Did Kleberg County have to sell its county hospital at public auction after following the hospital-sale statutes?
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This page answers the general question as of 1985. Ezel answers yours: what it means for your facts, under current Texas law, with citations.
Texas AG Opinion JM-335: County Hospital Sale at Auction
Plain-English summary
The Kleberg County Attorney asked what procedures the county had to follow when selling its county hospital. The county had used a hospital-sale statute requiring published notice, a public hearing, and, on these facts, "a referendum election approving the sale." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
The proposed transaction also fell within article 4437e-2, section 5, which allowed an issuer of hospital revenue bonds to sell a "hospital project" to a nonprofit corporation. The question was whether the county also had to use article 1577's general public-auction procedure for county real estate. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
JM-335 concluded that article 1577 did not apply when a county sold a hospital under article 4494l or article 4437e-2. It explained that article 1577 governed when no other authority existed, but "when counties sell real estate by other means authorized by the constitution or statutes, compliance with article 1577 is not mandatory." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
The opinion also treated a hospital sale as more than a land conveyance. Articles 4494l and 4437e-2 permitted sale of a hospital "as a going concern," including real property and tangible and intangible personal property, so article 1577 alone would not authorize the complete transaction. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
JM-335 applied the specific hospital statutes instead of the general county-property statute. It stated that a law specifically addressing county hospital powers applied "to the exclusion of a relevant statute that deals with a county's powers generally." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
Currency note
This opinion was issued in 1985. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Common questions
What had Kleberg County already done before asking for the opinion?
The request said the county had complied with published-notice and public-hearing requirements and, for this proposed sale, held a referendum approving it. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
Did article 1577 always control a county's sale of real estate?
No. JM-335 said article 1577 was required when no other authority allowed the sale. It did not override another constitutional or statutory method that specifically authorized the transaction. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
Why was a hospital sale different from an ordinary land sale?
The opinion said a functioning hospital included "not only real property but also tangible and intangible personalty." Article 1577 addressed county real estate and was not enough by itself to authorize sale of the operating hospital. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
Did the opinion decide whether every article 4437e-2 sale also had to comply with article 4494l?
No. Because Kleberg County had fulfilled both hospital statutes, JM-335 expressly said it did not consider whether article 4494l compliance was required for a sale made under article 4437e-2 alone. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
What interpretive rule controlled the result?
JM-335 applied the hospital-specific statutes over the more general county-property statute. It said the Legislature had enacted "a wide range of statutes governing county hospitals" because hospital establishment and maintenance was an important and unique county function. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
Background and statutory framework
Article 1577 authorized counties to sell real estate by public auction. Earlier cases stated that county land sales had to comply with that article, but JM-335 read those statements in their historical setting and reiterated that county authority had to rest on the Texas Constitution or statutes. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
Article 4494l specifically authorized a county hospital sale after its prescribed process. Article 4437e-2, section 5, authorized a hospital-revenue-bond issuer to sell a hospital project to a nonprofit corporation. The opinion found that either specific route displaced article 1577's general auction procedure. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
The opinion reviewed prior attorney general opinions that had required specific statutory authority to sell or lease county hospitals. It found it inconsistent to say article 1577 did not independently authorize such transactions but nevertheless imposed mandatory procedures when another statute did authorize them. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
Citations and references
- V.T.C.S. article 1577
- V.T.C.S. article 4437e-2, section 5
- V.T.C.S. article 4494l
- V.T.C.S. articles 4478 through 4494r-4
- V.T.C.S. articles 4437 through 4437d
- Ferguson v. Halsell, 47 Tex. 421, 422 (1877)
- Hardin County v. Nona Mills Co., 112 S.W. 822 (Tex. Civ. App. 1908, no writ)
- Canales v. Laughlin, 214 S.W.2d 451, 453 (Tex. 1948)
- Wilson v. County of Calhoun, 489 S.W.2d 393, 397 (Tex. Civ. App. - Corpus Christi 1972, writ ref'd n.r.e.)
- State v. Jones, 570 S.W.2d 122 (Tex. Civ. App. - Austin 1978, no writ)
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
Source
- Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0335
- Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0335.pdf
Original opinion text
Best-effort transcription from a scanned PDF. Minor errors may remain. The linked PDF is authoritative.
The Attorney General of Texas
July 22, 1985
Honorable William A. Ewert, Jr.
Kleberg County Attorney
P. O. Box 1411
Kingsville, Texas 78363
Opinion No. JM-335
Re: Whether a county must comply with the public auction requirements of article 4494l, V.T.C.S., in order to sell a county hospital in accordance with articles 4494l and 4437e-2, V.T.C.S.
