Honorable Jesse

State Treasurer Austin, Texas
Dear Mr. James: James

OpinionNo. O-4178 Re: Whether or not InsuredBuilding and Loan Association stock certificatesare eligibleunder the StateDepository Law as collateral to secure State funds?
We beg~to acknowledge receipt of your letter asking for an opinion from this department, as follows:

"TheState Depository Board is requesting an opinion from you at your very earliest convenience in regard to InsuredBuilding and Loan AssociationStock Certificates,as follows:
"1

. Are such Certificates eligibleunder the StateDepository 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 securitieswhich are eligible as collateral to a depository for State funds, as follows:

"Bondsand certificates and other evidences of indebtednessof the United States, and all otherbonds which are guaranteed as to both principaland interest by the United States; bonds of this State; bonds and other obligations issuedby 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 interestof said **bonds** are guaranteed by the United States Government;Home Owners Loan Corporation..

Honorable Jesse James, page 2 

### o-4178

bonds, providedboth principal and interestof said bonds are guaranteed by the United States Government and such securities shall be acthe Board in an amount not less than zz&~~ per cent greater than the amount of State fundswhich they secure;provided, that TexasRelief Bonds may be accepted at facevalue 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; * * +" InsuredBuilding 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 iswell, perhaps, for us to refer to Senate Bill No. 

### 166,passed by the Regular Session of the 47th Legislaturedealing with Investmentby 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 hereaftermay be issuedunder 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 !lnsuredaccounts' issued or thatmay hereafter be issued by any institution insuredunder the provisions of Title IV of the NationalHousing Act, approved June 27, 1934, as amended and as may hereafter be amended, or any evidences of indebtedness or accounts thatmay 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 theHome Gwners' Loan Corporation, or by the Federal Savings and Loan InsuranceCorporation, or by the Reconstruction Finance Corporation,or by the--Federal

Farm Loan Board, or by any Eederal Lana Bank, or by any National MortgageAssoclatlon, or by any entity, corporation or agency,which has been or which may be created by or authorizedbyHonorable Jesse James, page 3 o-4178

any Act, which has been enacted or which may hereafter be enactedby 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, shallhereafter 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 authorizedby law to be accepted. ***' Assuming, but not deciding, that the last provision..- of the above quotationwith respect to securities there mentionedbeing eligible 'as security for all publicdeposits where deposits of bonds or mortgages are authorizedby law.~ to be accepted", is applicable to the class of deposits involved inyour letter of inquiry, neverthelessS.B.No. 166 in this respect Is a general law of deposit securities, whereas the StateDepository Act herein first above quoted Is a special law upon the subject of securitieseligible for deposit by State depository banks, and underwell-established principles,numerouslyattested by the decisions, the special law prevails over the general. It is treated as an exception to the general law, thus enablingboth 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, 18 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/GroverSellers FIRST ASSISTANT ATTORNEYGENEFUL Approved Opinion CommitteeBy s/BWB Chairman