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0 EXAS
GROVER SELLERS AU~THN II. TEXAS
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AlTORNlEY G*:NERAr.
Hon. 0. P. Lockhart, Chairman
Board of Insurance Commissioners
Austin, Texas
Dear Sir: Opinion No. O-5768
Re: Is the Board of Insurance Commissioners
directed by Articles 4740 and 4725, R.C.S.,
as amended by S. B. 0 and 9, Acts of 1943,
48th Leg., R. S., to accept securities which
are not eligible for reserve investments
but which are eligible for capital and surplus
investments 7
Your request for an opinion on the above matter has been received
and carefully considered. We quo,te said request as follows:
“One of our Texas life insurance companies has submitted to
ma for deposit under the policy registration ArticIes 4740-4743
an offering of securities eligible for capital and surplus invest-
ments but which do not meet the requirements of reserve invest-
ments, as provided in Article 4725. Articles 4740 and 4725 were
amended by Senate Bills 8 and 9 of the 48th Legislature.
“Before the 1943 amendment the requirement for reserve and
capital investments under Article 4725 were the same. Such invest-
ments were eligible for deposit under the registration articles but
surplus investments were not. The five articles were in harmony
with themselves and with the conception of the public generally,.’ I
think, that the Commissioner’s certificate of registration on a pol-
icy meant that he had in hand either the cash representing the re-
serve on the policy or securities of the kind in which the reserve
funds might be invested.
“You will note that Senate Bill 8 lowered the requirements for
capital investments by fixiri&them equally with surplus investments
and left reserve requirements substantially as they were. Senate
Bill 9 amending Article 4740 changed the word “funds” to “capital,
surplus and/or reserves.” Articles 4741-2-3 were not amended.
“To accept the securities not eligible for reserve investments
it is necessary to construe “and/or” in the amendment as “or”,
Honorable 0. P. Lockhart, Page 2 O-5768
which seems in conflict with Article 4743 defining what deposits
may include. Construction of “and/or” as “and” will apparently
confine the deposits to reserve investments.
“I have declined to accept the capital and surplus investments
because of the ambiguity and conflict involved and because of the
real importance of the issue to the holders of registered policies.
“Please advise me whether the Board is directed by the above
articles as amended to accept securities which are not eligible
for reserve investments but which are eligible for capital and
surplus investments.”
Article 4740, Vernon’s Annotated Revised Civil Statutes of Texas
of 1925, prior to being amended by S. B. No. 8, reads in part as follows:
“Any life insurance company now or which may hereafter be
incorporated under the laws of this State may deposit with the
Commissioner for the common benefit of all the holders of its
policies and annuity bonds, securities of the kinds in which, by
the laws of this State, it is permitted to invest or loan its funds,
equal to the legal reserve on all its outstanding policies in force,
which securities shall be held by said Commissioner in trust
for the purpose and objects herein specified. . . .”
The only change made in said Article 4740 by S. B. No. 8 which
here needs to be considered is that the word “funds” was omitted from
said amendment and the words “capital, surplus, and/or reserves” sub-
stituted therefor. It is necessary, therefore, to determine what the Legis-
lature intended in adopting said amendment.
In the case of Yett vs. Cook, 281 S. W. 837, 841, the Supreme Court,
speaking through Chief Justice Cureton, held:
u . . . . An elementary rule of construction is that, when a
law is amended, effect must be given to the amended law in a
manner consistent with the amendment.”
In the case of American Surety Company of New York v. Axtell Com-
pany, 36 S. W. (2d) 715, the Commission of Appeals held:
41. . . . It will be presumed that the Legislature in adopting
the amendment intended to make some change in the existing law
and, therefore, the courts will endeavor to give some effect to the
amendment.”
. .
Honorable 0. P. Lockhart, Page 3 O-5768
In the case of Independent Life Insurance Company of America vs.
