Honorable Dale Wanna 

Johnson County Attorney 

1st Floor, Courthouse 

Cleburne, Texas 76031 

Opinion No. JM-1262 

Re: Authority of a county to 

pay a "finder's fee" to a real 

estate aaent for locatina a 

purchase; for county prope;ty 

(RQ-1994) 

Dear Mr. Iianna: 

You ask: 

If a County publishes notice and sells county 

owned real property at auction as set forth 

in Section 263.001, Local Government Code, 

can the County pay a *finder's fee' to a real 

estate agent for locating the purchaser of 

the county property? 

Local Government Code section 263.001(a) provides: 

The commissioners court of a county, by an 

order entered in its minutes, may appoint a 

commissioner to sell or lease real prope*y 

owned by the county. The sale or lease must 

be made at a public auction held in accordance with this section unless this chapter 

provides otherwise.1 (Footnote added.) 

you say in your request that the Johnson County conmissioners court voted to advertise a county property for sale 

and to advertise that the county would "pay a 3% finder's 

fee to the real estate agent responsible for locating the 

actual buyer." You say that the property did not, however, 

"sell as a result of the advertisements.V8 Two years later 

the commissioners court again voted to advertise the 

1. Jack, 694 S.W.?d 391 (Tex. App. - San 

Antonio 1985, writ ref'd n.r.e.), noted that the provisions 

now in section 263.001(a) are mandatory despite the 

permissive terms in which they are couched. 

p. 6743 
Honorable Dale Hanna - Page 2 (JM-1262) 

property for sale by auction though no advertisement was 

then made regarding the finder's fee. Before that auction a 

real estate agent, aware of the previous advertisement 

regarding the finder's fee, located a prospective buyer and 

showed him the property. That person then bought the 

property at the auction, at which he was the only bidder. 

The commissioners court has asked you to request an attorney 

general opinion on the legality of the county's paying a 

finder's fee. 

We caution that whether the finder's fee may be paid in 

this instance depends on the resolution of various~ fact 

questions. We are unable to make findings of fact in the 

opinion process. We will however respond to what we perceive to be the specific legal issue raised in your guestion: whether the county may, if all other legal reguirements are met, pay a finder's fee to a real estate agent who 

locates a person to buy county property at an auction held 

pursuant to section 263.001 of the Local Government Code. 

The court in Edwards v. Lubbock County 33 S.W.Zd 402 

(Tex. Civ. App. - Amarillo 1930, no writj addressed a 

situation where the county commissioners had'not wished to 

go through the auction procedures for sale of some county 

land under article 1577, V.T.C.S., now Local Government Code 

section 263.001, without a guaranteed minimum bid. The 

plaintiff had purportedly agreed with the county judge, and 

with the knowledge of the commissioners court, that he would 

be paid a sum of money by the county if he could locate such 

a bidder. The plaintiff then located such a bidder who 

contracted with the county judge to bid the agreed amount at 

the auction, deposited such sum with the county treasurer, 

and in fact bid that amount at the auction. The land was 

sold at the auction, but to another, higher bidder. 

The trial court concluded that the commissioners court 

had no authority to enter into the alleged contract with the 

plaintiff, which contract, being wyltra vires from its 

inception," was not therefore valid. The trial court ruled 

that the plaintiff should take nothing. Edwar-, at 483. 

On appeal, the Edwards court held on the facts presented that no express contract had been made for payment of 

the plaintiff for his services and that the plaintiff was 

not therefore entitled to recover on the express contract 

alleged, & at 484. mwardg did not hold, however, as the 

trial court had, that the commissioners court was without 

authority to enter into such a contract. Moreover, edwards 

reversed the trial court's ruling that the plaintiff take 

nothing, and held that he was entitled to recover on a 

-turn me& theory, & at 484. 

p. 6744 
I’ 

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Honorable Dale Hanna - Page 3 (JM-1262) 

We read Edwards as standing for the proposition that a 

"county may employ a broker for the sale of its land provided the requirements of a public auction are met." &S 35 

D. Brooks, County and Special District Law 5 9.24 (Texas 

Practice 1989). 

We think it implicit in the a court's treatment 

of the case that the commissioners court, 

authorized agent,2 

or its duly 

would have had authority to contract to 

pay the finder's fee in question had all legal requirements 

been met. In its brief opinion, the court quoted article 

1577, V.T.C.S. -- codified in 1987 as Local Government Code 

263.001, the provision you ask about -- and noted, at 404: 

The object of the statute in providing the 

sale at public auction is to secure to the 

z;yAyi; fair price for the property. This 

not called upon to pass upon the 

wisdom or expediency of any contract of 

employment with the commissioners' court, as 

the making of such contract is, within the 

exclusive discretion of such court. 

