The opinion
Honorable Ii. Pat Edwards
Civil District Attorney
Hall of Recotids
Dallas, Texas
Dear Sir:
Opinion Number O-3774
Re: Proceeds of bond
funds of Common
School Districts.
We acknowledge receipt of your opinion re-
quest of recent date and quote from your letter as
followe?
"The Reinhardt CommonSchool District
No. 16 of Dallas County, In the Fall of 1940,
by an election duly called and held, voted
favorably for the issuance of $35,000.00
Schoolhouse Bonds 'for the purpose of provld-
ing funds to be expended in payment of accounts
legally contracted in constructing and equlp-
ping a'public free school building of materi-
als other than wood; installing necessary
sanitary Improvements and purchasing addition-
al school grounds in and for said district',
In the ptieparation of preliminary orders and
for the 'purpose of presenting the bond trane-
eript to your department for approval, the
School Board hired and paid W. P. Dumaa, an
attorney-at-law of Dallas County, Texas, the
sum of $150.00 attorney's fee, and also paid
the sum of $74.50 for the printing of the
bonds. When the bonds were offered for sale
on March 15, 1941, a joint bid was received
from Jam&s, Stayart & Davis, Inc. and Beckett,
G,llbert & Co., Inc., a true and correct copy
of which is herewith enclosed, and which bid
you will observe wa8 contingebtupon the 'si-
multaneous acceptance by the Board of True-
t;ees of the District of the attached contraot.
Honorable R. Pat Edwards, page 2 (O-3774)
By paragraph 2 of the attached contract it
appears these alleged bond buyers agreed that
at thelr expense and with the assistance of
the trustees @to secure and compile all nec-
essary data and Information and to prepare
all necessary forms and to do all things nec-
essary to a full and fair presentation of
application for the sale of said bonds by
the District to the State Board of Education
for InvCstment In the Permanent School Fund’,
and In consideration of such servicers it ap-
pears from the contract that the Board of
Trustees agreed to pay the purported buyers
the sum of $500.00 caah. And, It will be
observed further that this contract provided
that this sum Ishould be paid regardless of
whether the bonds were delivered to these
purported buyers or to the State Board of
Education.
“As stated above, the Board of Trustees
had already contracted to pay Mr. Dumae~the
8um of $150.00 attorney’s fee for preparing
the bond transcript and presenting the same
to your department, and the sum of $74.50’
expense of printing the bonda, and a6 ehown
by the attached letter from James, Stayart
& Davla, Inc. on March 15ti-1, 1941, when this
contract in question was entered into, the
School District had already prepared to a
great extent the Application Form for pre-
senting the bonds to the State Board of Edu-
cation, so that it was necessary to do very
little to complete this minor part of the
proposed services. Therefore, aa explained
by these buyera, their services consisted
in this reepect ‘almost solely of the prl-
mary part of the within described full and
fair presentation of Application’. This is-
8ue of bond8 was duly purchased by the State
Board of Education for the price of par and
accrued Interest plus a premium of $519.99.
The County Superintendent of Schools was not
advised of this contract, and subsequent to
the receipt of the purchaee price of the
bonds from the State Board of Education,
he joined in the payment of the attorney’s
fee and cost of printing the bonds, but
Honorable H. Pat Edwards, page 3 (O-3774)
when presented wfth a request to join with
the,Trustees in the payment of $500.00 to
these alleged bidders for their so-called ,,
servibes,~ the effect of which was to require'
V;he State Board of Education to bid above
par and accrued Interest for the bonds, re-
fused to authorize such payment and addressed
an Inquiry to this office as to the legality
of~paylng from the proceeds of thfs bond is-
<sue, $500.00 for alleged servfces under this
contract hereto attached. The School Board
has no funds other than the proceeds of this
bond issue from which payment may be made.
* * + * * *
"Can the trustees of a common school
district pay out of the bond account, which
had been legally voted by the people of this
district, a fee to proposed bond buyers for
compiling data and information on required
forms and such other things as might be nec-
essary for a full and fafr presentatfon of
fLppllcatlon for the sale of such bonds to
the State Board of Educatfon for Investment
l.n the Permanent School Fund?"
This department has heretofore held that all
absolutely necessary expenses inourred in the issuance
and sale of bonds may be pafd out of the proceeds re-
ceived from the sale of the bonds* Opfnfon Number
O-131:!* .The determination of necessary expense must
be based upon facts peculiar to each issue, the knowl-
edge of which obvfously fs within the province of the
persons charged by law with administering the affairs
of the issuing agency. It will be observed that the
law has conferred upon the County Superintendent the
duty of approving expendetupes of common school dls-
tr9cts (Article 2693, Revised Cfv%l Statutes) and we
gather from the facts stated in the instant matter
that such offfcer has exercised his authority by de-
clining to approve the payment in questfon. It must,
therefore, be presumed by this department that he has
possecsfon of the facts, and his judgment thereon can-
not be questioned fn the absence of a showfng that
he is arbitrarily abusing the authorfty vested in him.
-?
h
. . I
Honorable H. Pat Edwards, page 4 (O-3774)
We, therefore, hold that under the law his
action is concluelve on us.
mmnm Auc3 27, 1941 Very truly yours
/e/ Grover Sellers ATTORNEY
GEIVRRAL
OF TEXAS
FIRST ASSISTANT
ATTORNEY GENERAL By /6/ Claud 0. Boothman
Claud 0. Boothman
COB-s:lm Assistant