. .

Grover Sellers Arisaxw ILI. -B-EXAS .J

Hon. JohnR. Shook Criminal District Attorney Bexar County SanAntonio, Texas Attention Mr. S. Benton Davies

Dear Sir: Opinion No. O-6962 Re: Legality of proposed issuance of time warrants from the Permanent ImprovementFundin payment for newconstruction andimprovement,of certain existing facilities at the Robert B. Green Hospital. We.acknowledge receipt of your opinicn request of recent date and quote ~fromyour letter as ,follows:

“Weare enclosing herein a copy of aletter submitted to us by Hon. Charles W. Anderson, County Judge of Bexar County, Texas, on the 26th day of Novemberof this year,, which letter carried with it a copy of a contract between the Bexar County Commissioners’ Court andDewar, Robertson ,&Pancoast, et al, bond houses, of date November 7, A.D.,‘,1945.

“Wecall your attention particularly to that part of the County Judge’s letter which reads as follows:

“‘The Commissioners’ Court on today passed an order authorizing end instructing meto request the Criminal District Attorney of Bexar County to ask the Attorney General of Texas for an opinion as to the legality andvalidity of ‘said Permanent Improvement FundTimeWarrants proposed to be issued by Bexar County,; the proceeds of which are to be used in payment?for such newconstruction andimprove-’ ment of certain existing facilities at said Robert B. Green Hospital as well as for the purchase of certain newequipment at said, institution.‘

.

“In accordance with this request above quoted andfor the reason that whenthe Refunding Bonds are issued to take up the TimeWarrants proposed to be issued it will become the duty of the Attorney General to approve such issues, we are forwarding these communications to you with the request that youHon. John R. Shook, page 2 

### (o-6962)

render us an opinion answering the questions propounded in Judge Anderson’s letter.

“In addition to the matter referred to in Judge.Anderson’s letter, we desire to ask the following questions:

“I. Canthe Commissioners Court legally enter into a contract with the bonding companies prior to the time any contract has been,let for the improvements contemplated andprior to the time TimeWarrants are issued in liquidation of the indebtedness of the County for the performance of the coqtract for improvements; and, can the County at this time andprior to the issuance of said warrants bind itself to refund the Time Warrants into bonds?

“II. Does the contract here in question create anyliability on the part of the County to the bonding companies? l’Your usual prompt attentions to matters sub-, mitted to youwill be greatly apprehi&ted.~8 In 

### ,1913,

the Legislature of Texas authorized the establishment of county hospitals and provided for the election for bond issues andthe issuance of bonds for the cost of the erection of sameandprovided revenues for maintaining andmanaging said hospitals.

This Act has been brought forward tated civil Statutes as Articles 

### 4478-4493.in Vernon’s AnnoArticle 

### 4478,reads as follows:

“The commissioners court, of any county shall have power to establish a county hospital andto enlarge anyexisting hospitals for the care and treatment of persons suffering from any illness, dlsease or injury, subject to the provisions of this chapter. At intervals of not less than twelve months, ten per cent of the qualified property tax paying voters of a county maypetition such court to provide for the establishing or enlarging of a county hospital, in which event said court within the time designated in such petition shall submit to such voters at a special or regular election the



### PHon. John B. Shook, page 

### 3 (o-6962)

proposition of issuing bonds.in such aggregate amountas maybe designated ,+i said petition for the e’stablishing or enlarging of such hospital. Whenever‘any,such proposit$on’ shall receive a madority of the vo,tes of the qualified property tax payers voting ,at such election, said commissioners court shall establish andmaintain such hospital and shall~ have the following powers:

“1.. To purchase andlease real property therefor,~ or acquire suchreal property,,and easements’therein, by condemnation proceedings.,

“2. Topurchase or erect all necessary buildings, makeall necessary improvements and repairs and alter any existing buildings, for ~the use of said hospital-. Theplans for such or repair shall first b’e Health officer, if his erection, alteration, approved by the State approval is requested court. by the said ‘commissioners



### “3. To cause to collected, such taxes property ownedin the

_. * be assessed, levied and upon the real andpersonal county as it shall deem necessary to provlae the funds for the maintenance thereof, andfor all other necessary expenditures therefor. 