Work, 77 S. W. (2d) 1036, 1039, the Supreme Court, speaking through
Justice Greenwood, held:
“The rule is elementary that we must give some effect to
changes in the words of legislative acts and must also construe
their words so as to accomplish the legislative intent.“’
Applying these rules to the amendment of Article 4740 by S. B.
No. 8 in the particular hereinabove referred to, it is obvious that the Legis-
lature amended said Article for the purpose of clarification and to make cer-
tain the kinds of securities any life insurance company may deposit under
said Article and to specify that same could include securities of the kinds in
which, by the laws of this State, it is permitted to invest or loan its capital,
surplus, and/or reserves.
Owing to the fact, however, that the use of the phrase “and/or”
in statutes has been before the courts a number of times and frequently
has been critized, it is necessary to interpret said phrase as used in order
to determine the intent of the Legislature in using same, in said amendment.
This phrase has been referred to as “ambiguous;” “indicating
ii
uncertainty and doubt; ” “confusi.ng and misleading;” “unintelligible;” “mean%
ingless; ” “gibberish;” and “an abominable invention that is as devoid of mean-
ing as it is incapable of classification by the rules of grammar and syntax.”
Various other epithets have been applied thereto by the courts, several of
which appear in the Annotations in 118 A. L. R., pp. 1367 et seq., but it is
our opinion that when said phrase is properly used, as it was in said amend-
ment, its meaning is not uncertain. It is broad, but not indefinite; it is elas-
tic, but within definite bounds and for a definite purpose. A proper interpreta-
tion of said phrase depends in each instance upon the circumstances under
which it is used, and when used in a statute it must be construed so as to ex-
press the true int&ntion of the Legislature. When so construed, it does have
a well-defined meaning recognized in law.
Webster’s New International Dictionary, Second Edition, defines
“and/or” as follows:
“Either -and or -or.” “‘butter and/or eggs” means “butter and
eggs, or butter or eggs.”
The following statement as to the use of said phrase is made by the
court in the case of State vs. Dudley, 159 La. 872, 877, 106 So. 364, 365, as
follows:
Honorable 0. P. Lockhart, Page 4 O-5768
i Whheil used 3~1a contract, the intention is that the one word
or the other Mayo be take,n accordingly as the one or the other
will bc:st el:C?c+. +.he purpose of the parties as gathered from the
contract t,aken as a whole. In other words such an expression
in a contract amounts in effect to a direction to those charged
with construing the contract to give it such interpretation as
will best accord with the equity of the situation, and for that
purpose to ,~SE either ‘and’ or ‘or’ and be held down to neither.”
Thr Supreme Cou,rt of California considered the meaning of said
phrase in the case of Powers Farm, Inc., v. Consolidated Irr. Dist., 119
P. (2) 717, as same was used in an act relati.ng to the liabi,lity of irrigation
districts, their officers and employees for damages, which Act reads in part
as follows:
“Section 2 provides: ‘Whenever it is claimed that any per-
son or property has been injured or damaged as a result of any
dangerous or defective condition of any prop&rty owned or oper-
ated and under the control of any irrigation district or i~tsoffi,-
cers or employees and/or the negligence or carelessness of
any officer or employee of an irrigation di,strict, a verified
claim for damages shall be presented”‘, etc.
,, ” . I ,As >JYF~ in Section 2 of the act., it. refers to a clai~m
for damage g;?,,undtd upon any one of the following clauses (1)
a dangerous 01 defective conditi.on of property of the distri.ct
and negligence it an officer or employee; or (2) a dangerous or
defective condition of property of the district, that is a general
liability withorlt rc~:feren,ce to negligence; or (3) the negligence
of an officer 0~ ernpl~oyee.”
The meaning *.~,fsaid phrase was also considered by the Georgia
Supreme Court in the c,ase of Davison v. F. W. Woolworth Company, 186
Ga. 663, 198 S. E. 738, 118A. L. R. 1363, as same was used in the statute
levying a tax on Electiical Contractors, as follows:
“Electrical Contractors. Upon all electrical Contractors
$25.00 for each county. The term ‘electrical contractor‘ used
in this paragraph shall be held to mean each person, firm, or
corporation who shall engage in installing, repairing, and/or
selling electrical wi,ring or equipment.”
