, 

THEAT%ORNEY GENEECAL 

XAS 

Honorable J. M. Falkner Opinion NO. c-230 

Banking Commissioner 

Department of Banking Re: Applicability of Sections 4 

John Ii. Reagan Building and 7 of Article 1524a, V.C.S., 

Austin, Texas to certain corporations, who are 

licensees under Article 6165b, 

Dear Mr. Falkner: V.C.S., Texas Regulatory Loan Act. 

Your recent request to this office asked our opinion as 

to whether corporations who have licenses issued by the Texas 

Regulatory Loan Commissioner ursuant to Article 6165b, V.C.S., 

and whose car orate 

P 

purposes P as reflected In their Articles of 

Incorporation would have made them subject to the provisions 

of Article 1524a, V.C.S., are exempted from compliance with 

Sections 4 and 7 of Article 1524a, V.C.S., by virtue of the 

provisions of Section 29 of Article 6165b, V.C.S. 

Section 29, Article 6165b, V.C.S., reads as follows: 

II Chapter 144, Acts of the 48th Legislature, 

Regular Session, 1943, compiled as Article 4646b, 

Vernon's Annotated Civil Statutes of Texas, and 

Artlcles 5069, 5071 and 5073, Revised Civil Statutes of Texas, 1925, where inconsistent with this 

Act shall not apply to licensees under this Act, 

mows of Cuer 165. Acts of 

Lhe 4hd Lenislature. RP on. 1911. u 

\lernon t 

_tated Clv;l Statutes of Texas. abolv to SuQ 

Jicensee. (Emphasis added.) 

The portion of the caption of Senate Bill 15, Chapter 205, 

Acts of the 58th Legislature, Regular Session, 1968, which relates to Section 29, reads as follows: 

I, providing that Chapter 144, Acts of the 48th 

Legislature, Regular Session, 1943, (compiled as 

Article 4646b, Vernon's Annotated Civil Statutes of 

Texas), Articles 5069, 5071 and 5073 of the Revised 

Civil Statutes of Texas, 1925, and Chaoter 165. Acts 

of the 42nd Legislature. Reaular Session. 1931. as 

amended. (compiled as Article 1524a, Vernon's 

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Honorable J. M. Falkner, page 2, Opinion No. C-230 

Annotated Civil Statutes of Texas), where incons i stent wit h this Act shall not anolv to licensees 

under this Act; . . .' (Emphasis added.) 

From a comparison of the caption and Section 29 of the 

Texas Regulatory Loan Act, it is obvious that Section 29 is 

broader than the caption. The caption describes the scope of 

the Act as exempting licensees under the Texas Regulatory Loan 

Act from the purview of Article 1524a, V.C.S., only where 

those provisions are inconsistent with the Texas Regulatory 

Loan Act. On the other hand, Section 29 attempts by the use 

of the disjunctive nor, to exclude the application of all provisions of Article-4a, V.C.S., to licensees under the Act 

whether they are consistent or inconsistent. 

Article III, Section 35 of the Constitution of the State 

of Texas, 1876, provides in part: 

,I But if any subject shall be embraced in an 

Act; which shall not be expressed in the title, 

such act shall be void only as to so much thereof, 

as shall not be so expressed." 

The case of Davis v. State, 225 S.W. 532 (Crim.App. lg20), 

held that: 

"It is also urged that there are matters in the 

bill not comprehended by the caption, and if so, 

under the express direction of section 35, art. 3, 

of our state Constitution, such act would be void 

as to such extraneous provision, provided that such 

uncomprehended provision be separable from the 

others." 

The Commission of Appeals in Consolidated Underwriters v. 

Kirby Lumber Co., 267 S.W. 703 (Comm.App. 1924), stated th a: t

,I 

* . . it has been held, with equal uniformity, 

that particular provisions are not within a given 

title where no subject at all is expressed in the 

title; where the ultimate subject exoressed and 

that orovid ed for are olaia different: where the 

provisions are DalDablv ulterior or foreign to the 

title: where they are seDarate. distinct from, and 

not permane to the sub.lect exnressed; where by no 

. -1114- 
Honorable J. M. Falkner, page 3, Opinion No. C-230 

intendment they possess a necessary or proper connection with it; where they are disconnected from 

it and Inappropriate to it; or where the provlsions 

come clearly within the evil to be suppressed." 

