                                                   R-940


                        OFFICE       OF
        THE ATTORNEY                  GENERAL

                        December 2, 1947

Hon. J. M. Faulkner,           Opinion No. V-445
Ranking Commissioner,
Austin, Texas                  Re:   Insured mortgage
                                     loans - Eligibility of
                                     for State banks.
Dear Sir:
            Your request for an opinion by this depart-
ment upon the above subject matter is accompanied by a
letter from Mr. L. J. Cappleman, State Director, Uni-
ted States Department of Agriculture, Farmers’ Home Ad-
minigistration,
              Dallas, Texas,~from which we quote as fol-
    :
            “I am sending you a copy of,Section
      371, Title 12, United States Code, rihich
      provides for the making of insured mort-
      gate loans through the Federal Reserve
      Aot. . . .”
            “We trust you will be able to give
      us your opinion within a short time and
      will notify the officers of the State
      banks of Texas concerning their eligibil-
      ity, and we in turn will pass the inform-
      ation to our Supervisors in order that
      they may discuss the matter with bankers
      in their respeotive counties.”
            Artiole 342-504 (Vernon’s Codification) of
the Texas Ranking Code defines the eligibility of real
estate ‘loans or investments for State banks. The sub-
ject seourities are not there embraced.
            Artiole 342-511 of the Code, however, is as
follows:
            “Any provisions of this Code to the
      aontrary notwithstanding, any State bank
      may make any loan or investment which
      suoh bank could.make were it operating as
      a national bank, and the making of suoh
     -‘loanor investment shall not constitute
Hon. J. Id.Faulkner - Page 2   (V-445)


      a violation of any penal provision
      of the stxtutes of the State."
            In Opinion No. O-6809 by this Department un-
der'date of September 15, 1945, addressed to Hon. H. A.
Jan&son, Commissioner of Banking, this Department con-
strued the last quoted article in the following language:
             "Article 342-511 above quoted
      clearly deals with the subject of eli-
      gible loans for investments for State
      banks, and therefore is in pari materia
      with the prior Articles 501, 502, 503,
      504, 505 and 506 of Chapter V--all deal-
      ing with the same subject, though for
      the most part ,bynegation. The common
      subject to which all these Articles re-
      late is eligibility of investments. Ar-
      ticles 511 and 507 have nothing in com-
      mon-- that is to say, Article 511 does
      not deal with the question of limita-
      tion of liability of any one borrower,
      as does Article 507."
            In a later opinion, No. O-7098 addressed to
Hon. L. S. Johnson, Banking Conunissioner,this Department
again quoted - 511 and commented as fol$ows:
               "State Banks in Texas have only
      the powers conferred upon them by the
      statutes    of the State and the charters
      under which they act, and have no pow-
      ers beyond this from any other govern-
      ment or source.     The Code is a compre-
      hensive one and covers the whole field
      of the operation of such banks. It is
      familiar law in statutory construction
      that such a code should be construed
      in its entirety, as a whole, giving ef-
      fect to every portion thereof as an in-
      tegral part of the law governing the
      particular inquiry. Article 4 would,
      if standing alone, exclude the charac-
      ter of investments permitted by Article
      11. But it does not stand alone; on
      the contrary, Article 11 is as much a
      part of the law as any other part of
      the Code and is to be read in connec-
      tion with Article 4 as though the same
      had been actually incorporated inthat
Eon. J. ,Ih.Faulkner.? Page 3   W-445)


             Article as, indeed it is, a proviso."
            Such farm'mortgage insurance loans are eli-
gible for national banks as we understand it.
            Fr?m what :':e
                         have said it follows that the
insured mortgage loans of Section 371, Title 12, United
States Code, are eli(~r,ible
                           investrlentsfor Texas State
banks.
                          SUMMARY
              Insured mortr,aceloans authorized by
        Section 371, Title 12, United States Code,
        are elig1bl.efor loans for investnent by
        Texas State yanks in virtue of Article 11,
        Chapter V, of the Texas F3ankinf:
                                        Code.
                                     Yours very truly,
                                ATTORhXY GXWRAL



                                BY
0S:wb                                Assistant


                                APPROVED:
