Gerald C. Mann 

Hon. T. F. Slack 

County Attorney 

Opinion Number O-5584 

Re: 

Reeves County 

~1s the recent Act of the LegislaPecos, Texas 

ture, which grants to the State Board 

of Eduaation an option to purchase reDear Sir: 

funding bonds, issued to refund bonds 

owned by the State Permanent School 

Fund applicable to the refunding of 

the Beeves County Courthouse and Jail 

Bonds in question? 

We are in receipt of your letter of recent date reading as follows: 

“On November 2.5, 1942, Reeves County entered 

into a contract with B. V. Christie & Company to 

refund $92,500. Reeves County Courthouse end Jail 

Bonds of an issue now.outstanding in the amount of 

$105 000, 

i! i 

the remainder to be discharged out of 

vai able sinking funds. Under this contract, B.V, 

hristie & Company was granted an option to purchase the refunding bonds, bearing interest at the 

rate of 3 l/2$ per annum, at par and accrued interest. B. V. Christie & Company has recently exercised the optiongranted by the contract to purchase 

these bonds. 

“Subsequent to the makin 

Legislature enacted Chapter 2 6 

of this contract, the 

8, Acts of the 48th 

Legislature, RegularSession, which grants to the 

State Board of Education an option to purchase refunding bonds issued to refund bonds owned by the 

State Permanent School Fund. The State Permanent 

School Fund now owns $93,000 in principal amount of 

the County’s Courthouse and Jail Bonds which have 

been called for redemption on September 30, 1943 

pursuant to the opinion of the Supreme Court in {he 

recent case of Co&ran County v. Mann. 

“I would appreciate your valued opinion as to 

whether or not this recent Act of the Legislature 

is applicable to these particular bonds and whether 

or not it is necessary for the County Judge to comply with the terms of that statute in regard to 
Hon. T. F. Slack, page #2 

notifying the Board of the terms under which the 

County has agreed to sell the refunding bonds to 

B. V. Christie & Company. 

"Article I, Section 16, of the Constitution of 

Texas, and Article I, Section 10 of the Constitution of the United States 

t, 

forbid the enactment of 

laws impairing the obliga ions of contracts. These 

constitutional provisions apply to the contracts between States and individuals. The State of Indiana 

~63",3,"'~~l~5fS~~rt;~~d~o~E1z~o:o~~)v* They 

also Apply ti Contracts between political sub&visions of States and individuals. Shauleigh v. Sag 

eteiQL 15: U.S. 646, 42 L.Ed. 310, Payne v. First 

I n 1 B nk, 291 S.W. 209 (Comm. App.). 

"In 9 Texas Jurisprudence 

t 

$3, the nature of the 

protection of contracts agains impairment afforded 

by both Constitutions is stated as follows: 

"'The constitutional provision is violated whenever there is any invasion of the effect of a contract "in however small a particula9'; the contract 

need not be entirely or even materially impinged upon. 

""'The utmost freedom to enter into any contract 

permitted by existing law is the inherent right of 

every citizen, and when he exercises that right in a 

lawful way, no Legislature has the power to disturb 

the purposes or effect, or in any manner rewrite any 

of the provisions of that contract, er make a new 

contract for him, and the right to comply with and 

enforce its provisions as written is fixed and vested. 

The degree in which the offending statute may impair 

the obligation of contract is immaterial. The only 

question is, Has the obligation been encroached upon 

in any respect?"' 

"Under its contract with the County, B. V. Christie & Company is given the right to purchase the refunding bonds. This right is a creature of the contract. If the above mentioned Act of the Legislature 

grants a prior right to the State Board of Education, 

it seems clear that the rights of B. V. Christie & 

Company are thereby impaired. Since this is prohibited by both Constitutions, it is my opinion that this 

statute does not apply to the bonds covered by the 

preexisting contract. 
Hon. T. F. Slack, page #3 

"The State Board of Education meets again on 

September 6th and I would greatly appreciate your 

opinion on this question before that date if it is 

conveniently possible. Please send a copy of your 

opinion to the State Board of Education." 

Replying to the above you are advised that under the 

facts as stated, it is our opinion that the authorities cited 

by you sustain your position. Both the State and the United 

States Constitutions forbid the enactment of laws impairing 

the obligation of contracts. It follows that if B. V. Christie & Company entered into a valid contract with Reeves County 

prior to the passage of Chapter 248 

Legislature, Regular Session, said E 

Acts of the Forty-eighth 

hapter 248 is not applicable to these bonds and it is not necessary for the County Judge 

to comply with the terms of same in regard to notifying the 

Board of Education of the terms under which the county has 

agreed to sell the refunding bonds to B. V. Christie & Company, 

but it is sufficient if it be made known to the Board that a 

valid contract had been made prior to the passage of said Chapter 248, giving to said Company the option to purchase the refunding bonds. 

Very truly yours 

ATTORNEY GENERAL OF TEXAS 

By /s/ C. F. Gibson 

C. F. Bigson, Assistant 

APPROVED SEP 3, 1943 

/s/ Gerald C. Mann 

ATTORNEY GENERAL OF TEXAS 

APPROVED: OPINION COMMITTEE 

BY: BWB, CHAIRMAN 

CFG-s:wb