Honorable Jesse   James
State Treasurer
Austin, Texas
Dear Mr. James:           Opinion No. O-4178
                          Re: Whether or not Insured Build-
                               ing and Loan Association stock
                               certificates are eligible un-
                               der the State Depository Law
                               as collateral to secure State
                               funds?
        We beg~to acknowledge receipt of your letter asking
for an opinion from this department, as follows:
       "The State Depository Board is requesting
   an opinion from you at your very earliest con-
   venience in regard to Insured Building and Loan
   Association Stock Certificates, as follows:
       "1 . Are such Certificates eligible under
   the State Depository Law as collateral to secure
   State Funds?
       "2 . If in your opln!.onthey are eligible
   as collateral for State Funds, how or by whom Is
   the collateral value of such Certificates to be
   determined?"
        Article 2529 of Vernon's Cfvil Statutes prescribes
the kinds of securities which are eligible as collateral to
a depository for State funds, as follows:
       "Bonds and certificates and other evidences
   of indebtedness of the United States, and all
   other bonds which are guaranteed as to both
   principal and interest by the United States; bonds
   of this State; bonds and other obligations is-
   sued by the University of Texas; warrants drawn on
   the State Treasuryagainst the General Revenue of
   the State; bonds issued by the Federal Farm
   Mortgage Corporation, provided both principal and
   interest of said bonds are guaranteed by the United
   States Government; Home Owners Loan Corporation
                                                                  ..




Honorable Jesse James, page 2            o-4178


    bonds, provided both principal and interest of
    said bonds are guaranteed by the United States
    Government and such securities shall be ac-
              the Board in an amount not less than
    zz&~~     per cent greater than the amount of
    State funds which they secure; provided, that
    Texas Relief Bonds may be accepted at face value
    and without margin for the amount of State funds
    allotted, provided such State Relief Bonds have
    all unmatured coupons attached; bonds of counties
    located in Texas; * * +"
        Insured Building and Loan Association shares or
stock are not included in the list of eligible securities ~.
for State deposits, and the Board, therefore, has no author-
ity to accept them as such.
        It is well, perhaps, for us to refer to Senate Bill
No. 166, passed by the Regular Session of the 47th Legis-
lature dealing with Investment by Fiduciaries.
           Section 1, of Senate Bill No. 166, contains the fol-
lowlng :
        ' * * *, hereafter, all mortgages, bonds, ae-
    bentures, notes, collateral trust certificates,
    and other such evidences of indebtedness, issued
    or that hereafter may be issued under the terms
    and provisions of the National Housing Act, ap-
    proved by the President of the United States on
    June 27, 1934, as amended and as may hereafter
    be amended, and all !lnsured accounts' issued or
    that may hereafter be issued by any institution
    insured under the provisions of Title IV of the
    National Housing Act, approved June 27, 1934, as
    amended and as may hereafter be amended, or any
    evidences of indebtedness or accounts that may
    be issued or insured by any lawful agency created
    thereunder, all mortgages, bonds, debentures, notes,
    collateral trust certificates, or other such evl-
    dences of indebtedness, which have been or which
    may hereafter be issued by the Federal Home Loan
    Bank Board, or any Federal Home Loan Bank, or
    the Home Gwners' Loan Corporation, or by the
    Federal Savings and Loan Insurance Corporation,
    or by the Reconstruction Finance Corporation, or
    by the--FederalFarm Loan Board, or by any Eederal
    Lana Bank, or by any National Mortgage Assoclatlon,
    or by any entity, corporation or agency, which has
    been or which may be created by or authorized by
Honorable Jesse James, page 3        o-4178


    any Act, which has been enacted or which may here-
    after be enacted by the Congress of the United
    States, or by,ang amendments thereto, which has
    for Its purpose the relief of , refinancing of or
    assistance to owners of mortgaged or encumbered
    homes, farms, and other real estate, and the im-
    provement or financing or the making of loans on
    any real property, shall hereafter be lawful in-
    vestments for all fiduciary and trust funds in
    this State, and may be accepted as security for
    all public deposits where deposits of bonds or
    mortgages are authorized by law to be accepted. ***'
        Assuming, but not deciding, that the last provision..-
of the above quotation with respect to securities there men-
tioned being eligible 'as security for all public deposits
where deposits of bonds or mortgages are authorized by law.~
to be accepted", is applicable to the class of deposits in-
volved in your letter of inquiry, nevertheless S.B. No. 166
in this respect Is a general law of deposit securities,
whereas the State Depository Act herein first above quoted
Is a special law upon the subject of securities eligible for
deposit by State depository banks, and under well-established
principles, numerously attested by the decisions, the special
law prevails over the general. It is treated as an exception
to the general law, thus enabling both the general and the
special laws to stand at the same time and to be applicable
in their appropriate spheres.
       San Antonio & A. P. Ry. Co. v. State, 95
           s. w. (2) 680;
       Townsend v. Terre11 (Tex.) 16 S.W. (2)
           1063;
        Cole v. State (Tex.) 170 S. W. 1036, 163
            s. w. 353;
       Hunt v. Atkinson (Corn.Apps. 12 S.W. (2)
           142, 17 S. W. (2) 780, 18 S.W. (2) 594;

        39 Tex. Jur. 'Statutes", g g 81,82.
                                                      -   .




Honorable Jesse James, page 4          O-4178


                                Very truly yours
                           ATTORNEYGENERAL OF TEXAS

                                By s/Ode Speer
                                     Ocie Speer
                                      Assistant

OS :MR:wc

APPROVED NOV 8, 1941
s/Grover Sellers
FIRST ASSISTANT
ATTORNEY GENEFUL
Approved Opinion Committee By s/BWB Chairman