Honorable 0. P. Lockhart, Page 5 O-5768
The Court made the following holding:
“We recognize the rule that tax acts, including acts imposing
taxes on occupations, are to be strictly construed against the gov-
ernment. Mayor, etc., v. Hartridge, 8 Ga.~ 23; Mystyle Hosiery
Shops v. Harrison, 171 Ga. 430, 155 S. I?. 765. But we must not
lose sight of another rule which admonishes us that however awk-
ward and unusual the language of a statute may be, the legislative
intent manifested by it must be ascertained and enforced as the
law. Torrance v. McDougald, 12 Ga. 526 (3); White v. State, 121
..:- ~a.. 592, 49 S;;E. 715; Lee v. Tucker, 130 Ga. 43, 60 S. E. 164. If
the word combination “and/or” has a well-defined meaning recog-
nized in legal parlance, it is the duty of this court to give the stat-
ute in which it is used that construction which is in harmony with
that meaning. If in doing so the authorities lead us to the conclu-
sion that it was the purpose of the General Assembly to tax one in
the situation of the defendant, the rule of strict construction will
not have been violated. The expression “and/or” has been before
the courts a number of times and frequently has been criticized....
3 C. J. S. 1069, deals with this word combination, and analyzing
the holdings of the various courts says in the text that the meaning
of “and/or” may be clear, supplying the intention either that effect
shall be given to both the conjunctive “and” and the disjunctive “or”,
or else that the one word or the other may be taken accordingly as
the one or the other will best give effect to thepurpose intended as
gathered from the instrument taken as a whole, and for that purpose
to use either “and” or “or”, and be;held down to neither; and that on
the other hand it has also been said that, as sometimes used the
term is ambiguous.
“We think that what. the legislature intended was that Paragraph
50 of Section 2 of the general tax act of @35%s to be read by using
the word ‘and’ or the ikrwd’or interchangeably between the words
‘installing,’ ‘repairing,’ and ‘selling,’ so as to impose the tax pro-
vided in said act on any person who shall engage in installing, re-
pairing, and selling electrical wiring and equipment, or who shall
engage in any one of them. To hold otherwise would be to entirely
ignore the disjunctive “or”. Since there is a construction permiss-
ible, under the authorities cited in the note to 3 C. J. S. 1069, which
will permit us to do so, the rule that we are to give effect, if possible,
to every word in a statute, requires us to adopt this construction.”
We think a similar construction should be placed upon said term as
used by the Legislature in S. B. No. 8, and that what the Legislature intended
4 . ..
Honorable 0. P. Lockhart, Page 6 ‘O-S768
was that the word “and” or the word “or” should be used interchangeably
between the words “capital,” “surplus”, and “reserves.” When so con-
strued it is apparent that the Legislature intended to authorize any life in-
surance company seeking to comply with the provisions of S. B. No. 8 to
deposit with the Board of Insurance Commissioners securities of the kinds
in which, by the laws of this State, it is permitted to invest its “capital”,
its “surpl,us”, its “reserves”, i.ts “capital and surplus”, its “capital and
reserves”, tts “‘surplus and reserves”, or its “capital, surplus and reserves.”
In other words, any such company can comply with said provision by deposit-
.ing securities of the kinds in which it is permitted to invest its capital, sur-
plus, and reserves, or any combination thereof, as it may prefer.
It is our opinion, therefore, that sai~d inquiry should be answered
i.n the affirmat,ive and that the Board of Insurance Commissioners is directed
by sai,d Artf~le as amended to accept any securities offered thereunder which
are eligible for investment as capital, surplus or reserves.
Trusting that this satisfactorilly answers your inquiry, we are
Very truly yours
ATTORNEYGENERALOF TEXAS
BY 73cLcdtt-
w Jas. W. Bassett
Assistant
APPROVED JAN 15, 1944
ATTORNEY GENERAL OF TEXAS
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