OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
QROVER SELLERS
ATTORNLI OLNLRAL
Ho&mb& O&udo Irboll
saoiotarf of utato
Mrt 10, hxnl
Attwhtloa, J. L. noaarit~, x.84 of chartor
hu air:
Your roquort so abovo rtatod mat-
ter liar boa rocofrod 8ad iullf bl thlr do-
putmnt.
I la p a r t lB follour:
Corpor~tioar luthorls~ )r~ t&o pro-
tlrioor OS thlm Aot dull not bo lutboMs.d to bo
ore&ted lo olt es or torn8 of 8mv than trootp
fir. haadrod ( 4500) p o p ula tb
lo otu‘
o r diug
to the
last p r r o o dlng
?odoral Co nr ur .
Your tlrrt two qor8tioar ora:
1. %lmt pm orot of aombo?rhlp forr om bo
used to WJ a rolloltor of mmbora?”
Eoaoroblo Oloudo Xoboll, p-o 2
2. %uot t& lollolt~ of momb.Frrbe ont-
0d 0 1i00~00 or p0mft fra tho kouritko 8a-
mlool~r of Tox8ot'
Thelnwwo E0Ed up o ath eup-
to th o o oq 000t1 odo
pliaabllity of tbm kouritloo lut (&tlok F OOa, V.A.U.8.)
to the oolo of uderrhlpo in owh on oremlaatloo as t&
hoopltal ooo lratino prov1d.d for b &mot. Dill Ro. 181.
h a tio3n (Pnof th e kourltloo $lflEoo “oooPlt~” as
rot
follorrr
“Tim tom *ooourltyn or ~ooourltlool oholl
lnoludo oar rhuo, ltook, troooary otook, otook
oortlfloot~ under l totlw tart agroomont, ool-
lateral trust oortlfloat8, oqulp8oat trust ow-
tifloato, preorg~alrrtlonoortlfioato or rooolpt,
luboarlptloa or roorgmlo~tloo outlfisrto, 8ot0,
bowl, doboaturo, mort&o#o oootlflr~to or other
lridonoo of lodobtodnooo, oa7 form of oomorolal
papop, oortlfio~to in op nm4or a profit &ulrq
or putiolpotloa 4groo8oat, oortlflooto or mar
ours)
A mmberahlp in 8 hoopltal oooparotlto oortolaly
mu&Y be a l oortlflooto . , . roprooomtl&g . . . an lotoroot
la say w 811 of tin . . . loooto" of rush rooporatlro, and
tha solo of owh wrborrblp would bo ~lthia tha purtlor ol
t& Aot anloor lxompt br the prorloloor of kotloa 3. 8ub-
dlrloloo (a) of (kotloa 3 of t&u &ourltloo Aat lo as fallour;
‘Aar wowlt or wmtwrahlp loouod b l ow-
rrtim ~8~~18 ai lxoloolrol~ for odwot I0-1,
r lmtoloat, fratoraal, okarltablo, or roforutor~
pwporor and not for pootmlor~ profit, ad a0 part
of tko wt lunlago of uhioh lnuroo to tho boaeflt
of mr lto&hoUor, obomholdor, w ladlrld~l
mmbor, oad rharo nc4oamloolo~ or rularoratloa lo
pold w alron w lr to k paid w /inn in oonamo-
$roa vlth the dlopooltloa t&roof.
IO a bospltal oooporotl+o ooatomplatid bv Muto
Bill 80. 181 l ohslt8bk 006 rrtla? Uo $hloL not, do-
it. tha faoto th8t this lll3”4~8omlutoo it ouoh. A oh8rit-
3 k loporatl.arr~o boos rarlouol~ deflaed in thou tomu:
A VblumF~ l
oyolatloo orga~lrodto otldo far
wathl~ plymats, modl081, l urglo81 rrd hooplta P oaro for
no&or0 vho ~0~0 l 8ploy8oo of l rallval oompaay aad mia-
toiala6 lovorol hooplt8lo, l
~8 not oporatod ooiuoltol~ fu
-- Qhoritabk purpoooo, 00 no to b olrolqptfro= 000101 MOur’
lty taxatloa, motvlthot8adIagthot r8llr87CJfQQ
8 y& so-
preol8blo ~lfto to loooolotloa oroh SW,
ohorlty 08000 voro t&ken ooro of, 0 ml! 8oooal8tloa hod no
aot lwa.l~~. bith v. Ao~ldo, 43 F. 8upp. 5l0, 514.
lUhwltabkg ia ot8tuto lromptlng olmltoblo o o r -
porotlo8.8 tram the pqmoat of uaomplo mto~no8tloatu
lo liritod to or~mtlolu m@lattriluF"l%eluolvol~ fw aloe-
Lulugtoa Coaotory Co. t. Camonvoolth,
?iiii!?%p:i??%, 699, 703.
