Court Opinion

ID: 4138921
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:41:53.600453+00
Date Added: 2024-06-11T14:31:13.387314
License: Public Domain

THE    A     OIKNEY        GENE-
                          OFI'EXAS
                         AUSTIN   aa. TEXAS
GROVER SRLLRRS

   Honorable C. G. Mendenhall
   Coimtg Auditor
  Xhambers County
   Anahuac, Texas
  Dear Sir:                  Opinion No. O-7393
                             Re: Investment of county bond proceeds
                                 in short-term U.S. Treasury Cer-
                                 tiflcates.
           We have received your letter of recent date which we
  quote, In part, as follows:
           "This county has just sold a 3 million dollar
      bond issue, and in as much as it is going to be
      impossible for us to use these funds for some time,
      except a small portion, we are anxious to know if
      the county has authority to invest these funds or
      a portion of them in short term U.S. Treasury Cer-
      tificates.
           "Will you give us your attention on this at your
      earliest convenience."
           Article 708b, Vernon's Statutes, provides as fol-
  lows:
           "That any political subdivision of the State
      of Texas which heretofore has Issued and sold bonds
      Andyis unable to obtain labor and materials to car-
      ry out the purpose for which the bonds were issued
      may invest the proceeds of such bonds now on hand
      in defense bonds or other obligations of the Unlted
      States of America; provided, however, that whenever
      war time or any other regulations shall permit such
      political subdivlsions to acquire the necessary la-
      bor and materials,,the obligations of the United
      States In which said proceeds are Invested shall be
      sold or redeemed and the proceeds of said obligations
      shall be used for the purpose for which the bonds of
      any such political subdivision were authorized~. Acts
      1943, 48th Leg., p. 211, ch. 131, II2." (Emphasis
      added)
Honorable G. C. Mendanhall, page 2         o-7393

         It Is seen that the words "heretofore" and "now on
hand" are used. An examination of.the
                                    .  original
                                         __     act .reveals that
the same words are used in the caption. moreover, tne emergency
clause provides In part: "The fact that many political subdi-
visions of the state have issued --
                                 and sold bonds. . . '
(Emphasis added).    -
         It Is obvious, therefore, that the act applies only to
the proceeds of bonds which were issued and sold prior to the
effective date of the act (April 12, 1943). As the.bonds under
consideratFon were issued and sold in 1946, it Is evldent that
the provisions of Article 708b are not applicable.
         You are advised that we find no provision in law au-
thorizing the investment of the proceeds of these bonds in
United States Government Treasury Certificates. We quote the
following from our Opinion No. O-4746:
           "It is a fundamental principle of law that the
    proceeds derfved from the sale of bonds mst be de-
    voted to the purpose for which the bonds were Issued
    and not otherwise. Beaumont v. Matthew Cartwright
    Land Co., 224 S.W. 539 (Error refused); Simpson v.
    City of Nacogdoches, 152 S.W. 858; Aransas County
    v. Coleman-Fulton Pasture Company, 191 S.W. 554;
    Lewis v. City of Fort Worth, Texas, 89 S.W. (2d)
    975. "
         You are, therefore, advised that the   Commissioners'
Court of Chambers County is without authority   to invest proceeds
derived from the sale of bonds issued or sold   after the~~effec-
tive date of Article 708b (April 12, 1943) in   United States
Government Treasury Certificates.
                             Very truly yours
                          ATTORNEY GENERAL OF TEXAS
                             By s/George W. Sparks
                                  George W. Sparks
                                  Assistant
GWS/LH/wc
APPROVED SEP 20, 1946
s/Carlos C. Ashley
FIRST'ASSISTANT
ATTORNEY GENERAL
Approved Opinion Committee By s/BWB Chairman