Dear Mr. Ewert:
You have inquired about the procedures Kleberg County must follow in selling its county hospital. You have explained that Kleberg County has complied with the provisions of a statute that authorizes a county to sell a hospital after notice by publication, a public hearing and, in this instance, a referendum election approving the sale. V.T.C.S. art. 4494l. The proposed sale you have described also comes within the scope of a statute that authorizes an issuer of hospital revenue bonds to sell a "hospital project" to a non-profit corporation. V.T.C.S. art. 4437e-2, §5. Your question is whether Kleberg County must also comply with article 1577, V.T.C.S., which authorizes counties to sell real estate by public auction.
In our opinion article 1577 is inapplicable when a county sells a hospital pursuant to article 4494l or article 4437e-2. Because Kleberg County has fulfilled the requirements of both article 4494l and article 4437e-2, we do not consider whether a county must comply with article 4494l when it sells a hospital pursuant to article 4437e-2.
The source of your concern is the statement in several Texas cases that a county must comply with article 1577 in order to sell real estate. See, e.g., Ferguson v. Halsell, 47 Tex. 421, 422 (1877); Hardin County v. Nona Mills Co., 112 S.W. 822 (Tex. Civ. App. 1908, no writ). Such statements must be read in their historical context. The legal basis for any action by a county must be found in the Texas Constitution or statutes. Canales v. Laughlin, 214 S.W.2d 451, 453 (Tex. 1948). A conveyance of land by a county is void if it is not done in a manner prescribed by statute. Wilson v. County of Calhoun, 489 S.W.2d 393, 397 (Tex. Civ. App. - Corpus Christi 1972, writ ref'd n.r.e.). Article 1577 states that counties may sell real estate in accordance with its provisions. Absent other authority for selling real estate, however, a county must sell real estate in accordance with article 1577 or not at all. 15 Tex. Jur. 2d Counties §88. Clearly, when counties sell real estate by other means authorized by the constitution or statutes, compliance with article 1577 is not mandatory. See Ferguson v. Halsell, 47 Tex. at 422 (1877).
Also, both article 4494l and 4437e-2 authorize something more than the sale of real estate. Both statutes clearly permit and perhaps anticipate the sale of a hospital as a going concern. Such a sale would include not only real property but also tangible and intangible personalty. Consequently, article 1577 alone would not be sufficient to authorize the sale of a functioning hospital. Indeed, in 1969 this office considered whether Wharton County had the authority to sell its county hospital. At that time article 1577 authorized counties to sell real estate at public auction, but no statute applicable to Wharton County specifically authorized a county to sell its county hospital. Finding no authority for the sale, this office concluded that Wharton County had no authority to do so. Attorney General Opinion M-1048 (1969). See also Attorney General Opinion H-668 (1975). Similarly, in response to questions regarding the lease of a county hospital, this office has consistently looked to statutes dealing specifically with the lease of county hospitals, not to article 1577, which also gives counties authority to lease real estate. Attorney General Opinions H-777 (1976); H-16 (1973). Implicit in those opinions is the conclusion that article 1577 does not authorize the lease of a county hospital in the absence of specific statutory authority for such a lease. It would be nonsensical to conclude that even though article 1577 does not authorize the sale or lease of a county hospital, its provisions are mandatory when a county hospital is sold or leased pursuant to another statute.
The establishment and maintenance of hospitals is an important and unique county function. Consequently, the legislature has enacted a wide range of statutes governing county hospitals. See, e.g., V.T.C.S. arts. 4478 through 4494r-4; V.T.C.S. arts. 4437 through 4437d. In our opinion a statute that specifically refers to a county's power with regard to a county hospital applies to the exclusion of a relevant statute that deals with a county's powers generally. See State v. Jones, 570 S.W.2d 122 (Tex. Civ. App. - Austin 1978, no writ).
SUMMARY
A county is not required to comply with the public auction requirements of article 1577, V.T.C.S., when it sells a hospital pursuant to article 4494l or article 4437e-2, V.T.C.S.
Very truly yours,
JIM MATTOX
Attorney General of Texas
TOM GREEN
First Assistant Attorney General
DAVID R. RICHARDS
Executive Assistant Attorney General
ROBERT GRAY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Sarah Woelk
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Rick Gilpin, Chairman
Colin Carl
Susan Garrison
Tony Guillory
Jim Moellinger
Jennifer Riggs
Nancy Sutton
Sarah Woelk
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