THEATIYORNEYGENERAL 

WILL W-N 

A-l-l-0-cIwII&RAI. 

OF ?rExAs 

AUSTIN 11, TEXAS 

June 26, is362 

Honorable J. W. 

Commisrioner of 

Texas Eduoation 

Austin, Texas 

,: 

Dear Dr. Edgar: 

Edgar 

Eduoation 

Agenoy 

Opinion No. WW- 1362 

Rer Legality of purchasing 

bulk gaeollne by echo01 

dlatrlcts from companies 

whose .consignees are 

members of the school 

board, an& related questions. 

Your recent mXpe8t for an OPlnlOn on the above subjeot 

matter reads in part aa .follow#: 

“Recently sohool districts of this rtatr 

have requested this Agenoy to obtain an opinion 

from the Offloe of Attorney General oonoernlng 

oontractlng,for bulk garollne and for eerviolng 

:of sohool owned vehloles when one or more of 

lte sohool board member8 are oonslgneer for 

011 oompanles. The rituationa are generally 

outlined in the following questions: 

“I. May a rchool distriot ‘legally conttiot by negotiation or sealed bid proo&dure, 

?or bulk ga8ollne needs of the dirtriot with 

X or Y 011 companies where one or more member8 

of the dlstrlot bohobl boaH# are OO.nUigneeB, 

of the rival gabollne i’lxms. The bids arb 

made by the how office of the oil oompanles 

but the account 1s serviced bo looal dlatrlbutors. 

"2. May a sohdol district legally oontraot, by negotiation or aealed bid proaeduree, 

for servicing of Its sohool vehioles (warrhlng, 

greasing, oil changes, tire repair, eta.) with 

a local retail rervloe station managed by a 

person who is &mplbyed on: aalar& ‘and .obmmlssion basis by the parent company and responsible 

to Borne extent to the looal consignee of the 

company. The consignee Is a member of the dlstrict echo01 board. The company Is the actual 

. 
c-r. J. w. Edgar, page 2 W-1362) 

owner of the station. 

"In the first situation mentioned,, It 

may be significant that the home offloe of 

the gasoline firm makes the quotation Concerning the price of the gasoline. Consignee 

is not Involved in arriving ate the price. 

"In the second situation, it may be of 

slgnlfioance that very little material or 

product Is Involved In vehicle servicing. 

The majors cost Is labor of the manager and 

his employees. 

" . . . 

"A. F. McFarlane, President, Board of 

Trustees, Del Rio Independent School District, 

Del Rio, Texas, stands ready to furnish any 

additional Information as 

purposes of this opinion." 

may be needed for 

During a telephone conversation with this office on 

June 7, 1962, Mr. McFarlane stated to us that the 011 company 

consignees who also serve as members of the dlatrlot sohool 

board would receive a commlssion in contraat situation No. 1, 

If one of their respective companies were awarded the contract. 

,Also; Mr. McFarlane stated that In contract situation No. 2, 

the oonslgnee who supplies 011 products to.th&retail service 

station would reoeive a sales commieslon on produots supplied 

to the service station, 

The sale of gasoline or other supplies to a school 

district by a person who Is also a trustee of the school distsact Is void as $agalnst public policy. Attorney Qeneral's 

Oplnlons O-078 19 9 , 

!nl:%d”;:%~g O ’ 

t 21 

0-1014 19 9) 

and v-6 fi 3 9 

o-1589 (ig3g), 0-2306 

l&), copies of which are 

Thle conclusion lg based on the principle 

of law that contdcts in whlah the offloial who made them may 

have a personal interest, and oontraots giving an official a 

personal ln,terest in any official act to be done by him, are 

contrary to publSo polloy and void. 

The fact’that no school district trustee acts lndlvldually as a oontraoting party in either oontraot situation 

No. 1 or No. 2, Is immaterial... 

*From Dillon on Munlcl 

Volume 2, pages 1140, 1143 to 11 fi 5, 

al Corporations, 

z 

th Edition, 

and 1146 to 11 7, we quote 
^ . 

