Untitled Texas Attorney General Opinion

828

OFFICE OF ME A7-rORNEY GENERAL OF TEXAS
AUSTIN

Honorable W~lllam J. Lavaon
Seoretary of State
Austin, Texas
Attentlonr Mr. Will Jbmn Rlaberdaoa’ *.

Dear S1r1 opinion RO. o-3989
ROB Does a corporetion bavo a right
to operate a cllty bus 1Ine under
auMlvlaIon 66, Article 1302,
Yernotlla Annotated civil Stat-
utes, end related queatlona?
Your letter of September 16, 1941, requeatIng the opin-
ion of this depertmant on the questions stated herein, reads Ln
part as r”ollovsz
“The above named corporation vaa rented a char-
ter using as Its purpose SubdIvIsIon 6% of ArtIale
1302 ‘to aatabllsh and maIntaln a line of stages.’
Under this aubdIvIaIon the corporation her been op-
erating buses In the City of Ulchlta F8118.
“In order to teke adventwe of the povera grant-
ed br ArtIalo 6548 end Article 6548a.~the oorporatlon
baa filed an application for en amendmentchenging
its purpose alauae to Inolude thoa,e powers. It vi11
be noted twt those ArtIalea 8pp4 to ~orporatlona
vhIch vere formed as street rellvey aorporatlona end
vlah nov to operate buses in plaoe of street cars.
The street railvay nubdIvIaIon Is Ho. 67 of Article
1302, end it Is the aontention of this Departmeqt
that Artlalea 6548 &xl 654th apply only to corpora-
tions formed under that subdIvIsIon. If auah Is tlae
?aae, the oorporatlon uould not aaacmpllah thla ahange
by en ~endatent becauao of the prohIbItIona In the
last lentenoe of Artlale 1314.

“The attorneys for the corpomtlon, hovever,
contends that since they have been opereting a alty
 Bonorable Vllliem J. Lavaon, Page 2

bualineuaderSubdIvIsIon66, that theyareaot &eng-
ing the purpose OS the corporation by adopting the en-
larged povera granted under Artfolsa 6548 and 6548a.

“This Department has been of the opinion that
SubdIvIsIon 66 vaa tha aorreot aubdlvltlon to be used
by bus lines &wn.n¶.ngSrom one city to imther and that
it did not authorize. the operation of a city bus line.
It Is easy to see that a court could say that an lnter-
city bus line vaa similar to, end authorlted by, the
line OS stages au~vlsion, but the almIlarIty Is not
so great betveen a 1Ine of stages end the operation of
city buses.
"We should like an opinion Srw your Department
on the Sollowlng questions:
Does a corporation have a right to operata
3 clt~ka line un&s? Subdivision 66 of Article 13025
“2. IS ~ubdlvlalon 66 la not tha proper subdlvl-
sion, under vhat subdivision should a corporation
vlahlng to operate a bus line in a city be formed?
‘3. IS SubdIvIaIon 66 Is the proper aubdIvIaIon,
nay such a aorporatlon have the enlarged pavers grant-
ed by Artlalea 6548 end ~6548s~.either by eraendmentor
as en iouldental pover to their right to operate a
city bus line?"
The pertinent facts relatlvo to the WlchIta Traatlon
Companyare set out In a letter firm HonoraBle Bennett L. Smith,
Attorney at Lav, addressed to the Attorney General, bearing date
September 19, 1941, are as Sollova~ ;.

"WlchIte Traotloa Company, a Texas aorporatlon,
ovned end operated a street rellvay system In Wichita
Pilla MU.1 Its aharter expired under Its ovn terms Zn
August, 1934. Prior to th&t tbue, the&arter of UlchIU
/ Traction Companyvaa amended to pennit t* substitution
Honorable UIlllam J. Lavaon, Pego 3

of huesa in compliance vlth Articles 6548 an4 65M.s.
'Aher, the charter expired In 1934, Wichita Traction
Ccnpany vaa not then operating azxystreet rallvays
but vaa entirely operating motor buses ln and about
the City of Ulahlta Falls.
%hortly after the expiration of the oharter
of Wichi’ta Traction Companya nev corporationvaa
formed, the Wichita Trenalt Corporation, under 3ub-
division 66 of Actlole 1302, vhich Corporetlon ac-
quired the motor buses and system formerly operated
by Wichita Traction Company. The nev Company tcok
over .ZX&operated the identical operationa maI&aln
sd by 'iha predecessor. Wichita Transit Corporation
-has since been engaged in the buaIne8s of operating
buses fop the carriage of passengers for hire vithln
the City of Wichita Falls. During part or +A1 of
t!xt tL!e, the Corporation has operated buws outaide
;f t!x City llsita R& tit.0 the suburbs..

