OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

Eonorable noaim F. Rainey, mx&.lent 

The Uxdversity of Totas 

Austin, Texas 

,amltoraker 

or the hoqdtaligent 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.ons in 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% &"Ireaent contraat* 

*@.wq this contraot is abrogated we actually SmLre then 

to enter into a 12811 ocmtract 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 departmnt, 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 arrangement 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 Galveston to take oar-a of’ the i-gent patients of the city 

who rary be designated by the health offioer of the CSy. 

l 4 . 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 hospitaltest-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 outlined above, we would greatly appreoiate it tf your Beprtnront 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 abrogntj.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 restore the stetu6 quo ante. The oanoelletion of the rtaelp 

ro0al cmezmnte of the p6rtiee mnstitutes reoiproael eonsiderotlone for the neir oontrlrot 0S ebrogetion. 

2. Upon the execution of the contract or agreement 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, tbereSore, vlll then h6oe th8 pover sn% euthority to operete 

the nospitdl in oonneetion with the Ate%ioal School at Galveston, If 6~9.1 operetlon be nwoesary, or oven incidentally 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 eontract 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. 

APPROP JAB 2, lg41 

OS-U6 

Verytrulygaurs 

ATTOBICBI QE%ERAL OF TRXAS