TIHIEAITORNEYGENERAI~ 

OF' TEXAS 

AUSTIN. TgxAs 78711 

July 1. 1975 

The Honorable Patrick C. Batchelor 

Criminal District Attorney 

Navar ro County 

Corsicana. Texas 75110 

Opinion No. H- 638 

Re: May a person elected city 

commissioner remain pecuniarily 

interested in a contract previously 

entered into with the city whereby 

the city sells water to him for resale to rural customers? 

Dear Mr. Batchelor: 

You have requested our opinion regarding whether an officer of a city 

may purchase water from the city for further distribution to rural clients 

when the contract involved was entered into before he took office. 

Article 373 of the former Penal Code was repealed by Acts 1973, 63rd 

Wit., ch. 399, p. 991, § 3(a), eff. .January 1, 1974. We presume your question 

concerns a fact situation which arose prior to the effective date of the repeal. 

Article 373 provided in part: 

If any officer of any county, or of any city or town 

. . . shall become interested . . . in the purchase 

or sale of anything made for o’r on account of such 

county, city or town, . . , he shall be fined not less 

than fifty nor more than five hundred dollars. 

The penal code article, prior to its repeal, was long complemented by 

a civil statute, article 988, V. T. C. S . , which ,remains in effect. Article 988 

reads in part: 

No member of the city council, or any other officer of 

the corporation, shall be directly or indirectly interested 

in any work, business or contract, the expense, price or 

consideration of which is paid from the city treasury, or by 

an assessment levied by an ordinance or resolution of the 

city council, nor be the surety of any peraon having a contract, work or business with said city, for the performance 

of which security may be required, nor be the surety on the 

official bond of any city officer. 

p. 2807 
The Honorable Patrick C. Batchelor - Page 2 (H-638) 

Both statutes were discussed by the court in City of Edinburg v. Ellis, 

59 S. W. Zd 99, 100 (Tex. Comm. 1933): 

It is the~getieral, iule that,municipal..coritracts in 

which office’+8 or kmployeis of tlie: city have a personal 

interest are void . . . This rule is held to apply to members of the city council. It has long been the public policy, 

of the state to prohibit officers of a city from having a peisonal pecuniary, interest in contracts with the city and.this 

policy is specifically &pressed in both the penal and civil 

statutes. See article 373, Penal Code, and article 988, R. 

C. S. 1925. Article 373 provides that if an officer of,a city 

or town shall become in any manner pecuniarily interested 

in any contracts made by such city or town, or shall become interested in the purchase or sale of anything made 

for or on account of such city or town, he shall be subject 

to a fine. Article 988 also provides that no member of the 

city council or any other officer of a corporation shall be 

directly or indirectly interested in any contract, consideration of which is paid from the city treasury. 

The foregoing rule rests upon sound public policy. Its 

object is to insure to the.city strict fidelity upon the part of 

those who represent it and manage its affairs. The rule 

prohibiting public officers from being interested in public contracts should be scrupulously enforced. 

A public official must avoid a position where his private pecuniary interest might conflict with his public duty. In explaining why a cotipty judge could 

not receive payment for acting as attor+y,,for the county to enforce a contract 

and collect indebtedness’ due, the Supreme Court of Texas observed in Ehlinger 

v. Clark, 8 S. W. 2d 666,674 (Tex. Sup. 1928), that the county judge, as a member 

of the commissioners court was charged with insisting that contractors with the 

county properly perform their contracts, and “if, after an attorney was employed, 

it should be found that the attorney was not performing his duties in a competent or 

faithful manner, it would become the duty of the commissioner,@’ court, presided 

over by the county judge, to relieve such attorney of his duty and employ another. ” 

Similarly, in the situation your office has described, it could become the 

duty of the city commission to demand that the person contracting with the city 

(the city commissioner) perform his contractual obligations to the city in a manner 

other than he was willing or able to do. In such an event the involved commissioner 

could find his private pecuniary interests and his public duty to be in conflict. Or 

his attitude toward the water policy of the city could be affected by his peculiar 

personal pecuniary interest. 

p; 2808 
The Honorable Patrick C. Batchelor. -,.Page 3 (H-638) 

The court in Meyers v. Walker, 276 S. W. 305 (Tex. Civ. App. -- 

Eastland 1925, no writ) applied the predecessors of the foregoing statutes 

to a contract of the City of Lamesa, and in doing so observed that contracts 

in their nature calculated to influence the actions of public officers - and the 

effect of which is to influence them one way or the other - are against public 

policy. We believe article 988, V. T. C. S., condemns such pecuniary influences 

and interests whether they arise from contracts which were originally valid but 

have become the source of potential conflict, or arise from those which were invalid in their inception because of an existing potential conflict. The pernicious 

effect is the same. As noted in Delta Electr% Construction Co. V. City of San 

Antonio, 437 S. W. 2d 602, 609 (Tex. Civ. App. -- San Antonio 1969, writ ref., 

n. r. e. 7 . llriti is the existence of such interest which is decisive and not the 

actual effect or influence, if any, .of the ‘interest . “See Knippa v. 

Iron Works, 66 S. W. 322 (Tex. Civ. App. 1902, no writ); Bexar County v. H 

. . 2d 126 (Tex. Civ.App. -- San Antonio 1964, wirt ref’d. n, 

Former penal code article 373 spoke prospectively: “If any officer . . . 

shall become . . . interested . . . “Article 988, V. T. C. S., speaks in the present. 

“No members. . . shall be directly or indirectly interested. . . . ” The first is 

to be strictly construed as penal statute while a rule of liberal constuction will 

be applied to the second in order to effect its remedial purpose. Attorney General 

Opinion M-714 (1970). 

Because the contract arose prior to the election of the’city commissioner, 

we do not believe former’article 373 would be applicable to the situation described, 

but in our opinion, the continued pecuniary interest of the commissioner in the 

contract after he took office would bring the matter within the proscription of 

article 988, V. T. C. S. And see V. T. C.S., articles 5973, 5974;Penal Code $ 39. 01. 

-- 

SUMMARY 

It is a violation of article 988, V. T. C. S., but not 

former penal code article 373, for a person elected 

city commissioner to remain pecuniarily ‘interested 

in a contract previously entered into by him with the 

city whereby the city sells water to him ,for resale 

to rural customers. 

Very truly yours, A 

Attorney General of Texas 

p. 2809 
The Honoiable Patrick C. Batchelor - Page 4 (H-638) 

Opinion Committee 

jad 

p, 2810