                           July 7, 19%


Honorable Jesse Jsmea            opinioa No. ww-470
State Treasurer
Capitol Station                  Re: Whether cert@n   securities
Austin, Texas                        are eligible 'as collateral
                                     for Stati.de&oeits.

Dear Sirs

        Your letter requests our opinion:

            I . . . u'to .x&ether obligations at
        the followlug types are eltgible under
        the Depoaitoq Laws, or shy Special ~StrC-
        utes, to be accepted by the State~DepHi-
        tory Board ro~collateral fbr Stata::de
        po*ito~r

            1. Consolidated BQqdmqf ,Fed+al
               HomeLoan   Banks. These bonds
               are the joint'and eeveral .ob-
               ligation6 of,the Federal Home
               Loan Banks.

            2. Federal National mortgage As-
               sociation Debentures.

            '3. lkderal ~FarmLoan IWnds - The
                twelve lw   banks are jointly
                and severally liable for con-
                solidated tarm loaa~bo~~s.

            4. Consolidated Debentures of Banks
               for Cooperatives. ,:.:        I

            5. Federal Intermediate Credit Bsnk
               Bonds. These are consolidated
Honorable Jesse James, page 2 (~~-470)



                  collateral trust debentures and
                  are the joint and several obli-
                  gations of the twelve Federal
                  Intermediate Credit Banks.

                 If your office should rule that any
            oc :all,of the...abovetype obl:igations are
            eligible as collateral, please advise:u&-.
         :. what collateral worth the State TrBeD..
            shall uee for such obligations.*

         Alrticle 2529, V.C.S., prescribes the securities
which may be accepted by the State Depository Do@     ee+l-
lateral for deposit of State funds. This article is a
special act relating:~~ci,fical~y,rto statedepositories.~

          We have also considered Jhethe,r.Articles 842 and
~842a, V.C.&, may apply in.~dete'rm&aiag~what'a~ities      are
acceptable .as collateral for state ,deposits. .The wording
of these ~~:~strl~tes~~with.referen~: to *he types of securi-
ties therein~meutioned~as being eligible ,for iQpestment pur-
poses is practically the same.     Their wordiagzl:withreference
to the types of securities each lists as being eligible as
"security for publ.ic'depositsm is identical.
                                  j:'_! ,'
          The particular %+ordingof<these-two statutes where-
in certain securities.:aze authorized for purposes of invest-
ment and as security for public depasits~ ,is as follows (that
portion relating to *security for public depositem which is
identical is underscored):

               Article 842: *I. . . shall be a lawful
           investment for all~..fiduciaxyand t.r.ust
           funds ~in~thie.State; iad~~sav .be:caccepted
           as secu~ritv for~aPl~Dub1iedeooeit.s where
           deposits cfbcmds or.mortgaqee are au-
           thorized by law to be accepted . . :

           The correlative..pertiaeut:-qart of Article 842a,
reads*
Honorable Jesse James, page 3 (WW-470)


              * . . . shall hereafter be lawful invest-
         ments for .all fiduciary and trust funds in
         this State, and may be accepted as security
         for all public deposits where deposits of
         bonds or laDrtgages are authorieed by law to
         be,accepted . . .#

         Because of this identical wording with respect
to l. . .security for all public deposits . . : and the
over-all content and evident purpose of these Articles 842
and 842a, it is manifest that the Legislature ~intended that*
the field of application with reference to insecurity for all
public deposits* of both articles should be the shame. We
note that Article 842 was enacted in 1917 and Article-8428
was not originally enacted until 1933.         ,,,.

         The Legislature in its 1925 codificationof   the
civil statutes placed Article.842 in Titles No. 22 entitled
"Bonds - County, Municipal, etc.* and in Chapter 8 of this
title styled *Sinking funds - Investments, etc.* Article
2529 was codified under a different title, Title No. 47
entitled nDepositaries.n

         Comparative analysis of the last amendment of
Article 2529 (Acts 1955, 54th Leg., ch. 425, p. 1132) and
of the last amendment to Wticle   842a (Acts 1941, 47th Leg.,
ch. 618, p. 1356) reveals an irreconcilable conflict be-
tween these two articles as, to the type of security of the
Home Owners' Loan Corporation which is acceptable under each.
Article 2529 listsr

            ". . . Home Owners' Loan Corporation
         Bonds, provided both principal and inter-
         est of said bonds are guaranteed by the
         United States Government . . .U,

whereas, Article 842a includesr

            I
                .  all mortgages, bonds, debentures,
                    .   .


         notes, collateral 'trust certificates, or
         other such evidences of indebtedness, which
Honorable Jesse James. page #4 (WW-470)



         have been or which may hereafter be issued
         by the . . . Home Owners' Loan Corporation
                  l
         .   .   .




