OFFICE OF THE ATTORNEY **GENERAL OF**  **TEXAS AUSTIN** 

iionorablc

Claude Iabell secrekry of state **Austin,** TeIll8 Attention:Xr. I. L. BmGarl

0p5n10n 30. o-6561
Rer Whether the Se0 **ahou3.d**

**approva**

oration **ha8 a** 

hich wodLd

1945, requeetln& the opln- @nt8 thu above geeetiou,and sred under the ioLl.oning factual

.“uhere the aubaoribl.ng putpose kk~? uhlah would not persit it **buslnaee** of the other aorporatlon.* ostatio copy of the **propo8ed** ssvmdnmnt blng the above qucpltions, aooonpenlrryour ou desire to kcior whether or not 

### aa8#should be approved and illed.

The applicablepubdlvlelonot Brt. 1302, rterised Civil Statutes of ;Texna, 1925, provldea:Zen. Claude Iaball, pace 2

wTt~e purpoaaa for which private oorporationo may be formad 

### am: "34. To trenecaot

any nanuraoturing **or** m.ininc buainssa,en8 to purohatia end aall hoods, warois

and merohaendisa

usad for auah business.
".
. . ".
. . *39. To guroheseand sell gooda, weraa end marohandiaeand agrioulturaland farm producta." The partioularoorporetionainvolved in your quaatlona have, in **their** ahartar, adopted the foregoingpurpoea oleuae8. Yubdivialon 34 ia adopted by the rubaoriblng **Qor** poretion,end Subdlvlalon39 by the corporation voting the lnoreaae in atook and tandsrint: the smndment. Under the provisionaof Art8. 1313 and 13l& R.C.s., 1925, the duty ie lmpomd upon tha SaoLMery of State to file **acd reoord**  tha oharter and proper authentloetad amandmanta theretowhen the atookholdera of any oompang ahell turnlah aatisraotory

eoidonoa to tha Beoratary of State of a oomplianoawith the prorl8lonsof Chap. 2, Title 32 (nrtr. 1303-18, inoluaive) V. A. C. S. **Art.** 1320, SUbdivisiOn7 of aaid atatutaaprovide8 that any oorporetion **aa** 8uoh haa the power to enter into any obllgetionor oontraotsaabntial to the tranaeotionof it8 authorizedbuainoae.

Art. 1321 of aaid atetutaaprovldse that oorporatlona may borrow aumey o~i the orcdit of the oorporetlon and may axacute bond6 and promleaorynotas tharafor, and may pladga the property and income of the **oorportation.**

Art. 1349, v. A. c. M., insofar a8 metarial,providea that no corporation, domastio or foral@i,doing buaineaa in this state, ahall employ or um tta stock,maana, assets or ottsr property, diraotlyor indlraotly,ror any purposewhatever other than to aooompliahthe legltlmatabuainaas of lta creationor thoea purpoaaa otherwisep9rmlttadby law, provided Mat nothing in thie artiola shall be bald to inhibit oorporetiona

rron oontributinCto eng . . . cloio enterprieaa.

. .

### ‘706

lion. Claude ;Lsbell, P4@ 3

It is generallyraoognlzed,and by tha waight of euthorlty that in the ebsenoe of a statute or oonatitutional ~rovialon to the contrary,a corporation may take atook of mothtir corporation in payment of, or aa eeourity, ror a debt. 16 C. J. ii., Far. a3, p 682; 13 Amer. Jur., Par. 791, i: 312; 1 iillCebrend*a Terse Cor oration8 Par. 80, p 243, a:.d see iimotatione in 701. 3 i! , kamr. kit. dep., P 140. Neither the proposed amandmentwith eooompanying affidavit nor your letter, diaoloaa any other than a bona fide laaue ond aubaorlptlon of atook under the above mntiotad and generallyreoo&zed rule.

The cane of Uolnma and Orlgg8 Mfg. co. v. Holmaa and Ware611 Eatal Co., 127 Ic. Y. 252, 27 B. &. 831, 24 Ammsr. St. itap.

4l+8, l'urnlahea

tha leading authorityand aupport of the above rule. In that oeae tha prerIdr.at and aaoretery of the EenufeoturlngCompany,a oorporatlon,aubaorlbadlndlvldually for the atook ln a nawl.y foreud oorporetlon,aam being laaued to a truetee for said offloera. The nclw oorporatlon theraaftarpurohaaedthe entire plent, meahlnary, and ato., of tha plaintiffoorporetion for whloh it laaued raid atook ea aforesaid,and said tianufeoturing Company ratirad from bualneaa. The rule wee reoognlzed in thla oaao that a **oor** poretlon oannot purohaaa **or** deal in atooke of other oorporetlona unless expraaalgauthorlaed to do 

### 80. Tha l tatute under which plaintiffoompenywaa Inoorporatad **in the**  **state** or caw York provided that *It ahell not **be** lawful for suoh company to use any of their fund8 in the puroheac of any stock in eny other oorporet1on.n

The court held that add statute was AOt intended to 1Imlt the power8 of th6 oorporetlonbayond its neoaaaary powara ln the exaroiaa of lta oorporata franohlse, to-wit: selling of property,oolleotlon**of** debta,

. . . taking title to all kinds of property, includingthe atook of another oospariy in ths peymant of a debt, in holding tha tranaaotion not ultra vlres. Tha court raeaoned in the following language;

*The plaintiffhaa mold lta rolling-mIl1 machli:ery,

ato., to the defandant. It has taken stock in the lettirr oompeny in paymaut therafor. Ineamuuh aa this wea done with tha oomant OS all or the stookholdara,It being the act of a private corporations, not in any manner harming tha publio,wa sac no reason‘YV 6

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