                             E               CD                             A

                                         0          EXAS

  GROVER     SELLERS                    AU~THN      II. TEXAS
  -xmxx
AlTORNlEY     G*:NERAr.

     Hon. 0. P. Lockhart,   Chairman
     Board of Insurance   Commissioners
     Austin, Texas

     Dear   Sir:                             Opinion No. O-5768
                                             Re:   Is the Board of Insurance         Commissioners
                                                   directed   by Articles   4740     and 4725, R.C.S.,
                                                   as amended     by S. B. 0 and      9, Acts of 1943,
                                                   48th Leg., R. S., to accept        securities    which
                                                   are not eligible    for reserve      investments
                                                   but which are eligible     for    capital   and surplus
                                                   investments    7

                 Your request    for    an opinion  on the above matter     has been         received
     and carefully   considered.        We quo,te said request  as follows:

                  “One of our Texas life insurance           companies     has submitted      to
            ma for deposit     under the policy      registration    ArticIes   4740-4743
            an offering   of securities    eligible   for capital    and surplus   invest-
            ments but which do not meet the requirements                of reserve    invest-
            ments,    as provided    in Article    4725.    Articles   4740 and 4725 were
            amended     by Senate Bills 8 and 9 of the 48th Legislature.

                  “Before    the 1943 amendment         the requirement      for reserve      and
            capital   investments     under Article      4725 were the same.         Such invest-
            ments were eligible       for deposit    under the registration        articles   but
            surplus    investments     were not.    The five articles      were in harmony
            with themselves       and with the conception       of the public generally,.’       I
            think, that the Commissioner’s          certificate    of registration      on a pol-
            icy meant that he had in hand either the cash representing                   the re-
            serve   on the policy    or securities     of the kind in which the reserve
            funds might be invested.

                  “You will note that Senate Bill 8 lowered           the requirements      for
            capital  investments     by fixiri&them     equally   with surplus    investments
            and left reserve     requirements      substantially    as they were.     Senate
            Bill 9 amending     Article   4740 changed      the word “funds”     to “capital,
            surplus   and/or   reserves.”      Articles   4741-2-3    were not amended.

                  “To accept      the securities    not eligible   for reserve    investments
            it is necessary      to construe     “and/or”    in the amendment      as “or”,
Honorable      0.   P. Lockhart,     Page   2     O-5768




        which seems   in conflict   with Article     4743 defining what deposits
        may include.   Construction      of “and/or”    as “and” will apparently
        confine the deposits    to reserve    investments.

              “I have declined    to accept  the capital   and surplus     investments
        because    of the ambiguity    and conflict  involved   and because      of the
        real importance     of the issue to the holders      of registered     policies.

               “Please    advise  me whether    the Board is directed   by the above
        articles    as amended     to accept  securities which are not eligible
        for reserve      investments    but which are eligible  for capital and
        surplus     investments.”

          Article 4740,         Vernon’s    Annotated  Revised   Civil Statutes of Texas
of 1925, prior to being         amended     by S. B. No. 8, reads in part as follows:

               “Any life insurance    company     now or which may hereafter               be
        incorporated     under the laws of this State may deposit              with the
        Commissioner       for the common      benefit    of all the holders        of its
        policies   and annuity bonds,    securities     of the kinds in which,          by
        the laws of this State, it is permitted        to invest or loan its funds,
        equal to the legal reserve      on all its outstanding        policies     in force,
        which securities      shall be held by said Commissioner               in trust
        for the purpose     and objects   herein    specified.    . . .”

           The only change made in said Article               4740 by S. B. No. 8 which
here needs to be considered         is that the word “funds” was omitted          from
said amendment       and the words      “capital,    surplus,    and/or reserves”    sub-
stituted therefor.     It is necessary,      therefore,    to determine    what the Legis-
lature intended    in adopting    said amendment.

              In the case of Yett vs. Cook, 281 S. W. 837,             841, the Supreme         Court,
speaking      through  Chief Justice Cureton, held:

             u . . . . An elementary     rule of construction is that, when a
        law is amended,       effect must be given to the amended     law in a
        manner     consistent    with the amendment.”

            In the case of American   Surety           Company       of New    York   v. Axtell    Com-
pany,    36 S. W. (2d) 715, the Commission             of Appeals      held:

             41. . . . It will be presumed      that the Legislature    in adopting
        the amendment        intended   to make some change       in the existing   law
        and, therefore,      the courts   will endeavor   to give some effect to the
        amendment.”
 .       .