(Emphasis added.) 

However, under the express provision of Article 111) Section 35, of the Constitution, an act contalning matters no,t 

included within the caption is void as to the extraneous provision provided it is separable from the others. Therefore, 

from the language of the cases cited, it is clear that since 

the caption contemplated an exemption from the provisions of 

Article 1524a, V.C.S., only where they were inconsistent with 

the Texas Regulatory Loan Act, but Section 29 attempted to 

provide exemption from all provisions of Article 1524a, V.C.S,., 

whether inconsistent or not, that the Texas Regulatory Loan 

Act cannot be given an effect broader than its caption. 

Acts 1931, 42nd Legislature, Chapter 165, as amended, 

which is codified as Article 1524a states in Section 1 that: 

"This Act shall embrace corporations heretofore 

created having for their purpose or purposes any or 

all of the powers now authorized in subdivisions 48, 

49 or 50 of Article 1302, Revised Civil Statutes of 

Texas, -LWp, xn-b ~-c&vLC~J~~ "3: bm?;tftesz created 

having In whole or in part any purpose or purposes 

now authorized in Chapter 275, Senate Bill Number 

232 of the General and Special Laws of the Regular 

Session of the 40th Legislature." 

It follows that a corporation whose charter contains a single 

purpose clause authorizing it to accumulate and lend money by 

obtaining a license under the provisions of the Texas Regulatory Loan Act is not a corporation subject to Article 1524a, 

V.C.S., because Article 6165b, V.C.S., is a special act enacted in obedience to Article XVI, Section 11, of the Texas 

Constitution, as amended in 1960, and the provisions thereof 

relative to its creative purposes are inconsistent with the 

creative purposes of Article 1524a. A special statute will 

control over the provisions of a general statute, and will be 

treated as an exception to a general law previously enacted. 

39 Tex.Jur. 150, Statutes, Sec. 82. 

It is, therefore, our opinion that those provisions of 

Article 1524a, V.C.S., that are not inconsistent with the 

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Honorable J. M. Falkner, page 4, Opinion No. C-230 

provisions of Article 6165b, V.C.S., are to be given full 

force and effect as regards licensees under Article 6165b, 

V.C.S., while those provisions of Article 152&a that are inconsistent with Article 6165b, V.C.S., are not to be applied 

against licensees under the Texas Regulatory Loan Act. 

We have applied the foregoing standard to the four questions which you propounded as follows: 

1. You asked if a corporation whose charter contains a single purpose clause authorizing it to accumulate and lend money by obtaining a license under 

the provisions of the Texas Regulator 

exempt from compliance with Sections 5 

Loan Act is 

and 7 of 

Article 152&a, V.C.S., if such corporation offers 

for sale or sells in Texas its bonds, notes, certificates, debentures or obligations. 

You are advised that such corporation is exempt 

from Sections 4 and 7 of Article 152&a since that 

Article applies only to those corporations who have 

as corporate purposes those provisions that would 

have formerly brought the corporation within the 

purview of the Banking Commissioner's authority. 

The corporate purpose noted is within the scope of 

the inconsistency test of Article 6165b, V.C.S., but 

if such corporation offers for sale or sells in 

Texas its bonds, notes, certificates, debentures or 

obligations, and if such acts are found to be, as to 

that corporation, ultra vires, such acts would be 

unlawful. 

2. Your second question asked if a corporation 

whose charter contains a 

nlI 

or all of the purposes 

contained in Subsections 8, 49 or 50, Article 1302 

or Article 1303b, V.C.S., is exempt from compliance 

with the provisions of Section 4, Article 1524a, 

V.C.S., if such corporation has obtained a license 

issued by the Regulatory Loan Commissioner to do 

business under the provisions of the Texas Regulatory Loan Act. 

