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         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
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 for
        the improvements contemplated and prior to the
        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 the election
for bond issues and the issuance of bonds for the cost of the
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.
                 Article   4478, 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
Hon. John B. Shook, page 3      (o-6962)


     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 is requested by the said ‘commissioners
     court.
            “3. To cause to be assessed, levied and
     collected,    such taxes upon the real and personal
     property owned in _.the *county as it shall deem
     necessary 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.”
           Article   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        for patients    suffering    from
                   tuberculosis     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, tomsubmit 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
             doctrine   in this State, and has been from an early time.         It was
      ;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 1 Court of sloyd County, et al. v.
.NN;p;Q.et   al., 142 S.W. 37; Allen v... Abernathy,. et al., 151

           Sometime after these     decisions,   the’ ,Leglslature   author-
ized the issuance of, bonds for     coluthousesj    jails,~public    roads,
etc.
             Later, in the case of Lasater v. Lo,pez, 217 S.W. 373,
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     enactments which gave the, commissioners!       court au-
thority    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
      refused.    this distinction    is drawn with great clarity.
      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
Hon. John R. Shook, page 6     (o-6962)


     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
of the authorizlng,law.       City  of Lubbock v.   Gee. L. Simpson, 31
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
School District     25 S,.W.(,2d) 174, 34-Tex.Jur.,    672; Henrietta In-
dependent School District      VI Garrett & Company, 25 S.W.(2d) 317.
                                   .,
.   . .


          Hon. John R. shook,     page 7    (o-6962)


                      We have been unable to find any statutory require-
          ments setting out the method for the sale pf bonds other than
          Article  708, 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 our opinion that it is wit Rin the discretion   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
                                                       GENERALOF TEXAS
                                                By /s/ Claud 0. Boothman
                                                Claud 0. Boothman, Assistant

          APPROVED  JAN 10, 1946
          /s/ Csrlos C. Ashley
          FIRST ASSISTANTATTORNEYGEEERAL
          APPROVED:fX&EI~~OI?C~TEE
          BY:         3
          COB:EPrwb
