        OFFICE OF THE ATTORNEY GENERAL OF TEXAS
                         AUSTIN




Iionorsbls
         c . H. c.aYnesa
State Auditor
Auetln,!l'ex4m

Dear Sir:




                                          e OS yow.ppohlem
                                          olved in ita aolu-
                                          the pragptPesaof
                                        eratlonof your re-



                                          Foundation for
                                          oorporatu?rl,
                                      a State, for the
                                         eaw.Pias end
                                        1, aa proper*
                                         es of the X&d-
                                         ty, and other
     hospIt& builm     or buildingsLa the City Oi ml-
     vestonin oonneotlonnlth the John seelyxospital
     and the endannenfthareof,fwtheuse ofthepeopls
     of the said City of Qal*eston,by prov~d.dlng;
                                                theinwfth
Hon. c. 3. cavness,Page 2


    the naaessarymediaalmre atxIattentiontherein,
    the legateesu&der the will of the estate OS John
    S~ly,dea~sed,~eclohotthlrm,beandarahe~-
    by mlleved and ralsesedfrom paymentof taxes pro-
    vided for ln Chapter5, Title 122, RevlsadStatutes
    of Texna,generallyknown a5 Inheritanoelkxer,and
    the state c0mptr0iiOrand the 'paxc0ut0t0r or (ki-
    VestonCountyantheMbO~~andd~u~not
    to oolleator lttaaptto oolleotauuh tax or tame,
    whloh ta%ea if not ao herebyrelsaaedvould be par-
    able outofthepart; ofhis eatcstedetiaedaxx3ba-
    queatbedby said Scaly to said Foundatian,and pro-
    vided, however,that the City of Oalventonahell not
    thembybs releasediropIanyobllgatloninorundar
    a oertalnlease of said Yoba Scaly Hospital,exe-
    outedby the Board of Regentsof the Rnlvarsityof
    ~~,PithsaZdCity,datedthc9thdayoi~y,
         .
    "ssotion2i S8Qtio&1lmwof8b6il3 beeoslevoid
    unlsaathe"scalyend smithRotrndsts.onror the John
    ~~Hospital*hau.sithin.sir8onfha~~~rfhs
    palream.~#.tU:A&   enter rat;0M Bap?e#osrrt
                                              with
    the 'Road a? Rego&iiaf:the lJamm#ity of sxm)~
    a orgy whereofmrt~ed aa a em        otspybyfh8
    P.yMeat.0~ the~U~&veraitj  of Taxas&all be~fU.ed
    wltlt~tbot3awMry of St&e wbamby thk-sea1yand
    SndthFounb*tionfar~o Johealy      Eosp~talrball :
    agreawithaai+3BoaMoilbgent~to8q$reg*toaad
    a~t,apartpmprmty;ort?wprWWl8thaPaof,ar
    aaah, orpewt~prqw$y~~lycruh,        ts.k
    lgrW     .t@ w~~,duid be$v@ea’~Wd‘Fbmda~iqa      &ad .$l.w
     Mid   Re    t,a of 8 raltM  aQAak.tom
                                    -                            "
    !l%oudy$~;00.c?3) Dolkr?r,thr eatmtsd                            i
    amountof taxm w.bymd~'~:#l&xtlaq1 hewcand
    bywhlah said PoundatLom.~eWLl;rgrWto~keop
                                            auah
    p r o p wty a q wa to fr o nit* eth e rlwta    o r p r q mty
    a ndto we th r 3x & o o me                   th edlrmtion
                               th e r a m la la ler
    and r ith tha a jq mva l      ,s*Zd~Regwita fo r U;r a Yeh a
                               a l.
     sea4 Htmpitnl, twaay      a@dltluna   thqroto   .m .Bullw
    t0 be wed in OUIIUW**~~WWL~,~O~ r0p*         0f th0
    purporer8pecitied.b tkb lKll1of a4d.dYoha saalr.
    T& sum htWebyrerd.tt8d&Q.l ;pbrpsourl~b Uadm'
Hon. C. R. Cmmess, Page 3


     the joint oontrolof the Board of Regents of the
   --Unlversltyof’Texas,and the Sesly and Smith
     Foundationto investand reInvestthe prooeeas.
     Approved,Ootober1, 19Z6.n
          we have aneertainedthat the 0ondlt10w oontalned
in Sootion2 ol=the Aot vere met by the Foundatlanand by the
BoarrlcURegents oqJanwrp31,1927,endttuttthm fund thus
orentedhaa alnoebeen admlnlsteredin aooordanoev%tb the pro-
vlslonn of the Bat.