Tb torm %aorlty" 81~8~1 connotoo tho pub110 gan-
woll~, or the publlo 8t 18re0, or 8t le8ot 8n lndoflalte
uotlon of It, es dirt1 ulohed from 8 dofialto sootion
t&roof, ud 8 ‘oharltabYo ~00’ lo oao t&t 8xioto for par-
loao moortaM, as tho ubllo lt l8rgo, or mm0 paorol
?ho poor or tho moody. In ro Altom~“o
::r?b::, 87 aioo. 955.
Thocofwo, it lo the oplnloa of this doportunt
that the ooli of wmborohlpo in tho hoopltal oooporotivoo
oontomptited by &ado bill lo. 181 lo oubjoot to the pro-
rloloao of tho kourItloo hot. Ikotlorr7 l ? tho sold & c ur -
ltloo Aot protIdoo,
‘In tho oroot * doolor 00 doflud horoln
-11 oall w offor for ulo 88 poor~o8tlon
oortlflo8to or rooolpto, w ahJ 1 la any wmnor
oolloit ouboorlptlono to or la ly propoood ow-
pwatioa, trust w joint ltwk 8-w po’oposod
Howroblo O&W Ioboll, pogo 4
t0 b8 fmo4, the ROO?Otw~ QS 8t8tO ny ro-
qrlro 1s hr deuo it moooaar tho lm- to protoat
torA or p0apeot1+. 0~80?1 lo ro OP lWtifiO.t.
heldoro, th doa8r 00 .f~orlmg OUOhmar1t100
for rla to da sit, 8u moMy0 Md fu&o rooolt-
odfratb 08c th o r o olf,
x o o pltwh mounts
thUOoi 80 t& 8OO?Otuf Of 8t8tO Ur &We padu.
this &t8lhV&d.~ pOmiB&tl- lmUeO a
oomolooioao for tbo ulo of oolh kourlty, to bo
dopooltod lm a trout rooount le oom bank c trust
oapomy dolw buol~oo la tb W&to of Tows
Wtll lWh tf8o 80 lUOhp r o p o o 008pUy
od dl
hOV0 Odd th0 BfetrlU sOpita% t0 &U-
(IO-t Of
thorloo lt to be@8 burluoo in ¶'oUo, 8t uhloh
tlu tho bask or trust ooap4ay &il truofor
lwhfmdototbr propooodowperationaad its
luout1+0 0ff10~0 SW tha pIppou or po?m1tt1n&
it to uadort8ko Its bmlnooo, In tho lvoat ouch
P-Po~ 0 80 b?OfR dofiud Obn f.11
rlthin tvo 8ro to ooll the 8lolmm UoUlt
of oopital noooooar~ Sol, tbo be#mnl~ of boolwoo
la TOIU, the bei& w trust oaapary ohdl roturn
to tho oubooribwo that portion of tho Stir
:-thot hod boon dopooitod undo? muoh proorgoalm-
tlon 8&FO&WOt. At th tlw of nklng tho 60-
posits, ls borola provUod fw, the do@lu w
loowr aball fvralob to ouoh beak w trust OQ-
puy the uwo of the mroow p~~ohol~ or sub-
oerlbla# So oaoh ooorltloo, and tho owunt of
moaoy paid lo br laoh.
8bfLOrObl0C18UdO foboll, pvarn5
fir mavor to our uooad ~wotlon, it lo the opln-
loo of thl0 doportwat Lo t th8 wlioitor of 8ombobo must
bare l lloooao or per8.U from the 8eorltloo Ooriooloaer
of Tu80.
Your tblrd, fourth Ua flftb queotlon0 Uo 80 fol-
lovr,
3 ‘If tho sot door wt boron lffoctlro
ant11 90 dap rftor adjournmat, oan the obrtor
bet&y red WV sad laced oa file rltb u ad
ld pendlag tL rold offoatlro darl o f tho
Iti
oQtt*
4. 'Cm th8 8OllOltOtl~ Of ruaber8 begin
aov, prtor to t& lffootlro doto of the 8ot, 8ad
tho ipods oompoundodto bo rotorned if tho ohortor
is rojooted?”
