Court Opinion

ID: 4144603
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:47:13.67655+00
Date Added: 2024-06-11T14:35:23.493677
License: Public Domain

Honorable John F. May
County Attorney
Karnes County
Karnes City, Texas

Dear Sir:             Opinion Aumber O-1797
                     Re:   Authority of Commissioners'
                           Court to refund road bonds
                           to mature in lesser t'imethan
                           that of the underlying bonds.
          We   are in receipt of your letter of December 29, re-
questing our   opinion as to the legality of the procedure pro-
 osed in the   matter of refunding certain bonds OS Road District
8 of Karney
 3             County. The facts are briefly as follows:
          "Road District #3 of Karnes County, Texas,
     voted-a bond issue of $32,000, bearing interest
     at a rate of not more than 4$, due and payable
     serially, one bond of $1,000 due each year for
     twenty-six years, and one bond of $1500 due each
     year for the following four years, vlth option
     of prior redemption after five years from the
     date of such bonds. A bond buyer has proposed
     to purchase the bonds as they were voted and then
     have the Commisslonerst Court to refund the bond
     issue so as to make them due and payable serially
     Fn twenty years and make the payments due each
     year about equal, with ten year option as to
     payment."
            Your question is:

          "Can this be legally done withaut another
     election?"
Honorable John F. May, page #2       (O-1797)

           After a careful reading of the statute governing
the issuance of refunding bonds, we must advise that we
have failed to find any provision within the statute  re-
quiring the submlsslon of the proposltlon of the issuance
of refunding bonds to the electorate. We, therefore, must
answer your question in the affirmative.
          By giving an affirmative answer we do not intend that
this opinion shall be construed as approving the procedure
outlined in your letter. Article 752x of the Revised Civil
Statutes of 1925 is the law appertaining to the refunding of
road bonds, and reads as follows:
               "That the commissioners' court of the several
          counties in Texas shall have authority to refund
          any road bonds that have been issued or that may
          hereafter be issued by authority of any law en-
          acted pursuant to Section 52 of Article 3 of the
          Constitution of Texas, when such road bonds have
          been issued for and on behalf of a political sub-
          division or defined district or consolidated dis-
          trict in such aounty. Such refunding bonds shall
          be made to mature serially over a period not ex-
          ceeding forty (40) years from their date, as x
          & determined & the commissioners court,-@
          they staxbe made tobear Interest atthesame
                                                   --    or
          lower ratethant.G   original bondswhm    are being
                -
          refunded.  'PhecGiiiiissioners'
                                        court7iE71have

          provide for the levy of ad valorem taxes on all
          taxable property In the political subdivision or
          defined district, or consolidated district, as the
          case may be, sufficient to pay the current Interest
          on said refunding bonds and to pay the principal
          as it matures."
               It will be noted Prom a careful reading of this
statute that  a great deal of latitude Is vested in the commis-
sioners' court in the matter  of determining the feasibility of
refundFng road bonds. We have underscored certain language
Honorable John F. May,   page #3   (o-1797)

used .in this statute which we think'~indlcatlve.of the legis-
lative intention to make the advisability of a refunding a
matter of dlscretlon. we must conclude, therefore, that it
is legally within the power OS the commis'sloners'court .to
refund any bonds that have been issued where such,'d'ourt
deems it advisable and to the best interest of the'district
that such refunding be done.
          The courts of this State,have often announced the
principle that where a statute gives authority to commis-
sioners' courts; it will be reasonably construed in orderto
effect its purpose. See Sheffield vs. Sheppard,'39 S. W,.'
(26) 1111, Wallace vs. Commlssloners~ Court OS Madlson County,
281 s. w. 593. Jurisdiction has been conferred upon the
county commissioners' court to effectuate refundings for the
various defined road districts situated in~its county; and
having acquired that jurFsdiction they may, except as re-
strained bylawi exercise such~powers according to their
discretion., See the case of Raberbekken vs. Coryell County,
247 S.W. 1086. In the case of Cameron vs. Earnest, the
Court of Cltil Appeals stated that:
          "In the absence OS Sraud, no court has right
     to set aside decision of commissioners' court on
     matters within Its,jurisdiction." 34 S. W. (2d)
     685, error dismissed.

          And again the Court OS Civil A peals held in the
case of King vs. Falls County, 42 S.W. 72d) 481, that:
          “A dlstrlct court cannot revFew dlscretlon of
     commissioners~ court unless it appears there has
     been clear abuse of court's discretion."
          It will be seen from the above quoted decisions that
where a matter comes wLthin the discretlonarg powers of a
commisslonersl court much latitude of action is permitted
said court. And since we have heretofore determined that
Article 752x invests the commissioners' court wlth a certain
amount of discretion In the matter of determining the neces-
sity for a refunding, we must indulge the presumption that
Honorable 3ohn F. May, page #4    (o-1797)

the cornmIssioners court is actkg within Its authority ia
proposing to refund the road bonds of District #3 to mature
in twenty fears Instead of the thirty-year period authorized
In the election. In the absence of an abuse of this dis-
cretion the presumption must be in favor of the legality of
the traasactioa.
          You are, therefore, advised that unless it appears
that the c'osnsissioners~
                        court is abusing that discretion, the
proposed refunding cannot be said to be Illegal. This would
be true even though a greater burden was placed upon the tax-
payer thaiawas anticipated by the electorate at the time the
bonds were authorized.
          You are further expressly adtisdd that the commis-
sioners' court's authority to refund any Issue of bonds ari.ses
only after the underlying bonds have been issued, and, under
the law, bonds are not considered to have been Issued until
they have been sold and the proceeds thereof placed In the
cujtody of the County Treasurer. Hence, it must follow that
the agreement%o refund bonds prior to their issuance is not
only premature but is unauthorized.
                                  Very truly yours
                             ATTORIiRYGFZRRAL OFTRXAS

                             BY      /s/ Clarence E. Crow0
                                         Clarence E. Crowe
                                                 Assistant
CEC-s:mjs
APPROVED JAR 27, 1940
/s/ Gerald C. Mann
ATTORIiZYWFBRALOFTRXAS
APPRWED OPIHION COMMITl!RB
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