Honorable Fred Erisman
Criminal District Attorney
Longview, Texas
.
Dear Sir: Attention: Ur. Mike Anglin
Opinion No. O-2880
Re: Are the relief orders issued
in the months of July, August,
and September, when no cur-
rent funds were available nor
any provlsign for their pay-
ment made by the commissioners'
court, a legal obligation of
the county?
Your recent request for an opinion of this Depart-
ment upon the above stated question has been received.
We quote from your letter as follows:
"Your opinion is requested upon the following
question:
'During the last fiscal year, the Commissioners1
Court of Gregg County made an appropriation in its
budget for the relief of paupers. This approprlatlon
was exhausted, and thereafter the Commissioners'
Court declared an emergency amending its budget, and
set aside another appropriation for the relief of
paupers. At the time this second appropriation was
made, a written contract was given to various mer-
chants in the County whereln they agreed to supply
groceries and merchandise upon relief orders given
them by certain designated persons, which persons
were dlslgnated by the Commissioners' Court as County
Relief Workers. When this second appropriation
was exhausted, the workers continued to issue relief
orders, which relief orders were honored by the
merchants, and some three thousand dollars worth of
groceries were charged to Gregg County during the
months of July, August, and September, 1940, upon
these relief orders.
"The appropriations maae for this purpose had
..
Honorable Fred Erisman, page 2 o-2880
been expended, and there were no current funds with
which to pay them. At the beginning of the new fls-
cal year, October 1, 1940, these relief orders were
ordered paid by the Commissioners’ Court, and re-
fused by the Auditor.
“Are the relief orders issued in the months of
July, August, and September, when no current funds
were available nor any provisfon for their payment
made by the CommlsslonerstCourt, a lsgal obligation
gf the County?
“It appears that no notice was given the mer-
chants that the money had been expended, or at least
that they were lead to believe, that they would get
their money from Gregg County when they Issued these
rsllef ardors. Such belief on the part of the mer-
chants may have arisen by reason of the fact that
they had signed a COntraCt agreeing to furnish Gregg
County with groceries upon the recsipt of relief orders
issued by authorized uorkers.
“Article 11, Soctian 7, Constitution of the
State of Texas, prohibits the creation of a debt
unlsss provision is made at the tims of creating the
same for levying and collecting a sufficient tax to
pay the lnterost thereon and provide at least 2s as
a sinking fund. Oti oourts have uniformly held that
the creation of a ‘debt” within ths meaning of the
constitution, must be such a debt that is not payable
out of funds on hand, or funds which the party to the
contract reasonably contemplate will be under the
Immediate control of the Commlssloners’ Court.
“However, in the present instance, the merchants
furnished the groceries which were accepted by the
county and fed to Its indlgont citizens, and the
County having accepted the beneflts of the contract,
Lt would seem unjust that it should so accept them
and not pay for them.
“Leading case on this proposition Is Sluder v.
City of San Antonio, by the Commission of Appeals,
2 s. W. 2d, p. 841, wherein many cases are cited,
announcing the principle as follows:
“‘The rule thus firmly established by the Courts
of this State rests upon the obligation of a munlci-
palitg to do justice when it has received money, pro-
P-Q, or services of another. Under such clrcum-
Honorable Fred Erlsman, page 3 o-2080
stances, the plainest prlnclple of justice require
that it should not be permitted to receive and re-
taln the benefits of a contract without paying the
reasonable value thereof. This principle, we think,
is supported by the great weight oY authority.'
"To the same effect are West Audit Company v.
Yoakum County, Commission of Appeals, 35 S.W. 26,
page 404; Austin Brothers v. Montague County et al.,
Commission of Appeals, 10 S.W. 26, page 718; Colonial
Trust Company v. Hill County, Commission of Appeals,
27 S.W. 2d, p. 144, and many other cases too num-
erous to cite.
"It is our opinion that the merchants cannot
rely upon their original contract, but that since
the County has accepted the benefits of the contract,
even though no provision was made for its payment,
there 1s an implied contract and the County is es-
topped from denying its liability, and the claim of
the various merchants for merchandise sold, delivered,
and consumed by reason of their contract with Gregg
County are legal claims against the Courity and that
upon proof of the reasonable value of the goods de-
livered to Gregg County, the Auditor should approve
said claims."
Article 2351, Vernon's Annotated Civil Statutes,
specifying certain powers of the commissioners' courts
provides in part that:
"Each commissioners' court shall: . . . ..(II)
Provide for the support of paupers and such idiots
and lunatics as cannot be admitted into the lunatic
asylum, residents of their County who are unable to
support themselves. By the term resident as used
herein is meant a person who has been a bona fide
inhabitant of the county not less than six months
and of the State not less than one year. . . . . .I'
The case of Galveston County v. Gresham (Clv. App.)
220 S.W. 560, among other things, holds in effect, that
where the evidence shows that the commissioners' court has
acted with knowledge of the circumstances and that the
other party to the alleged contract has innocently placed
himself in a situation which will cause him loss in case
the contract is not sustained, it may be concluded that
the county is bound thereby.
The case of Germo Mfg. Co. v. Coleman County (Civ.
Honorable Fred Brlsman, page 4 o- 2880
App.) 184 S.W. 1063, holds in effect that the ratification
or estoppel must be based upon action on the part of the
commissioners8 court.
