Court Opinion

ID: 4138499
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:37:06.03168+00
Date Added: 2024-06-11T14:36:40.825095
License: Public Domain

Autwx.xN   H.   .lk%Au
PRICE   DANIEL
*T?oRWEY GEN?mAL
                                        June 28, 1947

     Hon. James F. Houllban,                         Opinion Bo. V-271
     County Auditor,
     orange county,    ;                             Rer Atlthoritgof Or-
     Orange, Texas                                       ange County to
                                                         issue time uar-
                                                         ,Mlntsagainst tbe
                                                           :z    .ana bFi-
     Bear nr. xoullhanr
              Pour request for an opllllonof thls 4fzgErt-
     me& is eotnrtuntia~ly
                         ae follower
                 lPz%or.to the date of thle request,
            it had been~the ctlstcmof the.Cormnlseioners’
            court to paI%s.an order, whsch .saiaolder lra8
            retarded ln .theMinutes oS sala Co*t, .wbalW-
            in the Ommlesioner ,d sanb pertianlarprs-
            cinct was ~authorisedto lsbue a eorip .+7-
            rant agalnst~his p&m&act irmds payable ln
            one ‘oktwo or more gears arter date, tith @
            wIthoot SMxmest, whereu$on the .CountyOlerlc.
            wtmld issue an ‘ordinaryscrip warrant dlrect-
            ed to the County Treatvarer,aad in the lower
            left haml oorner 0r saia scrip warrant or
            elmwhere in the body of ealclscrip warrant
            wtmld tit0    In the worde ‘Payableon or be-
                       l.lOth, 19189 or similar &tee, fob
            rzzlA c the words With Interest e>        per
            -‘.        aamm.mes these irarrantawere pay-
            abfr to a bank an4 the Ooumdsaloner would
            a40    fbsl   t0   the     bank,    discbunt        them,   and   .~
            bmm the pmoeeas deposited to hle preaiact
            amount, aad thereafter carrent warrante
            wmld be dram against these funda to pay
            atrJw allared for the arMnary ana necef3-
            w    expemea incurma in the construction
            gmm~tot+nc~    ,or roads and bridges in tbat
                    .
                .%metWea   these scrip wamanta were
            &nwn to tbr order of t3omeparticular f%rnI
            ah MivLaual ana given in payment f.or shell,
        iron. James F. Koullhan - Page 2   (V-271)

             lumber, machinery, or other equipment and
             supplies. This t e of scrip warrant while
             payable In one (1c two (2), or mope years.
             from date of Issue dia not always bear Ia-
             terest. . .
                  a. . .

                  "1. Must all warrants Issued'against
             the roadand bridge funds of a county and
             payable out of revenue anticipatedIn some
             future year, sala warrants being carried as
             outstandingby the Treasurer,while other
             warrants were being paid out of current
             fuule, be classed as time warrants7
                  a2. Must the CommIseIonersCourt pub-
             lish their intention to Issue l!ImeWarrants
             as out?.Iaeaand provided for In Article
             2s   (NT
                   ‘3. Can Orange County with a valua-
             tion of alight1 over elgbteen mIllIon and
             Ho/l00 dollars 9$~~,OOO,,OOO.OO) lame arinety-
             fire Hun&red and l'?o/lOODollars ($9,500.00)
             la Time Warrants In'any one year against Its
             Read and Bridge funds without advertis
             publia~     or giving notice of the intea
                                                    T! Ion
                                                        Or
             of thoCfnmi~8lqaert3~ Court to do sq?.
                    .4. If the Ccumnlaaloners~     Court should
             x!&ias an'oraer authorizing any partloular aan-
    .        ml8sloner to issue a warrant, ecrlp 6r other-
             idme agamt        his particular precinct fUula,
             mile       ln any year other than the current
             yap with or without~lnterest,aaId warrant
             tobe    psed  by  said   commlSslonerto purchase
             ~;cI,         shell, or road building matbrlal,
             'orto be ticounted by said oommlaslonerand
             tsr,pooeeds used to finance current work In
             Ua pzeolnot and to pay other warrants issued
             wt         his preclaot funds to pay alaIms Ia-
             m        Uto     these wappaats are authorleed, Is
             * Ooamty Clerk requiped to Iesue said war-
             xmts am mwh a court orderana ia the County
             ztgzaq                 to approve ana countersign

