OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

Iionorsbls c . H. c.aYnesa 

State Auditor 

Auetln, !l'ex4m 

Dear Sir: 

e OS yow.ppohlem 

olved in ita aoluthe pragptPesa of 

eratlon of your reFoundation for 

oorporatu?rl, 

a State, for the 

eaw.Pias end 

1, aa proper* 

es of the X&dty, and other 

hospIt& builm or buildings La the City Oi mlveston in oonneotlon nlth the John seely xospital 

and the endannenfthareof, fwtheuse ofthepeopls 

of the said City of Qal*eston, by prov~d.dlng; thein wfth 
Hon. c. 3. cavness, Page 2 

the naaessary mediaal mre atxI attention therein, 

the legatees u&der the will of the estate OS John 

S~ly,dea~sed,~eclohotthlrm,beandarahe~- 

by mlleved and ralsesed from payment of taxes provided for ln Chapter 5, Title 122, Revlsad Statutes 

of Texna, generally known a5 Inheritanoe lkxer, and 

the state c0mptr0iiOr and the 'pax c0ut0t0r or (kiVestonCountyantheMbO~~andd~u~not 

to oolleat or l ttaapt to oolleot auuh tax or tame, 

whloh ta%ea if not ao hereby relsaaed vould be parable outofthepart; ofhis eatcstedetiaedaxx3baqueatbed by said Scaly to said Foundatian, and provided, however, that the City of Oalventon ahell not 

thembybs releasediropIanyobllgatloninorundar 

a oertaln lease of said Yoba Scaly Hospital, exeouted by the Board of Regents of the Rnlvarsity of 

~~,PithsaZdCity,datedthc9thdayoi~y, 

. 

"ssotion 2i S8Qtio&1lmwof8b6il3 beeoslevoid 

unlsaa the "scaly end smith Rotrndsts.on ror the John 

~~Hospital*hau.sithin.sir8onfha~~~rfhs 

palream. ~#. tU:A& enter rat;0 M Bap?e#osrrt with 

the 'Road a? Rego&ii af: the lJamm#ity of sxm)~ 

a orgy whereof mrt~ed aa a em otspyby fh8 

P.yMeat.0~ the~U~&veraitj of Taxas&all be~fU.ed 

wltlt ~tbo t3awMry of St&e wbamby thk-sea1y and 

SndthFounb*tionfar~o Johealy Eosp~talrball : 

agreawithaai+3BoaMoilbgent~to8q$reg*toaad 

a~t,apartpmprmty;ort?wprWWl8thaPaof,ar 

aaah, orpewt~prqw$y~~lycruh, ts.k 

l grW .t@ w~~,duid be$v@ea’~Wd‘Fbmda~iqa &ad .$l.w 

Mid Re t,a of 8 raltM aQAak.to m - 

!l%oudy$~;00.c?3) Dolkr?r, thr eatmtsd 

" 

i 

amount of taxm w.bymd~'~:#l&xtlaq 1 hewcand 

bywhlah said PoundatLom.~eWLl;rgrWto~keop auah 

prop wty a q wa to fr o n it* ether l wta or prq mty 

a nd to we th r 3x & o o me ther a m la la ltehe r dlrmtion 

and r ith tha a jq mva l a l. ,s*Zd~Regwita for U;r a Yeh a 

sea4 Htmpitnl, twaay a@dltluna thqroto .m .Bullw 

t0 be wed in OUIIUW**~~WWL~,~O~ r0p* 0f th0 

purporer 8pecitied.b tkb lKll1 of a4d.d Yoha saalr. 

T& sum htWeby rerd.tt8d &Q.l ;pbrpsourl~ b Uadm' 
Hon. C. R. Cmmess, Page 3 

the joint oontrol of the Board of Regents of the 

-- Unlverslty of’ Texas, and the Sesly and Smith 

Foundation to invest and reInvest the prooeeas. 

