Court Opinion

ID: 4143036
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:28:52.957861+00
Date Added: 2024-06-11T14:21:57.507440
License: Public Domain

THEAITORNEY               GENERAL
                              ~PTExA~
                             AUSTXN~ILTBXAR
GERALD C. MANN
--ON
*TrORNEzYc4ENERAL

       Honorable Eugene Brady
       County Attorney
       Hunt County
       Greenville, Texas
       Dear Sir:                  ClginionNo. 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 opin-
       ion 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 macadam-
              ized 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 is-
  sue bonds for the purpose of   the construction,
  maintenance and operation of   macadamiaed, gravel-
  led, 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 Coun-
  ty 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 Coun-
  ty 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 certi-
  fied 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 con-
     tracts for work to ,be paid for out of the
     said bond money.
          "Article 779 RCS is as follows: 'The Con-
     missioners' Court nay invest sinking funds ac-
     cutntnulated
                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 nay-
     ment 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 nur-
     pose 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;sor for any-
     thing other than for actual material, labor
     and supplies used in construction, and main-
     tenance 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 Conmis-
     sioners' Court could invest any surplus '.,hat
     might be accummulated in the sinking funds in
     such defense bonds."
          Article 752q, Vernon's Annotated Civil Statutes, pro-
vides:
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'sof 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 coun-
ty 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~ethan 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 accununulatedin the sink-
ing 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