5. 'Cm the Fopoud umboro wv oator loto
the purelmw of 8 propomd site?"
The lff&otlto dots of Seaato Bill lo. 181 being
Septwbsr 4, l9955,thou qwurtlono ue woof aad ve deem it
uwocroou~ to onwor uu.
Your sixth qw0t10o 101
6. %hOt Vi11 the filiQ# f80 b0 fW O.&J
lwh ohortor or on omendmont tborototl
Arti. Is14 prwld.8 1~ port as follourr
‘The Uar8tory of 8trt8 lo 8uthorlood sad
roqulro& to chuga for the uva of the bt8to tha
follovirrqothor fooor
.. . . .
p1am.r mo
SW any other purpooo
or powfl~ 8 fllily
Ionoroblo Clado Ioboll, po@ (I
it81 ltwk Of
0.00) Dolluo of
Its 8utborirod lrgltti #took Cr ir8otloa81 gut
thoroof oftor t& flrot.’ (mphaofo ouro)
In aanor to yr quootloa lo. 6.~0~ WI dtlwd
tht 8 filing foe of w lmr th8a fifty do mo lo roquirod
fllfn# of mu& ObutCm, CUmdkOto, Cr l uppl~mCato
XZOi!? Cf tho hooplt81 ooopOr8tlrbo provided for ill8eaoto
Bill lo: 181.
Your wrmth qwot loa lr I
7. %8r 8 group of oltlsbn8 llrln# 1aCldo
tbo OOP&kO~.tC~li8itS Of t two-Vith .~~pU+tfOo.
1B .tOoO~ of r,gW.’ Ol'&.nlSOsad Oprrot. VUOh 0
oorporrtlorhlf tha hoopItol lo 1008tOd outside
tha oorpor*to llrlto of rwh rlt7 w tovntg
?h~ obrlour lnteat of ¬o bill lo. 181 18 to
permit t& ovnlng aad oporotloa of hoCpIt8l oooperotlvoo la
omllor ooaaunltloo vhuo ouoh rorvlroo are not nov ovoll-
lblo. The vordlrrg of 8ootlon 2, hovovor, lo obomaro. It
p?orldoC that rwh Oorper8tloar %h811 mt b0 8uthWi8.d
to br or tad la lltloo w torar of 8oro,than tuoatpilro
hundred t'g00) popamloa.~ ThiB lOll#IlO600.0 -811 O&J
tbt owh oorpor&tloao till wt lotablloh W ulnt81
hooplt8l ooopor8tlvoo & oltloo or tom8 of 8oro th8a B5W
popPkt1oo. There lo aothiry in tho Aot uhlrh vould prohibit
perrollsrho 00 r*dd*ato of lorgor torn0 from orgotblrlug,
w king nmborr of, 8 OOOpOr8tlve to bo lot8blloh8d 8ad
ulat&laod o&old8 of lwh tow, 00 10~ Co lwh lOOporOtlvo
hoopltol is 1oC.t.d lo t& mdi&tO 1Wtiitf VtMro th0 mm-
bore romlde.
Your rl#ith qwotlw 18r
‘8houl4 tha requiremoats with rorpeot
to Ogti.tiOa oppou on the SOOTOf the oh4rter
J 8a 8ffidCVit 8ttOChOd thor*tot’
or g8’
ktlClC Uti pWidO0 88 fOllM@l
mrloroblo C1odo Iobotl, p8p 7
‘A ohrtor must k poopmod wttlu fwtha
1 .The
M m o fth e
lo r p u8tlo 8~
“2.
The purpooo for rhlrh lt ir femodl
‘1. Tha plooo or plamr vluro its buolnooo
lo to bo truuut8dJ
‘4. fho tom SW rPlloh it lb to l
xiot;
l
5. Tl& oabor of dlroataro w truCtCC8,
and tha n&me8oml r~oldo~oo of thaw rho are &p-
po1at000 for the flrot feuJ;
l
6. The omowt of Its Upit. stock, lf w,
8W tha aumbor of -es late rhloh it IO divided.*
brtiole 1309 ooat8lnr theoa pwirlorror
“If Uu &orotmf of bt8ta lo rot o8tlofl~d,
ho UT, lt tho lxpotm of the Inowporotoro, ro-
qulre other utlrfbctorX widenem bolero ha till
ba r+qulrod to roodto, file and rword owh ohut-
or.’
