Untitled Texas Attorney General Opinion

Bon. J. M. Falkner,Gnmissioner state Departmentof Banking Austin,Texas opinionNo. V-13l.l. i’ Re: Applicabilityof Senate _. Bill No. 339, Acts 52ud Legislature,1951, to loanand brokerageocm- panies organizedunder seotiolls43, 49, and 50 of Article1302 and un- Dear sir: der Article1303b, V.C.S. Pour requestfor an.opinionreads, in part, as fol- lows: Vi.ssirmingthatSenateBill No. 339 passed at the last Sessionof the Legislatureis or will subsequentlybeheldtobeavalid law, w%llitbe necessaryforloanandbrokerage com- panies,heretoforeor&auiaedunder Article1302, lX?b,haviuga capitalstock of $5O,OOO.OOas requiredin Senate Bill 339, to amend their charters,or can they enjoy the additional~iv- ileges granteduuder SenateBill 339 without an srmndlmnt?" SenateBill 339, Acts 52nd Leg., 1951, ch. 472, p. 832, provldesin part: "section1. Corporationsheretoforeformed or hereafterto be formed for the purposesspeci- fled in Seotlons48, 49, and 50 of Article 1302 and Article1303b, Revised Civil Statuteeof the State of Texas for 1925, am3 bavlng a minimm paid- illcapitalof Fifty Thousand (d50,OOO.CC)lbl3ars shall, in additionto the powers conferredupon corporations by the general corporate law, have the folloulugpowers. . . .s The additionalpowers grantedto those corporations mentionedin the first paragraph of Section1 are set out in Bon. J. M. Falkner,Page 2 (V-1311) detail along with the obligationswhich attach to the exer- cise of the enumeratedpowers. SenateBill 339 is a compre- hensive set of regulationsfor loan and brokeragecompanies, and most parts of it have no bearingupon the questionpre- sentedhere; hence the statutewill not be quoted. Subsections48; 49, and 50 of Article 1302, V.C.S., authorizecorporationsto be formed for the followingpur- poses: "46. To accumulateand lend money without bankingor discountingprivileges." "49. For any one or more of the following purposes: To accurrmLBfeand lend money, purchase, sell and deal in notes,bonds and securities,but tithoutbankingand discountingprivileges;to act as trusteeunder anylawfulexpress trustcom- mltted to them by contractand as agent for the performanceof aq lawfulact." "50. To subscribefor, purchase,Invest in, hold, own, assign,pledge and otherwisedeal In and disposeof sharesof capitalstock, bonds, mortgages,debentures,notes and other securities, obligations,contractsand evidencesof indebted- ness of foreignor domesticcorpxations not oom- petingwith each other inthe same line ofbusi- ness; providedthe powersand authorityherein oon- ferred shall in no way affect any provisionof the anti-trustlaws of this State." Article1303b, V.C.S.,provides: "d privatecorporationmay be formed for anJ one or more of the followingpurooses;without banking or insuranceprivileges)to accumulateand loanmoney~ to eell and dealinnotas, bonds and seouritlea;to act as Trusteemxler aqv lawful ex- press trust oonnnittedto it by oontraotor W.l, or under appointmentof aw court having jurlsdlo- tdon of the subjectmatter,and as agent for the performanceof any lawfulacts to subeorlbefor, purchase,invest in, hold, own, assign,pledge and otherwisedeal In and disposeof shares of capital stooks,bonds, mortgages,debentures,notes and other securitiesor obligatlona,contractsand evi- dence of indebtednessof foreignor domesticcor- porationsnot competingwith each other in the . . - Ron. J. M. Falkuer,Rage 3 (V-1311) same line of business;to borrowmoney or is- sue debenturesfor oamyingout any or all puvposesabove enumerated. Providedthat the power and authorityherein conferredshall iu no way affect any of the urovisionsof the anti-trustlaws of this state." Article1318, V.C.S.,provides: "'Allchartersor amendmentsto charters, uuder the provisionsof this Chapter,shall be subjectto the power of the Iegislatureto elt62, reformor amend the sazm." A questionvery sidlar to that under consldera- tionvas involvedin State . o Public k-v&q&~ 69 S.W.2d38 ('&run. App. 19;4 case a statutepro- vided that any corporationoperatinga streetor suburban railwaycou3doperatemotorvehloles to oarrypssengursfor hire ulthln the city or tovn or within five miles thereof. The public servioeooqany operatedbusses under the statute, but failed to amend its charterto includethis purpose. In holding that the ccnupanyuasauthorimd to operatethebussez, the Court said: "The state contends,however,that in anyeventappellantwasrequired to amend its charterafter the enactmentof Article6548 in 1923, so as to avail Itself of its provi- SIOIUI. This contentionIs