               - tnlml the Legislature paeeea what I8 ae-
i       a-       a# the %ond and Warrant.Law* (Art. 2368a,
        Hon. James F. Houllhan - Page 3    (V-271)

        V.C.S.).   The Bond,and Warrant Law, while it recognizes
       .Mme   wrrad.6,  and regulates ana lImIta their lseuance;
        do&t!not purport to.authorlzetheir Issuance; it does
        expressly authorize the funding OS euch warrants as tire
        validly Issued Into negotiable bonds’. The.manner ana
        mode OS such reSuaalag is careSully and minutely ipecl-
        riea.   In the cases of the erectionof court houses,
        jails, aad the coastmotion of pub110 ma&s, it has been
        oitea heltYthat the county hae the Implied power to ls-
      . me time warrants~to pay therefor (A&IUEJ  VB. McOi.11,
        146 S. W. (26) 332; San Patrlclo Couaty vs..McClane,58
        Tex.243; Oavls vs. Bumey, 58 Tex.~364; Stratton ~8.
        CamIssloners~ Court, 137 S.W. 1170; Leeater vs. Lopez,
        217 S. w. 373).
                   Section   7, Article Xl of he Constitution of
        Tern8 provides In partr
                   a        lUodebt for any purpose shall
             ever bi $krred in any manner by any city
             or oouaty lmlesa provision ia made at.the
             time of creatingthe .eame,for leVylag aqd
             oolleoting    a suSSluI~nt tax to pay .thefin-
             teremt thereon and provide at kmst- two per
             centattaslnklngSunQ,.         .*.
                  TM8 department, Ia disoueslag’ the above con-
        etitutlaml p~ooialon, la Opinion Bo.- O-6433, dated
        July 24, 1945, state&a                               .
 :                   %a   foregoing provIsIoa Is a restrlc-
  .    .       tiara and lImItatioa,and it .Ms been held
:<.;           that when no authority exists to levy a tax
  *.:..        to PJ a debt, no power can exist to Incur
   ‘..         tba &bt.    (&mater v. Lopez, (Clv.App.)
  .            202d. W. 1039, affirmed 130 Tex..179, 217
               S. Y. 373.) We point out that the term
              ’ ‘bci#’ab usea In the above oonstitutianal
                  adsion is to be distinguishedrrom ob-
               b      OM payable Sran aurmnt revenues.
               The tern ‘tibt’, above referred to has been
               aeflmd *a8 ocunprehendIn&  any pecuniary ob-
                llgaWosrimposed by ooatract, exoept such
               as is at the date oS the agreement within
                ths la~Sul ti ,reasonablecontemplationOS
                t& mrtie8, to be eatiatled out of the our-
                mat revenuea for the year, or out OS some
                fuea then vUhU   the immediate coxitrolof
                thm ~a.rloaors ' oourt
                Sdo.l21, p* 670). If ai'th!%iFi       %*'- - .
                tractis made, it is contemplatedthat any
&n.   J-8       F. Houllban - Page 4      (V-271)