The case of Sluder v. City of San Antonio, supra,
among other things, holds that where a county has received
benefits under a contract which is illegal in that it has
not been made in conformity wlththe Constitution or statutes,
liability is held to exist, also by reasonof implied con-
tract to pay the reasonable value of the benefits which the
county may have received. This case further holds In ef-
fect that where the contract is void and no recovery is
permitted thereon, the courts hold that common honesty and
fair dealing requires that a county should not be permltted
to receive the benefits of money, property, or services
without paying just compensation therefor.
In the case of Cochran County v. West Audit Co.,
10 S.W. (2d) 229, it was said irregularities in making a
contract employing audltors to audit the books and accounts
of the county would not defeat recovery on a quantum merult.
Where warrants are held void as being in contravention of
the Constitution, it Is nevertheless erroneous to sustain
a general demurrer to a petition alleging acceptance of ths
goods for which the warrants were issued, ana the benefits
therefrom retained without offering restitution thereof.
A recovery thereon Is not in any sense a recognition of the
validity of the contract which the fundamental law has
made void, but rather the recovery is upon that implication
of law which imposes a duty and legal liability to pay the
reasonable value of the property or services of another,
accepted and retained under circumstances justifying the ‘~..
assumptlon that there was an intention to pay.
The case of the City of Waco v. Murray, 137 S.W.
(2d) 1062, holds in effect that where a municipal corpora-
tion receives the benefits of a contract which is illegal
because It was not made ln,conformitg with the statutory '
or charter provlslons, the city will be held liable on an
implied contract for the reasonable value of the benefits
received by it.
In the above mentioned case the city raised the
proposition in which it contended that since the budget
adopted for the fiscal year in question, did not provide
for the compensation claimed by Murray, therefore, he
(Murray) could not lawfully receive or recover compensa-
tion for the services rendered by him. We quote from
this case as follows:
Honorable Fred Erlsman, page 5 O-2880
"The city presents a proposition in which
it contends that since, in the budget adopted
for the fiscal year 1934--1935, a salary of
$60 a month or an aggregate of $720 per year
was provided for 'building engineer and elevator
operator', appellee could not, under the facts
hereinbefore stated, lavfully receive or recover
compensation for the services rendered by him
In operating the furnace and regulating the
radiators. The city of Waco was et all times
here under consideration operated by a city
manager under provisions prescribing his pow-
ers and duty. City Charter (1930) Sec. 15,
Art. 61. Under the provisions of said article,
he was authorizedto employ and remove all
subordinate employees without notice. Appel-
lee was such an employee. Regardless of the
rather vague and technical descrlptlon of the
nature of his employment, as shown by the ex-
cept from the budget hereinbefore quoted, the
uncontradicted testimony showed, as herein-
before stated, that his employment, so long as
the same should continue, was to operate the
elevator dally, with the possible exception
of Sundays and holidays, and to operate the
furnace and regulate the radiators if and when
necessary to do so during the winter season.
This arrangement seems to have continued with-
out discussion or controversy for more than
four years. When his customary compensation
for his services in operating the furnace and
regulating the radiators was not paid during
the fall of 1934 as had been theretofore done,
he called the matter to the attention of the
city manager, who advised him that he would
get the matter straightened out and corrected.
Appellee, relying on such assurance, continued
to perform his duties in that capacity and the
city continued to accept and enjoy the benefits
of the same until the then current six months
period was completed. Incidentally, there was
no proof that the then current budget was reg-
ularly prepared and adopted as provided by
Vernon's Ann. Clv. St. art. 68ga, subdivisions
13 to 16, inclusive. Neither was there any
proof of its contents other than the brief ex-
cerpt above quoted. Appellee's suit, however,
is upon an implied contract and not upon a for-
mal contract based on that budget. The city
manager had authority to discharge him at any
.
Honorable Fred Erlsman, page 6 o-2880
time and he had a right to quit at the end of
any month. Apparently, the city manager pre-
ferred to have him continue to perform the
onerous extra duties incident to the winter
season. It is shown wlthout contradiction
that on two separate occasions he promised
appellee that he would take the matter up and
get it straightened out and corrected, and
that appellee relied on such assurances.
"Our courts have held in similar cases
that regardless of strict legality or form-
ality, when a municipal corporation receives
the beneflts of a contract illegal because
not made in conformity with statutory or charter
provisions, such corporation will be held liable
on an implied contract for the reasonable value
of the bsneflts received by it. *****ii. "
For your Information, we call your attention to
the fact that this department has heretofore hold that the
fiscal year begins January l,and.ends December 31, in
Opinions Nos. O-2324 and O-2478, and we enclose copies of
these opinions herewith.
In view of the above stated facts and the fore-
going authorities, you are respectfully advised that it is
the opinion of this Department that the claims of the var-
ious merchants for merchandise sold, delivered,-and con-
sumed by reason of their contract with Gregg County are
legal claims against the county and that upon proof of the
reasonable value of the goods delivered to said county the
auditor should approve said claims.
Trusting that the foregoing fully answers your ln-
qulry, we are
Yours very truly
ATTORNEY GENERALOF TEXAS
By s/Ardell Wllllams
AW:BBB:wc Ardell Williams
Assistant
APPROVED DEC 13, 1940
s/Gerald C. Mann
ATTORNEY GSNBRALOF TEXAS
Approved Opinion Committee By s/BWB Chairman