Untitled Texas Attorney General Opinion ( 1939 )

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THEATITORNEY GENERAE
OFTEXAS
A-RN- DsLCNF,-L
. . .,...... _ _.- . . -._.-.-.--_.-._
Hoa..T. M. Trlmble Opinion m:o-905
First Assistant Ret (a) From what fund, school or
State SuperInt endent county, should court costs and attor-
Austin, Texas ney’s fees incIdent.to foreclosure by
county of vendor’s lien on county
school lands, be paid. (b) From what
fuud, school or county, should delin-
quent and current taxes on county
school lands be paid by county owning
same. (c) Should the County Schol-
astic 4pportIontnent be first taken
from the County Available School Fund
before other allowable disbursements
Dear Slrt are made therefrom.
By your letter of June 13 1939, you request the opin-
Ion of this Department upon the foliowing questions which we
uote from letter to you of date June 12,1939, from the County
8 chool Superintendent of At~ascosa County:
“In 1927 our Commissioners’ Court sold a part of our
school lands In LaSalle County, Texas, constituting the
Permanent School Fund of our county. $5312.91 was paid
in cash and balance of consideration being evidenced by
a vendors lien note for $53,1.29.16. The principal of this
note was reduced by payments to $37,500.00 and the Interest
at 6% was kept paid up to 1935, when default was made in
further payments and purchasers also allowed taxes to be-
come delinquent.
“The land has been ‘subdivided and sold to purchasers
,In Texas and other states. Our Commissioners declared the
entire debt due for default and instituted Inquiries to
locate the parties so that citation might be served upon
them in suit to foreclose our lien. This cost amounted to
$200..00.
“Our Commissioners’ Court will shortly make requisi-
tion upon school authorities and the County Board for ap-
y $3 000.00 to pay delinquent and current taxes,
750.60 attorneys fees and court’costs estimated
to $500.00.
Hon. T. M. Trimble, page 2 ~(0-985)
“All payments on the principal have been credited
as made to the Permanent School Fund of our County and
all Interest payments as made have been credi.$ed to the
,County Available Fund.
“Please advise me if it 1s the duty of the County
School Board and County Superintendent to pay this out
of school funds. If so, from what fund. Should we not
take care of the balance’ of the County Apportionment
which is $C& per scholastic before this ~fund is used
for ‘any other purpose?”
The constitutional and statutory sohool funds are the
atate Permanent School Fund,, the State Available School Fund, the
County Permanent School Fund, the County Available School Fund,
,Loaal School Funds derived from maintenance taxes levied by the
various school districts, and School Bond Sinking Funds of the
various districts.
The State Permanent School Fund and the County Permanent
School Fund are constitutional funds, and it is provided expressly
ln the pertinent sections of the Texas, Constitution that lands, or
the proceeds thereof, constituting such funds, shall be held ln
trust for then public free sohools. With these funds we have no oon-
oern beoause the applicable constitutional and statutory provisions
dlreot their Investment in oertaln designated bonds, and It is
only the interest therefrom which beoomes the State and Count
Available School Fund, respeotlvely subjtiot to annual apport f on-
ment for the support of the publlo,)ree sohools. Acoordlng to the
leading case of Dallas Co. vs. Club.Land and Cattle Co., et al.,
66 6.~~294, it is the gross rather than the net proceeds from the
sale of school lands whlch.,should go into the~county Permanent
,‘Bohool Fund for investment e Under this case no part of the oash
rooeeds from the sale in 1927 of sohool land8 owned by Atasoosa
8 ounty in LaSallr County or subsequent. prlnolpal payments thereon,
constituting the County Permanent Sohool Fund of said County, may
lawfully or constitutionally be diverted for the payment of our-
rent, and delinquent taxes on such lands or ior the payment of
lttorney’r fear and oourt oosts InoldenC to the pending foreolor-
ure and sale thereof,, and the rohool authorltlrr of Atasoosa County
rhould not draw against the County Permanent Sohool Fund for these
expenditurea.
