THEAITORNEY GENERAL 

~PTExA~ 

GERALD C. MANN AUSTXN~ILTBXAR 

--ON 

*TrORNEzYc4ENERAL 

Honorable Eugene Brady 

County Attorney 

Hunt County 

Greenville, Texas 

Dear Sir: Clginion No. O-3329 

: Can the commissioners' 

court invest surplus 

bond funds in the 

United States Defense 

Bonds under the facts set 

forth? 

Your letter of November 13, 1941, requesting an opinion of this department on the above'stated question, reads, in 

part, as follows: 

*Under the terms of Article 752a RCS 

a special road district has been formed in 

this county and bonds voted in the amount 

0f Qb125,ooo. These bonds have been sold 

and the money is now on hand. In conformity 

with said article such bonds were issued for 

the specific purpose of constructing macadamized roads in the defined road precinct. 

"The bonds have now been sold and said 

District has on hand the Qb125,OOO. They are 

commencing construction of roads as soon as 

possible, however, they are of the opinion 

that only about $50,000 of this amount will 

be used within the next two or three years. 

They desire to invest the surplus funds 

amounting to about $50,000 in United States 

Defense Bonds. 

"The Commissioners' Court has requested 

an opinion as to whether they can legally 
Honorable bugene Brady, Page 2 O-3329 

invest this money in United States Defense Bonds, 

"Article 752a provides that a road district 

may be created and 6s hereby authorized to issue bonds for the purpose of the construction, 

maintenance and operation of macadamiaed, gravelled, or paved roads and turn pikes or in aid 

thereof.' 

"Article 752 reads in part: 'The election 

order and notice of the election shall state the, 

purpose for which the bonds are to be issued, the 

amount thereof, rate of interest, etc.' 

"Article 752j provides that said bonds shall 

be sold to the highest bidder for cash 'and the 

purchase money therefor shall be placed in the 

County Treasury of such County to the credit of 

the Available Road Fund of such county or of 

such political subdivision or road district, of 

such county as the case may be.' 

"Article 7520 reads as follows: 'The County Treasurer is oustodian of all funds collected 

by virtue of this law and shall deposit them with 

the County Depository in the sane manner as County Funds are deposited. It shall be the duty of 

the County Treasurer to promptly pay the interest, 

and principal as it becomes due on such bonds out 

of the funds collected and deposited for that 

purpose.' 

"Article 752~ is as follows: 'The purchase 

money for such county bonds shall be paid out by 

the County Treasurer upon warrants drawn on the 

available road fund, issued by the County Clerk, 

countersigned by the County Judte, upon certified accounts approved by the Conc.issionerst 

Court of the county; and the Furchase ,money,for 

such bonds issued on the faith and credit of 

political subdivision or district shall be 

paid out by the county treasurer upon warrants 

drawn on the available road fund thereof, issued 

by the County Clerk, Countersigned by the County 

Judge and approved by the Cotmissioners' Court.' 
Honorable Eugene Brady, Page 3 O-3329 

"Article 752~ and 7.52~ define the powers 

of the Commissioners' Court in awarding contracts for work to ,be paid for out of the 

said bond money. 

"Article 779 RCS is as follows: 'The Conmissioners' Court nay invest sinking funds accutntnulated for the redemption and payment of 

any bonds issued by sue> eounty,political 

subdivision or defined district thereof, in 

bonds'of the United States; of Texas, or any 

county in this state' --------* 'No such 

bonds shall be purchased which according to 

their terns mature at a date subsequent to 

the tine of maturity of the bonds for the nayment of which such sinking fund was created.' 

"1 have been unable to find any other 

statutes or any decisions touching on this 

question. However, from a construction of 

the above articles it seems to me that the 

sale price of such honds are held by the 

County as Trustee for the Road District and 

that the Commissioners' Court, nor no other 

authority, would be justified in expending 

any of the principal raised from such bond 

sale for any purpose other than for the nurpose set out in the election order, that is, 

the construction, maintenance, etc. of roads. 

It is by belief that County Treasurer would 

not be justified in paying out such money 

for the purchase of defense bonc;s or for anything other than for actual material, labor 

and supplies used in construction, and maintenance of the roads to be built, and then 

only upon proper warrants upon certified 

accounts approved by the Commissioners' Court. 

Of course I think it is clear that the Conmissioners' Court could invest any surplus '.,hat 

might be accummulated in the sinking funds in 

such defense bonds." 

Article 752q, Vernon's Annotated Civil Statutes, provides: 
Honorable Eugene Brady , Page 4 O-3329 

"The expense incurred in surveying the 

boundaries of a political subdivision or 

road district, and other expenses incident 

to the issuance of bonds of such subdivision 

or district, shall be paid from the proceeds 

of the sale of the bono's of the subdivision 

or district issuin!: the sane." 

We have carefully considered the statutes cited in 

your letter, together with other statutes cited in Chapter 3, 

Title 22, Vernon's Annotated Civil Statutes, relative to county and municipal bonds, etc., and agree with the conclusion 

stated by you. 

Therefore, it is our opinion that the commissioners* 

court or ;ny other authority does not have any legal authority 

or power to expend any portion of the principal raised from such 

bond salefcr any other purpos~e than for the purpose set out in 

the election order and those expenses authorized by Article 752q, 

supra. It is our further opinion that the commissioners' court 

could invest any surplus that might be accununulated in the sinking fund in such defense bonds in compliance with the provisions 

of Article 779, Vernon's Annotated Civil Statutes. 

We thank you for the brief and the opinion expressed 

by you. 

Trusting that the foregoing fully answers your inquiry, 

we are 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

BY Ardell Williams 

Assistant 

AW:PAM 

APPROVED NOVEMBER 25, 1941 

Grover Sellers 

FIRST ASSISTANT ATTORNEY GENERAL 

Approved Opinion Committee 

By BWB, Chairman