Trinity River Authority of Tex. v. Carr

• Decision Date: 20 January 1965
• Docket Number: No. A-10448,A-10448
• Citation: 386 S.W.2d 790
• Parties: TRINITY RIVER AUTHORITY OF TEXAS and City of Houston, Relators, v. Waggoner CARR, Attorney General, Respondent.
• Court: Texas Supreme Court

Page 790

386 S.W.2d 790

TRINITY RIVER AUTHORITY OF TEXAS and City of Houston, Relators, v. Waggoner CARR, Attorney General, Respondent.

No. A-10448.

Supreme Court of Texas.

Jan. 20, 1965.

Clark, Thomas, Harris, Denius & Winters, Austin, McCall, Parkhurst & Horton, Dallas, John Wildenthal, Jr., City Atty., Houston, Victor W. Bouldin, of Vinson, Elkins, Weems & Searls, Houston, Fulbright, Crooker, Freeman, Bates & Jaworski, L. Keith Simmer and J. Wiley Caldwell, Houston, for relators.

Waggoner Carr, Atty. Gen., Austin, Joe Long and James M. Strock, Asst. Attys. Gen., for respondent.

CALVERT, Chief Justice.

In this original proceeding in this Court, Relators seek a writ of mandamus to require respondent to approve Trinity River Authority of Texas Interim Water Revenue Bonds (Livingston Project), Series 1964. The bonds are in denominations of $500,000 each and total $48,500,000. They are secured by and payable from a pledge of income to be received by the Authority from the City of Houston. The writ sought is issued conditionally.

Respondent offers two reasons for declining to approve the bonds; and, in addition, respondent presents nine objections raised by certain taxpayers in a suit filed in the 152nd Judicial District Court of Harris County, Texas, for consideration by this Court.

We will consider first the respondent's reasons for refusing approval. They may be restated in our language as follows: (1) The statutory provision under which the Authority purported to act is so vague and uncertain in so far as it authorizes issuance of 'interim bonds' that it is void, and the bonds do not meet the standards required by other statutory provisions relating to the issuance of 'interim bonds'; and (2) the bonds cannot be approved as other than 'interim bonds' because they contain the word 'interim' in their title and thus would be misleading.

Trinity River Authority of Texas is a conservation and reclamation district created in 1955 by an act of the Legislature. See Acts 54th Leg., p. 1314, ch. 518, shown in Vernon's Texas Civil Statutes as Art. 8280-188. ¹ Sec. 8 of the statute confers power on the Authority to issue bonds and places certain limitations on the power.

Sec. 8(a) provides that the Authority may issue negotiable bonds of three general classes, as follows: (1) Bonds secured by ad valorem taxes, when voted. (2) Bonds secured solely by a pledge of net revenues accruing to the Authority. (3) Bonds secured by a combination pledge of net revenues and taxes.

Sec. 8(c) provides that 'Bonds of the Authority ² shall be authorized by resolution adopted by the Board (of Directors) * * * shall mature serially or otherwise within such period and at such times as may be prescribed in the resolution, not exceeding a maximum of fifty (50) years. * * * provided that the interest cost to the Authority * * * does not exceed six per cent (6%) per annum, * * * and within the discretion of the Board may be made callable prior to maturity at such times and prices as may be prescribed in a resolution authorizing the bonds.'

Sec. 8(j) reads: 'Pending the issuance of definitive bonds the Board may authorize the delivery of negotiable interim bonds or notes, eligible for exchange or substitution, by use of definitive bonds.' This is the only provision in the statute dealing expressly with 'interim bonds.' Sec. 8(k) authorizes issuance of refunding bonds.

The bonds which respondent his declined to approve were ordered issued by a resolution of the Board of Directors on October 16, 1964. They are dated October 15, 1964, mature on October 15, 1966, bear interest for the first year at the rate of 3 1/4% and thereafter at the rate of 4%, and are redeemable at any time on thirty days' notice.

Respondent does not question that the bonds are well within the limitations of Sec. 8(c), inasmuch as they mature in less than fifty years and bear interest at a rate less than 6%. But respondent argues that the limitations provided in Sec. 8(c) are not applicable to 'interim bonds'; that if they were applicable there would be no distinction between 'interim bonds' and the bonds authorized in Sec. 8(a); that the word 'interim' means 'meanwhile' or 'in the meantime,' and in enacting Sec. 8(j) the Legislature intended to provide for the issuance of 'temporary' bonds for which it provided no standards or limitations in Art. 8280-188; that if the power to issue 'interim bonds' is to be upheld, they must meet the standards and be within the limitations prescribed for 'interim bonds' in Art. 7880-84a, Vernon's Texas Civil Statutes.

Art. 7880-84a is contained in Chapter 3A of Title 128 of our statutes and deals exclusively with water control and improvement districts and water improvement districts. It authorizes boards of directors of such districts 'to declare an existing emergency in the matter of funds not being available' for certain necessary expenses, and authorizes the issuance of 'interim bonds,' after construction bonds have been voted, to obtain emergency loans. The principal limitations placed on the issuance of such bonds are (1) that they must mature not later than ten years from date of issue, and (2) the principal amount of the issue may not exceed 25% of the principal amount of the bonds of the district which have been voted, but not sold. It is apparent that the bonds in question here do not comply with the first limitation.

There is undoubtedly a reasonable basis in the language of Sec. 8(j) for the position of the respondent that the Legislature intended to differentiate between permanent or final bonds and 'interim bonds' to be issued by the Authority. We note again the language of Sec. 8(j): 'Pending the issuance of definitive bonds the Board may authorize the delivery of negotiable interim bonds, or notes, eligible for exchange or substitution, by use of definitive bonds.' The language contrasts 'definitive bonds' with 'interim bonds,' and authorizes the exchange or subsititution of 'definitive bonds' for 'interim bonds.' According to Webster's Third New International Dictionary, the word 'definitive' has a variety of meanings, and is said to be a synonym of 'conclusive' and to be contrasted with 'provisional.' The word is sometimes used in referring to judgments as 'definitive judgments,' and as so used is interpreted to mean 'final judgments.' See 11 Words and Phrases, p. 606; 26A C.J.S., p. 146. Considering the respective meanings of the words 'interim' and 'definitive,' it is clear that the Legislature intended to authorize the Authority to issue two types of bonds, temporary and permanent or final.

Having thus agreed to some extent with the premise of respondent, we are yet not prepared to accept his conclusions that because the Legislature failed in Art. 8280-188 expressly to prescribe outside limits of amount and term for which 'interim bonds' could be issued, less than those for which 'definitive bonds' could be issued, Sec. 8(j) must be held void for vagueness or the limits prescribed in Art. 7880-84a must be read into it. We know of no good reason why the Legislature could not empower the Authority to issue 'interim bonds' in amounts and for terms within the limitations provided for definitive bonds; and this, apparently, is what the Legislature did. When the Legislature provided a maximum term of fifty years and a maximum rate of interest for 'bonds of the Authority' in Sec. 8(c), it provided limitations for all bonds of the Authority, whether tax bonds, revenue bonds, combination revenue and tax bonds, definitive bonds or interim bonds. When Art. 8280-188 is thus interpreted, there is no need to read into it legislative provisions expressly limiting the amount and term of interim bonds to be issued by other types of water districts. When it is thus interpreted, use of the word 'interim' in the title of the bonds does not mislead prospective purchasers; rather, it serves a useful purpose in that it gives notice that the Authority intends later to issue and substitute definitive bonds and that the interim bonds are to be left outstanding only in the meantime, only temporarily. That the bonds are...