You wo adtiud, thoroforo, that tboro rued ba no-
thing 00 th# fooo of t& o&&or of rwb 8 oorpor8tlea rog8rd-
ln$ the popul8tlo.nat the rlty or twm la or mom rhloh Ouch
OOOpo?8tlvO $8 to bo l8t8bllOhd~ IOVOVO?, tk kOrotUy Of
Stat0 UX PMulm ltldom00 that thm ~~iOlO~0 Of tb~ AOt &U-
thoris- the oro&tloa of luob owporotlwo ham boeo mot. It
18 the opfnfoa es this deportrat that v&n the f8oe of the
ohartu foilo to ohov tb popul*tion of Lhr oltr Cr toYa la
vhloh t& evr.tlve hooplt.1 lo to bo bC.tC& toa Will be
juotlflob lo requlrlxu orldoaoo ootlrfootw~ to 700 of rwh
f8Ot.
Xow olnth qwrtloa 1st
%OJ the Cb8FtO? Of OUCh 8 OCFpC.F&tiO~
pro& SW tiho lorwwo of o8plt8l OtOOk?'
ktkk l>@ 80 rUadCd w
tb0 ~O+iOiollO Of 8CkrutC
Bill No. 181 door sot prohibit tb lo OM U.
Ofl.plt.1
ltbok
bl 8 OO~.tiolr Uo0t.d fW t& pUl’pCbCCf CVW 8ad OpU.tiU
Eonorobl~ Clouds foboll, flgv 8
8 m-pOiit 000~?8tit. bOCpit.1. fP thC 8bCCWCOf 8 ~0.
hlbltloo, vv kaou of 00 romon vh, lwh ow~.tlon lonaot
grovldo So? the I8oMWo of C.pit8i ltuk.
Your tenth ~wotloa lor
10. ‘If the oorpor8tloa lo orgonlnd ritb
Out 68pftti @took, ohodd the o&?to? Mko 8 O-
.----VIDim a0 t0 t& lOUrOO Of th 0
of the corporatlolr8rd 88 to 1to
proport, rad oquipntt”
In vim of Article l.304 sad Artlclo 1302 80 maded
by &wto Bill Ho. 181, if 8 OWJBW.tiOfl fw tho pwpou of
ovelag md Cpciotln# 8 ooopor8tlro horn it8l IO orgonlrod vlth-
out c8pltrl stool, thC ChC.FtOFwod a~? 88k~ 8o~ prorlrloa
regordlag t& oo~oo of tho vor&lng oopltal rnd its right to
own property 8nd 8quipmeat.
Your llovonth gwotloo 181
ll. vi11 rwh 8 corpor8tIou h8vo to po, 8
frowhlaa tax o&adif it does hov vlll rwh tu be
co8putodt”
Subwotlon (8) of Artlolr 7084 pwldoor
%Oopt 80 horola prorldod, over, dO8oOtlO
lrd fopa&@ owporotion &rotoforr w horoUter
ahrrtorod ‘or 8uthUlZCd to do buoInoo8 lo Touo, or
doing buoIaooo la hx80, -1, 00 or bofuo U8,
18t Of 080h ,vu, po, 10 8dv8Wv t0 th@ 8COrCtU~
of bt8to 8 irOWUU tu fW t&,oU fo~ovl~,
besod upon tiht pro tioa of tho outotmdIng
OOpitOl @took, BUPPp”Uo Sod uadlvlded p?Ofit@,
plus the mount of outot8adlng bonds, not.8 sad
d.bWLt~O@, (OUtBtrodf~ baado, Eotoo sad deboe-
twos oh811 laoludo 811 mitton ltldOwOB of Iadobt-
odnooo vhloh be8r l rturltf d8tr of OIY (1) m8r
or more fror d&to of 18ow, on4 8ll lpeh lnotru-
vats vhlrh bou 8 uturlty doto of lo88 tE,;w
(1) w fra d&to Of 180~ but vhlrh r
lado~da,oo rhloh ho rCmOln8d
porlod of oao (1) yeu w awe
tlon, but vhloh h8vo beon r o uved
o rlxtonde4, w
Poow8ble C1oudo Iaboll, Poe 9
roflmaaod by tl¶o 108aoa00 of other lr ldo no oofo
the lsdrbtod&88, vhothw to the oam OF other
pot100 8~3 it lo frtlber povidod timt this tom
ohall mot lecludc lnotrmonto vhloh hvo provlouo-
1, boom 8&OOifird 00 OUFphlO) 80 th0 ~000 ?O-
COlpt8 f?~8 it0 bUOlao88 doa0 Lo Teuo b08~0 t0 th0
tot.1 qO80 rOOOipt8 Cf r*tlolrfro8
its
omtl?a bwirU88, rhi.h t ooaputod oa
tho booio of Om Dollor per Om Thouoond Dal-
luo (&,OO@ Oz fF8OtfOMl port tho?ooti prorldod,
that ouch tox -1 not bo lorr thoa hront, Dollus
(420) la the oooo of mu oor ratioa, lmludin# thooo
VlkhOut OCplt81 otook, 81~3 t iit ro provldod fwtho?
