Court Opinion

ID: 4139506
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:48:23.713747+00
Date Added: 2024-06-11T14:44:54.828373
License: Public Domain

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 Subsec-
                                                       tion 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 con-
           struction 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 Arti-
           cle 7 alIows a State bank to make investments         repre-
           senting 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 appropriate-
           ly 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 in-
        volve 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 ob-
        ligation 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 in-
        strumentality    or agency of the United States Govern-
        ment. ” (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 limita-
tion, 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 un-
qualified liability or obligation or undertaking.    This view
is supported by such decisions      as--

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

                  IllinoisPower & Light Corporation    v. City of
                        Centralia, 11 Fed, Supp. 874;
                  City of Eugene v. Willomet   Valley Co., 97 P. 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 con-
sideration 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