### “4. To issue county bonds to provide funds for the establishing, enlarging and equipping of said hospital, andfor all other necessary permanent improvements in connection therewith; to do all other things that maybe ,required by law in order to render said bonds valid.

“5. To appoint a board of managers for said hospital. 

### “6. To accept andhold in trust for the county, any grant or devise of land, or any gift or bequest of moneyor other personal property or any donation to be applied, principal or income or both, for the benefit of said hospital, and apply the samein accordance with the terms.of the gift.” Article 

### 4493reads as follows:Hon. John FLShook, page 4 (C-6962)

"Where no county hospital is nowprovided,for the purpose aforesai,d, or where such provision is inadequate,'the commissioners court of each county which may&a

### vea city with a population of'more than ten thousand'persons, within six months from the time when such city shall have attained such population, such population to be ascertained by such court in such manneras maybe determined upon resolution thereof, shall provide for the erection of such county hospital or hospitals as maybe necessary for that purpose., andprovide therein a room or rooms, or ward or wards for the care of confinement cases, anda room or rooms or ward or wards for the temporary care of persons suffering from mental or nervous disease, and also makeprovision in separate buildings for patients suffering from tuberculosis and other comnmniaable diseases, and from time to time add thereto accommodations sufficient to take care of the patients of the county. This time maybe extended by the State Board of Health for good cause shown. Unless adequate funds for the building of said hospital can be derived from current funds of the county available for such purpose, issuance of county warrantsaud script, the commissioners aourt shall submit,, either at a ,special. election called for the purpose, or at a regular election, the proposition of the issuance of county bonds for the purpose of building such hospital. If the proposition shall fail to receive amajority vote at such election said court maybe required thereafter at intervals of .not less than twelve months, upon petition of ten ‘per cent of the qualified voters of said county, tom submit said proposition until sameshall receive the requisite vote authorizing the issuance of the bonds." In,the case of Seydler S.W.(2d) 702,, the Galveston Couri?et al,. v. Border, et sl., 115 of Civil Appeals held that Artitle 4478was constitutional andthat sameauthorized counties to issue bonds for the construction and equipment of county hospitals. The court else held that the authorization of bonds for the construction andmaintenance of hospitals by county units for care of the s&ok constituted a "public purpose" as distinguished from a “private purpose.” The courts of this State have /

.. repeatedly held that a county cannot .issue bonds unless such

power is expressly conferred by law. Such is the established ;i doctrine in this State, andhas been from an early time. It was affirmed in the original appeal of SanPatricia County v. McClane,

‘\~ 44 Tex. 392, andreiterated in Robison v. Breedlove, 61 Tex. 316; also, in Lasater v. Lopez, 217 S.W. 376. / /~Hon. JohnR. Shook, page 

### 5 (o-6962)

Prior to 

### 1903there, wasno provision in .our statutes for the issuance of bonds end the courts held that counties had the implied authority to issue time warrants for the,construction of permanent improvements. Straton v., Commissioners1 Court of Kinney County, 

### 137S.W. 1170,; Cowan et al. v.,Dupree, et al., 139 S.W. 887; Commissioners .NN;p;Q.et al., 1Court of sloyd County, et al. v.

142 S.W. 

### 37;Allen v...Abernathy,. et al., 

### 151

Sometime after these decisions, the’ ,Leglslature authorized the issuance of, bonds for coluthousesj jails,~public roads, etc. Later, in the case of Lasater v. Lo,pez, 217 S.W. 

### 373, the SupremeCourt held, that it was in the, discretion of the Commissioners~ Court’whether~they issue time warr,ants or bonds for the construction of t,hese permanent imppove’ments,? In this opinion, Judge Phillips deals at 1,engthwith thenConstitution and legislative enactments which gave the, commissioners! court authority to issue both warrants andbonds.

.,

In the more recent ,case of Adamsv. McGill,~~

### 146 S.W. (2d) 332, In which this department intervened, the court held that under a statute authorizing a county to provide for. annual exhibition of horticultural and agricultural products but not expressly confirming the power to issue obligations to pay for improvements constructed for such,purpose, the county’ had the implied power to issue time warrants payable over a-period of years for improvements of aLivestock and.Agricultural Ruilding.