Dr. J. W. Edgar, page 3 (w-1362) 

>j 

as follows: 

"It Is a well-established and salutary 

doctrine that he who Is Intrusted with the 

business of others cannot be allowed to make 

such business an object of pecuniary profit 

to himself. This rule does not depend on 

reasoning teohnlcal In Its character, and Is 

not local In Its applicat,lon. It la based 

upon principles of reason, of morality, and 

of public policy. It has Its foundation In 

the very constitution of our nature, for It 

has authoritatively been declared that a 

man cannot serve two masters, and Is recognized 

and enforced wherever a well-regu.lated system.of jurisprudence prevails. . . . 

"At common law and generally under 

statutory enactment, It Is now established 

beyond question that a contra& made by an 

officer of a munlclpallty with himself, or 

In which he Is Interested, Is contrary to 

public policy and,talnted with Illegality; 

and this rule applies whether such officer 

acts alone on behalf of the munlclpallty, 

or as a member of a board or council. Neither: 

the fact that a majority of the votes of a 

council or board In favor of the oontract 

are cast by disinterested officers, nor the 

fact that the officer lntereuted did not 

participate in the proceedings, necessarily 

relle,ves the contract from its vloe. The 

fact that the Interest of the offending officer 

In the Invalid contract Is Indirect and Is 

very small Is Immaterial. . . . 

n " . . . 

"As said in City of Edlnburg v. Ellis, 59 S.W.2d 99 

(1933), opinion by the Commission of Appeals: 

(It Is the general rule that municipal 

contracts In which offloers or employees of. 

the city have a personal pecuniary Interest 

are void.*" 

According to the facts alleged In the first question. 

the proposed contract for the purohase of gasoline is between 

I 
Dr. J. W. Edgar, page 4 (~~-1362) 

the school district and X or Y 011 company. The bids are to 

be made by the home offices of the respective companies and 

no relationship to the school board Is given other than the 

fact that one, or more of the trustees of the school board are 

consignees of the rival companies. However, Mr. McFarland has 

stated that the consignee or wholesaler whose company Is awarded 

the contract for gasoline will receive a commlsslon based on 

the total volume of gasoline specified In the contract. The 

trustee of the school district who Is also the consignee of 

the company receiving the contract would consequently have a 

pecuniary Interest In the contract with the school district. 

You are therefore advised that such contract Is void as against 

public policy. 

Under the facts stated In your second question, the 

proposed contract Is between the school district and a local 

company owned and operated service station. The local consignee or wholesaler who supplies this service station Is also 

a member of the district school board. Although you state 

that the servicing of school vehicles will not Involve the use 

of a significant amount'of 011 products, nevertheless the 

proper servicing of these vehicles will ~ecessarlly require 

some use of such products. As stated previously, the consignee 

who ~supplles this retail outlet with 011 products would receive 

a sales commlsslon from the consignor company. In this situation 

the trustee of the school dlstrlot who supplies this station 

In the business capacity of an oil oompany consignee would 

have a pecuniary Interest In the contract with the schools 

district. You are ,therefore advised that such codtract would 

be void as against public policy; 

SUMMARY 

A contract for the plrohase of bulk gasoline with 

an oil company'whose consignee Is a member of.the 

district school board would be void as against 

public policy, because such consignee would receive 

a oommlsslon on the basis of the volume of gasoline 

specified In the contract. 

A contract for servicing school district vehicles 

with a service station which Is supplied by an oil 

company consignee, who Is also a trustee of the 

dlstrlot school board, would be void as against 

public policy for the reason that such trustee 

In his business capacity as a consignee would 
_ . . 

Dr. J. W. Edgar, page 5 (~~-1362) 

receive a sales oommlsslon on products supplied 

to the service station. 

Very truly youra), 

WILL WILSON 

Attorney General of T&xas 

By: 

AL 6iap#.& &ia!.+ 

I. Raymond Wllllams, Jr. 

1RW:mkh Assistant 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Pat Bailey 

Coleman Gay 

Bob Patterson 

REVIEWEDFORTHEA'M'ORNEYOENERAL 

By: Leonard, Passmore