          Althoughthe Aat speaks in temna or u *release*of
lnherltanoe tuxtar,  we are or the optnionthat the Aot 88 a whole
does not agotmpllnha relaeseOF rmn.laeIon   of t&see,and henoe
t.b&tthe Aot doe8 not run afoul or those ~OVISIOM    or  oup con-
atltutlonvbloh problbLtthe rsmLaaionof taxes. ,%&ion 1, the
SectionwhIoh purportedly    "re3mwes" t&m tmcos, cm&.& an a
gMatiqf$nat*,baps        beocmeaffeatlveoq@vhsa $700,ooo,
 the.08tba&Od OBBwmt.W tUce# releaSea.bpSeetlcmla, ma ret
aaldetwLsrthe.terasandeol@it~ ou30otian2. state&dir-
rdiy,     agy eh5m.t of l.,~r elea  wuehsed.gbt have be& bhorsat
in the~operathnof sSoW?nlvas lmedZately~crfmntsr-balaaoed         by
the aeg2yga$am of a aa #@d@.od ag "the e5tinurtt$d      ylox$or
~t*rsd.
      *,kr;r&j."bj,~:-.,;Ebof&&

          we huve bee@aJlmmd     by reprssentativeu
                                                 of the




"thmthenmountof mmhliab$li~~. ,Comidmed asavboM, the
Aot IS en appreps?Utioa a@6athar
                              &lam a mleaae, an apprupr.lation
 fs the aaanner.and
                  for the purpeses~nt.sted
                                         in sootlen2'aereof.
 It remainsto $0 seen~wlmthesthe Iagi.slaturepoilass8ed     the power
 to mnke an appf@H.attonor ttrlskWd.
Hon. c. FL cavaeua,PQge 4
Hon. c. H. CaYne5s,Page 5


              A8 statedin the Aot, the Joha~SealyHo~pltalis,
amlwaaattketims o?thepssssge o?theAat,oumdbythe
8tate OS 2ema and wed ior olintoslpurpo5estqths.vledioal
lJehoo1    of the Universityof Tsxaa. Sindlarly,M have aaoer-
talnedtlu%ttkobdldiage inoormeotionpith tkeXorrplt&l       are
and ware wed HOP 8duoutiowl purpaseaby pai8 sdmol. It is
alem, wo fool, thut the lfospital aad its attemlant buudlnge
nrewedfora         'govezmmsntslpurpose" o?the State,ati that
eixpauttuw       ?Poathe lnrm?#eOfthefwd   tiQum8tionare au-
thmlmA 6aly in oonneotfonvith and in the ?urthmanos of such
purcporre.
         SeetIau51 of Artl~leIII of our C0nstitutks.n
                                                   pmnr¶Aes
inpartanfollwa~




                          of the lbov6-Quotedaf.wtt~
     *iOn vita fbe lneening
     tutioztalpwMslon.
HOL c. H. Cevwss. page 6




          Thus, althoughthe lZtem1 wm&g        OS the constitution
problbltsall grantato a munLalpt31    OT other eorporatlon, our
aourtehave, with respsotto munloipaland politicaloarparetlone,
intOPpl’8tOdthis ~OV&SiWl 80,pl’Ohibiti.?i& Otis those gP&UtS vhicrh
are not for 8 gfxern;wtntul  purpose.  That a similarlnterpsetetion
is applicnbleto privateobarltableoorpoxations       of the type under
dlsousaioilis lll.~lat??atedby the eme or conlegv. naughtem of
the Republio,1% 3. W. 197, I57 S. I?. 937. muler th8 ?8miller
sects of ws eajgse  t&3 3it6~teptlrobaeedthe Alamo for the use and
0nJoymentof tbe people of lexa~,and, ardw le~elatlve dlreotion,
the govwnor deliveeed.&.ob    propertyto the eurtodyand owe of
the @wghtera of the Republloo# 2exen,a
gam,“‘roP edtist1ow1 purposei, xa
le&elature,the Court, e?tsr ststlng                 0r the ~Stiato over
it8 pmpe~y, atstaluded~