not sustained. Ar- ticle 6548 Is a psrt of the title YLaiJroads' of the R.S. 1925, and is not a subdivisionof article1302, relatingto the purpose clauses of corporations. It specifioallyauthorizes an electriomotor streetrailway corporation like appellantto operategasolineaopelled motor vehiclesin connectionwith its street railwaybusiness. Ihe law is settledthat the powers of a corporationorganizedunder gen- eral laws are not determinedalone from Its chartarprovislons,but are also determined flwm the law under which it is organizedor operates. It is also settledlaw that It is not necessaryfor the charterof a corpora- tion to containall the powers conferredby statute;nor is it necessarytoamend the char- ter of a corporationto includepowers confer- red solelyby statute,unless the act itself Ron. J. M. Falkner,Page 4 (V-1311) requiresthe awrdment. RoaringSpringsTOWS site Co. v. FaducahTel. Co., 109 Tex, 452, 212 S.W. 147; Texas CentralPower Co. v. Jolly (Tex. Civ. App.) ,246 S.W. 420; Kuehlerv. Tex. Power Corporation(Tex.Civ. App.) 9 S.W. (2d) 435; M&his v. Pridham,1 Tex. Civ. App. 58, 20 S.W. 1015; WichitaFalls TractionCo. v. Reley (Tex. Civ. App.) 17 S.W.(2d)157; 'Chomp- ;sa~4~00rations (3d Ed.) R 188." (69 S.K . We think the answer to your questionIs controlled by the law aunouucedin the above CBSC). The appellentin that case had no power to operatemotmbueses until such poVar was conferredupon it by the act creatingArticle6548, which act did not specifically requireappellantto amend its charter to inolwiethe powers so confemed before it could exeraiasthem. The Court held thatappellantwas ootreqtied to amend Its charterbsfore sxerclsidgthe p0uer to operate z~-toi9u~ses,for such paver tis 8p0ifi~a~ grantedbyArti- cle 654% 'Ibisholding is in accordwith the folkMug State- ments of the rule set forth in Texas Jurisprudence and Amrl- can Jurisprudeme~,j, "The effeot of a generalstatutorygrant is to invest the corp0ratiOn~wlth the power as fully azd effectuallyas if It were set out at length in It6 charter.n(10 Tex. Jur. 863, kporations, Sec. 234.) "The charterof a ooqmatiou organizeduz- der a generalaot consistsof the provielonsof the existingstate constltutlon, the particular statuteunder which it is formed and all other geuerallaws whloh are made applicableto oornor- ations formzd thereunderand of the articlesof associationor incoruorationfiled thereunder,as the charteror certlfioateof Incorporation grantedby the Court or offirerin compliance with its terms, althoughthe provisionsof suoh laws are n0t embodiedin the charter,and the parers,rjghtd,duties,and lisbllltiesof the corpratlon are determinedaccordingly." (l8 0. J.S. 422, Cqmrations, Sec. 43.) . . - . Ron. J. M. Nlkuer, Page 5 (V-l3l.l) Your questionpertainsouly to corporationswhich have a minlmumcapital stockof $5O,COOand which were formed prior to Septembsr7, 1951, the effeotlvedate of Senate Bill 339, for the purposesspecifiedin Sections48, 49, and 50 of Article1302 and In Article1303b. SenateBill 339 speoifioallyprovidesthat such corporationsshallhave, in additionto the powsrs conferredupon corporationsby the general corporatelaw, the powers thereinenumerated. This bill does uotspaoificallyrequireany corporationto which It applies to amend Its charterto includethe powers so con- ferred before It may exercisethem. -You are thereforeadvisedthat corporationsformed pior to September7,1951, for the purposessoecifiedin Sec- tions 4S, 49, and 50 of Article1302 ald in Article1303b, V.&S., and havinga minimumpaid-incapitalof $50,000,may exercisetbe additional@vilegee granted.themby Senate Bill 339,~,uithoutamehdiugtheir charterstoinclude the privilegesso conferred. In answeringyour question,we have not considered the constitutionalityof SemxteBill 339, sinceyour question is based upon an assumptionof constitutionalityand does not require om consideration thereofat this time. Corporationsformed pior to September7, 1951, the effectivedate of Senate Bill 339, Acts 52ad bg., R.S. 1951, ch. 472, p. 832, for the purposesspeolfledin Sectlone48, 49, and 50 of Article1302 arxlIn Articlel303b, V.C.S.,and having a mlnimmnpsid-Incapitalof $5O,OOO,nmy exercise the additionalpvivllegesgrantedthem by SenateBill 339 withoutameudiugtheir charters to inoludethe privilegesso couferred. Sandy- -, 69 S.%?d 38 bnm App. 1934). APPDOVED: Yours very truly, 0. K. Riohards PRYcEDADYDL bial 6rAppellatsMvision AttorneyGsmral Jesse P. I&a, Jr. b--e$j- %viewlng Assistant w Qarles D. k&hews Bruce W. Bryant First Assistant Assistant BhDlWb