,




                  THEAT%ORNEY                GENEECAL
                                       XAS




    Honorable J. M. Falkner         Opinion NO. c-230
    Banking Commissioner
    Department of Banking           Re: Applicability of Sections 4
    John Ii.Reagan Building         and 7 of Article 1524a, V.C.S.,
    Austin, Texas                   to certain corporations, who are
                                    licensees under Article 6165b,
    Dear Mr. Falkner:               V.C.S., Texas Regulatory Loan Act.
         Your recent request to this office asked our opinion as
    to whether corporations who have licenses issued by the Texas
    Regulatory Loan Commissioner ursuant to Article 6165b, V.C.S.,
    and whose car orate purposes Pas reflected In their Articles of
    IncorporationP would have made them subject to the provisions
    of Article 1524a, V.C.S., are exempted from compliance with
    Sections 4 and 7 of Article 1524a, V.C.S., by virtue of the
    provisions of Section 29 of Article 6165b, V.C.S.
        Section 29, Article 6165b, V.C.S., reads as follows:
        II      Chapter 144, Acts of the 48th Legislature,
        Regular Session, 1943, compiled as Article 4646b,
        Vernon's Annotated Civil Statutes of Texas, and
        Artlcles 5069, 5071 and 5073, Revised Civil Stat-
        utes of Texas, 1925, where inconsistent with this
        Act shall not apply to licensees under this Act,
                       mows       of Cuer     165. Acts of
        Lhe 4hd Lenislature. RP              on. 1911. u
                                              \lernont
        _tated Clv;l Statutes of Texas. abolv to SuQ
        Jicensee.    (Emphasis added.)
          The portion of the caption of Senate Bill 15, Chapter 205,
    Acts of the 58th Legislature, Regular Session, 1968, which re-
    lates  to Section 29, reads as follows:
          I,     providing that Chapter 144, Acts of the 48th
          Legislature, Regular Session, 1943, (compiled as
          Article 4646b, Vernon's Annotated Civil Statutes of
          Texas), Articles 5069, 5071 and 5073 of the Revised
          Civil Statutes of Texas, 1925, and Chaoter 165. Acts
          of the 42nd Legislature. Reaular Session. 1931. as
          amended. (compiled as Article 1524a, Vernon's




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Honorable J. M. Falkner, page 2, Opinion No. C-230


        Annotated Civil Statutes of Texas), where incon-
        sistent with this Act shall not anolv to licensees
        under this Act; . . .' (Emphasis added.)
     From a comparison of the caption and Section 29 of the
Texas Regulatory Loan Act, it is obvious that Section 29 is
broader than the caption. The caption describes the scope of
the Act as exempting licensees under the Texas Regulatory Loan
Act from the purview of Article 1524a, V.C.S., only where
those provisions are inconsistent with the Texas Regulatory
Loan Act. On the other hand, Section 29 attempts by the use
of the disjunctive nor, to exclude the application of all pro-
visions of Article-4a,    V.C.S., to licensees under the Act
whether they are consistent or inconsistent.
     Article III, Section 35 of the Constitution of the State
of Texas,  1876, provides in part:
      ,I      But if any subject shall be embraced in an
     Act; which shall not be expressed in the title,
      such act shall be void only as to so much thereof,
     as shall not be so expressed."
     The case of Davis v. State, 225 S.W. 532 (Crim.App. lg20),
held that:
           "It is also urged that there are matters in the
        bill not comprehended by the caption, and if so,
        under the express direction of section 35, art. 3,
        of our state Constitution, such act would be void
        as to such extraneous provision, provided that such
        uncomprehended provision be separable from the
        others."
        The Commission of Appeals in Consolidated Underwriters v.
Kirby    Lumber Co., 267 S.W. 703 (Comm.App. 1924), stated tha:
                                                              t
        ,I
         * . . it has been held, with equal uniformity,
        that particular provisions are not within a given
        title where no subject at all is expressed in the
        title; where the ultimate subject exoressed and
        that orovided for are olaia   different: where the
        provisions are DalDablv ulterior or foreign to the
        title: where they are seDarate. distinct from, and
        not permane to the sub.lectexnressed; where by no