Wequote from the opinion as follows: l1***IA distinction is drawnbetween borrowing moneyand obtaining property or l,abor on credit, it being everywhere held that a municipal corporation has an implied power to use its credit f.or the. accomplishment of any object for which it is authorized by law to expend money.I

“In the case of Bridgers v. C~ityof .Lampasas, Tex. Civ. App., 249 S. W. 1081. 1084. writ of error refused. this distinction is drawnwith great clarity. The opi&on is .bythat great jurist,, Judge,Key. In the opini~on this proposition, taken from appellant’,.? brief, was approvedr. ‘It is generally oonceded andwell established that municipal corporations~ are invested by implication with the power to aontr~act onthe general credit of the city with respect, to such:improvements was they are authorized to make.1 The sootion we have referred to above in Ruling Case Lawwas quoted from withHon. John R. Shook, page 

### 6 (o-6962)

approval in the course of the opinion. The samesettion is cited in the case of Clark v. W. L. Pearson &Co.+, 121 Tex. 

### :34;39S, W. 2d 2+31, as sustaining the following proposition: 'The 'rule' is well established that municipal corporations are investe~d at least with an implied or Qicidenfalpower to contract on the general credit of the city with respect to such improvements as they are authorized by law to make.' Amongthe numerous cases cited by Judge Sharp in support of the proposition is the, case of Lasater **V.** Lopez, 110Tex. 

### 17~9, 189,217,s.jl.373. "It is true that the foregoing two Texas cases we have cited and briefly discussed,involve'the power of cities. The case of Lasater v. Lopez,',supra, cited by Judge Sharp, involves a county. Butwe see no'valid reason whythe reasoning doesnot apply tothe action of a county acting within' the orbit of its authority conferred by law. ***II It is our understanding that the Robert B. Green Hospital is a county hospital andhas been duly andlegally established under the authority of Articles 

### 4478-4493, Revised Civil Statutes. departmentIn view of the foregoing, it is'the opinion of this

that, Bexar C,ountysubject to the express restrictions imposed by the Constitution and general laws haspower to issue time warrants in,payment for 'newconstruction and improvements on the existing facilities at the Robert B. Green Hospital and equipping same, provided that the applicable regulations relating to the issuance of such warrants be observed.

In this opinion we are not,passing on the question of whether 'or not ,time~warrants may.be issued for the purpose of establishing' and constructing a county hospital.

In reply to your last two questions, wehave carefully examined the contract submitted and on its face it appears to be a legal andbinding contract.

Bonds must be sold In,accordance with the provisions of the authorizlng,law. s. w. (2d) 

### 665. City of Lubbock v. Gee. L. Simpson, 

### 31

Valid contracts for the sale andpurchase of bonds maybe enforced whenthe prescribed conditions,have been complied with. Dalla~s'Trust &Savings Bankv. WorthamIndependent School District 25 S,.W.(,2d) 

### 174,34-Tex.Jur., 672; Henrietta Independent School District VI Garrett &Company, 25S.W.(2d) 

### 317.

.,. . . Hon. John R. shook, page 

### 7 (o-6962)

Wehave been unable to find any statutory requirements setting out the method for the sale pf bonds other than Article 

### 708,Vernon's Annotated Civil Statutes, which reads as follawsr"Bonds shall never be sold for less than their par value and accrued interest exclusive of commissions." In the absence of s eaific statutory provision, it is our opinion that it is witR in the discretion of the Commissionersg Court as to when andwhat type contract they enter 'into in regard to the refunding of time warrants subject to the right of referendum as prescribed bylaw.

Trusting this answers your questions, we are Yours very truly ATTORNEY

GENERAL

OFTEXAS By/s/ Claud 0. Boothman Claud 0. Boothman, Assistant APPROVED

JAN10, 

### 1946 /s/ Csrlos C. Ashley FIRSTASSISTANT

ATTORNEY

GEEERAL APPROVED:

fX&EI~~OI?C~TEE BY: 3 COB:EPrwb