Honorable H. A. Jamison, Commissioner Department of Banking Austin 14, Texas Dear Mr. Jamison: Opinion No. o-6808 Re: Construction ofthe 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 6of Article 7Chapter V of The Texas Banking Code, which in effect makes reference to the type ofinvestment 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 6which word and the meaning ofit is the occasion for our inquiry. We have taken the position that some character ofconstruction 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 ofview we have taken the position that theword when construed in the light ofthe over-all subject involved in Subrsection 6Article 7alIows 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 ofthe issuing body. Stating our position another way we feel that revenue bonds and warrants or script, the latter issued by authority ofthe 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 ofSubsection 6Article 7 Chapter V ofthe Texas Banking Code exclude as lawful investments by a State bank inan 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 itfollow 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 ofthe issuing body an obligation authorized or voted upon by the people ?”

Subsection 6, referred to by you, is a part ofthe enumerated exceptions to our bank-loan limit statute. Itis as follows:

‘“6. Bonds and other legally created general obligation ofthe State of Texas or ofany county, city, municipality or political subdivision thereof and indebtedness ofthe United States ofAmerica, the Reconstruction Finance Corporation or other instrumentality or agency ofthe 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 itwas used ina different sense. The generally accepted meaning ofthe 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 anunlimited 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, 11Fed, Supp. 874; City ofEugene v. Willomet Valley Co., 97 Pac. 817; DeLoach v. Scheper, 198S. E. 409; Hartz v. Truckenmiller, 296 N. W. 568. Yourare correct in classifying revenue bonds as not being a general obligation, but are inerror as towarrants or scrip; these are general obligations.

of course, the ter’m inthe connection here under consideration does not necessarily mean only an obligation voted upon by the people, although it ofcourse includes such,ItHonorable 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