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Honorable J. M. Falkner, page 3, Opinion No. C-230


       intendment they possess a necessary or proper con-
       nection with it; where they are disconnected from
       it and Inappropriate to it; or where the provlsions
       come clearly within the evil to be suppressed."
       (Emphasis added.)
     However, under the express provision of Article 111) Sec-
tion 35, of the Constitution, an act contalning matters no,t
included within the caption is void as to the extraneous pro-
vision provided it is separable from the others. Therefore,
from the language of the cases cited, it is clear that since
the caption contemplated an exemption from the provisions of
Article 1524a, V.C.S., only where they were inconsistent with
the Texas Regulatory Loan Act, but Section 29 attempted to
provide exemption from all provisions of Article 1524a, V.C.S,.,
whether inconsistent or not, that the Texas Regulatory Loan
Act cannot be given an effect broader than its caption.
     Acts 1931, 42nd Legislature, Chapter 165, as amended,
which is codified as Article 1524a states in Section 1 that:
          "This Act shall embrace corporations heretofore
       created having for their purpose or purposes any or
       all of the powers now authorized in subdivisions 48,
       49 or 50 of Article 1302, Revised Civil Statutes of
       Texas, -LWp, xn-b~-c&vLC~J~~"3:bm?;tfteszcreated
       having In whole or in part any purpose or purposes
       now authorized in Chapter 275, Senate Bill Number
       232 of the General and Special Laws of the Regular
       Session of the 40th Legislature."
It follows that a corporation whose charter contains a single
purpose clause authorizing it to accumulate and lend money by
obtaining a license under the provisions of the Texas Regula-
tory Loan Act is not a corporation subject to Article 1524a,
V.C.S., because Article 6165b, V.C.S., is a special act en-
acted in obedience to Article XVI, Section 11, of the Texas
Constitution, as amended in 1960, and the provisions thereof
relative to its creative purposes are inconsistent with the
creative purposes of Article 1524a. A special statute will
control over the provisions of a general statute, and will be
treated as an exception to a general law previously enacted.
39 Tex.Jur. 150, Statutes, Sec. 82.
     It is, therefore, our opinion that those provisions of
Article 1524a, V.C.S., that are not inconsistent with the



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Honorable J. M. Falkner, page 4, Opinion No. C-230


provisions of Article 6165b, V.C.S., are to be given full
force and effect as regards licensees under Article 6165b,
V.C.S., while those provisions of Article 152&a that are in-
consistent with Article 6165b, V.C.S., are not to be applied
against licensees under the Texas Regulatory Loan Act.
     We have applied the foregoing standard to the four ques-
tions which you propounded as follows:
     1.   You asked if a corporation whose charter con-
     tains a single purpose clause authorizing it to ac-
     cumulate and lend money by obtaining a license under
     the provisions of the Texas Regulator Loan Act is
     exempt from compliance with Sections 5 and 7 of
     Article 152&a, V.C.S., if such corporation offers
     for sale or sells in Texas its bonds, notes, certi-
     ficates, debentures or obligations.
         You are advised that such corporation is exempt
    from Sections 4 and 7 of Article 152&a since that
    Article applies only to those corporations who have
    as corporate purposes those provisions that would
    have formerly brought the corporation within the
    purview of the Banking Commissioner's authority.
    The corporate purpose noted is within the scope of
    the inconsistency test of Article 6165b, V.C.S., but
    if such corporation offers for sale or sells in
    Texas its bonds, notes, certificates, debentures or
    obligations, and if such acts are found to be, as to
    that corporation, ultra vires, such acts would be
    unlawful.
    2.   Your second question asked if a corporation
    whose charter contains a   or all of the purposes
                              8, 49 or 50, Article 1302
    contained in SubsectionsnlI
    or Article 1303b, V.C.S., is exempt from compliance
    with the provisions of Section 4, Article 1524a,
    V.C.S., if such corporation has obtained a license
    issued by the Regulatory Loan Commissioner to do
    business under the provisions of the Texas Regula-
    tory Loan Act.
         It is our opinion that such corporation would
    not be exempt since its purposes would allow it to
    do other acts than those contemplated by the




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Honorable J. M. Falkner, page 5, Opinion No. C-230


     exemption in Article 6165b, V.C.S., and must there-
     fore cornly with either paragraph one or two of
     Section .t Article 1524a, V.C.S., according to its
     activitie;.