Honorable       0.   P. Lockhart,     Page     3      O-5768




           In the case of Independent  Life Insurance                   Company    of America   vs.
     Work,   77 S. W. (2d) 1036, 1039, the Supreme                     Court, speaking  through
     Justice   Greenwood,   held:

                   “The rule is elementary       that we must give some effect    to
             changes   in the words   of legislative    acts and must also construe
             their words    so as to accomplish      the legislative intent.“’

                Applying    these rules to the amendment           of Article    4740 by S. B.
     No. 8 in the particular       hereinabove    referred   to, it is obvious     that the Legis-
     lature amended      said Article     for the purpose   of clarification      and to make cer-
     tain the kinds of securities        any life insurance    company      may deposit    under
     said Article    and to specify     that same could include       securities    of the kinds in
     which,   by the laws of this State, it is permitted         to invest or loan its capital,
     surplus,   and/or   reserves.

                 Owing to the fact, however,       that the use of the phrase    “and/or”
     in statutes   has been before     the courts   a number     of times and frequently
     has been critized,     it is necessary    to interpret   said phrase   as used in order
     to determine     the intent of the Legislature      in using same, in said amendment.

                  This phrase      has been referred          to as “ambiguous;”          “indicating
                                                                                                                ii
     uncertainty     and doubt; ” “confusi.ng         and misleading;”        “unintelligible;”        “mean%
     ingless;   ” “gibberish;”       and “an abominable          invention    that is as devoid         of mean-
     ing as it is incapable        of classification       by the rules of grammar            and syntax.”
     Various     other epithets       have been applied        thereto    by the courts,      several      of
     which appear       in the Annotations         in 118 A. L. R., pp. 1367 et seq., but it is
     our opinion     that when said phrase           is properly      used, as it was in said amend-
     ment, its meaning         is not uncertain.         It is broad,    but not indefinite;       it is elas-
     tic, but within definite        bounds and for a definite          purpose.     A proper        interpreta-
     tion of said phrase        depends     in each instance       upon the circumstances              under
     which it is used, and when used in a statute it must be construed                           so as to ex-
     press    the true int&ntion of the Legislature.               When so construed,           it does have
     a well-defined       meaning      recognized      in law.

                     Webster’s      New   International        Dictionary,      Second   Edition,   defines
     “and/or”        as follows:

                     “Either   -and or -or.”       “‘butter   and/or    eggs”    means    “butter   and
             eggs,     or butter or eggs.”

               The following   statement as to the use of said phrase is made by the
     court in the case of State vs. Dudley,  159 La. 872, 877, 106 So. 364, 365, as
     follows:
Honorable       0.   P. Lockhart,      Page   4    O-5768




              i Whheil used 3~1a contract,       the intention   is that the one word
        or the other Mayo be take,n accordingly           as the one or the other
        will bc:st el:C?c+. +.he purpose     of the parties    as gathered    from the
        contract   t,aken as a whole.       In other words      such an expression
        in a contract    amounts     in effect to a direction      to those charged
        with construing     the contract      to give it such interpretation      as
        will best accord     with the equity of the situation,         and for that
        purpose   to ,~SE either    ‘and’ or ‘or’ and be held down to neither.”

                Thr Supreme     Cou,rt of California     considered    the meaning     of said
   phrase     in the case of Powers    Farm,     Inc., v. Consolidated     Irr. Dist.,   119
   P. (2) 717, as same was used in an act relati.ng to the liabi,lity of irrigation
   districts,    their officers  and employees       for damages,    which Act reads in part
   as follows:

                 “Section    2 provides:      ‘Whenever     it is claimed       that any per-
            son or property     has been injured       or damaged        as a result of any
            dangerous     or defective    condition    of any prop&rty        owned or oper-
            ated and under the control         of any irrigation      district    or i~tsoffi,-
            cers or employees        and/or    the negligence      or carelessness        of
            any officer    or employee      of an irrigation     di,strict,    a verified
            claim for damages        shall be presented”‘,      etc.




                   ,, ” . I ,As >JYF~ in Section         2 of the act., it. refers   to a clai~m
            for damage        g;?,,undtd    upon any one of the following          clauses     (1)
            a dangerous        01 defective      conditi.on    of property    of the distri.ct
            and negligence          it an officer    or employee;       or (2) a dangerous       or
            defective      condition     of property      of the district,   that is a general
            liability  withorlt rc~:feren,ce to negligence;          or (3) the negligence
            of an officer    0~ ernpl~oyee.”

