                  THEATTORNEYGENERAL
                                     OF      TEXAS

                                 AUSTIN            a~.T~xas

  WILL   WILSON
ATTORNEY    GENERAL
                                          A,pril     9,   1962


      Honora.ble Jesse      James                   Opinion      No. WW-1303
      Sta.te Treasurer      of Texas
      Austin,   Texas                               Re:       Whether investment     moneys
                                                              received  by building      and
                                                              loan associations    which
                                                              represent   payments made
                                                              upon shares of stock or
                                                              share accounts    come within
                                                              the purview of Para.graph
                                                              b of Section    1, Article
                                                              3272b, as enacted by the
                                                              57th Legislature,    Third
      Dear Mr. James:                                         Called Session.


                  We quote     from your            letter      of    March 19,   1962:

                   “Please   advise this department by official
            opinion    whether investment     moneys received   by
            building    and loan associations     which re,present
            payments made upon shares of stock or share
            accounts    come within the purview of Pa.ragra,ph
            b of Section     1, Article   3272b, as enacted by
            the 57th Legislature,       Third Called Session.”

                  Section     1 of    Article          3272b,        Vernon’s   Civil     Statutes,
      provides:

                   “Duties   of Depositories    of Dormant or
            Inactive    Accounts.      Every depository   holding
            dormant &posits        or inactive  accounts   of
            de,positors    or owners whose existence      and
            wherea.bouts are unknown to the depository,
            shall   preserve    intact   the deposits   and ac-
            counts so long as they remain in a dormant
            or inactive     status.

                    “a. The term lde,pository’     as used in this
            Article    means any bank, savings      and loan asso-
            ciation,     banking institution     or organization
            which receives      and holds for others     deposits   of
            money or its equivalent        in banking practice     or
            other personal      property   in this State,    or in
            other States for residents        last known to have
            resided     in this State.
Honorable    Jesse     James,    page   2 (W-1303)


                     The terms    ‘dormant   deposits’   and ‘in-




      of this Article         have continuously       remained
      inactive    for a period of more than one (1) year
      without    credit     or debit whatsoever        through the
      act of the de,positor,          either    in ,person or
      through an authorized           agent other than the
      depository     itself.       ‘Dormant deposits’       and
       ‘inactive    accounts’     lose their      status as such
      when a deposit        is made by the de,positor,         or
      a check is drawn or withdrawal              is made there-
      from by such depositor,            either   in person or
      through an authorized           agent other than the
      depository     itself.”        (Emphasis sup,plied)

             It should be noted that the reference              to “. . .
any . . . savings and loan association               . . .’ in Paragraph
a of the statute      includes     building    and loan association        as
these associations       a.re alike    in every respect,       regardless
of which name is used.          Art. 342-205;       Art. 881a-25,    V.C.S.
Accordingly,     any reference      in this opinion       to one includes
the other.      By way of further        predicate,     we wish to point
out that it is assumed the investment               moneys mentioned      in
your request     are “in this Sta.te, or in other states             for
residents    last known to ha.ve resided          in this State,”      as re-
quired by Paragraph a, and the investment                moneys have been
held for the requisite         period of time to become “dormant”
or “inactive”     within    the meaning of Paragraph b.

             Adverting   to the underscored         language of Paragraph
b, as quoted above,      it is seen that our question,            in essence,
is whether the purchase of shares or share,,accounts                 in a
savings    and loan association      amounts to a                deposit   of
money . . . held by a de,pository          for repayment to the de,posi-
tor or creditor      . . .” within the meaning of Paragraph b.                A
savings and loan association         clearly     falls   within   the general
definition    of a. “depository”     in Paragraph a since these in-
stitutions    are expressly     mentioned     in that paragraph and they,
beyond question,      at least   in reference       to some funds (for       ex-
ample: unpaid dividends),        receive     and hold ,personal pro,perty
for others.      The problem arises      from the use of the words
“deposit”    and “de,positor”     in Pa.ragraph b, and the fact tha.t
investments     in a savings and loan association            are, in contem-
plation    of the statutes     governing     these associations,        not of
Honorable    Jesse   James,   Page 3 (w-1303)


the same lega.    charazter      as deposits   in a. bank.   ,Observe      for
instance, Article     881a-27,     V.C.S.,,  which provides:

             “No building     and loan association      shall
      carry or have upon its books at any time any
      demand, commercial       or checking     account,  or any
      credit   to be withdrawn upon the presen,tation          of
      any negotiable      check or dra.ft,     and all invest-
      ment monies     received   by any such association
      shall ~represetit a ,payment made u,pon shares of
      stock or share accounts;         provided,    however,  that
      s,uch associations      ma.y accept money from members
      to be used for the purpose of paying taxes,             as-
      sessments    and insurance      premiums on the property
      on which the a.ssocia.tion       has a lien.”

            The foregoing   statute   obviously    has the effect     of
precluding   savings and loan associations       from carrying     in-
vestment moneys for shares or share accounts          as “deposits”,
as ,that term is ordinarily     understood    in bankins practice.
The statute   does not, however,     employ the word     deposit”      to
accomplish   this purpose.