With equal deflnlteness, can It be said that Looal School
Fundo derived from maintenance taxes and Interest and Slnklng
Funds derived from bond taxes, levied by t,he various sohool dls-
trlote, cannot be called upon to pay any of the costs, expenses or
taxes mentioned ln your letter. These expenses and taxes aooryed
In conneotlon with the sale, preservatl,on and proteotlon of sohool
lands owned by the county in trust for the schools of the county
. .
Hon. T. M. Trimble, page 3 (O-985)
generally, and maintenance and bond taxes of the various school
districts of the county are not levied for any such general pur-
poses or expenditures but rather for specific local purposes.
And to pay the expenses and taxes involved in the instant ques-
tion out of a fund derived from taxes levied to pay interest and
create a sinking fund for the purpose of retiring bonds voted by
a particular district, would constitute, under all the authorl-
ties of this State, an unlawful diversion of such funds.
It but remains to determine whether or not the taxes and
expenses involved in your question are chargeable against and pay-
able from the two remaining school funds, to-wit the State Avail-
able School Fund or the County Available School l&nd, or if from
neither of these, from what funds of the county they might be paid.
The disposition of these two funds is governed by Section
1, Articl,e 2827, Revised Civil Statutes of Texas, which provides
as follows:
“The public free school funds shall not be expended
except for the following purposes:
“1. The State and county available funds shall be
used exclusively for the payment of teachers’ and super-
intendents’ salaries, fees for taking the scholastic
census, and interest on money borrowed onsh& time to
pay salaries of teachers and superintendents, when these
salaries become due before the school funds for the current
year become available; provided that no loans for the
purpose of payment of teachers shall be paid out of funds
other than those for the then current year.”
In 1930, Chapter 49? General Laws, 4th Called Session,
klst Legislature, modified the foregoing pre-existing statute
upon this subject by providing that from and after August 31, 1930,
the salary and office expenses of the county superintendent of pub-
lic instruction and such assistants as he may have shall be paid
out of the school funds of the common and independent school dls-
trict of the county. It is apparent that with this statute, en-
larging the expenditures allowed by Article 2827, Revised Civil
Statutes, we have no concern under the facts submitted.
But we are concerned with the provisions of ,kticle 7150a,
Vernon’s Annotated Civil Statutes, enacted subsequent to said
Article 2827, Revised Civil Statutes, and enlarging the scope of
same to provide’ that the County Available School Fund, if such
there be, may be used to pay county and district taxes on county
school lands o This statute provides as follows:
“Any county in this State owning any land mentioned
and referred to in Section 6a of Article VII of ,the
. .
Hon. T. M. Trlmble, page 4 (O-985)
Constitution of Texas adopted by the people as en
amendment to the Constitution under S.J.R. No. 10 of
the Regular Session of the 39th Legislature, is hereby
authorized to pay taxes duly and lawfully levied on the
same out of the CountyPs revenue derived from such land.
In the event any County has no such revenue, such taxes
shall be paid out of the general fund of the .County,
and If any County has sufficient of such revenue to pay
only a portion of such taxes the remainder shall be paid
out of the general fund of the County.”
Under the express authorization of the -foregoing statute,
we advise that the county school authoritiesof Atascosa County may,
in the mode and manner provided by Articles 2693 and 2830 Revised
Civil Statutes, draw and approve vouchers against the Available
Sob001 Fund of said county, if any there be, for the purpose of pay-
lng,current and delinquent county and district taxes against school
laud owned by said county in LaSalle County in the approximate
amount of $3,000QO0, subject however to the limit at ions and condi-
tions hereinafter discu.ssed.
These conditions and limitations are: (1) The only
classification of county school lands subject, under the Constltu-
tlon of Texas to county and district taxation are “agriculture or
grazing school land,” and the County Available School Fund cannot
be drawn upon, under Article 7150a, Vernon’s Annotated Civil Stat-
utes, to pay such taxes accruing against other classifications of
sohool lands such as timber land. This is by virtue of Article
7, Sea, 6a, Constitution of Texas, whiah reads as followsa
l’All a riculture or grazing school land mentioned
In section % of this article owned by any county shall
be subject to taxation except for State purposes to the
same extent as lands privately owned. (Sea. 6a, &t. 7,
adopted election November 2, 1.926; proclamation January
20, 192;b)”
Construlng this section of the Constitution the Court
in Childre ss County vs. Morton Ind. School Dlstrlot, 45 S.W.(2d)
1031, spoke pointedly as follows:
Wnder seotion 6a, supra, of the Constitution sohool
lands belonging to any county are not taxable unless such
lands are agricultural or grazing land. Manifestly, there-
fore, if a county’s school lands were classified as tlti
b,ered lands, they would not be subject to taxation.”