thot tho tu ohall in ec O&W bo lcmputed on 8 ma
&ma tbn tha l08880.d ~olw, for 8t.t. 8d ttiO?rs
tu purpomoo, of the proport, ovuod by the oorporo-
tlolrla thl8 btote. Where 0 fwolgb owporotlo~
-opplyln& for 8 permit hornthwotoforr dam 116
bu8laooo in Teur, owh tox oholl wt bo papblo
until the and of one (1) ~eor fmm the &to of ouoh
permit, lt vhloh tlmo the tu obU1 bo oompoted
ocoordly to flrrt you90 bu8feo88~ &ad, 8t tb
aam8 tiu, ruoh oorpor8tlon ah811 8100 pay its tu
in ldvonoo, boood upon the flrrt yoor~o buolecoo,
for the pwlod frm the end of tha first you to
and 1n01ud;ng no, lot fouwlng. In 011 other
OOOCtB,the tU -11 by CapUtCd f?a th. d&t.
oorGolnod in tb roportr roquirrd b7 &tiCloO 7987
sad 7089. OOpit.1 8tWk 88 lgpllod to OOrpor.-
tlonr vlthout 00pit.1 ltook rbu -U tb. Wt
l080t 8. ’
owporotloar vhloh uo vxompt fro8 t&o pIpent
Tb
of 8 fronohloo tu ore la a w& to in
d Article 7094, vhloh pro-
tldo8 88 fOlbW81
"The f?&ooh18. tu irrgO8.d by thla 0hpt.r
till wt &ml, to &Ik, lnouronoo 008pony, wot,,
gwroaty or fldollty oapoay w My tronoportotloa
ocmpoey, or on, rlcoplng, pobco cor sad dining oo?
oapoay vhloh la 801 raulrod to p&f 8n onnlwl tu
w8oar0d by th03.sgo88 rooolpto, or to oorpor*-
tlorro horiw no o8pltol ltwk sad org8nl8sd SW tba
UO1U81+. PWPOU Of ~OmOti~ th0 publi8 intOr8Ot
Eooor~blo Claude Irboll, p#o 10
of any oity 0 tom, or to oorporAtloor o~ralred
for th8 urpo8@ of roll(lioulrorrhlp, or for pro-
t%dlpu p L oem of burial sot for pirat. proflt,
or oorporetloar orgmalmd for th8 purpow of hold-
lag qrloultuml f8lrr mhd lnoourr~lag lplrultur-
ti pto8Uit8, O? fOF 8tPl8t~~ td lt;Oti puIpO8.8,
W fW DWOlY Dub110 Ohri f . -818 OUr8)
A8 la dlo 4 t.d
ia OW l(L81O)r8
t0 IOUr fir8t tV0 QW8-
tloor, t& lorpomtloa prorlded for in Ram% I)111lo. 181
U8 lOt O?milOd f0 urotf ubllr OhUit and thoroforo
th8 ~8 wt Ulthla th0 lurpt I! 00 pPWld8d ‘Ia0, la Art1010
WY 1 . ft :8 th0 ODioiOa Of th18 d8WtB8Ot tht 8UOh OOr-
+atloa, vh8tlur it 188~m-l Orpitti-8tOOk W Oat, lU8t
l fl’aWh18. t8X 0ollgUt.d l8 pcorlded for la A&lob 708P .
v8rr truly fOUr8
NJltdb
APPRll+’
OPINION
COYYIlTK=
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