"The Corporation nov desires to amend its char-
ter by changing its purpose clause Srom that wntain-
ed in 3~bdIvlslon 66 in Article 1302 ~to 3ubdIvIsIon
&'4efeoS, aa suppleaiented by Articles 6548 and
.

3ubdlvlslons 66 end 67 oS.Artlole 1302, Vernon's Annotated
Civil Statutes, read as Sollovsi
"66. To eatabllah end nalntaIn a line of
a tage8.
"67. To conatruat or aoqulre vlth paver to
maintain and operete, atxwet'rallvayaend suburben
rallvsys and belt llnaa of rellvaya vlthIn and near
cities and tovna, for the transportation of freight
and passengers, vlth paver also to conatruat, ovn
and operate union depots, end to bw, CM, sell end
convey right of vay upon vhIch to eonstruat raIlroada.'
The last sentence of Article 1314, Vemonta Annotated
Civil Statutes, reads as Sollova:
Honorable YlllIc~n J. LavaOn, Page 4

“ho amendment or change vIolatlve of the Con-
stitution or lavs of this State or any provision of
this title Or ;rhich SC changes tho original purpose
ot such corporation as to prevent the execution.
thereof, shall be of any fcrca or effect.”

Article 65&e, Vernon’s Annotated C.&v11 Statutes, pro-
vides In effect that any corpporation authorized to operate a
street or a suburban rallvay or Interurban rallvay and to carry
gaaaen;srs for hire, Is suthorlsed, subject In every case to the
approval and consent of the Governing body of the city or town
where said street, suburban or Interurban railway company is
operated to substitute for such rallvay automobile motor bus llnea,
In vhole or in ?art, and to maintain and operate motor buses for
the purpose of carrying pnaaeqera for hire on the public roads,
streets, plaxs, allOTs, and hii;hvaya vIthin the corporate limits.
Of anv* incorlxratcd cltlea or towns, tender such resulationa as
zqv- Ye :~eocl;lbcd ‘-:y ~7 cuch cities or towns, and on the public
roach --rid hi:rtwsys vith’a five miloa Of the corporate l*Qnlts of
anj- such incO2~0r;ited citlea or tOvn3, -under ~such regulaslona, in
territory outside of cltjr llmita, ns the COmmisa~onora’ Court of
tho county nay 2roscrlbo; snd such substitutidn of motor buses
for street car8 and street or Interurban rallvey and the dlacon-
tinullnco of such atroet or interurban rnilvaya shall not In any
vay Im=aIr any of the corporate powers of corporations heretofore
Incorporated as street 0 r lnterurbsn rsllvaya with respect to the
o-peratlon.oS other public utilities authorized by their charters
and by statutes nov In Force.

ArtFcle 65&h, Vernon’s AnnOtated Civil Statutes, among
other things, In effect, provides that grivnte corporationa here-
tofore kxor&Jorated Sor the purpose of operating street or ,inter-
urban rsilvaya, vhIch said private corporstlons have totally
abandoned such operations prior to January 1, 1934, may emend.
their charters so a8 to include as a sopsrate purpose of the cor-
porat f On the acqulrIug, ovnins and operating of motor vehlclea
end motor buaes for transportation of passengers for hire upon
the ~~jlic streets and -,ublfc vaya of cltlea and towns end u>on
the public ways of the adjacent unlncor?orated territory vlthin
five miles frOm the limita of such cities and tovna, provided, hov-.
ever, this limit shall not be construed to prohibit any corporation
 Honorable Wllllapl 3. Lawson, Pago,5

.y..,:
2, coafomily vlth thi6 act from contractillg~for chartered pag-
a8ILger beyond said five mile Xi&nit, under suah reason-
acrvvice
able re,Yations as may be legally Unposed from t-e to tl,m
by such cities and tovnr vlthfn the limit8 thereof a& the Cm-
mlsuionera' Court of counties as mu presaribed by Article 6548.