It is not made to appear from the facts submitted with
your letter whether or not the school land in question is agrloul-
tural, grazing or timber land, and we consequently deemed it not
. .
..,
Hone To M. Trlmble, page 5 (O-985)
amiss to point out for your guid,ance the ‘fo’regoing limitatj.on of
tax liability.
(2) A second ~limitation orcondition upon the right and
authority oft the county school boar.d to pay current and delinquent
county and district taxes against school lands owned by your county,
out of the County Available School Fund, ‘under Article 7150a, Ver-
non’s Annotated Civil Statutes, is that the county is not liable
for such taxes during the tlme~ same was owned by the purchaser
thereof In 1927, or until the land shall be reacquired by the county
on foreclosure, of Its vendor’s’ lien; but, of course, the taxes
which ,accrued-kin this interim would ‘be secured by a lien upon the
land which Atascosa County could elect either to .,discharge by pay-
ing taxes or to allow s&e- to be sold for taxe’s. This is made plain
by the following language of the ‘court In the case of Childress
County vs. State, 92 S.W. (2d). 1011:
“It Is disputed from the facts certlfled that
Enochs ownedY he lend in controversy on Januarylst of
the years 1931 1932 and, 1933- Enoch’s ownership there-
of on January i, 1933, created a~liabllity on his part
for the taxes, levied upon such property for that~ year
. s .
.“When the land reverted to Childress County, It was
reacquired subjaect to the taxes due thereon while it was
privately owned. Therefore, Childress County can pro-
teat It’s lnte,rest in the land by paying the taxes due
Cochran County for the years 1931 and 19,32, or let it be
sold for such taxes.”
(3) Aaother limitation or condltion’upon the application
of Article 7150a Vernon~ls Annotated Civil Statutes considered in
connection with Aec. 6a, Article 7, Constitution of’Texas Is that
only that portion of the County Available School Fund whiih repre-
sents rental or other income or revenue from the m sohoph
u Involved In your question while sane was prraed bv Atas-
urivately owned, can be used for paying the taxes
We rest this conclusion upon Opinion No. O-215, of
date February 18,,1939, directed to, Honorable Ralph Logan,’ County
Attorney, Tom Green County, wherein the writer made the following
well-considered observatlonst
“This article was intended to cover the kl.nd of
situation you shave in this case. In the facts you
have stated you’ say that since October 1, 1935, Tom
Green County has received about $24,000 as interest
money and lease ‘money from all of its school lands,
only a small portion of this being from this particu-
lar land 0 We believe that nn1.v’the rev~~+?~e derived
. .
Hon. To M. Trimble, page 6 (O-985)
from the particular land can be used to pay the
County and School District taxes due on this land,
and this hellef is because this statute says the
Commissioners’ Court shall pay the taxes ‘out of
the County’s revenue derived from m land.’ “Such
land’ means the particular land from which the reve-
nue is derived.
*IWealso believe that only revenue derived from
this particular land after the State owned the land
can be used to pay these taxes and this belief is be-
cause the statute says ‘any county . . . y any
land mentioned and referred to in Section a of Arti-
cle VII. . . is hereby authorized to pay taxes. . .
levieu on the same. . .I. The land must be actually
owned by the State in order for the revenue from it
to be so used, and revenue from the land in the form
of interest on vendor’s lien notes derived before
the county regained title to the land could not be
used to pay these taxes. You say that ‘during the
latter part of 1937 and the early portion of 1938
this county foreclosed its vendor’s lien,’ and we as-
sume it obtained title at that time.”