          Article 2529 and the several prior amendments
 thereto, including its predecessor in the 1911 codifica-
 tion of the civil statutes  (Article 2423), and including
 the original state depository law enacted in 1905 (29th
 Leg., Reg. Sess., ch. 164, p. 387) and its amendment in
 1907, all relate specifically and only to depositories
 for state funds and each is very specific wherein it sets
 forth the character of the securities acceptable as col-
,lateral for the deposit of state funds.

         The legislative intent as to the fields of appli-
cation of these three articles (Nos. 2529, 842 and 842a,
V.C.S.) is very clear.+ Article 2529 is a special law which
names.the kinds of securities which may be accepted as col-
lateral for deposit of state funds, and'titicles 842 and
842a are general laws which relate (along with other matters
not'pertinent to the topic under consideration) tc,the,gen-
era1 field of "security for all public'deposits.*

            "This rule of construction has found
         frequent and apt illustration where one
         of the supposedly conflicting statutes
         was general in its terms and the other
         specific.  In such a case it is univer-
         sally held that the ,specific statute more
         clearly evidences the intention of the
         Legislature than the general one, and
         therefore that it will control.   In such
         a case both statutes are permitted to
         stand - the general one applicable to all
         cases except the particular one embraced
         in the specific statute."   Townsend v.
         Terrell, 118 Tex. 463, 16 S.W. 26 1063,
         (1929).~

              "In 59 C.J. 1057, sec. 623 (d), the rule
         is ~thus stated8
Honorsble Jesse James, page #5 (WW-470)



             *'It is a fundamental rule that where
              the general statute, if standing alone,
              would include the same matter as the
              special act, and thus conflict with it,
              the'special act will be considered as
              an exception to the general statute,
              whether it was passed before or after
              such general enactment . . . and where
              the general act is later, the special
              statute will be construed as remaining
              an exception to its terms, unless it is
              repealed in express words or by neces-
              sary i~plicationg~.  Hallum v. Texas
              Liquor Control Board, 166 S.W. 2d~l75
              (Civ. App. 1942, error ref.). Also2
              Fortinb&v   v. State, ex. rel. mere,
              283 S.W. 146, Tex. Comm.App. (1926);
              39 Tex. Jur. 149-151, *Statutes*, Sec.
              81-82.

         Article 2529 does not specifically name any of the
types of bonds concerning which you inquire. As to whether
or not any of them may come within the general provisions of
this article as being:

             ,L
                   .  . . bonds and certificates and other
                  evidences of indebtedness of the United
                  States, and all other bonds which sre
                  guaranteed as to both principal and
                  interest by the United States; . . .
                  bonds issued by the Federal Farm Mort-
                  gage Corporation, provided both prin-
                  cipal and interest of said bonds are
                  guaranteed by the United States govern-
                  ment . . .I

will require an examination of the particular security and
probably a transcript of proceedings underlying its issu-
ante.
-.   I




         Honorable Jesse James, page #6 (WV-470)



                                      SUMMARY

                      Article 2529 is the special statute
                      which determines whether the types
                      of securities nsmed in your inquiry
                      are eligible to be accepted by the
                      State Depository Board ascollateral
                      for State deposits. None of these
                      securities are specifically named in
                      this article. Therefore, we will
                      have to examine the particular se-
                      curity offered, and probably addi-
                      tional evidence, to determine whether
                      it is comprehended within the general
                      provisions of Article 2529.




                                                Very truly yours,

                                                WILL WILSON
                                                Attorney General of Texas




                                                       Assistsnt
         WJZA-s

         APPROVED:

         OPINION COMMITTEE      '

         J. C. Davis, Jr., Chairman

         Tom I. McFarling
         Jack Goodman
         Henry G. Braswell
         REVIEWED FOR TEE ATTORNEY GENERAL
         Bya W. V. Geppert
