HonorableWm. J. Lawson

Secretary0P State Austin, Texas,

Dear Sir: Attention:' Will Mann Richardson

O&&on No. O-3304 Re: Whethes th,e'Holland Texas HypotheekBank of Amsterdam, Holland,will ,be

doing business~in Texas under the recited facts. You,havw requested the opinion of this department upon the question of whether the Holland Texas Bypotheek sank of'

imstwrdam,Holland, under the recited facts, may surrenderita permit to do business in Texas and not be subject to liabilitythere,altwr for doi,% business in Texas without a permit. Thwre was enclosedwith your rwquest4wtter a copy of ~aletter ftiom the attornwy for the corporation

which rwcitws the followingfacts:
"The Holland Texas HypothwekBank of Amsterdam,Holland, Incorporated under 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 invadedby Germany and occupiedby Pores and as a rwsult of such invasionand for thw purposes of protecting the assets,oPthe subjects~ofthe Kingdom of' the Netherlands,the President issuwd a proclamationPrewzingall of said funds locatedwithin the United States. On May 24, ~1940,the Royal NethprlandsOovernment residing in London, promulgatedits dwcrww wherwbg the title to all propwrty,inthe United Ztatws was vested In the NethsrlandsCtovernmsnt. Under the dwcree, the Minister of the Netherlands 'wad appointedAttorney:inFact for the Government and was duly wmpower,ed to delegate the authority vested in him.HonorableWm. J. Lawson, Pagw 2, (O-3384)

"For the purpose of placing an additional protectionaround 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 followedwas to organizwa domestic corporation under the laws of this State, said corporation being designatedthe Holland Texas Mortgagw Compenywith an office in Port Arthur, Texas. All of the assets of the Holland Texas Hypotheek Bank of Amsterdam, Holland, were transferredto the Holland Texas Mortgage Company. Since said date, the domicile of the Amsterdam corporation has bwwn changedundwr Dutch law to Wlllemstad,Curacao. The, only asset now hwld by the Holland Texas

., HypothewkBank of Willwmstad,Curacao, is a mortagw on the assets of the Holland Texas " Mortgage Companywhich bears Interest. The COPporatlon does not perform any of the acts authorizedunder its permit but continuesto maintain an office in Port Arthur, Twxas. All business such as erecting or repairingany building ,or improvwmwntand thw loaning of money, etc., Is done by the Holland Texas Mortgage Compeny."
The question of whether a forwign'corporation is 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 otherwisecontractural.

We cannot categoricallysay, as a matter of law, either that the HypotheekBank of Amsterdamwill or will not be doing business in Texas henceforth. The statement that the Holland corporation will have a mortgage on the assets of thw Texas corporation, which bears interest, suggests many possibilities relative to the actual relationship between thw two corporations. Likewise, the recitation that the foreign corporation will continue to maintain an office in Texas does not descrlbw the activitiesor Sunations thereof. Moreover, the statementthat the Holland corporation will not continue to pwrform any of the acts authorized under its pwrmit or its charter is a legal conclusion,requiringboth a knowledgw of the provisions of the corporationls permit and charter, togetherwith an understandingof that which the corporation will continue to do in Texas. Certainly thw'maintenancw oft en office in Texas auggwsts the doing OS business in Texas. In King v. Monitor. -c

HonorableWm. J. Lawson, Page 3, (0-3384)

Drilling Company, 92 9. W: 1046, 1047, 1048, it was said:

"And unless a foreign corporationis transacting or soliciting business in this State, or. has an officehere, it is not rwquiredunder Eese circumstances

to 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*s attornwy'inthe ,abovwmentioned letter), the sign;niSicance of the maintenanceof an office was recognizedby the court as follows:

"Thw petition disclosers that plaintiff,a corporationorganizedand,doingbusiness in Kentucky, holds the two notes executedand delivered to it by defendant in Texas and made payable in ,Galvwston

of 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 th i?had'%oSSice in Dallas County, at T wxas, thus bringing itself clearly and affirmatively within %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. (rwcwntl decidedby this court) 92 8. W. 1046. * * *' (Emphasisours)

In Bank of America v. Whitney CentralMatlonal Bank, 261 U. 3. 171, the Supreme Court of the United States held that the corporation was not doing business in New York, and speaking throughMr. Justice Brandies said at page 173:

"The Whitney Centralhad what would populatly be called a large New York business. The transactions

were varied. importantand expensive. But it had no place of business in New York. * * *" (Emphasisours) Perhaps,however, the fact of thw maintenanceof an office of itself is not conclusiveof thw questionas to whether the Holland corporation will be doing business In Texas. As said by Mr. JusticeHolmes In Edwards v. Chile Copper Company, 270 U. S. 452, "the activitiesand situation must be judged as a whole".- ‘

_

HonorableWm. J. Lawson, Page 4, (O-3384)

The general rule touching the question of whether a foreign COrpOratiOnis tPaXMactiIIg business in a state is summarizedIn l&a Corpus Jurls, Pagw 1270, Section 3977, as follows:

"Thw general rule is that when a foreign corporationtranacts some substantial part of its ordinarybusiness in a state, it is doing, transacting,carrying on, OP engaging in buslness thwrwin,within the meaning of the statutes under consideration."

An interminablediscussion'could be 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 departmentcannot with propriety categorically rulw upon the quwstion of whether the Holland Texas HypotheekBank will be doing bUSinWSs in Texas under the limited statementof facts before UB.

YOUPB very truly

ATTORREY GENERAL OF TEXAB By /s/ Zollie C. Stwaklg
Zolllw C. Stwakley

Assistant

ZCS:LM:EAC

APPROVEDMAY 1, 1941 /s/ Glenn R. Lewis

ACTING ATTORKEYGERERAL APPROVED OPIRION COMMITTEE

BY B.W.B. c-