The Wichita Traction C~snpany vaa a&arently Orgadz8d
for the purpose8 set out ln Subdivialon 67 of Artlole 1302 and
had smended its charter to malt the substitution of busea in
cqnplianoe vlth Articles 65p"8 and 654&, but its charter expired
and V8S not r8neved. The subject corporation, Wichita Tranalt
corporatbn, V8a orgaxilsed a8 a nev oorporationunder subdlvl-
slon 66, with its purpose clause readings "To operate a line of
stagea," and although thlr corporation 8cQuired all the property
of the Wichita Traction Cm-, vhlch at that time vas .operatlng
only bUSBS, the povera of Wichita Transit Corporation and the pro-
priety of the charter ammdmentvhLch haasbeen submitted mast be
tested bp the charter of the present corporation snd the lava ap-
?licable thereto, and not the charter and lavs applicable to the
expired Wichita Traction Company.
there appear8 to be no aubdlvi~ion~of Artlole
Uhile
1302 vhlch expre88lj m6ntlozis the oper*tlon of bun liner .betveen
clticts, lt would seem that the State Department'8 construction
of Subdlvlaion 66 88 lncludlng the ~operatlon of titer-city bu8
lines 18 correat. It does not follov however that this excludes
the operation of a line of stager or buses vithln cities. In
this conneotion ve refer to the caue of staacke v. Routledge
(sup. Ct. 1922) 241 s. w. 944, vhlah involved the burlnesrr of
renting automobile8 with driver8 ln the olty of San Antonlo under
subdiviafon 64. The court in ltr opinion. stated:
"Subdlvlrlon 10 of Article 1121 (nov Subd. 66
of Art. 1302), outho~laiag the areatlon of oorpora-
tioits for the eatablis and mainteW!UiCeOf Stage
lines and Subdlvirion -t18 nov subd. 69) of,the same
Article, petittlng the fOi3BStiOnOf COrpOratiOna
for the transportation of goods, vares, and merchan-
dlae, or any valuable th%ng, 1s aaah olearly broad
enough to have permitted the fonn.stlon of 8 aorpora-
tion for th8 tranaportatlon of paa8sngers for hire,
or to engage in the bue%nesa vbich defendant in error
alleges uas the bualnesa Polloved by the Rambler
Automobile Company."
 Honorable William J. Lavaon, Page 6

.‘.>~. If the court vaa correct ln Its exprssalon with refer-
ence to Subdlviaion 66 in that case, we know of no resaon vhp
t-8 Subdivision would not b8 auff$clantly brasd to permit-the
OperatiOn Of a 1bl8 Of Stage5 or buses within aa well aa betv88n
Cit.185 end tovIm. This ststement by th8 court yaq probably not
necessary to the deciaicn of the case but It does furnIah a
guide in construing the statute. ;

Although there may be other Subdlvlslona 3n Article
1302 which vould be mor8 appropriate for the operation of city bus
lines, e metter vhioh ve do not nw determine, It 1s our opinion
that it Is sufficiently broad to include the orwation in question.

