Honorable H. A. Jamison, Commissioner 

Department of Banking 

Austin 14, Texas 

Dear Mr. Jamison: Opinion No. o-6808 

Re: Construction of the term “general 

obligations”, as used in Subsection 6, Article 7, Chapter V, of 

the Texas Banking Code of 1943. 

Your request for an opinion upon the above-captioned 

subject matter is as follows: 

“Your attention is invited to Sub-section 6 of 

Article 7 Chapter V of The Texas Banking Code, which 

in effect makes reference to the type of investment 

a State ,bank may make in an amount exceeding its loan 

limit. 

“Your particular attention is invited to the 

word ‘general” as used in Sub-section 6 which word 

and the meaning of it is the occasion for our inquiry. 

We have taken the position that some character of construction must be given to the word that will lend to 

it a special significance since obviously it intends 

to embrace a type of obligation which would offer the 

holder appropriate assurance as.to the issuing body’s 

capacity to pay. 

“From a Departmental point of view we have taken 

the position that the word when construed in the light 

of the over-all subject involved in Subrsection 6 Article 7 alIows a State bank to make investments representing general obligations of the issuing bodies 

named which are voted by the State, the County or 

municipality involved and which involves the full 

faith and credit of the issuing body. Stating our 

position another way we feel that revenue bonds and 

warrants or script, the latter issued by authority 

of the Commissioners’ Court, could not be appropriately classified as a general obligation. Our question, 

therefore, is as follows: 
.-. 

Honorable H, A. Jamison-page 2 (O-68438) 

“‘Does the language of Subsection 6 Article 7 

Chapter V of the Texas Banking Code exclude as lawful 

investments by a State bank in an amount in excess of 

the loan limit revenue bonds issued by a municipality 

and/or other obligations issued under the authority 

vested in Commissioners” Courts, or does it follow 

that the use of the word ‘general” in Subsection 6 

Article 7 requires the broader c,onstruction to the 

effect that it embraces only obKgations which involve the full faith and credit of the issuing body 

an obligation authorized or voted upon by the people ?” 

Subsection 6, referred to by you, is a part of the 

enumerated exceptions to our bank-loan limit statute. It is 

as follows: 

‘“6. Bonds and other legally created general obligation of the State of Texas or of any county, 

city, municipality or political subdivision thereof 

and indebtedness of the United States of America, 

the Reconstruction Finance Corporation or other instrumentality or agency of the United States Government. ” (Article 342-507, Rev. Civ, Stat., Vernon’s 

codification). 

A word or term when used in a statute is to be 

given its generally accepted and understood meaning, unless 

it appears from the context that it was used in a different 

sense. The generally accepted meaning of the word ““general” 

is all embracing, without qualification, exception or limitation, and is, of course, to be understood as pertaining to 

the noun which it describes, Thus, a ““general obligation”‘, 

in the business or financial world, means an unlimited or unqualified liability or obligation or undertaking. This view 

is supported by such decisions as-- 

Lloyd t$;rporation v. Bannock County, 25 Pac. (2) 

Illinois Power & Light Corporation v. City of 

Centralia, 11 Fed, Supp. 874; 

City of Eugene v. Willomet Valley Co., 97 Pac. 817; 

DeLoach v. Scheper, 198 S. E. 409; 

Hartz v. Truckenmiller, 296 N. W. 568. 

Yourare correct in classifying revenue bonds as not 

being a general obligation, but are in error as to warrants or 

scrip; these are general obligations. 

of course, the ter’m in the connection here under consideration does not necessarily mean only an obligation voted 

upon by the people, although it of course includes such,It 
Honorable H. A. Jamison-page 3 (06808) 

is enough that such general obligation must have been “IegaJly created.” 

This construction is accentuated by the context of the 

statut~c. The class of obligations specially excepted in Subdivision 6 

is based upon the legislative thought that they are a Class-A favored 

investment. 

Very truly yours 

ATTORNEY GENERAL OF TEXAS 

BY S/ Ocie Speer 

Ocie Speer 

Assistant 

APPROVED SEP 18, 1945 

S/ Grover Sellers 

ATTORNEY GENERAL OF TEXAS 

OS-MR-bjb 

Approved 

Opinion 

Committee 

By BWB 

cl-law