     3.    You asked if a corporation whose charter con-
     tained a single purpose clause authorizing it to
     accumulate and lend money only under the provisions
     of the Texas Regulatory Loan Act would be exempt
     from compliance with Section 4 of Article 1524a,
     V.C.S.,  if such corporation makes loans in excess
     of the sum of $1500,
          You are advised that since such corporation
     was organized with the single purpose of complying
     with Article 616513,V.C.S., it is within the incon-
     sistency exemption of that statute. Such loans if
     completed would be beyond the scope of the purpose
     for which the corporation was organized, and if
     made would subject the corporation to the penalties
     for acting beyond the scope of stated corporate
     purposes.
     4.  Your last question asked whether or not a
    corporation whose charter contains a purpose clause
    authorizing it to accumulate and lend money after
    obtainlng a license under the provisions of the
    Texas Regulatory Loan Act is subject to the provi-
    sions of Article 1524a, V.C.S., if its charter con-
    tains in addition one or more of the purposes set
    forth in Subsections 48, 49 or 50, Article 1302 or
    Article 1303b, V.C.S.
         We are of the opinion that the material facts
    contained herein are the same as those contained in
    your question No. 2, and the same answer would
    apply.
     The construction we have placed upon both Article 152&a,
V.C.S., and Article 6165b, V.C.S., is harmonious with the
legislative intent in that it provides adequate protection for
both the borrower and the investor. The duty of harmonizing
the construction with the legislative intent is clearly seen
in McPherson v. Camden Fire Ins. Co., 222 S.W. 211 (Comm.App.
19201, where the Court at page 212 said:




                             -1117-
Honorable J. M. Falkner, page 6,       Opinion No. C-230
             It is Incumbent upon the court to asccrtafn
     tbe'intention of the Legislature, and, If possible
     by fair construction, uphold it. The constitutional
     provisions referred to should be construed liberally,
     rather than embarrass legislation by a construction
     the strictness of which is unnecessary to the accom-
     plishment of the beneficial ends for which It Wa8
     adopted."
                             SUMMARY

     1.   A corporation whose charter aontalns a single
     purpose clause authorizing it to accumulate and
     lend money by obtaining a license under the provl-
     sions of the Texas Regulatory Loan Act Is exempt
     from compliance with Sections 4 and 7 of Article
     1524a, V.C.S.
     2.   A corporation whose charter contains any or
     all of the purposes contained in Subsections 48, 49
     or '50 of Article 1302 or Article 1305b, V.,C.S.,Is
     not exem t from compliance with the provisions of
     Section t Article 152&a, V.C.S., even though such
     corporati& has obtained a license Issued by the
     Regulatory Loan Commissioner to do business under
     the provisions of the Texas Regulatory Loan Act.

    3.   A corporation whose charter contains a single
    purpose clause authorizing It to accumulate and
    lend money only under the provisions of the Texas
    Regulatory Loan Act is exempt from compliance with
    Section 4 of Article 1524a, V.C.S., and It is im-
    material if such corporation makes loans in excess
    of the sum of $1500.

     4.    A corporation whose charter contains a purpose
     clause authorizing it to accumulate and lend money
     after obtaining a license under the provisions of
     the Texas Regulatory Loan Act is subject to the pro-
     visions of Article 1524a, V.C.S.,  if Its charter
     contains in addition one or more of the nurooses set
     forth in Subsections 48, 49 or 50, Articie isO2 or
     Article 1303b, V.C.S.
                                      Very truly yours,
                                      WAGGONER CARR
                                      Attorney General



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Honorable J. M. Falkner, page 7, Opinion No. C-230


                                 B
                                      Assistant Attorney General
RER:da
APPROVED:
OPINION COMMITTEE
W. V. Geppert, Chairman
Linward Shivers
Paul W. Phy
John R. Reeves
Pat Bailey
Howard Fender
APPROVED FOR THE ATTORNEY GENERAL
By: Howard W. Mays




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