             The meaning     *.~,fsaid phrase    was also considered by the Georgia
   Supreme   Court in the c,ase of Davison        v. F. W. Woolworth Company,    186
   Ga. 663, 198 S. E. 738, 118A.       L. R. 1363, as same was used in the statute
   levying a tax on Electiical      Contractors,     as follows:

                   “Electrical    Contractors.     Upon all electrical      Contractors
            $25.00     for each county.      The term ‘electrical      contractor‘    used
            in this paragraph       shall be held to mean each person,          firm, or
            corporation       who shall engage    in installing,  repairing,     and/or
            selling    electrical  wi,ring or equipment.”
Honorable     0.   P. Lockhart,      Page   5    O-5768



                   The   Court   made   the following     holding:

                  “We recognize      the rule that tax acts, including        acts imposing
            taxes on occupations,        are to be strictly    construed    against   the gov-
            ernment.     Mayor,    etc., v. Hartridge,      8 Ga.~ 23; Mystyle     Hosiery
            Shops v. Harrison,       171 Ga. 430, 155 S. I?. 765.        But we must not
            lose sight of another       rule which admonishes         us that however      awk-
            ward and unusual the language          of a statute may be, the legislative
            intent manifested      by it must be ascertained         and enforced    as the
            law.   Torrance     v. McDougald,     12 Ga. 526 (3); White v. State, 121
    ..:-    ~a.. 592, 49 S;;E. 715; Lee v. Tucker,           130 Ga. 43, 60 S. E. 164. If
            the word combination         “and/or”      has a well-defined     meaning     recog-
            nized in legal parlance,        it is the duty of this court to give the stat-
            ute in which it is used that construction            which is in harmony        with
            that meaning.       If in doing so the authorities        lead us to the conclu-
            sion that it was the purpose          of the General     Assembly     to tax one in
            the situation    of the defendant,       the rule of strict construction       will
            not have been violated.         The expression       “and/or”    has been before
            the courts    a number     of times and frequently         has been criticized....
            3 C. J. S. 1069, deals with this word combination,                and analyzing
            the holdings    of the various      courts    says in the text that the meaning
            of “and/or”     may be clear,       supplying    the intention   either that effect
            shall be given to both the conjunctive            “and” and the disjunctive         “or”,
            or else that the one word or the other may be taken accordingly                      as
            the one or the other will best give effect            to thepurpose      intended     as
            gathered    from the instrument          taken as a whole,     and for that purpose
            to use either     “and” or “or”,       and be;held    down to neither;     and that on
            the other hand it has also been said that, as sometimes                  used the
            term is ambiguous.

                   “We think that what. the legislature             intended was that Paragraph
            50 of Section       2 of the general      tax act of @35%s       to be read by using
            the word ‘and’ or the ikrwd’or               interchangeably      between     the words
            ‘installing,’      ‘repairing,’      and ‘selling,’    so as to impose      the tax pro-
            vided in said act on any person               who shall engage       in installing,    re-
            pairing,      and selling    electrical    wiring    and equipment,      or who shall
            engage      in any one of them.         To hold otherwise       would be to entirely
            ignore     the disjunctive      “or”.    Since there is a construction           permiss-
            ible, under the authorities  cited in the note to 3 C. J. S. 1069, which
            will permit  us to do so, the rule that we are to give effect,    if possible,
            to every word in a statute,   requires  us to adopt this construction.”

                  We think a similar   construction  should be placed upon said                    term as
     used    by the Legislature   in S. B. No. 8, and that what the Legislature                    intended
                                                                                                    4   .   ..




Honorable       0.    P. Lockhart,     Page   6    ‘O-S768




 was that the word “and” or the word “or” should be used interchangeably
  between     the words     “capital,”    “surplus”,        and “reserves.”          When so con-
  strued it is apparent        that the Legislature          intended    to authorize      any life in-
  surance     company     seeking     to comply     with the provisions          of S. B. No. 8 to
  deposit    with the Board of Insurance            Commissioners           securities     of the kinds
  in which, by the laws of this State, it is permitted                  to invest its “capital”,
  its “surpl,us”,     its “reserves”,       i.ts “capital     and surplus”,      its “capital     and
  reserves”,      tts “‘surplus    and reserves”,         or its “capital,      surplus    and reserves.”
 In other words,        any such company          can comply       with said provision        by deposit-
.ing securities       of the kinds in which it is permitted               to invest    its capital,   sur-
 plus, and reserves,         or any combination           thereof,    as it may prefer.

             It is our opinion,  therefore,   that sai~d inquiry     should be answered
i.n the affirmat,ive    and that the Board of Insurance      Commissioners         is directed
by sai,d Artf~le     as amended   to accept   any securities     offered   thereunder    which
are eligible     for investment   as capital,  surplus   or reserves.

              Trusting     that this   satisfactorilly        answers      your     inquiry,   we are

                                                               Very     truly     yours

                                                         ATTORNEYGENERALOF                      TEXAS


                                                         BY                          73cLcdtt-
                                                               w   Jas.   W. Bassett
                                                                          Assistant
APPROVED             JAN 15, 1944



ATTORNEY             GENERAL      OF TEXAS



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