THEAITORNEY GENERAL
~PTExA~
AUSTXN~ILTBXAR
GERALD C. MANN
--ON
*TrORNEzYc4ENERAL
Honorable Eugene Brady
County Attorney
Hunt County
Greenville, Texas
Dear Sir: ClginionNo. O-3329
: Can the commissioners'
court invest surplus
bond funds in the
United States Defense
Bonds under the facts set
forth?
Your letter of November 13, 1941, requesting an opin-
ion of this department on the above'stated question, reads, in
part, as follows:
*Under the terms of Article 752a RCS
a special road district has been formed in
this county and bonds voted in the amount
0f Qb125,ooo. These bonds have been sold
and the money is now on hand. In conformity
with said article such bonds were issued for
the specific purpose of constructing macadam-
ized roads in the defined road precinct.
"The bonds have now been sold and said
District has on hand the Qb125,OOO. They are
commencing construction of roads as soon as
possible, however, they are of the opinion
that only about $50,000 of this amount will
be used within the next two or three years.
They desire to invest the surplus funds
amounting to about $50,000 in United States
Defense Bonds.
"The Commissioners' Court has requested
an opinion as to whether they can legally
Honorable bugene Brady, Page 2 O-3329
invest this money in United States Defense Bonds,
"Article 752a provides that a road district
may be created and 6s hereby authorized to is-
sue bonds for the purpose of the construction,
maintenance and operation of macadamiaed, gravel-
led, or paved roads and turn pikes or in aid
thereof.'
"Article 752 reads in part: 'The election
order and notice of the election shall state the,
purpose for which the bonds are to be issued, the
amount thereof, rate of interest, etc.'
"Article 752j provides that said bonds shall
be sold to the highest bidder for cash 'and the
purchase money therefor shall be placed in the
County Treasury of such County to the credit of
the Available Road Fund of such county or of
such political subdivision or road district, of
such county as the case may be.'
"Article 7520 reads as follows: 'The Coun-
ty Treasurer is oustodian of all funds collected
by virtue of this law and shall deposit them with
the County Depository in the sane manner as Coun-
ty Funds are deposited. It shall be the duty of
the County Treasurer to promptly pay the interest,
and principal as it becomes due on such bonds out
of the funds collected and deposited for that
purpose.'
"Article 752~ is as follows: 'The purchase
money for such county bonds shall be paid out by
the County Treasurer upon warrants drawn on the
available road fund, issued by the County Clerk,
countersigned by the County Judte, upon certi-
fied accounts approved by the Conc.issionerst
Court of the county; and the Furchase ,money,for
such bonds issued on the faith and credit of
political subdivision or district shall be
paid out by the county treasurer upon warrants
drawn on the available road fund thereof, issued
by the County Clerk, Countersigned by the County
Judge and approved by the Cotmissioners' Court.'
Honorable Eugene Brady, Page 3 O-3329
"Article 752~ and 7.52~define the powers
of the Commissioners' Court in awarding con-
tracts for work to ,be paid for out of the
said bond money.
"Article 779 RCS is as follows: 'The Con-
missioners' Court nay invest sinking funds ac-
cutntnulated
for the redemption and payment of
any bonds issued by sue> eounty,political
subdivision or defined district thereof, in
bonds'of the United States; of Texas, or any
county in this state' --------* 'No such
bonds shall be purchased which according to
their terns mature at a date subsequent to
the tine of maturity of the bonds for the nay-
ment of which such sinking fund was created.'
"1 have been unable to find any other
statutes or any decisions touching on this
question. However, from a construction of
the above articles it seems to me that the
sale price of such honds are held by the
County as Trustee for the Road District and
that the Commissioners' Court, nor no other
authority, would be justified in expending
any of the principal raised from such bond
sale for any purpose other than for the nur-
pose set out in the election order, that is,
the construction, maintenance, etc. of roads.
It is by belief that County Treasurer would
not be justified in paying out such money
for the purchase of defense bonc;sor for any-
thing other than for actual material, labor
and supplies used in construction, and main-
tenance of the roads to be built, and then
only upon proper warrants upon certified
accounts approved by the Commissioners' Court.
Of course I think it is clear that the Conmis-
sioners' Court could invest any surplus '.,hat
might be accummulated in the sinking funds in
such defense bonds."
Article 752q, Vernon's Annotated Civil Statutes, pro-
vides:
Honorable Eugene Brady , Page 4 O-3329
"The expense incurred in surveying the
boundaries of a political subdivision or
road district, and other expenses incident
to the issuance of bonds of such subdivision
or district, shall be paid from the proceeds
of the sale of the bono'sof the subdivision
or district issuin!:the sane."
We have carefully considered the statutes cited in
your letter, together with other statutes cited in Chapter 3,
Title 22, Vernon's Annotated Civil Statutes, relative to coun-
ty and municipal bonds, etc., and agree with the conclusion
stated by you.
Therefore, it is our opinion that the commissioners*
court or ;ny other authority does not have any legal authority
or power to expend any portion of the principal raised from such
bond salefcr any other purpos~ethan for the purpose set out in
the election order and those expenses authorized by Article 752q,
supra. It is our further opinion that the commissioners' court
could invest any surplus that might be accununulatedin the sink-
ing fund in such defense bonds in compliance with the provisions
of Article 779, Vernon's Annotated Civil Statutes.
We thank you for the brief and the opinion expressed
by you.
Trusting that the foregoing fully answers your inquiry,
we are
Yours very truly
ATTORNEY GENERAL OF TEXAS
BY Ardell Williams
Assistant
AW:PAM
APPROVED NOVEMBER 25, 1941
Grover Sellers
FIRST ASSISTANT ATTORNEY GENERAL
Approved Opinion Committee
By BWB, Chairman