. ,
Partly overruled by
Trinity Universal Ins. Co. v.
Ausxmv nl.Ta!zxas J. C. McLau hlin, et al
373 SW 2d 62
June 7, 1963
Honorable D. C. Greer
State Highway Engineer
Texas HighwiayDepartment
Austin, Texas
Opinion Ho. C-96
Re: Whether the Highway Department
may dispense with the require-
ment that the contractor fur-
nish an affidavit of bills paid
prior to making final payment
by virtue of Senate Bill 213.
Dear Hr. Greer:
Your request for an opinion recitea that on April 26, 1963,
Senate Bill 213 was signed into law by the Governor and went into
immediate effect. This bill deleted that portion of Article 6674m,
Vernon's Civil Statutes, that stated:
"and final payment shall not be made until it is shown
that all sums of money due for any labor, materials,
or equipment furnished for the purpoae of such improve-
ments made under any such contract have been paid."
You have submitted to us a request for our opinion on the
following questions:
"1. Hay this Department dispense with the requirement
that the contractor furnish an affidavit of bills paid
prior to making final payment?"'
"2. Hay this Department now make final payment to con-
tractors on jobs completed in the past where no such
affidavit was furnished?"
n3. ‘. In the event your answer to Question No. 2
is in t~e'afflrmatlve,please advise us whether or not:
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. ,
Honorable D. C. Greer, Page 2 (C-96)
“a. The State may pay the money retained on
these contracts directly to surety by warrant
iaaued in aurety'8 name."
"ba The State or any of the officials Involved
would be liable to surety if payment were made
to the contractor.”
Aa early aa 1857, the Texas Supreme Court held in The State
v. Andrews, 20 Tex. 230, that where an amendatory act of the legia-
lature reads that a certaln,aectionof a previous act shall here-
after read aa follows, any provision of the previous act which is
not found in the emendatory act ia repealed.
In Texas Farm Bureau Cotton AssIn v. Lennox, 296 S.W. 325
(Tex.Clv.App.1927), the Court was concerned with an amendatory
act regardLng jurisdictionand held:
"The present act, an amendatorystatute . . . declares
that the earlfer act . . . ehall be ‘amended80 as to
read a8 follows.' From this it follows that the legla-
latlve Intentionwas a recasting of the whole language
of the earlier article. In effect, all such por-
tions of the original a8 &i omitted from the amendatory
act are abrogated thereby and are thereafter no part of
the statute. State v. Andrews, 20 Tex. 230."
Senate Bill 213 states as follows:
"Section 1. That Section 13 of Chapter 186, Acts of
1925, 39th DegirrlatureRegular Sesaion (Article 667481,
Revised Civil Statutesj be amended 80 that It shall
hereafter read aa follows:
"Section 13. Said contractsmay provide for partial
payments to an amount not exceeding ninety-fiveper
cent 95 ) of the value of the work done. Five per
cent tB
5 ) of the contract price shall be retained un-
tll the entire work haa been completed and accepted."
Inasmuch aa the legislatureamended Article 6674m, Vernon'6
Civil Statutes, and deleted that portion which stated:
"And final payment shall not be made until It is ahown
that all 8ums of money due for labor, materials, or
equipment furnished for the purpose of such improve-
ments made under any such contract have been paid,"
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Honorable D. C. Greer, Page 3 (C-96)
It Is our opinion that the legislatureIntended that such requlre-
ment no longer be mandatory upon the Texas Highway Department and
that the remaining five per cent (5%) of the contract price be re-
tained until such time when the work has been completed and
accepted.
Since your first question directed to us Is "ma this Depart-
ment dispense wlth,the requirementthat,the contrac -3or furnish an
affidavit of bills paid prior to making final ayment?", your
attention is directed to Article 6674k and 667f 1, Vernon's Civil
Statutes:
"Article 6674k. Form of contract
"The State Highway Commission shall prescribe the form
of such contracts and may Include therein euch matters
aa they may deem advantageousto the State. Such forms
shall be uniform, a8 near as may be."
