Honorable Wm. J. Lawson
Secretary 0P State
Austin, Texas,
Dear Sir: Attention:'
Will Mann Richardson
O&&on No. O-3304
Re: Whethes th,e'Holland Texas
Hypotheek Bank of Amsterdam,
Holland, will ,bedoing busi-
ness~in Texas under the re-
cited facts.
You,havw requested the opinion of this depart-
ment upon the question of whether the Holland Texas Bypo-
theek sank of'imstwrdam, Holland, under the recited facts,
may surrender ita permit to do business in Texas and not
be subject to liability there,altwrfor doi,% business in
Texas without a permit. Thwre was enclosed with your rw-
quest4wtter a copy of ~aletter ftiomthe attornwy for the
corporationwhich rwcitws the following facts:
"The Holland Texas Hypothwek Bank of Am-
sterdam, Holland, Incorporatedunder the laws
of the Kingdom of Netherlands,was granted a
pwrmlt to do business in Texas on November 30,
1931, whloh permit will expire on November 30th
of this gear, In May, 1940, the Netherlands
waa invaded by Germany and occupied by Pores
and as a rwsult of such invasion and for thw
purposes of protecting the assets,oP the sub-
jects ~ofthe Kingdom of'the Netherlands,the
President issuwd a proclamationPrewzing all
of said funds located within the United States.
On May 24, ~1940,the Royal NethprlandsOovern-
ment residing in London, promulgatedits dwcrww
wherwbg the title to all propwrty,in the United
Ztatws was vested In the NethsrlandsCtovernmsnt.
Under the dwcree, the Minister of the Netherlands
'wad appointed Attorney:inFact for the Government
and was duly wmpower,edto delegate the authority
vested in him.
Honorable Wm. J. Lawson, Pagw 2, (O-3384)
"For the purpose of placing an additional
protection around the assets of this corporation
as against thw enemy, it became necessary to
adopt a plan in the nature of a reorganization.
In brief, the plan followed was to organizw a
domestic corporationunder the laws of this
State, said corporationbeing designated the
Holland Texas Mortgagw Compeny with an office
in Port Arthur, Texas. All of the assets of
the Holland Texas Hypotheek Bank of Amsterdam,
Holland, were transferred to the Holland Texas
Mortgage Company. Since said date, the domi-
cile of the Amsterdam corporationhas bwwn
changed undwr Dutch law to Wlllemstad, Curacao.
The,only asset now hwld by the Holland Texas
., Hypothewk Bank of Willwmstad, Curacao, is a
mortagw on the assets of the Holland Texas
" Mortgage Company which bears Interest. The COP-
poratlon does not perform any of the acts au-
thorized under its permit but continues to main-
tain an office in Port Arthur, Twxas. All busi-
ness such as erecting or repairing any building
,or improvwmwntand thw loaning of money, etc.,
Is done by the Holland Texas Mortgage Compeny."
The question of whether a forwign'corporationis
doing intrastatebusiness in Texas is essentiallyone of
fact. The casws arw legion which dwal with the problem.
Particularlyis this true where therw is the relationship
of parent and subsidiary,or one otherwise contractural.
We cannot categoricallysay, as a matter of law,
either that the Hypotheek Bank of Amsterdam will or will
not be doing business in Texas henceforth. The statement
that the Holland corporationwill have a mortgage on the
assets of thw Texas corporation,which bears interest, sug-
gests many possibilitiesrelative to the actual relation-
ship between thw two corporations. Likewise, the recitation
that the foreign corporationwill continue to maintain an
office in Texas does not descrlbw the activities or Sunations
thereof. Moreover, the statement that the Holland corpora-
tion will not continue to pwrform any of the acts authorized
under its pwrmit or its charter is a legal conclusion,re-
quiring both a knowledgw of the provisions of the corporationls
permit and charter, together with an understandingof that
which the corporationwill continue to do in Texas.
Certainly thw'maintenancwoften office in Texas
auggwsts the doing OS business in Texas. In King v. Monitor
. -c
Honorable Wm. J. Lawson, Page 3, (0-3384)
Drilling Company, 92 9. W: 1046, 1047, 1048, it was said:
"And unless a foreign corporationis trans-
acting or solicitingbusiness in this State, or.
has an office here, it is not rwquired under Eese
circumstancesto havw a permit to do business to
enable it to sue in our courts * * *w (Jbnphasis
ours)
In Morton v. Thomas & Sons Company, 93 3. WI 711,
712 (citedby the corporation*sattornwy'inthe ,abovwmen-
tioned letter), the sign;niSicance
of the maintenance of an
office was recognizedby the court as follows:
"Thw petition disclosersthat plaintiff, a
corporationorganized and,doing business in Ken-
tucky, holds the two notes executed and delivered
to it by defendant in Texas and made payable in
,Galvwstonof that State. It is not disclosed that
it had been doing business in this State, and such
allegationsdo not bring it within the operation
of the statutes.:The case of Chatman v. Hallwood
(Tex. Civ. App.) 75 S. W. YbY, does not control,
f th the plaintiff corporationalleged that
i?had'%oSSice in Dallas County, Twxas, thus
bringing itself clearly and affirmativelywithin
%hw terms of the statute. The exact point was
a id d b thi t in line with our present
c%cl~sio~ in &TV. Monitor Drilling Co. (rw-
cwntl decided by this court) 92 8. W. 1046.
* * *' (Emphasisours)
In Bank of America v. Whitney Central Matlonal
Bank, 261 U. 3. 171, the Supreme Court of the United States
held that the corporationwas not doing business in New York,
and speaking through Mr. Justice Brandies said at page 173:
"The Whitney Central had what would populat-
ly be called a large New York business. The
transactionswere varied. important and expen-
sive. But it had no place of business in New
York. * * *" (Emphasisours)
Perhaps, however, the fact of thw maintenance of
an office of itself is not conclusive of thw question as to
whether the Holland corporationwill be doing business In
Texas. As said by Mr. Justice Holmes In Edwards v. Chile
Copper Company, 270 U. S. 452, "the activities and situ-
ation must be judged as a whole".
- ‘_
Honorable Wm. J. Lawson, Page 4, (O-3384)
The general rule touching the question of whether
a foreign COrpOratiOnis tPaXMactiIIg business in a state
is summarized In l&a Corpus Jurls, Pagw 1270, Section 3977,
as follows:
"Thw general rule is that when a foreign
corporationtranacts some substantialpart of
its ordinary business in a state, it is doing,
transacting,carrying on, OP engaging in busl-
ness thwrwin, within the meaning of the stat-
utes under consideration."
An interminablediscussion'couldbe had upon this
question in the light of the numwrous casws in which it
has been involved. We do not, however, bwlieve that such
would swrve a useful purpose in this opinion, The cases do
demonstrate,howwver, why this department cannot with pro-
priety categoricallyrulw upon the quwstion of whether the
Holland Texas Hypotheek Bank will be doing bUSinWSs in Texas
under the limited statement of facts before UB.
YOUPB very truly
ATTORREY GENERAL OF TEXAB
By /s/ Zollie C. Stwaklg
Zolllw C. Stwakley
Assistant
ZCS:LM:EAC
APPROVED MAY 1, 1941 APPROVED
OPIRION
/s/ Glenn R. Lewis COMMITTEE
ACTING ATTORKEYGERERAL BY B.W.B.
c-