It is our opinion that such corporation would 

not be exempt since its purposes would allow it to 

do other acts than those contemplated by the 

,1116- 
Honorable J. M. Falkner, page 5, Opinion No. C-230 

exemption in Article 6165b, V.C.S., and must therefore corn ly with either paragraph one or two of 

Section .t 

activitie;. 

Article 1524a, V.C.S., according to its 

3. You asked if a corporation whose charter contained a single purpose clause authorizing it to 

accumulate and lend money only under the provisions 

of the Texas Regulatory Loan Act would be exempt 

from compliance with Section 4 of Article 1524a, 

V.C.S., if such corporation makes loans in excess 

of the sum of $1500, 

You are advised that since such corporation 

was organized with the single purpose of complying 

with Article 616513, V.C.S., it is within the inconsistency exemption of that statute. Such loans if 

completed would be beyond the scope of the purpose 

for which the corporation was organized, and if 

made would subject the corporation to the penalties 

for acting beyond the scope of stated corporate 

purposes. 

4. Your last question asked whether or not a 

corporation whose charter contains a purpose clause 

authorizing it to accumulate and lend money after 

obtainlng a license under the provisions of the 

Texas Regulatory Loan Act is subject to the provisions of Article 1524a, V.C.S., if its charter contains in addition one or more of the purposes set 

forth in Subsections 48, 49 or 50, Article 1302 or 

Article 1303b, V.C.S. 

We are of the opinion that the material facts 

contained herein are the same as those contained in 

your question No. 2, and the same answer would 

apply. 

The construction we have placed upon both Article 152&a, 

V.C.S., and Article 6165b, V.C.S., is harmonious with the 

legislative intent in that it provides adequate protection for 

both the borrower and the investor. The duty of harmonizing 

the construction with the legislative intent is clearly seen 

in McPherson v. Camden Fire Ins. Co., 222 S.W. 211 (Comm.App. 

19201, where the Court at page 212 said: 

-1117- 
Honorable J. M. Falkner, page 6, Opinion No. C-230 

It is Incumbent upon the court to asccrtafn 

tbe'intention of the Legislature, and, If possible 

by fair construction, uphold it. The constitutional 

provisions referred to should be construed liberally, 

rather than embarrass legislation by a construction 

the strictness of which is unnecessary to the accomplishment of the beneficial ends for which It Wa8 

adopted." 

SUMMARY 

1. A corporation whose charter aontalns a single 

purpose clause authorizing it to accumulate and 

lend money by obtaining a license under the provlsions of the Texas Regulatory Loan Act Is exempt 

from compliance with Sections 4 and 7 of Article 

1524a, V.C.S. 

2. A corporation whose charter contains any or 

all of the purposes contained in Subsections 48, 49 

or '50 of Article 1302 or Article 1305b, V.,C.S., Is 

not exem t from compliance with the provisions of 

Section t Article 152&a, V.C.S., even though such 

corporati& has obtained a license Issued by the 

Regulatory Loan Commissioner to do business under 

the provisions of the Texas Regulatory Loan Act. 

3. A corporation whose charter contains a single 

purpose clause authorizing It to accumulate and 

lend money only under the provisions of the Texas 

Regulatory Loan Act is exempt from compliance with 

Section 4 of Article 1524a, V.C.S., and It is immaterial if such corporation makes loans in excess 

of the sum of $1500. 

4. A corporation whose charter contains a purpose 

clause authorizing it to accumulate and lend money 

after obtaining a license under the provisions of 

the Texas Regulatory Loan Act is subject to the provisions of Article 1524a, V.C.S., if Its charter 

contains in addition one or more of the nurooses set 

forth in Subsections 48, 49 or 50, Articie isO2 or 

Article 1303b, V.C.S. 

Very truly yours, 

WAGGONER CARR 

Attorney General 

-1118- 
Honorable J. M. Falkner, page 7, Opinion No. C-230 

B 

Assistant Attorney General 

RER:da 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Linward Shivers 

Paul W. Phy 

John R. Reeves 

Pat Bailey 

Howard Fender 

APPROVED FOR THE ATTORNEY GENERAL 

By: Howard W. Mays 

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