              These investment     moneys are unlike bank deposits
in that the withdrawal        of unmatured shares or share accounts
is hedged about by various         restrictions,       both statutory      and
by’the    by-laws   of the associations,         which afford      the member
something less than an absolute           right to repayment on demand.
Homestead Building       & Loan Association        v. Youngblood,       111 S.W.
2d 827 (Civ.App.       1937);   Texas H0mestea.d Building          & Loan Asso-
ciation    v. Kerr, 13 S.W. 1020 (Civ.App.            1890).     See Articles
8Bla-36      V.C.S    and 881a-46,     V.C.S.      For example, withdrawals
of fund; in the:e associations           are not allowed       unless funds
are available      out of receipts     and income for such purpose,
and these associations        are enjoined       by statute    from holding
out as an inducement to buy shares that such funds may be
withdrawn at a time certain          upon notice      of the shareholder’s
intention     to withdraw such funds.         Art.    881a-46,     V.C.S.   Ap-
parently,,however,       matured shares may be withdrawn at any
time after     maturity,    so long as the association           is a solvent
going concern.       Art. 881a-48,     V.C.S.

             In the technical   legal    sense a “deposit”       is a bail-
ment of goods to be kept for the deposltorwithoutreward                  and
to be returned    when he shall    require     it.    26~ C.J.S.   194, De-
g,;;JsitSec.   1; Bouvier’s   La.w Dictionary,      Vol. l-A, p. 8&7,
             If the word has this meaning in the subject            statute,
investmint    moneys for shares of stock in a savings and loan
association    cannot  be said to fall      within the purview of the
statute.     However, the word “deposit”         has been aptly described
as “a word of large and varied        signification.’       26~ C.J.S.     198,
Honorable    Jesse    James,   page 4 (WW-1303)


Depositories,    Sec. 1.     Taklng the word, as we must, In the
context    of the subject    statute, we believe that the Leglsla-
ture intended    to give It a broader meaning than 1s indicated
by its strict    legal   definition.

             It Is a matter of’ common knowledge that these lnvest-
ments In savings     and loan associations         are called    “deposits”      by
a large segment of the public.            They are also often called          “sav-
ings” or “savings      accounts”     and are referred      to as such In a
great deal of the advertising           sponsored   by savings     and loan as-
sociations.      The word “savings”       or “savings     account”   connotes
In common parlance      a fund of money held for repayment to the
person leaving     such funds.       Indeed,   they are looked upon by the
,public In general     as being comparable        to savlnge accounts       in
banks and are, as a rule,         regarded by the shareholders          them-
selves    as being withdrawable       on demand,      As a matter of custom
and ,practlce,    the shares are vltrually         payable on demand, It
being the usual practice        of savings     and loan associations        In
this day and time to freely          allow withdrawals      of unmatured as
well as matured shares.         Therefore,     It would not be surprising
to find the Legislature        referring     to these investments      aa “de-
posits”,    at least   in leglslatlon      which does not purport        to be
directed    at savings    and loan assoclatlona        alone,

              A further    insight     into the meaning oi the word “de-
posit”    In this particular        context     can be gained,     we think,
from examining the definition             of the closely      related     word
“depository”      in Paragraph a.         It 1s only logical        that the
Legislature      would Intend a “deposit”          in this Instance        to be
what Is placed In a “depository”,               as deflFed    in Paraffraph a.
It 1s sufficient       under the definition         of    depository       in Para-
graph a that any personal          property      be received     and held by a
savings    and loan association         or banking Institution          for repay-
ment to others.        Nothing is said about the personal               property
being unconditionally         repayable     on demand, nor about the ln-
stltutlon     being required      to return the exact amount left              with
the Institution,       nor about the lnstltutlon           being paid for the
service,     nor about the property         being used or not used by the
institution.       Obviously,     the payment of money to a savings and
loan institution       lor shares or share aocounts            leaves ,personal
property,     money, with the Institution            to be repayed to the
shareholder      under certain      conditions.       In short,     the word “de-
Kository”     1s not assigned      a meaning which would make It a
  depository”     in the strict      or technical      and legal     sense.    Hence,
it seems to us that the Legislature               would in this same statute
intend the word “deposit”           to be used In the same broad sense.

              Further,   the use of the word “account”       in Paragraph
b also indicates       that moneys paid to a savings       and loan asso-
ciation    for shares or share accounts       are Intended to be covered
by Article     327213. The federal    statutes   providing    for the
Honorable    Jesse   James,   ,page 5 (WW-1303)


Insurance  of these funds by the Federal     Savings and Loan In-
surance Corporation   employ the word "account"     in referring      to
shares in a savings   and loan institution.      12 U.S.C.A.    1724.
And, the Texas statutes   also employ the word "account"        in
referring  to investments   in savings   and loan associations.      Art,
881a, V.C.S.
               The view that the word "deposits"            includes  the lia-
bilities     of a savings and loan institution             on withdrawable    stock,
whether running or paid u,p, is not without                precedent.    In Mer-
chants & Mechanics Federal             Savings and Loan Association       v.vatt,
138 Ohio St. 457, 35 N.E.2d 631 (1941)                  it was held that the
word "dek---_-
            nnni tin" ?n-_. the
                            ._-- Ohio
                                 ~..-- statute
                                         -~~~~.~~ ,pl&ing   a tax on deposits
offinancial        institutions       Included   payments for stock in the
association.

            For the     foregoing    reasons,      your   que~stion   is   answered
in the affirmative.

                                    SUMMARY

              Investment moneys received     by a. building
      and loan association       which represent   .payments
      made u~pon shares of stock or share accounts          come
      within     the purview of Paragraph b of Section       1,
      Article     327213, V.C.S.

                                                Very truly   yours,

                                                WILL WILSON
                                                Attorney General      of   Texas



                                         By Henry G. Braswell
HGB:dsd                                     Assistant


APPROVED:
OPINION COMMITTEE
W. V. Gep~pert, Chairman
Morgan Nesbitt
Dudley McCalla
Frank Booth
REVIEWEDFOR THE ATTORNEYGENERAL
BY: Houghton Brownlee,   Jr.
