HE L%~~TORNIICY GENERAL
OF TEXAS
Honorable Wm. J. Burke Opinion No. WW-414
State Board of Control
Austin, Texas Re: Does Article 608, Vernon's Anno-
tated Civil Statutes, prohibit
a resident branch of a national
company from being considered
as an eligible bidder to supply
the State Departments with sta-
Dear Mr. Burke: tionery, supplies, etc.
We have received your letter of March 14th in which
you ask if, in our opinion, a resident branch ,of a national com-
pany can be considered as a resident of Texas, so as to be an
eligible bidder under the prwisions of Article 608, Vernon's
Annotated Civil Statutes, which reads, in part, as follows:
"The Board of Control shall contract for a
term of not exceeding two years with responsible
persons, firms, corporations, or associations of
persons, who shall be residents of Texas, for
supplying to the State all printing, binding sta-
tionery and supplies. 0 o .I* (Emphasis added)
We shall assume, for purposes of this opinion, that
the resident branches, as well as the national companies, are
otherwise eligible and that such branches are actually doing
business in this State under proper authorization.
The phrase Itae 0 residents of Texas. . .I' as used
in such statute, does not appear to have been specif&ally con-
strued by the Courts of this State. Furthermore, the terms
"reside", '%esidingt',"resident" and "residence" are elastic
and should be interpreted in light of the object or purpose of
the statute in which such term is employed. McGrath v. Steven-
son, 77 P.2d 608, 1% Wash. 160; Switzerland General Ins. C
y. Gulf Ins. Co,, Tex.Civ,App,, 213 S.W.2d 161. The usual Z-
port of "resident" however, is a legal residence, Buchholz v.
Buchholz, 115 P. fi8,63 Wash. 213.
In our opinion, Article 608, relates to the question
of with whom the Board of Control may contract or do business
insofar as the purchase of the enumerated supplies or services
is concerned. Who, then, are "residents of Texas",for purposes
of selling such supplies and services to the State of Texas?
Honorable Wm. J. Burke, page 2 U&J-414)
A Virginia statute required a license to be obtained
by every person selling goods'by sample who was not a "resident
merchant". After holding that a person could be a resident
merchant while not being a resident citizen, the Supreme Court
of,Appeals of Virginia, in Sueer v. Commonwealth, 23 Grat. 935,
14 Amer. R. 164, said:
I'
. . . The word 'residence', as used in con-
nection with the words 'merchant', 'mechanic' or
'manufacturer' was not intended to import a per-
sonal residence? but onlv the 'alace of business'.
0 . 0" (Emphasis added)
In 8 Fletcher Cyclopedia Corporations, Section 4029,
it is said that:
,I
a . . The rule universally obtaining in
.both England and the United States is that a com-
pany, for jurisdictional purposes, may have a
domicile, both where it was created and where it
transacts business."
Also, at Section 4046, a corporation ". . . might have a resi-
dence in every state wherein it does business and is privileged
by its charter to do business. . . ".
This seems to be the rule in Texas as well:
"'It is very generally held that a corpora-
tion is an inhabitant of the state under whose
law it is incorporated, and that it has a resi-
n. '
0 0 ." (Emphasis added) F'ittsburgWater Heater&
v. Sullivan, 115 Tex. 417, 282 S.W. 576.
This rule is restated in Nergenthaler Linotype Co. v.
Herrmann, (Tex.Civ.App.) 211 S.W.2d 633, but the distinction is
made that to be such a resident, the corporation must actually
be doing business in Texas.
In view of the foregoing authorities, in our opinion,
branches of national companies which are actually doing business
in Texas are "residents of Texas" within the meaning of such
term in Article 608, Vernon's Annotated Civil Statutes.
We are not unmindful of the distinctions between the
various types of eligible bidders specified by such Article in
so far as they may be natural persons or corporate entities,
but we feel that the controlling question
* is whether they actu-
ally are doing business in Texas, and not in what form the
Honorable Wm. J. Burke, page 3 NW-414)
prospective bidder may be doing business. As pointed out above,
we have assumed that the resldent branch is otherwise eligible
and properly authorized.
We are unable to determine any legislative intent, en-
visioned by Article 608, Vernon's Annotated Civil Statutes, to
prohibit the Board of Control from contracting with a branch of
a national company, if the branch is actually doing business in
Texas.
SUMMARY
Article 608 Vernon's Annotated Civil Statutes,
does not prohibit a resident branch of a national
company from being considered as an eligible bidder.
to supply the State Departments with stationery,
supplies, etc., if the branch is actually doing busi-
ness in Texas.
Yours very truly,
WILL WILSON
Attorney General of Texas
,qglJ 9t@LL$y
Tom I. McFarling
TIM:mg:wb Assistant
APPROVED:
OPINION COMMITTEE
Geo. P. Blackburn, Chairman
Riley Eugene Fletcher
Ralph Rash
'ii.0. Shultz
REVIEWED FOR THE ATTORNEY GENERAL
BY: W. V. Geppert