                                                                  I

      part 0s the purohaee price.18 to be *ia
      Srcm taxes levied and collected for ruttire
      years, the obligation aonatltutesa ‘debt’
      wl$Un the meaning 0s the corurtitutional
      prohIbItion.
           *The legislaturehas authorized ooun-
      ties to create ‘debts’within the meaning
      0s the oonstitutionby authorlslngthe is-
      mumoe of bonds and time warrants; and we
      are unablenna      am lenal meane by which
      a cam&esIonera’ court ma6 obll ate )rhetax
      revenue8of the county for a Su&ure year
      other than by complyingwith the statutory
      provIslom aa to the issuance oS bonds
      a&or time warranta.”
          The term “time warrant’ has beea.aeSIaeaas
includingany warrant iaeuea by a city or .couutynot pay
able out of current funds ana those warrants.lssuedand
payable out of aurreat Sunus aresImown as yecrlp warrints”.
Therefore,your SIrst question should be aamrered in .the
affirmnrtive%Mi8Inuchas warranta issued and payable,out
oS antlaipatedrevenue8 i,nsuture years should be ‘c~Eu~sI-
sled aa time rarraat;s.
            Seotion 2 of Article g3688, V. C. S.,       &ovSdes
in part as      r0~w8~
            a
            . . . liotice0s the ti.mi3
                                     and plaoe
      wha aad where mah coatraot shall be let
      s&l1 .be published in euoh oouity (i.S’
                                            cons
      eardsg      a aormty oontraot, or ooatract for
      mnh mbatvi~i0n 0s suoh county)     ana In
      m@t oi* (ff oonoeming a aity ooatract),
      ww   a week   $or two oonsecutiveweeks  prior
      to the time set for lettiag suoh oontract,
      m date OS the first publicationto be at
      lowt rowtesa aaya prior to the date set
      fw lot        Mid aontract, axidaaia oon-
      twat rlml
             9      be let to the lowest respoatti-
      Wlo Mwr,      oa the respeotlVe type oS oon-
      &met+       aelected. .. .
      a          prbritia,   that   la aaae of publia
      sty,      whwe it.beoaneeaeaessary to
      aat at on00 to a ropMate money to re-
      llwi the neoesal T y of the oitltene, or
      to~nezWe     the property of such oouuty or
      *,    or vb8a St Is neaeesarg to preeerve
Eon. James F. Houlihan - Page 5   (V-271)

    or protedt the public health of the clti-
    Zen8 of such county or city, or In caee of
    uaforeseen damage to public property, ma-
    chinery or equipment, t&Is provision ahall
    not apply; and provided further, that it
    shall not be applied to contracts for per-
    sonal or for professional services, nor to
    work done by such county or city and paid
    for by the day, as’such work progresses.”
         Section 3 of Article 2368a, ,V.C.S.,Is a8 Sol-
1Owet
          ?fhen It shall be the Intention of
    the CommI~sIoners~Court, or of the gov-
    erning body, to lasue time warrants for
    the,payment of all or any part of the pro-
    posed aontract, the notlae to.bldaers re-
    qu5lW under Section 2’of thIe Aot shall
    recite that fact,  setting out the maximum
    amount of the proposed time warrant Inaebt-
    edmee, the rate of Interest.such time
    Wmaats are to bear, and the xa&ci.mWn   ma-
    tur?lty&ate thereof.
           Section 5 o* Article 2368a, V.C.S., Is sub-
stantifilly a8 r0ii0w8:
          “The notice tibqulreaIn Sectlom 2 and
     3, aad the right to referendum election de-
     Simd in Section 4, shall not be applicable
     to expenditurespayable out of Our&eat funds
     or bond rum, a6 above aeacribea, aor to ad-
     tlltbaal expenditure8by counties unless In
     exaeee OS Five Hundred Dollar6 ($500.00 for
     eaccbdw Wllion Dollars ($l,OOO,OO,O.OO  1, w
     a oart thereof, of taxable property in’sala
     oaaw, according to the last approved tax
     rollai . . . andprovided further that no
     sti warraats shall ever be issued by a coun-
        la exoeee~of One Hundred Thousand Dollars
     (
     %o   ,OOO.OO) for any one year, without the
               ve notice and the’right to referen-
     :z?pz & ti in Section 3. Is in.exces8 of
     Uw W         .the expenc¶lturecannot be au-
     #arUed uaiil the expiration of the time for
     aatha      petition for referendum vote has
            . . .
          In the oaee of Foreman vs. Gooch, et al, 184
S. W. (a) 481, the court stated as follows:
_

    eon. James F.   Houllhan - Page 6     (V-271)