Approved, Ootober 1, 19Z6.n 

we have aneertained that the 0ondlt10w oontalned 

in Sootion 2 ol= the Aot vere met by the Foundatlan and by the 

Boarrl cURegents oqJanwrp31,1927,endttuttthm fund thus 

orented haa alnoe been admlnlstered in aooordanoe v%tb the provlslonn of the Bat. 

Although the Aat speaks in temna or u *release* of 

lnherltanoe tuxtar, we are or the optnion that the Aot 88 a whole 

does not agotmpllnh a relaese OF rmn.laeIon of t&see, and henoe 

t.b&t the Aot doe8 not run afoul or those ~OVISIOM or oup conatltutlon vbloh problbLt the rsmLaaion of taxes. ,%&ion 1, the 

Section whIoh purportedly "re3mwes" t&m tmcos, cm&.& an a 

gMatiqf$nat*,baps beocme affeatlve oq@vhsa $700,ooo, 

the. 08tba&Od OBBwmt .W tUce# releaSea .bpSeetlcm la, ma ret 

aaldetwLsrthe.teras andeol@it~ ou30otian2. state&dirrdiy, agy eh5m.t of l .,~r ewueh lea se d.gbt have be& bhorsat 

in the~operathn of sSoW?nlvas lmedZately~crfmntsr-balaaoed by 

the aeg2yga$am of a aa #@d@.od ag "the e5tinurtt$d ylox$or ~t*rsd. *,kr;r&j." bj,~:-.,;Ebof&& 

we huve bee@aJlmmd by reprssentativeu of the 

"thmthenmountof mmhliab$li~~. ,Comidmed asavboM, the 

Aot IS en appreps?Utioa@6athar &lam a mleaae, an apprupr.lation 

fs the aaanner.and for the purpeses~nt.sted insootlen 2'aereof. 

It remains to $0 seen ~wlmthes the Iagi.slature poilass8ed the power 

to mnke an appf@H.atton or ttrls kWd. 
Hon. c. FL cavaeua, PQge 4 
Hon. c. H. CaYne5s, Page 5 

A8 stated in the Aot, the Joha~Sealy Ho~pltal is, 

amlwaaattketims o?thepssssge o?theAat,oumdbythe 

8tate OS 2ema and wed ior olintoslpurpo5es tqths.vledioal 

lJehoo1 of the University of Tsxaa. Sindlarly, M have aaoertalned tlu%ttkobdldiage inoormeotionpith tkeXorrplt&l are 

and ware wed HOP 8duoutiowl purpasea by pai8 sdmol. It is 

alem, wo fool, thut the lfospital aad its attemlant buudlnge 

nrewedfora 'govezmmsntslpurpose" o?the State,ati that 

eixpauttuw ?Poathe lnrm?#e Ofthefwd tiQum8tionare authmlmA 6aly in oonneotfon vith and in the ?urthmanos of such 

purcporre. 

SeetIau 51 of Artl~le III of our C0nstitutks.n pmnr¶Aes 

inpartanfollwa~ 

*iOn vita fbe lneening of the l bov6-Quoted af.wtt~ 

tutioztalpwMslon. 
HOL c. H. Cevwss. page 6 

Thus, although the lZtem1 wm&g OS the constitution 

problblts all granta to a munLalpt31 OT other eorporatlon, our 

aourte have, with respsot to munloipal and political oarparetlone, 

intOPpl’8tOd this ~OV&SiWl 80, pl’Ohibiti.?i& Otis those gP&UtS vhicrh 

are not for 8 gfxern;wtntul purpose. That a similar lnterpsetetion 

is applicnble to private obarltable oorpoxations of the type under 

dlsousaioil is lll.~lat??ated by the eme or conleg v. naughtem of 

the Republio, 1% 3. W. 197, I57 S. I?. 937. muler th8 ?8miller 

sects of ws eajgse t&3 3it6~te ptlrobaeed the Alamo for the use and 

0nJoyment of tbe people of lexa~, and, ardw le~elatlve dlreotion, 

the govwnor deliveeed .&.ob property to the eurtody and owe of 

the @wghtera of the Republlo o# 2exen, a 

gam,“‘roP edtist1ow1 purposei, xa 

le&elature, the Court, e?tsr ststlng 0r the ~Stiato over 

it8 pmpe~y, atstaluded~ 

Although not Uwol 

Of Icing Y. shep?@i?d, 157 8. 

