          OFFICE    OF THE   ATTORNEY     GENERAL   OF    TEXAS
                                AUSTIN                                         .:




Eonorable noaim F. Rainey, mx&.lent
The Uxdversity of Totas
Austin,     Texas




                                                         ,amltoraker
                                                         or the hoqdtali-
                                                         gent oity patient8.




                                            Team5 aad the City of
                                        the John Scaly XOS#tal in
                                        oow or 8id.a Ze-analotaeb.
                                     on @.xlg thrw    t&o g#wee88
                                   tf.onsin the Lt67adniebriation
                                                               of
                                    Utiversity aab of the John
                                    urdrertity of Texas 03m8. lea
                              v0   have   Qome 'to the pla0s rhere
                           8~36 the Reg0nt6 0P The UaL+eroity
                           ogato the present svmtrwt   ana
 thus to return the John $ealy HocspStal to the uWtro1
 of a3 university of 263x6~5. In other words, re deeire
 tci r&urn to the status quo ante by the mutual abrO&iOn
 of al% &"Ireaentcontraat*

*@.wq this contraot is abrogated we actually SmLre then
to enter into a 12811ocmtract with the City & Clsrlroefos
$or the eara of' thhcsir
                       Indigent rdak. It fa prOpooed urnbr
                                                                                2%..5
Honorable namer 2. nsinep - Page 2




the new ooutraot that the City of Galveston will pay to
The Uaivereity of Texas the mm Of $40,000 per year %n
return for which The University of Terns will agree to
provide hospitalization for the indigent sick of the
City of Galveston.   The city, through its health depart-
mnt, mill designate those that they regard   as indigent.

*It Is the desire of both the City of Galveston end the
Regents of The Uuirersity of Texas to make this neu ar-
rangement ulder present leas, if possible, anil we are,
therefore,       asking     for   821 Opinion   of   your   &3pertment   upon
the rollow.ln$ questionea

          91. Whether or not the City Couuoil of the
Gity of Galveston an& the Boar6 of Regents have the
power to enter Into a contraof abrogtiug  the existing
lease oontraot between the %ty axxl the University in
reger~ to the operation of the John 8ealy Hospital.

                 s2.     Whothor or not the Board of Regents
here     power    ami    authority to Operate the John 3ealy lioepdtal
in come&ion             with the Medioal School et Galveston.

          a3. Whether  or not the Board of Regents ham
the power to enter Into a oontract with the City of Gal-
veston to take oar-aof’the i-gent   patients of the city
who rarybe designated by the health offioer of the CSy.

           l4 .Whether or not sn     eemnt  on the pert
of the Q.ty to pay the Unlreretty T 0,000 a yeer for en
iudefinite period of time for the oare and hospitaltes-
t-ion of indigent patients would create a debt against
the City whioh would be prohibited by the GolxititUthnl
of     Texas.

           86. In the event that present laws will not
 permit us to make the new errengement whiah I hare out-
 lined above, we would greatly appreoiate it tf your Be-
 prtnront aould suggest to us the type of legislation
 which se should have to ask the Leg%slature to pass in
 order to enable us to nuke the new &esiretl err%ngement.a


                  We answer your questions categorloally:


                  1.      The city Council of the City of Galveston
                                                                216


xomoreble Boner P.   afdney   -   Peg8   8




ami the Board of Regents of the 3tete Univer6it.y do hav8
the paer to enter Into an agreement or contract abrognt-
j.w the existfng lease contract between than: in regsr%
to the operntion of the John Sooly Hospftal.

          The City of Gelveston at present 16 operating
the John Scaly Hoepita un%er a long4A.m leaee from the
University of Texas, the ovwm of the Hospital.

           srro6p8ctl.re of the queefion of the mliaity
of the lease by vhich the Unirerelty of Texae let the
itospitel to the City OS Galveston, (an% we are not at
sll~implying thti.there WAS 6ny rice in the traneacitlon)
tlm parfi86 mutually my ebrogate the leeoe, eai thus re-
store the stetu6 quo ante. The oanoelletion of the rtaelp
ro0al cmezmnte    of the p6rtiee mnstitutes reoiproael eon-
siderotlonefor the neir oontrlrot 0S ebrogetion.

          2.  Upon the execution of the contract or agree-
ment 6brOg8tiXIg the present leaseI the HospIte villbe,
of cour6e, restore% to the University of Texas, en% the
Unlmzm%ity will own an% hold the same es of the orQ#nal
estate. The Boer% OS Regente of the unirer6ity, tbere-
Sore, vlll then h6oe th8 pover sn% euthority to operete
the nospitdl in oonneetion with the Ate%ioal School at Gal-
veston, If 6~9.1 operetlon be nwoesary, or oven incidental-
ly neaessary, to the proper operetion of the Ltedieel School.


           3. LIpon general principle6 of oo~porate law, the
Board of Regents of the Univ8roit.y would have the p0wer to
enter into a contra& vlth the City of Galveston to t6lr.e
car8 of the indigent pstients of the City, if the doing so
v66 reasonsbly neo866as-y  as an incident to the operation
of it6 md.Acal school at Galreston.    The Board would not
have the authorfty or power,   hovever, t0 m&e 6uch a eon-
tract with the City of Galveston emopt as 6.n incident to
the Board*6 power to operate the Me%l6al School. The
State University   is operating a medical 60hoo1, not a
 public hospital.


          4.  Such an agreement on the past of th0 City,
including it6 pronrlee to pay the Utiyeraity $&O,OOO.OO a
year for an IPdeflnite period of time for the aWe an%
 Honorable Eemsr P. Rainey - Page I:




 hos#tali5atioa  Of' i-gent  patients, would not areate
 a debt against the City which would be pohibited by
 the Constitution of Texas, nor would it oroate a debt
 at all for the single reason that such a contract would
 be voidable for iadeflniteness of duration, and could be
 temdnated by either party at ~111.

           Such an undertaMng   aould be entered into by
 tho City only through contraate for one year at a tiats
 to avoid the constitut5.onal requirement for prtisI,on
 for payment.


                                  Verytrulygaurs
APPROP     JAB    2,   lg41

                               ATTOBICBI QE%ERAL OF TRXAS




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