Honorable Jesse 

State Treasurer 

Austin, Texas 

Dear Mr. James: 

James 

Opinion No. O-4178 

Re: Whether or not Insured Building and Loan Association stock 

certificates are eligible under the State Depository Law 

as collateral to secure State 

funds? 

We beg~to acknowledge receipt of your letter asking 

for an opinion from this department, as follows: 

"The State Depository Board is requesting 

an opinion from you at your very earliest convenience in regard to Insured Building and Loan 

Association Stock Certificates, as follows: 

"1 . Are such Certificates eligible under 

the State Depository Law as collateral to secure 

State Funds? 

"2 . If in your opln!.on they are eligible 

as collateral for State Funds, how or by whom Is 

the collateral value of such Certificates to be 

determined?" 

Article 2529 of Vernon's Cfvil Statutes prescribes 

the kinds of securities which are eligible as collateral to 

a depository for State funds, as follows: 

"Bonds and certificates and other evidences 

of indebtedness of the United States, and all 

other bonds which are guaranteed as to both 

principal and interest by the United States; bonds 

of this State; bonds and other obligations issued by the University of Texas; warrants drawn on 

the State Treasuryagainst the General Revenue of 

the State; bonds issued by the Federal Farm 

Mortgage Corporation, provided both principal and 

interest of said bonds are guaranteed by the United 

States Government; Home Owners Loan Corporation 
. . 

Honorable Jesse James, page 2 o-4178 

bonds, provided both principal and interest of 

said bonds are guaranteed by the United States 

Government and such securities shall be acthe Board in an amount not less than 

zz&~~ p er cent greater than the amount of 

State funds which they secure; provided, that 

Texas Relief Bonds may be accepted at face value 

and without margin for the amount of State funds 

allotted, provided such State Relief Bonds have 

all unmatured coupons attached; bonds of counties 

located in Texas; * * +" 

Insured Building and Loan Association shares or 

stock are not included in the list of eligible securities ~. 

for State deposits, and the Board, therefore, has no authority to accept them as such. 

It is well, perhaps, for us to refer to Senate Bill 

No. 166, passed by the Regular Session of the 47th Legislature dealing with Investment by Fiduciaries. 

Section 1, of Senate Bill No. 166, contains the followlng : 

' * * *, hereafter, all mortgages, bonds, aebentures, notes, collateral trust certificates, 

and other such evidences of indebtedness, issued 

or that hereafter may be issued under the terms 

and provisions of the National Housing Act, approved by the President of the United States on 

June 27, 1934, as amended and as may hereafter 

be amended, and all !lnsured accounts' issued or 

that may hereafter be issued by any institution 

insured under the provisions of Title IV of the 

National Housing Act, approved June 27, 1934, as 

amended and as may hereafter be amended, or any 

evidences of indebtedness or accounts that may 

be issued or insured by any lawful agency created 

thereunder, all mortgages, bonds, debentures, notes, 

collateral trust certificates, or other such evldences of indebtedness, which have been or which 

may hereafter be issued by the Federal Home Loan 

Bank Board, or any Federal Home Loan Bank, or 

the Home Gwners' Loan Corporation, or by the 

Federal Savings and Loan Insurance Corporation, 

or by the Reconstruction Finance Corporation, or 

by the--Federal Farm Loan Board, or by any Eederal 

Lana Bank, or by any National Mortgage Assoclatlon, 

or by any entity, corporation or agency, which has 

been or which may be created by or authorized by 
Honorable Jesse James, page 3 o-4178 

any Act, which has been enacted or which may hereafter be enacted by the Congress of the United 

States, or by,ang amendments thereto, which has 

for Its purpose the relief of , refinancing of or 

assistance to owners of mortgaged or encumbered 

homes, farms, and other real estate, and the improvement or financing or the making of loans on 

any real property, shall hereafter be lawful investments for all fiduciary and trust funds in 

this State, and may be accepted as security for 

all public deposits where deposits of bonds or 

mortgages are authorized by law to be accepted. ***' 

Assuming, but not deciding, that the last provision..- 

of the above quotation with respect to securities there mentioned being eligible 'as security for all public deposits 

where deposits of bonds or mortgages are authorized by law.~ 

to be accepted", is applicable to the class of deposits involved in your letter of inquiry, nevertheless S.B. No. 166 

in this respect Is a general law of deposit securities, 

whereas the State Depository Act herein first above quoted 

Is a special law upon the subject of securities eligible for 

deposit by State depository banks, and under well-established 

principles, numerously attested by the decisions, the special 

law prevails over the general. It is treated as an exception 

to the general law, thus enabling both the general and the 

special laws to stand at the same time and to be applicable 

in their appropriate spheres. 

San Antonio & A. P. Ry. Co. v. State, 95 

s. w. (2) 680; 

Townsend v. 

1063; 

Terre11 (Tex.) 16 S.W. (2) 

Cole v. State (Tex.) 170 S. W. 1036, 163 

s. w. 353; 

Hunt v. Atkinson (Corn. Apps. 

142, 17 S. W. (2) 780, 1 8 

12 S.W. (2) 

S.W. (2) 594; 

39 Tex. Jur. 'Statutes", g g 81,82. 
- . 

Honorable Jesse James, page 4 O-4178 

Very truly yours 

ATTORNEYGENERAL OF TEXAS 

By s/Ode Speer 

Ocie Speer 

Assistant 

OS :MR:wc 

APPROVED NOV 8, 1941 

s/Grover Sellers 

FIRST ASSISTANT 

ATTORNEY GENEFUL 

Approved Opinion Committee By s/BWB Chairman