(4) Lastly, Article 7150a, Vernon’s Annotated Civil
Statutes, authorizing the payment of county and district taxes
upon county school lands out of the County Available School Fund,
is hedged about with the limitation or condition that such pay-
ment may be made only after the annual apportionment of the
County Available School Fund by the county school trustees, act-
ing with the county superintendent, on a pro rata basis accord-
ing to the scholastic population in accordance with the manda-
tory requirements of Articles 2685 and 2692, Revised Civil Stat-
utes. The County ,Avallable School Fund is, under controlling
constitutional and statutory provisions, held In trust to be
applied annually to the support of the public free schools of the
county; and, in our opinion the annual apportionment of such fund
for the exclusive and dire& .support of such schools, in the pay-
ment-of teachers’ and superintendent’s salaries, as provided by
Section 1 of Article 2827, Revised Civil Statutes, should not be
disturbed by the permissive right given by a subsequent statute,
to-wit; Article 7150a, Vernon’s Annotated Civil Statutes, to pay
county and district taxes on school lands out of the County Avail-
able School Fund or out of the General Fund of the county in the
event there is no Available School Fund. All of these statutes
should be construed harmoniously, if possible, and this allowable
contingent payment of taxes out of the General Fund of the county
is, to our mind a legislative indication that the County Avall-
able School Fun B to the extent of the annual apportionment there-
of, should be fiist devoted to the purposes of such apportionment
and note diverted to the payment of taxes on school lands.
iion. ‘1’. hi. Wimble , Page 7
/i
i
‘. of the publia free schools of the oounty; ad, in our opinion
the annual apportioment Of such fund. ior the exclueive and direot
sUpPOrt of such sohoola, In the payment oi teachers* ana supar-
intenaents’ salaries, as provided by Seotion 1 or Artiole 2~27,
Revisal Civil Statutes, should not be disturbed by the permissive
right given by a subsequent statute, to-wit: ~rticla 7l5Ga, Ver-
non’s Amotatea Cfvll Statutee, to pay county and dlstriot taxes on
school lands out of the County Available School Fund or out or the
General Fund of the eouuty in the event there is no Available
School Fund. All of these statutes should be oonstrued harmoniously,
if possible, and this allowable oontlngent payment or taxes out of the
General Fund of the county LB, to our mind, a legislative inaioa-
tion that the County Available Sohool Fund, to the extent or the
annual apportionment thereof, should be first devoted to the purposes
or such apportloxunent ana not diverted to the payment or taxes on
6ahOd lands.
We oome now to 00daer what partioular rm.8ohool.
county or otherwise, may be lawfully ahargea with oertaln axpens&
incident to the roreclosure in court by Atasoosa County or the
V~INIOP’B lien which it retained on a sale of lte Llohool land8 in
XaSalle county, namely, attorney's fees in the approximate sum
or #oao.oo and aourt costs ranging rr0m $SSO to $600. The rot-e-
going aiseussi0n ie oonrfnea to the proper rund iron whioh oarrent
anb delinquent oounty and al&riot taxes on sohool lands may be
properly paid. Suah taxea'rest upon a diiferent basis than a0 the
expenses enumerated above, and we have seen that payment ,of euoh
taxes, In certain aontingenaies, out of the County Available Sohcol ,
~&n&, wa8 allowable only by viftue of an express leglelative enact
sent upon the oubjeot, to-wit, Article 715Oa, Vernon's Annotated
6ivll Statutes, which beaame erreotive September.7, 1927. We also
pointed out one other lnstanoe, an Aat or the 4let Lagislature in
1980, weereby the Legislature enlarged the allowable expenditures
from the publia rree sahool tund originally authorized by Seotion 1
of Artiale 2827, Revised Civil Statutes. It ispatent that attorney's
fess and aourt coat&, lnoldent to foreclosure of the aoutxty's ven-
dor*s lien on sahool lands, ao not, under any tenable aonstruotion,
some within the saope of the 0itea etatuts, originally enaoted in
1905, or in subsequent mdifioations or enlargemante thereof in
1989 .ind 5930, hereinabove fully dlsoussed. .And we make the pro+
osltlon that unless such expenses is11 s&rely within the author-
Psea expenditures allowed by suoh Etatute, Seotion 1, Artiole 2827,
Revised Civil Statut.es, the sahool imthorities of your oouuty would
not be authorized to draw or ~‘approve vouohers therefor against the
:Publia. tree seh001 rund or the aounty,
4
. .