"Article66741. Signing contracts
"Every such contract for highway Improvementunder the
provisions of this act shall be made In the name of the
State of Texas; signed by the State Highway Engineer,
approved by at least two members of the State Highway
Commission and signed by the contractingparty, and no
such contract shall be entered Into which will create a
liability on the part of the State In excess of funds
available forexpenditure under the terma of this Act."
In Johnson v. Ferguson, 55 S.W.2d 153, (Tex.Civ.App.1932,
error dism.), the Court said:
"To the members of the~commlsslonand in large measure
to Its chief engineer are intruated responslbllltleeof
outstanding Importance. To meet these responalbillties
they are invested with a wide discretion. . Their
acts in the exercise of an honest dlscretio&'must be
respected when untainted by fraud and unassailed on
account of accident or mistake occurring in their per-
formance, or such abuse of discretion as under the
authoritieswould avoid the same."
It Is our opinion that although It is no longer mandatory
that the State Highway Department require an affidavit of bills
paid from the contractor,it may, In the discretion of the State
Highway Commission,require all contractorsto furnish such an
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. .
Honorable D. C. Greer, Page 4 (C-96)
affidavit. This requirement could be included in the contract
If the Texas Highway Commission deemed such matter to be advan-
tageous to the State.
With respect to your second question regarding final pay-
ments to contractorson jobs completed in the past where no such
affidavit of bills paid was furnished,the law seems to be well
settled that statutes which subsist at the time and place of the
making of a contract enter Into it and form a part of It as if
such statutes were exoreaaly referred to or incorwrated in lta
#----: Winder Bros. ;. Sterling, 118 Tex. 268, &S.W.2d 127,
terms
In the case of Smith v. Elliott & Deats, 39 Tex. 201,
(1873), the Court said:
"That the laws which exist at the time and place of the
making of a contract enter into and form a part of It,
embracing alike thoae which affect Its validity, its
construction,Its dlacharge, and Its enforcement,forms
a rule reconnlzedby numerous authoritiesof the hlnhest
character .-. Van-Hoffman v. City of Quincy, 4 Wail
550 . * * In the case of Von Hoffman v, City of Qulncy,
above cited, Mr. Justice Swayne says: 'It is also
settled that the laws which subsist at the time and place
of the making of a contract, and where It Is to be per-
formed, enter into ti$fOI'?na'part.of It as if.they were
expressly referred to, or incorporatedIn Its terms.'"
In regard to the contracts entered Into prior to Senate Bill
213, such contracts were executed at a time when by statute it was
mandatory that an affidavit of bills paid be furnishedby the con-
tractor prior to the payment of the remaining five per cent (5%).
Therefore, in answer to your second question It is our opinion
that on contracts executed prior to the date Senate Bill 213 became
effective the existing law required the contractorsto furnish
proof that all bills had been paid, that such law became a part of
the contracts and that the Texas Highway Department cannot now make
final payment to contractorson such contractsuntil such time that
proof of payment of all bills has been furnished.
Inasmuch as your request for an opinion on questions 3.a and
.b was contingent on an affirmativeanswer to question number two
2), these questions are not answered herein.
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. . c
Honorable D. C. Greer, Page 5 (C-96)
SUGARY
Senate Bill 213 which was signed Into law
on April 26, 1963, and which amended Article
6674m, Vernon's Civil Statutes, no longer
makes it mandatory that the Texas Highway
Department require an affidavit from con-
tractors that all bills have been paid.
However, all contracts executed after April
26, 1963, may include this requirement in
the discretion of the Highway Commission.
On contracts executed prior to April 26,
1963, the contractorsmust comply with the
law as It existed at such time and an affl-
davit of bills paid muat be furnished the
Texas Highway Department prior to receiving
final payment.
Very truly yours,
WAGGONER CARR
Attorney General of Texas
BY
Assistant Attorney General
REB:pm
APPROVED:
OPINION COMMITTEE:
W. V. Geppert, Chairman
Grady Chandler
John Reeves
Eawati Moffett
M. K. Wall
APPROVED FOR THE ATTORNEY GENERAL
BY: Stanton Stone
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