Unless the commissioners court had been authorized & 

&l&.& to make such a contract no recovery in em meruit 

would have been allowed. 

(A) county cannot be held liable in an 

action upon an implied contract or auantum 

meruit, unless the commissioners* court was 

authorized to make the contract sought to be 

implied, or on which the -turn menrif; is 

based. 

Baldwin v. Tra is County 88 S.W. 480, 404 (Tex. Civ. App. - 

1905, writ ref:d); see aiso 52 Tex. Jur. 3d mcinalities 

5 380, citing Edwards as well as m for this rule; and 

discussion at 84 A.L.R. 946.3 

2. m Local Gov't Code 5 262.001 (the predecessor 

statute, article 1580, V.T.C.S., was quoted in Edwards at 

484). Section 262.001 provides, and before it, article 1580 

provided, for a commissioners court's appointing an agent 

wto make a contract on behalf of the county . . . for 

any . . . purpose authorized by law." 

3. Edwar& cited Sluder v. Citv of San AntOniQ 2 

S.W.Zd 841 (Comm. App. 1928) as authority for its ruling 

that the plaintiff should recover on a guantum m rui 

(Footnote ContiEuedF 

p. ~6745 
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Honorable Dale Hanna - Page 4 (JM-1262) , 

You suggest in the brief accompanying your request that 

it might be argued that an amendment to article 1577 in 

1953, subsequent to the m court*6 consideration of 

those provisions, by specifically providing for the method 

of giving notice of sale at auction of county real estate, 

implicitly precludes the county from additionally paying a 

finder's fee to a real estate agent for finding a purchaser. 

m Acts 1953, 53rd Leg., ch. 133, at 447.4 

The 1953 amendment's addition of details to the auction 

requirement of the provision does not alter the import of 

the Edwards case: despite the auction requirement, the 

county is not precluded from paying a finder's fee to 

someone for finding a person to buy the property at the 

auction, if all other legal requirements are met. Where a 

power, here the power to sell property at auction, is 

conferred on the commissioners court, the commissioners 

court has broad discretion, within constitutional and 

statutory parameters, in its exercise of the power so 

conferred. w -es v. Laush;un, 214 S.W.Zd 451 (Tex. 

1948). 

We conclude, therefore, that a commissioners court may, 

if all other legal requirements are met, pay a finder#s fee 

to a real estate agent who finds a buyer for county real 

property sold at auction.pursuant to section 263.001, Local 

Government Code. We caution again that we do not here 

either approve or disapprove payment of the particular 

finder's fee, the issue of the payment of which you say 

prompted your request. The question of whether the county 

(Footnote Continued) 

theory. a' brief quote from the Sluder opinion 

included the portion thereof stating that it would be unjust 

to permit the city there "to interpose the defense that it 

should not be required to pay for [benefits received] 

because the contract was not made h the narticular form 

required by the city charter." (Emphasis ours.) The defect 

in the contract in Sluder was that it had been executed by 

the mayor alone and not provided for by ordinance of the 

city council as the city charter required. &2 SLU&z at 

841. By implication, the finder#s fee contract in Ed ard 

.as well, was one which it would have been withinW th: 

authority of the county to make had applicable legal 

requirements been met. 

4. Article 1577 was codified, without substantive 

change, in 1987 as Local Government Code section 263.001. 

The section includes, as subsection' (b), ;;I, prrisiz; 

added by the 1953 amendement. Acts 1907, ., - 

149, at 1035. 

p. 6746 
Honorable Dale Hanna - Page 5 (JM-1262) 

ever incurred an obligation to pay the fee as a result of 

the publishing of the advertisements you refer to and the 

real estate agent's locating, some two years later, a buyer 

to purchase the property at an auction, raises various legal 

issues which could be resolved only upon a full finding of 

facts. See. e.a., 14 Tex. Jur. 3d -acts S 70 (acceptance of offer within reasonable time), 5 73 (acceptance by 

performance), S 125 (past consideration); 52 Tex. Jur. 3d 

m 5 380 (implied contracts): and, authorities 

cited therein.5 

SUMMARY 

If all other legal requirements are met, a 

county commissioners court may offer to pay, 

and pay, a finder's fee to a real estate 

agent for locating a buyer to purchase county 

property sold at an auction held pursuant to 

section 263.001 of the Local Government Code. 

NARYKELLER 

First Assistant Attorney General 

JIM MATTOX 

Attorney General of Texas 

Lou MCCREARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAZLRY 

Special Assistant Attorney General 

RENEA HICKS 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Jim Moellinger 

Assistant Attorney General 

5. See alsg f 20(b) of the Real Estate License Act, 

V.T.C.S. art. 6573a (agreement on which action for 

commission on sale or purchase of real estate is brought 

must be in writing and signed by party to be charged or his 

authorized signatory). 

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