Hon. T. M. Trimble, page 8 (O-985)
trust, but in many cases they are impressed with a
special trust limiting their use to special educa-
tional spheres, and in such case, of course they
can be used for no other.’ 24 Ruling Case i aw, p.
594, S 48."
To the same effect is the case of San Benito Inde endent
School District of Cameron County vs. Farmers State Bank, 7ii S.W.
(2d) 741, involving an attempted transfer of funds between four
separate school accounts, and holding that “it is too well settled
to require citation, or any extended discussion, that a public fund
selected and ,allocated for a particular public purpose cannot law-
fully be diverted to the use of another particular public purpose.”
The case of Dodson vs. Jones, 190 S.W. 253, held that
Revised Statutes, 193.1,Article 2772 (being now Article 2827 Re-
vised Civil Statutes, above cited uy us) providing that the &ate
and county Available School Funds shall be used exclusively fork the
payment of salaries of teachers and superintendents and fees for
taking the scholastic census, etc. and that the surplus of the
State fund may be used to pay janitors and other enumerated pur-
poses, does not authorize payments from the Free School Fund to a
principal as janitor. Another decision limiting expenditures from
the public free school fund of a county to those specifically
enumerated by statute is Thompson vs. Elmo Independent School Dis-
trict, 269 S.W. 868.
This fundamental principle of school law has been recog-
nized by successive opinions of this Department. In 1927 an opin-
ion to the then Superintendent of Public Instruction held that
funds collected from a lease of county school lands, which i-s
clearly a part of the County Available School Fund, could not be
used to fence said lands. In an opinion of date June 17, 1931,
addressed to Honorable V. H. McClintock, County Attorney, Cot’cle
County, It was held that the Commissioners’ Court was without au-
thority to demand that the county school superintendent issue a
voucher on County Available School Funds to pay the proportionate
part of the cost of making an audit of the books of county offi-
clals. And again on December 7,,1935, in an opinion to Honorable
Winfred F. Newsome, it was held that the County Available School
Fund could not be used for the purpose of purchasing land at sher-
iff sales.
Havlng determined that attorney’s fees and court costs
incident to the foreclosure of the vendor’s lien retained by Atas-
cosa County on the sale of its school lands in 1927, are not pay-
able out of any of the constitutional and statutory school funds
named at the outset of this opinion, it appears we have fully an-
swered your questions, because the only issue involved therein was
whether or not it was the duty of the county school board and
Hon. T. M. Trimble, page 9 (O-985)
county superintendent to pay these expenses out of school funds,
and if so, from which school funds. But in holding that these
items of expenditures were no t payable out of any of the speci-
fic school funds ‘named and discussed, we did not mean to hold
that certain statutory court costs accruing in connection with
the foreclosure of the ven.dor’s lien in question would not be
payable out of the proceeds in the hands of the sheriff on sale
of the land under order of sale. Nor did we mean to hold that
such items of expense would no.t be payable out of the proper
funds of the county. Hence to avoid confusion, we shall briefly
discuss these two sources of payment.
As regards the payment of the items of expense now under
consideration, we point to a distinction between proceeds derived
from a sale of county schoo 1 lands a.t private sale and proceeds
derived from a sale of such i:ouhty school lands at sheriff’s
sales, under order of sale, after foreclosure of the county’s ven-
dor’s lien through coil.rt proceedings. In the former instance the
Supreme Court of Texas i.n the case of Dallas County vs. Club Land
& Cattle Company; 66 S.W. 294, and the Austin Court of Civil Ap-
peals in the case of Brazoria County vs. Padgitt, et al, 160 SeW.
