Court Opinion

ID: 4137800
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:29:05.718482+00
Date Added: 2024-06-11T14:37:45.476538
License: Public Domain

December.   16, 1949,

Honorable Robert S. Calvert
Comptroller   of Public Accounts
Austin, Texas                          opini0n.k      v-97.2           ”

                                       Rer Charges of pajting~ agent
                                           of college ConstitutidnU
Qear Mr.     Galgrt:                       tax bonds.             .,
          You request the opinion of the Attorney General on
queetians concernin& bonds issued under the College Building
Armendment, as follows:

           “‘I have been asked to issue warrants out of
     Xtis     r,aisAS. from the five-cent tax levy for the
     purpw8 of p*y&, the cost of retiring the bonds.,
     I awe&i apprecia, t e yoqr ~JISW~P   to ,the fo,llowing           ‘;. :’
     ,guestions:

            (4    If the cost of @%ying o; &fhecost af retfr-
                  ing tha.ss bbnds may be paid out of f&s
                  raised by the five-cent   tax levy collected
                  under authority of the College Building
                  &nendment     to the Texas Constitutidn?     :

            (2)   Zf your answer to QueStion No. 1 is in the
                  negative, may the Schools use funds ap-
                  prbpriated  from the State Treasury     for
                  the support and maintenance    for ,the purpose
                  of paying such costs? ”

           Article Vtff, Section 17, Constitution oi Texas;.authofizes
the issuance of bonds or notes by the state colleges      named there-
in fa,r t& purpose of acqui,ring, constructing,,   and initi$&ly equip-
ping buildings or ather permanent improvements;,        and~in payment
thereof this section provides for the levy of a state ad vbloreti       tax
,of five cents.

         The various colleges named in Se&on 17 have issued bonds,
and have designated as the paying agents of the interest and principal
of such bonds certain banks in Texas and in New York,
Honorable     Robert S. Calvert,    Page   2 (v-972)

           You wish to know whether payment of the charges of
there b&c# for interest and principal payment of the bon& may
be made out of funds realieed from the state ad va.lorun tr* of
five cents.

           Section 17 specifically   grants to the colleges    the power
to issue interest bearing negotiable bonds.       It is manifest that
there must be a place of payment of bonds, and that certain duties
must be performed       in such payment.    Our Supreme Court has held
that whenever a power is granted, it impliedly authorizes          what-
ever ie necessary     or indispensable   to the exercise    or enjoyment
of the grant, and that the grant of an express power carries with
it by irnplicbtion,  every incidental power that is necessary       and
proper to the execution of the power expressly         granted.   Terra
w,           104 Tex, 191, 135 S.W. 519 (1911).

           It lo recognized    by all that paying agents will not gratu-
itoualy perform their duties.        Thus, if there is a necessity   for a
pryment agent, it follows that there is a necessity        for the payment
of the reasonable     charges of such paying agent for the performance
of its duties,    Although Section 17 does not expressly      mention the
payment of the charges of a paying agent, we think that the same is
necessarily     implied.   In other words, this power is necessarily       im-
plied from the express power to issue bonds.

           You cite ue to our Opinion No. V-798 and No. V-799.      In
the first-mentioned   opinion it was held that the five cent tax fund
“may not be withdrawn from the State Treasury       except to pay
principal and interest reouirements    of bonds or notes issued under
Section 17.” It is our opinion that the charges of the bank of pay-
ment would constitute a requirement. which would have to be paid.

         In Opinion No. V-799 it was held that in the issuance of
the bonds authorized    in Sections 17 and 18 of Article VII, it would be
necessary  to Incur certain expenses     such as printing and attorneys’
fees and that the college board could properly incur such expenses
“and pay for them out of legally available funds of the institution,
aeeuming, of course,     that such expenses  are reasonable.”

            In that opinion        not called upon to decide;and
                              we were                             we
did not decide, what constituted  “legally available funds.” We do
not believe that Opinion No. V-799 is in any way inconsistent    with
our hold.ing with respect to the payment of the charges of the bank
of payment.

            To #how that the authority     for the payment   of such chargea
Honorable    Robert   S. Calvert,    Page   3 (V-972)

must   necessarily   be implied from the express power to issue
the bonds, let us give a practical    illustration. Without express-
ing any opinion as to what funds might be legally available (other
than the five cent tax fund), suppose that all public moneys were
earmarked     by the Legislature  for specific purposes,   none of
which included the payment of the charges of the bank of payment.
If the bank of payment received no moneys for the performance
of its duties, then it could refuse to perform them. In such event,
there would be a default in the payment of the interest or princi-
pal, or both.

          It is our opinion that Section 17 of Article VII, in express-
ly granting the authority to issue the bonds, impliedly authorizes
the payment of the charges of the paying agent out of the five cent
tax fund.

          Our answer to your first question in the affirmative               renders
unnecessary   an answer to your second question.

                                    SUMMARY

             The charges of the paying agent of the bonds issued
       by A college under Section 17 of Article VII, Constitution
       of Texas (College Building Amendment),     may be paid out
       of funds raised for the benefit of such college out of the
       state ad valorem tax of five cents levied by said constitu-
       tional provision.

                                                Very   truly yours,

                                      ATTORNEY          GENERAL       OF TEXAS

                                     By     &                 $rke
                                                                       Assistant
QWS:   u:v

                                      APPROVED

                                      FIRST ASSISTANT
                                      ATTORNEYGENERAL