Under the pwaent charter of the Wichita Transit Company
'it nay therefore operate bus lines or stages vIthIn cities or
tovra end between cities or tovm without any llzltatlon 3poa the
distance which it may operate Ita bun llnes from the corporate
1inita Ff cities. Subdlvlaion 57 authorizes the operation of
stzwzt ?~sllvqa and suburban rsllveys vlthln end near cities and
~tovns. 3y -m+.ue of Articles 6548 and 65488, Vernon's Texas Civil
Statutes, street railway corporations m&y extend their charter
powers so as to substitute motor burr68 for their reilvaya vlthin
the corporate limits of cities and tovna end on the pub110 high-
ways vlthln five miles of the aorporate limlta of such cities or
tovnq.
/ Would the proposed amen&iientso change the original pur-
pose of the corporation 85 to prevent.the execution thereof? We
think It vould. Under the orIgiPa1 charter the corporation Is
authorized to operate both inter end Intra aity buses or atage
llnea but by the proposed amendmentIt voul$ only be authorized
to operate bus lines vlthln Inaorporeted altlea end within five
miles thereof. That the corporationhas been operating buses
solely vlthln the city of Wichita Fella end its suburba ir not
aontrolling for the charter eeta Out the pUFpOB8 Of it8 tiCOF-
poretlon and we must look to that lnstruawnt end applicable lava
to determine its orIgina purpose.
There la another reason this emendmentmei not be made.
~otvlthatltaadlng both Subd.lvialona 66 and 67 deal with tranworta-
/ tion, they contain radioal , substantial and fundamental dlffer8ncea.
Rot only does the paver to operate 8 line of stages tietOrIelly
 Bonorablo WIlliaauJ. Lavaon, Page 7

differ, as a m8tter of fast, frar the,pover to aonatruot and
operate street, suburban pnd belt line rallvaya snd to bug’, ovn,
~~ sell and convey right-of-v8y,but the statute itself h8e amde
the diatinatlon end ve o8nnot say that theed purposee are fund8-
mentally the some. When the Saaorporatore qf the YIahlt.8 Tr8rb
sit Uompuiy oh086 the purpose OS the aorpora$lonthey no doubt
aonaldered the diSf8reme b6tVOti the.operatlon of 8 line of
stages and the operation of street r8llvaya under Su@livIslon 67
with the enUrged pavers granted by Articl8 6548 and 65488, 8&i
h8d same re8qn for Inaorpor8tIng for the eeleoted purpose rather
than85 8 et~etr8Ilv8y amp8ny. If would seem apparent that a
person atibaorlbing to the oapltsl etook of 8 corporation h8vlng
88 lta purpose the operation of a line of stages vould not con-
template thet euah aoFpor8tlon vo$ld oomtruat, amlntain ind
operate rsllwaye. The proposed smendmetitbeing a fundamental
and materiti &tnge in the purpose of the corporation, It should
- not be p8ltiIilh3d. 10 T. J. p. 664; FletOh8r’B Cyclopedia Corpora-
tions, Vol. 7, p. 7607.
Without qtlotlng in full Articles 6548 and 6548a, Ver-
non’s Texas Civil Stat&en, ve think it 1s aufflclent to point
tit that the firat mentioned statute by Its expreaa l8ngu8ge does
not apply to the corporation In question for it appllee.only to
.“Any oorporatlon authortied to oper8te a street 01pauburb8a rall-
way or interurban mllv8y 8nd to c8rry passengers for hire l l l.”
Th8t.the Aot is lirnlted In ita application to street snd Inter-
urbep railvaya Is borne out by the title and emergenoy al8uae of
z;a6;gg3* 43d Leg., p. 48, oh. 22, vhloh amendedoriginal Artl-
.
The same-oonelderatlonr an applicable to Article’ 65488.
That statute provides, “That prlve$ aorporatlona heretofore ln-
aor?porated for the purpose of operating street or Intmurb8n rall-
v8ya” may em& their ah8rtera so as to provide as 8 eepar8te
purpose for the operatlond motor bwee. See also the title 8nd
emergenay almae of Aata 1937, 45th Leg., p. 675, oh. 337. Clear-
ly these statutes do n& 8pply to aarporatlona organlted under
3ubdlviaIon 66.
Tour first question 1s enrverad In the affim8tlve and
the second does not require 8218nsver.
Honorable Wllilam J. Lawson, Page 8

In snaver to your third question, it la our oplnldn
a corporutlon having as its purpose Subdlvlalon 66 of ArtiCl8
1302, Revised Civil Statutes, 1925, may not emend its charter
so au to change its purpose to that set out In SubdIviaIon 67
of said Artlcle‘aa enlarged by Artlclea 6548;and 6548a, Vernon's
Texas Civil Statutes, .snd ~that the lset~ two &entioned statutes
are not applicable to end do not affeat the corporate povere of
aorporatloneorganized xmder Subdivision 66 of Article 1302, Re-
vised Civil Statutes, 1925.
Yours very truly

CCC:eJ