1170, have held that certain expenses attending a prlvate sale of
county school lands such as surveyorss fees, traveling expenses,
commissions, incidental charges, etc. are not payable either from
the gross proceeds rea.lized from such sale or by a conveyance of
a portion of the land, but rather are payable out of the General
Fund of the county; and all of the gross proceeds of the sale
must be paid into the County Permanent School Fund for investment
In the constitutional manner. But in the latter instance,, that
Is to say, where county schoo..7 I.and is sold at sheriff’s sale
upon foreclosure p through court proceedings, of the vendor’s lien
held by the county, the Supreme Cou.rt of Texas in McLennan County
vs* Graves 64 S.Wp R&l., has h,el.d that the funds in the hands of
the sherifi by virtu,e c,f s,uc.h sale may lawfu.lly be first applied
t!o’payment of costs ir~curred in its collaation the balance to go
into the school funds of the i:ounty. In that last case MoLsnnan
County made the contention that ,the sta.tutory oommiesion allowed
the sheriff on axec’uti.on sales and the statutory court ooats
could not be appropriated out of the moneys or Punda realized from
such sale, because such moneys bel.onged to the oounty school fundsi
but, grounding its decision upon the general rule that the aost of
enforcing a claim has prior ri.ght to satisfaction out of money cob
lected in the proceeding, the ccurt allowed the sheriff’s commis-
sions and proper court costs to be deducted Pram the proceeds of
th,e sale, before the transfer of same into the Permanent School
Fund of McLennan CourityO
In regard to the attorney@s fees and court costs involved
in the instant qrxesti~n,~ kcl.u.dir,g such statutory court coats as
are embraced in the rule announced above, we are of the opinion
that such expenses are payable out of the General Fund of Atascosa
County.
Hon. T. M. Trimble, page 10 (O-985)
Several of the opinions of this Department hereinabove
referred to, so hold in connection with the expenses therein in-
volved, as well as an opinion of the Department to Hon. J. I-I.
Foster, County Judge, RainsCounty, of date May 1 1931. The
facts involved In the latter opinion closely para i lel those of
the instant question in that the expenses sought to be paid from
the County Available School Fund were to protect the county’s
rights in school land ,which had been sold on time and default
made so as to throw the land back on the county.
Assuming that the attorney’s fees and court costs de-
scribed in your letter are otherwise lawfully payable (a question
upon which we venture no opinion), we believe a statutory duty
rests inferentially but squarely upon Atascosa County to pay such
fees and expenses from the General Fund of the county under Artl-
cle 2826, Revised Civil Statutes, which provides as follows:
‘IIt shall be the duty of the commlssloners court to
provide for the protection, preservation and disposition
of all lands heretofore granted, or that may hereafter
t;o;;nted to the county for education or schools.
., art. 7, sec. 7.)”
Concerning expenses incident to a private sale of county
school, land .but , in principle, applicable to expenses of a fore-
clo’sure sale of such lands as involved here, the Supreme Court, in
Dallas County vs. Club Land and Cattle Company, eupra., well stated
the reasons justifying the placing of this burden upon the General
Fund of the county:
‘1. . . As to the reason of the provision, it may
be urged that, since the county is made a mere trustee,
,it is unreasonable to suppose that it was intended to
charge it in its individual capacity with the expense of
administering the trust fund. The answer is that while,
in legal contemplation, ,the county is but a trustee,
and the school fund the beneficiary, .the county has an
important interest in the maintenance of public schools
within its limits; and. that it is not unreasonable that
the framers of the constitution should have deemed it
politic to make the expense of administering afund set
apart for the support of public schools in the county
a charge upon its general revenues. Since the lands
are the gift of the state for ‘the special benefit of
the educational interests of the county, it is not a
hardwhip to require the county administration to bear
the expense of converting the land into money. . .‘I
Hon. T. M. Trimble, page 11 (O-985)
Trusting the foregoing adequately answers your several
inquiries, we are
Yours very truly
ATTORNEYGENERAL
OF TEXAS
By /s/ Pat M. Neff Jr.
Pat M. Neff, Jr., Assistant
APPROVEDAUG15, 1939
/s/ Gerald C. Mann
ATTORNEY GENERALOF TEXAS
APPROVED:OPINION COMMITTEE
BY: R.W.F., CHAIRMAN
PMN:N:wb