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OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
GROVERSELLERS
ATTORNEY
GENERAL
Honorable Claude Iabell
Seoretary of State
Austin, Texas
ATTJZEJTICN:
Mr. J. L. Llogarity,Charter Diris
Dear sir:
:yehave receive
1945, whloh is quoted, in
"Thie otfloe has e a Departmental
ed ololl Statutm,
from the pay-
their pux$oso
ptarpcmeaof the
t thle Department oan
t euoh oorporatlonr
or suoh taxes. The
orations eubjeot to the
al praotloe sack to ini
ions of Seotlon 2 of
the Texas Revised Civil Statutea,
h LQgislature passed Sonata Bill No.
8 reported in Bernon'? Texas Seseion
uw Serpioe aa Chapter al, page ll.9.
%a hare been presented with a proposed
charter, a photortatlo aopy of vrhiohwe attaoh
hereto, for the above mentioned oorporation, and
following 0~ Departmental praatfce mentioned a-
bove reoueated that the propoeed OorpOratfOn set
189
Honorable Claude l8bell - page 2
out in its charter apeciflaally what eatlvlties
It Intended to support. In reply to our re;?caet
Per suoh information to be InserteU In the pro-
posed charter, we reoeivsd a letter frc;n the
attorney for the applloant oalling our attention
to the pasaege OS Senate Bill 19, mentioned sbovs.
i':e
also enolose herewith a photo8tatio copy of
the letter from the ag~~lioanteattorney so that
you sight be able to 8ee their poiiltof vie%.
*In the light of the above and oonslderlng
the enolosed doaumecte will you please advise u8
with respect to the followings
~1. Should the Secretary ai’Stats tiln the
enolosed charter?
"2. ye the Seoretary of State aorreot In hi8
Iuterpretatlon of your prevloue opinion8, In that
he has the suthority, and I.tis his hty to reqdra
the Informtion described In the first paragraph
of thfe letter to be oontainsd in oharterrrof oor-
poration aseking to be exeqt from the payaent of
franohias taxes?
~3. Does the passage of'Senate Bill No. 19
aterred to above In any way cffeot the prerlou8
opinion8 that you have heretoron, issued with
re8peOt to the oonstruotion and apsiioation Of
:-,sotI.on
2 of Artiole 1302 of the Texas Revised
civil Statute8, 1925."
Senate ~I11 19, 49th Legislature, 1946, presently
appears In V. h. 0. S., Title 32, ah. 1, Art. 1302, Sea. 105,
which reads as follows:
"Art. 1302. Purposes.
*The purposes for whloh private oorporatious
may be Soricsd8x0:
". . . .
*XX. Corporations xay be created for one or
more of the following pwpoaes, nmmly, 3digiOue,
Charitable, Literary, S'oientlfio or Eduoatlonal.
Acts 1945, 49th Leg., p. 119, ch. 81, .%a. 1."
c
Honorable olauae Dbell - pace 3
Paretofore, persoca interested ln forming a oor-
poratlon for religious puqxsea did so by authority of aub-
division 1 of Art. 1302; for oharitable and eduoational pur-
posaa, by authority 01 aubdfvislon 2 oi',Art.X302; and for
literary and soientlflo undertakings, by authority of sub-
division 3 or eaia Artiole. A oorporatlon oould be legally
formed for any one or more of the purposes set out in any
one of these subdlvieions, but not for two or more purposea
esdeslgnated in two or more subdivisions. see Damaey v.
TOd, 95 T. 614, t3m. ;I.135; Borden Y. Trespalacloua Rioe
end Irr. Co., Cfr. App.,82 5. Y. 463.
Consequently, the Legislature, realizing that
certain organizations epplyiag for lnoorporntlon wished to
oombine the purposes mentioned in the aiorementlonea sub-
dlVi8iOn8 in order t0 improve the cltlzenmhlp and welfare
of thla state, passed Senate Bill 19, (Subdivlslon 105 of
Art. X5002),supra, whioh state8 in the emergenoy clause
thereor the reason for its passage in tha following worde:
"The Saot that Foundations end 8imilar organi-
zations now are prohibited from inoorporating un-
der the laws of'the State of Texas, Por the oom-
bined purpoaes naned in this Aot, resulting in '
loaa of muoh needed tinanoial eupport for aotivi-
ties of importanoe to the citizenship and welfare
of this state, oraatea an emergenay and 8n im-
peratlve pub110 necessity that the Constitutional
RUl3 recuirlng bills to be read ln eaoh House on
three several days . . . ."
Thus it la aeon trom the above language that the
Logislsture passed thltiAct to legalize a combination or
purposes for lncorporatlon.
The Leglal.aturedid not, however, change the well ,)
settled law in this state apyl1oabl.eto the manner of set-
ting out suah purposes ln the charter apgllcatfon, whether
they be separated or combined. This law la well illustrated
by the languaga of the Supre?xeCourt of Texas in ,Tohnston,
et al, v. Townsend, Seoretnry of ijtqte,(124 S. Z. 417) a8
follows:
Honorable calude Iabell - pago 4
RA Charter lnust8p6Oify tha purpOaa iOr
whloh tha oorporatlon IIIto ba oreated. This
should be don& with sufflolaat olaernsaa to en-
able the Seoretary or State to sea that the pur-
pose specified Is one provided for by the Stetuta,
and to derlno with 101~ oertainty the soope or
the bualness or undertaking to be pursued.n
Tha purpose olauss of the charter applloatlon hare
under oonaldsratlon reads aa follows:
vooond# The purpoee ior which It 18 rormed
Is ior~loua, oharltable, literary, solentlflo
and educational purpo608, aa authorlsed by eald
ohaptar 81 or the Aote of the 49th Leglelature.W
The above olaum 8eta out exaotly but,onI thuar
word6 used in the #trtute, 1. a., subdivision 105-S
o Artlole
13OS. It 18 generaIly lnsufflolcmt for the oharter to 8trte
the purpose of ths oorporetlon In the exaot language of the
statute without further darlnltlon or purpo~?Nbaoause the
Seoretary or Stata is than unable to determine with osrtainty
the moopo of the buaimsa or undertaking. In other worde,
the incorporators must 8tata what the proposed lnoorporatlon
intend8 to do rather than ei'etetmcmt of oonoluslons 1111
B
lte purpoee. Smith '1.wortham, 106 Tex. 106, 157 S. 'a.740;
Opinions or theaAttorney (ranoral,Book 39, pe~ges1 through
63; Book 30, page 1, 191; Book 31, pa@ 447; Opinion No. O-
2903, dated February 34, 1941; Hlldebrand on Texas Corpor-
atlona, Vol. 1, oh. 3, Sao. 36.
NOW under thlr Aot, the luoorporatore may have
a flexible and lnolualrs purpose s yet It is lnoumbent upon
them to state the oharaotar and roope of the prdposed oor-
poration in the oharter appllaatlon so that the Seoratary
ot State may determine with reasonable osrtainty whether
this undertaking Is aotually for the purposes as lleted.
It la our opinion that in view of the lnoluslre
but limited language used in the purpose clause of tha ohar-
tar, you are justified lh requiring rurther elaboration with
Honorable Claude Isbell - pa,@ 5
respeot to the purposes of this propoam? oorporatlon, and
therefore your rirBt xeation la enswered In the nepntlve.
your second -uestlon Is anewered in the aff’irmtlve, and
your third ~:uestlonIn the negative, except ineorar as
subdlvlalon 105 of Artlole 1302 now permits a combination
or oertnln purposes whioh were roraerly separated.
very truly your8
BY
Eugene Alvie
AsaiEtaot