         Although
                not Uwol          aprivateosrijor~tlon
                                                     theokiraa
Of Icing
       Y. shep?@i?d,
                  157 8.            682 (OrPorP4fuaeddf
                                                     thP@w
addltiOaalll.@tap0nthiaprObl~i        IntiUa ~&Seth0   fWIitent1~
wea nmdethatthe abws quoted   oaoati~utlaaal pzwvbbn prohibited
the stutefroa         over; the title,oqo and owtouy of stof6
lad to the Hat           Servfqaof thb%dnval Oapsrnrpsnt    ?or
                PaPk,
we en a Riltfonel       In isj~otlng thitr“‘aicIltenttotha court
quoted?rom8n&adoptedthe 0 iaieno?the cpeariea~ee4qreme
CotlPtin Halme 01 Peay,159!karh3El,17 8. W. ,(2d)901, aa~
s0nm8
     *Woreover,a   traaefer
                          of the titleto landa S&m
HOII. C. H. CsameSS, Page 7



    Maa United States. The paeel.ngof thle property
    From one government;to the otitartivolwieno I.osa
    to the citizen or taxpayer. The o3ajeotof the uon-
     trt cl.               invoked wa3 to prevent a loss
     t0 t&
     its cP0dl.t. Bere not only can no loss result, but
     the sttits.OOX33%deFed830a pOliCloa1 Sllt;tty,i3 re-
     rights tmd privileges of tbfs gr
     be presoxvsd to the people 0,'Teriue3see.I
          "We tM’;I..‘.k   this decision is souzd and shcxld be
     rOu0vtsaas the law of thi.3 aa3e.”         @@233ie added)
          We feel that the cumulativeei%ct of these deoi&ms
is to demonstsstethat the lMb,bitlonsof'ScctLon 51 of Artlole
III or the Constitutionare oper&Lve only Vrzanthe grant hy the
State ie, or oan be;a diversfanof Statepropertyux Sunde to
nonqwJPnmenta1 purposea. Conversely,so long as the it      is
itma gmrnmerital prpcse;sdl haa onlybe used $3~ auohpur-
pow, we r3w that this SsctQJn is Lnopexative.
          Iitthe iIL3tSat81tUZtfiOfL,
                                   the Se?il~.+nd    Fwnda-
                                                iSslit&
tion is but 3 joint'oustedfan of the fund,in*ehtlciti,posaas-
;Lz ast      ort3ythe povero of a jolnt trusteewith qwspootto
              Xarsover, the Fo?andatlan arayexpe& auoh faoa oalo
for g&       ental purpoeea a& nosymke suoh srpe&l.tw?esonly
under the dirootlcn   a~nd tith the appmrel OS the Btxzrdof Xsgenta
o? tha lJla-5rslty  cr Texea. In au& a sftuatly     the eppzwpx$a-
titan2;~th.sLsglblature connot be said to be a gratuitousdo-
n&ion to a corporation. Retitheroan it be se&d that the spp&'o-
pxistlozidlvcst% tha ciblsfm and tazpqem 09 !k.as of the r@ht
or use 0r th3 furd OF fv4pal.mtb3f.r bsneitoiel rights theveto.
Under ths teme oi the 8 propxiatfon,              allop3avl.l.ege8
of the State titb respsce to the iuad are        pruaerved.
          Apart trOm Chh,mttera herotoiored%smssed, we 48~
peroelve no smlous qusatfons vMah al&t be mLsed agaC%st the
oonstitutionalityof the Act urrderdlsoussion. Cvtly,       PU
are wspeotfullg advfaedthat the At& Is Ln all wap v?Ciid
                                                       and
oonstltutional. !l!hLooonalu8ionrenduP unasaesaaryan 811lR7yn
to your iaquLry as to the titwe of the aotion whiah ehould be
tabn lf the Aat were to be i%%Idu!momtltIltio~~.
Hon. C. If. Catmess,   Pegs 8



                  thet the foregoing iullyanswersyour
          lbu8tln.g
lnquiky,ue era

                                Your0 very truly