aprivate osrijor~tlon theokiraa 

682 (OrPor P4fuaeddf thP@w 

addltiOaalll.@t ap0nthiaprObl~i IntiUa ~&Seth0 fWIitent1~ 

wea nmde that the abws quoted oaoati~utlaaal pzwvbbn prohibited 

the stute froa 

lad to the 

over; the title, oqo and owtouy of stof6 

Hat 

we en a Riltfonel PaPk, 

Servfqa of thb%dnval Oapsrnrpsnt ?or 

In is j~otlng thitr“‘aicIltentto tha court 

quoted ?rom8n&adopted the 0 iaieno? the cpeariea~ee 4qreme 

CotlPt in Halme 01 Peay, 159 !karh 3El, 17 8. W. ,(2d) 901, aa~ 

s0nm8 

*Woreover, a traaefer of the title to landa S&m 
HOII. C. H. CsameSS, Page 7 

Maa United States. The paeel.ng of thle property 

From one government; to the otitar tivolwie no I.osa 

to the citizen or taxpayer. The o3ajeot of the uontrt cl. 

t0 t& 

invoked wa3 to prevent a loss 

its cP0dl.t. Bere not only can no loss result, but 

the sttits. OOX33%deFed 830 a pOliCloa1 Sllt;tty, i3 rerights tmd privileges of tbfs gr 

be presoxvsd to the people 0,' Teriue3see.I 

"We tM’;I..‘.k this decision is souzd and shcxld be 

rOu0vtsa as the law of thi.3 aa3e.” @@233ie added) 

We feel that the cumulative ei%ct of these deoi&ms 

is to demonstsste that the lMb,bitlons of' ScctLon 51 of Artlole 

III or the Constitution are oper&Lve only Vrzan the grant hy the 

State ie, or oan be;a diversfan of State property ux Sunde to 

nonqwJPnmenta1 purposea. Conversely, so long as the it is 

itma gmrnmerital prpcse;sdl haa onlybe used $3~ auohpurpow, we r3w that this SsctQJn is Lnopexative. 

Iit the iIL3tSat 81tUZtfiOfL, the Se?il~.+nd iSslit& Fwndation is but 3 joint 'oustedfan of the fund ,in *ehtlciti, posaas- 

;Lz ast ort3y the povero of a jolnt trustee with qwspoot to 

for g& 

Xarsover, the Fo?andatlan aray expe& auoh faoa oalo 

ental purpoeea a& nosy mke suoh srpe&l.tw?es only 

under the dirootlcn a~nd tith the appmrel OS the Btxzrd of Xsgenta 

o? tha lJla-5rslty cr Texea. In au& a sftuatly the eppzwpx$atitan 2;~th.s Lsglblature connot be said to be a gratuitous don&ion to a corporation. Retither oan it be se&d that the spp&'opxistlozi dlvcst% tha ciblsfm and tazpqem 09 !k.as of the r@ht 

or use 0r th3 furd OF fv4pal.m tb3f.r bsneitoiel rights theveto. 

Under ths teme oi the 8 propxiatfon, 

e 

allo p3avl.l.ege8 

of the State titb respsc to the iuad are pruaerved. 

Apart trOm Chh, mttera herotoiore d%smssed, we 48~ 

peroelve no smlous qusatfons vMah al&t be mLsed agaC%st the 

oonstitutionality of the Act urrder dlsoussion. Cvtly, PU 

are wspeotfullg advfaed that the At& Is Ln all wap v?Ciid and 

oonstltutional. !l!hLo oonalu8ion renduP unasaesaary an 811lR7yn 

to your iaquLry as to the titwe of the aotion whiah ehould be 

tabn lf the Aat were to be i%%Id u!momtltIltio~~. 
Hon. C. If. Catmess, Pegs 8 

lbu8tln.g thet the foregoing iully answers your 

lnquiky, ue era 

Your0 very truly