Montana Attorney General Opinion 17-137

Opinion No. 137. County Commissioners-Powers to Lease Property. HELD: 1. County Commissioners under Sec. 4465.21 and 4465.24. R. C. M. 1935, as amended, have power to lease and rent county machinery when in the discretion of the Board such leas- ing or renting is for the best interest of the county and the use of the ma- chinery is not then necessary for county purposes. 2. Members of the Board of County Commissioners cannot become inter- ested directly or indirectly in lease or rental agreements of county machinery. acting both as agent for machinery company and county. August 13. 1937. State of Montana Division of Public Accounting Office of State Examiner The Capitol Attention of Mr. A. M. Johnson, Deputy State Examiner. Gentlemen: We have your letter, inclosing a copy of Machine Lease Agreement, also copies of statements of payments and copies of claims of the Town of Troy, pertaining to all of which you are asking three several and distinct questions which will be answered chronologically. 1. Is the above machine lease agree- ment legal? The lease as presented is legal as to contractual form and comes within the implied powers of the commissioners to perform, provided other elements of the statute are complied with. Section 4465.21 provides that: "The board of county commission- ers has jurisdiction and power under such limitations and restrictions as are prescribed by law: To represent the county, and have the care of the county property, and the management of the business and concerns of the county in all cases where no other provision is made by law." Section 4465.24 provides that: "The board of county commission- ers has jurisdiction and power under such limitations and restrictions as are prescribed by law: To perform all other acts and things required by law not in this title enumerated, or which may be necessary to the full discharge of the duties of the chief executive authority of the county gov- ernment." Section 4465.27 provides that: "The board of countv commission- ers has jurisdiction and power under such limitations and restrictions as are prescribed by law: To lease and demise county property, however ac- quired, which is not necessary to the conduct of the county's business or the preservation of county property and for which immediate sale cannot be had. Such leases shall be in such man,ner and for such purposes as, in the Judgment of the board, shall seem best suited to advance the public benefit and welfare. and all revenue derived therefrom. except as other- wise provided shall be paid into the .ounty treasury. On the tenth dav of January and the tenth day of Jul; in t'ach year the county treasurers shall distribute such revenues to the sf'verol county and trust and agency funds on the basis of the tax levy for the preceding calendar year. All such property must be leased subject to sale by the board, and no lease shall be for a period to exceed three (3) years." You will note from the above sec- tions that the statute vested in the county commissioners very compre- hensive powers over the business. OPINIONS OF THE ATTORNEY GEXERAL 151 property, and affairs of the county. The Constitution provides that county commissioners may be invested with local administrative powers, and the statute invested them with authority -over county property, business, and affairs. Ransom v. Pingel, et aI., (Mont.) 65 Pac. 2d. 616, 618. Section 4605.1 requires that a re- quest for bids is necessary in making purchases exceeding one thousand dol- lars, and the purchase under the Ma- chine Lease Agreement, which is a lease agreement, exceeds this amount. This means to say that the contract cannot be held to be invalid, but under Section 446, R. C. M. of 1935, is voidable. So, if there are no objections, it is only reasonable to believe that the contract will stand regardless of the lack of calling for bids. It may be voided, however, at the instance of any party, excepting the officers inter- ested therein. This may be stretching a point for the reason that the statute requiring a request for bids seems mandatory unless an emergency may -exist, and I can see in a case like the one suggested it might be considered an emergency. In any event, it might be well said that the commissioners have gone to the limit in the making of the Machine Lease Agreement men- tioned. 2. Is it legal for the county to rent this machinery? From the statutes quoted under the -answer to your first question, you will note that it is legal for the county to rent the said machinery. The board Df county commissioners may exercise powers not specifically g-ranted, if they are necessarily implied from those which are granted, and from the neces- sity of proper management of the coun- ty's business we are assuming that the commissioners in the exercise of this discretion rented this machinery, which, in our opinion. is within their power. This seems to be the general law. Arnold et al. v. Custer County et al.. 33 Mont. 130, 143; 15 C. J. 457, 459. 3. Is it legal and proper for the members of the board of county com- missioners to rent this said machine as an agent of the machinery company and for him to collect rental money for the said machine and make pay- ments direct to the machinery com- pany? Section 4604 of the Revised Codes of Montana, 1935, reads as follows: "No member of the board must be interested, directly or indirectly, in any property purchased for the use of the county, nor in any purchase or sale of property belonging to the county, nor in any contract made by the board or other person on behalf of the county, for the erection of public buildings, the opening or im- provement of roads, or the building of bridges, or the purchasing of sup- plies, or for any other purpose." Sections 444 and 445 read as follows: "Members of the legislative assem- bly, state, county, city, town, or town- ship officers, must not be interested in any contract made by them in their official capacity, or by any body or board of which they are members. State, county, town, township and city officers must not be purch~sers at any sale, nor vendors at any pur- chase made by them, in their official capacity." You will note from the reading of the above sections that any commis- sioner acting as an agent, as in the case you cite, goes beyond the scope of his authority. Public policy de- mands that a public officer cannot be permitted to place himself in a situa- tion where his personal interest will conflict with faithful performance of his duty. It matters not how fair a contract may be, the law will not suffer him to occupy a position so equivocal and so frought with temptation. Power v. May (Cal.) 46 Pac. 6; Berka v. 'vVoodward (Cal.) 57 Pac 777. . Our Sections 444 and 445 are ver- batim with California Codes Sections 920 and 921. ' There are several peculiar features connected with the case you present and it is quite possible we do not hav~ all the facts. In the first place the lease agreement is executed October 7, 1935; nearly two years have passed; payments have been made and the lessee has been in possession of the property; and the commissioners of this particular county have gone to 152 OPINIONS OF THE ATTORNEY GENERAL quite some length and paid quite some sum of money, or at least the machin- ery company has received quite some sum of money. So, to rule differently might be working a hardship on the county. We feel that the county com- missioners construed this agreement as a rental agreement, and since the re- quirement of rental is $342.16 per month, they, undoubtedly, did not con- sider the necessity for bids since the amount is less than $1000. That may have been the cause of their action. We do feel that Mr. Kensler, if he was a commissioner at the time of the execution of the contract, which is not a matter of record, had no right to represent the machinery company as their agent and comes within the pro- visions of Sections 444. 445 and 4606. I t is the opinion of this office, further, that whatever payments had been made for the rental of this machinery should have been paid to the county treasurer and distributed as provided for by Section 4465.27, above.