. . 

Grover Sellers Arisaxw ILI. -B-EXAS 

.J 

Hon. John R. Shook 

Criminal District Attorney 

Bexar County 

San Antonio, Texas 

Attention Mr. S. Benton Davies 

Dear Sir: 

Opinion No. O-6962 

Re: Legality of proposed 

issuance of time warrants 

from the Permanent Improvement Fund in payment for 

new construction and improvement, of certain existing facilities at the Robert B. 

Green Hospital. 

We .acknowledge receipt of your opinicn request of 

recent date and quote ~from your letter as ,follows: 

“We are enclosing herein a copy of a letter 

submitted to us by Hon. Charles W. Anderson, County 

Judge of Bexar County, Texas, on the 26th day of 

November of this year,, which letter carried with it 

a copy of a contract between the Bexar County Commissioners’ Court and Dewar, Robertson ,& Pancoast, et al, 

bond houses, of date November 7, A.D.,‘,1945. 

“We call 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 me to request the 

Criminal District Attorney of Bexar County to ask 

the Attorney General of Texas for an opinion as to 

the legality and validity of ‘said Permanent Improvement Fund Time Warrants proposed to be issued by 

Bexar County,; the proceeds of which are to be used 

in payment ?for such new construction and improve-’ 

ment of certain existing facilities at said Robert 

B. Green Hospital as well as for the purchase of 

certain new equipment at said, institution.‘. 

“In accordance with this request above quoted 

and for the reason that when the Refunding Bonds are 

issued to take up the Time Warrants 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 you 
Hon. 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. Can the Commissioners Court legally 

enter into a contract with the bonding companies 

prior to the time any contract has been, let for 

the improvements contemplated and prior to the 

time Time Warrants 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 and prior to the issuance 

of said warrants bind itself to refund the Time 

Warrants into bonds? 

“II. Does the contract here in question create any liability on the part of the County to 

the bonding companies? 

l’Your usual prompt attentions to matters sub-, 

mitted to you will 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 and the issuance of bonds for the cost of the 

erection of same and provided revenues for maintaining and managing 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 and to 

enlarge any existing 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 may petition 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 

P 
Hon. John B. Shook, page 3 (o-6962) 

proposition of issuing bonds. in such aggregate amount as may be 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 and maintain such hospital and shall~ 

have the following powers: 

“1.. To purchase and lease real property 

therefor,~ or acquire suchreal property,,and 

easements’therein, by condemnation proceedings., 

“2. To purchase or erect all necessary 

buildings, make all necessary improvements and 

repairs and alter any existing buildings, for 

~the use of said hospital-. The plans 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 owned in the 

_. * 

be assessed, levied and 

upon the real and personal 

county as it shall deem 

necessary to provlae the funds for the maintenance thereof, and for all other necessary expenditures therefor. 

“4. To issue county bonds to provide funds 

for the establishing, enlarging and equipping of 

said hospital, and for all other necessary permanent improvements in connection therewith; to 

do all other things that may be ,required by law 

in order to render said bonds valid. 

“5. To appoint a board of managers for said 

hospital. 

“6. To accept and hold in trust for the 

county, any grant or devise of land, or any gift 

or bequest of money or other personal property 

or any donation to be applied, principal or income 

or both, for the benefit of said hospital, and apply the same in accordance with the terms .of the 

gift.” 

Article 4493 reads as follows: 
Hon. John FL Shook, page 4 (C-6962) 

"Where no county hospital is now provided,for 

the purpose aforesai,d, or where such provision is 

inadequate,'the commissioners court of each county 

which may&a ve a 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 manner as may be determined upon 

resolution thereof, shall provide for the erection 

of such county hospital or hospitals as may be necessary for that purpose., and provide therein a 

room or rooms, or ward or wards for the care of confinement cases, and a room or rooms or ward or wards 

for the temporary care of persons suffering from 

mental or nervous disease, and also make provision 

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 may be 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 

a majority vote at such election said court may be 

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 same shall receive the requisite 

vote authorizing the issuance of the bonds." 

In,the case of Seydler 

S.W.(2d) 702,, the Galveston Cour i? 

et al,. v. Border, et sl., 115 

of Civil Appeals held that Artitle 4478 was constitutional and that same authorized counties 

to issue bonds for the construction and equipment of county hospitals. The court else held that the authorization of bonds 

for the construction and maintenance 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, and has been from an early time. It was 

affirmed in the original appeal of San Patricia County v. McClane, 

‘\~ 

44 Tex. 392, and reiterated in Robison v. Breedlove, 61 Tex. 316; 

also, in Lasater v. Lopez, 217 S.W. 376. 

/ /~ 
Hon. John R. Shook, page 5 (o-6962) 

Prior to 1903 there, 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, 137 S.W. 1170,; Cowan et al. v.,Dupree, et al., 

139 S.W. 887; Commissioners 

.NN;p;Q.et al., 

1 Court 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 Supreme Court 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,ength with then Constitution and 

legislative enactments which gave the, commissioners! court authority to issue both warrants and bonds. 

., 

In the more recent ,case of Adams v. 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 a Livestock and.Agricultural Ruilding. 

We quote from the opinion as follows: 

l1 ***IA distinction is drawn between borrowing 

money and 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~ity of .Lampasas, 

Tex. Civ. App., 249 S. W. 1081. 1084. writ of error 

refused. this distinction is drawn with great clarity. 

The opi&on is .by that great jurist,, Judge, Key. In 

the opini~on this proposition, taken from appellant’,.? 

brief, was approvedr. ‘It is generally oonceded and well 

established that municipal corporations~ are invested by 

implication with the power to aontr~act on the 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 Law was quoted from with 
Hon. John R. Shook, page 6 (o-6962) 

approval in the course of the opinion. The same settion is cited in the case of Clark v. W. L. Pearson 

& Co.+, 121 Tex. :34;39 S, 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 Qicidenfal power to contract 

on the general credit of the city with respect to 

such improvements as they are authorized by law to 

make.' Among the numerous cases cited by Judge Sharp 

in support of the proposition is the, case of Lasater 

V. Lopez, 110 Tex. 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 why the 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 and has been duly and legally established under the authority of Articles 4478-4493, Revised Civil 

Statutes. 

department 

In view of the foregoing, it is'the opinion of this 

that, Bexar C,ounty subject to the express restrictions 

imposed by the Constitution and general laws haspower to issue 

time warrants in,payment for 'new construction 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, we have carefully 

examined the contract submitted and on its face it appears to be 

a legal and binding 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 and purchase of 

bonds may be enforced when the prescribed conditions,have been 

complied with. Dalla~s'Trust & Savings Bank v. Wortham Independent 

School District 25 S,.W.(,2d) 174, 34-Tex.Jur., 672; Henrietta Independent School District VI Garrett & Company, 25 S.W.(2d) 317. 

., 
. . . 

Hon. John R. shook, page 7 (o-6962) 

We have 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 wit R in the discretion of the Commissionersg Court as to when and what type contract they enter 

'into in regard to the refunding of time warrants subject to the 

right of referendum as prescribed by law. 

Trusting this answers your questions, we are 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By /s/ Claud 0. Boothman 

Claud 0. Boothman, Assistant 

APPROVED JAN 10, 1946 

/s/ Csrlos C. Ashley 

FIRST ASSISTANT ATTORNEY GEEERAL 

APPROVED: fX&EI~~OI?C~TEE 

BY: 3 

COB:EPrwb