               aAppellant,in hi.8briefs, concedes
          that the &xmnlssioaers~Court.has authority
          to Issue what Is commonly called 'Interest
          bearing time war.rants,'contendingthat
          such warrants are authorIz.ed by the pro-
          visions of Article 2368a, Vertion'sAnn.
          Clv. St ., which statute Is known as the
          *Baod andwerrant Law.' With this contea-
          tlm we are unable to agree. As we under-
          stand the decisions, the authority for a
          Camlssloners" Court to Issue Interest bear-
          ing time warrants is derived from what now
          is Article 2351, Vernon's Ann. Tex. CIv.St.
          San Patrlclo County v. Jno. McClane, 58 Tex.
243; Lasater v. Lopez, 110 Tex. 179, 217 S.W.
          2;3. While Article 2368a, Vernon's Ann.CIv.
            ., is a restrlotlon or llmItatloa upon the
          authority 0s the CcnmnIssloaers~~Court Inis-
          suisg suih warrants Section 5 oS said Artl-
          cle urovldes that suoh Act does not apply to
          exmndltures DaYable out of aurreat funds."
              Therefore, In answer to your second question,
    It I? ths opinion of this department that notice must be.
    given of the:intention of the C~seloaers 1 Court to 18~
    sue tlWwaraWLtf3 is the expendituresare ia.excees 0s
    $5dO.OOfor tiaoh$~,OOO,OOO.OOoS tax,valtitlonor your
    county,ud the notices required by Article 2368a, supra,
    mwtbe&tvela before the Commisslonera~Court could le-
    gallyiwue time warrant.8for such purposes. Your sekoad
    questionshould be answered In the aSSlrmatIve.
                  Xa uestlon 100..3you askwhether O&nge Coun-
     ty WlMue         19,500.00 "In time warrants ln any one year
     agalnstlts road       -'bridge funds without advertising or
     publleb4 m giving notice of the Intention of the Can-
     IIISSS~-’      court   t0.‘a0   a?,*  aqd it is assumed by this de-
     partmeatthatthe expeI&dIture           is to bemade fromandthe
     wwraabS~wd           against current funds. IS such be the
     aa8e. Y       obvlarrslyyour question relates to s~crlpwar-
     raata Llbad OS time warrants as stated In your question,
     and lte        be mma from the foregoing oaae oS~Foremam vs.
     (loodr,   da,     rw,        that .theprovlslons 0s Section 5 of
    'Artl8leZ366ado not apply to those expendIt~es.S~cnncur-
      reatB,.but          li the IndebtednessIs-to be evldeaoed by
     a tiwmt              that is, oae r0r.a future year, then the
     '@ovi&a~ oS &ofion 5 would be applloable. Therefore,
      ltirfLopinSonoSthIs               department that Orange County,
      wboea et&an         lo alightly over $~~,ooo,ooo.o~,may Is-
      stu$g~.OOirrro~pti~ants                 from the current funds of
      its iarlrnd b&%dga funds without advertising,pt?blIshing
      ..

      Ilou.JrupsaF. Eoullhan - Page 7    (V-271)

      or glvlag notice of Its Intention to do so. Your third
      questian should be answered in the afSIrmatIve.    .;
                 Any warrant ordered issued by the Commlssloa-     ;
      era1 Court; payable out of the reasonably anticipated
      revenues for  the current year Is a vaild warrant and
      should be Issued by the County Clerk ad approved by
      the CountyAuditor. But, if a warrant be atiered Issued
      agalhst future revenues of the.countyand not payable
      wlthla the year from current funds, the seme would be
      classed as a time warrant. .ThereSore,a prerequisite
      to the lsswiace of'time warrants would be the required
      notlce, a tax levy, and.the estabilsbmeatof a sinking
      Sun6 to care for the same. The County Clerk would be
      bound by the order of the CommIssI~ers~ Court to per-
      Sms a sdalsterlalduty, but If the time warrants are
      not In doaSormItywith law the County Auditor Is'aot
      legallyauthorlsea~toapprove the same.         .
                              -SUMMARY
                         :
               1. A ttie.'warra&inaludeasay tirraat
           lssueaby a city or countynot .payabl? Sroq
           0-t     Sunds and notice, a tax levy, ana the
           ore&lea .0ra sinklug fund are.prerequlsltes.
i .        for the ldsuarke 0s the same by a Comlssion-                .
           ers' Cotirt.
               2. The Cwml.ssIonerslCourt of Orange
           County,vhose valustloais sllghtlyover
           EighteeaiUlUoa Dollars,may Issue N%ae              :~
           Thweand Five madred wllsrs la scrip war-
           &6   colifs "c-at   Suads"~wlthoutadVeT-
           2'       %~-$j8i?ivc:     ,"*l::~:a%aG::oh
           lt il,   185 S.W. (2i) I;Si;'&dAdams vs. McGIli,
           146 S.Y. (2a) 332.        :   .
                                         *Yours very. truli,

  . lHtlm,~*mw                               Assistant

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