. Kelton:                       of Grand Prairie.
          In your request for an opinion dated August 2, 1963,   you
stated the following facts:
         "Under the date of March 23, 1961, the Texas
    National Guard Armory Board, acting through the
    Air Natlonal'Guard, entered into a Contract, . . .
    with the City of Grand Prairie, Texas. This Con-
    tract provided, In part, that the Air National Guard
    would construct an eight Inch cast Iron water main
    within the City of Grand Prairie, the purposes of
    which were to provide better service to the Air
    National Guard facility at Hensley Field and to lm-
    prove the distribution system of the City of Grand
    Prairie for the benefit of its citizens. The Con-
    tract further provided that the City of Grand Prairie
    would reimburse the Air National Guard the cost of
    this extension by giving the Hensley Field facility
    a 40% credit on all water bills until the entire
    cost has been repaid.
         Pursuant to this Contract, the Air National
    Guard expended the sum of approximately $21,000.
    When demand was made by the Air National Guard for
    credit on its first water bill, the officials of
    the City of Grand Prairie advised representatives
    of the Guard that, in their opinion, the Contract
    was illegal and void. Their reasons for taking
    this position are set forth In a letter dated April


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Mr. Harry B. Kelton, page 2 (C- 128 )


     15, 1963, copy of which Is attached and marked Ex-
     hibit "B".
          We would appreciate your advice as to whether
     or not the Contract Is bInding upon the city of
     Grand Prairie."
          From additional Information given to this office, It
Is apparently contended that an April 7, 1959 amendment to the
Charter of the City of Grand Pralrle prohibits the city from enter-
ing Into such a contract of reimbursement. The applicable portion
of the Charter, which we have, reads as follows:
         "Henceforth, the City Commission shall not
    authorize any contract of reimbursement with any
    owner or developer for any of the costs or expen-
    ses Incident to the development within any sub-
    division, Including, but not exclusively, the
    costs and expenses-of the construction of streets,
    curbs, gutters, sidewalks, approaches, alleys,
    drainage systems, water mains or sewer mains that
    are required by the City to adequately serve such
    subdivision."'
          The above quoted portion of the Charter is by its own
terms applicable only to subdivisions. In Texas the term "sub-
division" is a word of art and by statute has a definite meaning.
(Article 974 (a), Vernon's Civil Statutes). Hensley Field, a
military establishment, Is certainly not a subdivision of a city
within the accepted meaning of a subdivision.
          Nor do we know of any constitutional or statutory pro-
visions which would prohibit an incorporated city, town or village
from entering into such a contract of reimbursement. Such relmburse-
ment contracts are frequently used by cities In order to facilitate
the construction of public utilities within their Incorporated limits.
Such contracts are in the exercise by a city of its proprietory func-
tions in order to secure a better or extended water distribution system
for the city. Mederland v. Calllhan, 299 S.W.2d 380 (Tex.Civ.App.-1957,
error ref., n.r.e.).
          Even if the contract entered into was void, it is our
opinion that the City of Grand Prairie, like a private person, would
nevertheless be liable to reimburse the Air National Guard for the
construction of such water main. Pltzer v. City of Abilene, 323 S.W.2d
623 (Tex.Civ.App. 1959); Boiles v. City of Abilene, 2'7bS.W.2d 922
(Tex.Clv.App. 1955, error ref.)


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Mr. Harry B. Kelton, page 3 (C- 128 )


          The Courts of this State have uniformly held that an
Incorporated city, town or village may be liable under a contract
though It be void. This rule Is stated as follows in the case of
Sluder v. City of San Antonio, 2 S.W.2d 841 (Tex.Comm.App., 1928)
                 Since the deoision in the French Case
        ity"if..SanAntonio v. French, 80 Tex. 575, 1.6
     P .W. 440_7 our courts have uniformly announced
     the doctrine that where a county or municipality :
     receives benefits under a contract, illegal because
     not made in aonformlty with the Constitution or
     statute of the state, or charter provision of'the
     city, It will be held llable on an implied contract
     for the reasonable value of the benefits which it
     may have-received. In other words, while such con-
     tracts are void, and no recovery is permitted there-
     on, our courts hold that common honesty and fair dealing
     require that a county or municipality should not be
     permitted to receive the benefit of money, property,
    ,.orservices, without paying just compensation therefor.
    ‘Under such circumstances, a private corporation would
     clearly be liable under an implied contract. There
     can be no sound reason why the same obligation to
     do justice should not rest upon a municipal corpor-
     ation."
          The letter from the City, dated April 15, 1963,   states:
          "Additionally, the Constitution of the State
     of Texas prohibits a city from lending its credit
     In any manner whatsoever, and further from authori-
     zing any expenditure without making provision for
     the tax levy to pay such Indebtedness. In regard
     to this provision, the Charter of the City of Grand
     Prairie further provides that no public monies shall
     be spent or appropriated that are not currently within
     possession of the city. It ltimy opinion that the con-
     tract referred to violated all of these constitutional
     provisions, as well as both charter provisions referred
     to."
          The above contentions of the city cannot be sustained by
virtue of the followin cases. Mineralized Rubber Co. v. City of
Cleburne, 56 S.W. 220 7Tex.Clv.App. 1 00) and Wagner            56
  W 566 (Tex.Civ.App. lgOO), and oth% cases cited herein, and those
c;'&d and discussed in Sluder v. City of San Antonio, supra.



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Mr. Harry B. Kelton, page 4 (C- 128 )


          It is therefore our opinion that the Air National Guard
Is entitled to receive reimbursement for the construction of such
water main.

                          SUMMARY
          The Contract between the Air National Guard
     and the City of Grand Prairie, whereby the Air
     National Guard was to construct a water main and
     the City of Grand Prairie was to receive title to
     such main and reimburse the Air National Guard for
     the amount so expended, is,a valid contract.
                                Very truly yours,
                                WAGGONER CARR




                                      Assistant
JB:mkh
APPROVED:
OPINION COMMITTEE
W. V. Geppert, Chairman
Marietta Payne
Ban Harrison
Roger Tyler
Paul Phy
APPROVED FOR THE ATTORNEY GENERAL
BY: Stanton Stone




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