,
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:
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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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