Hon. J. T. McMillin

Deputy Banking Commissioner Department of Banking Austin, Texas Dear Mr. Mciuiillin: Opinion No. O-2974
Re: Matter of extending the charter of Galveston Building & Loan Company whose charterhas expired by ' expiration of time.
We have your letter of December 11, 1940, asking for a legal opinion with respect to the above captionedmatter, which letter is as follows:
"In Galveston Building and Loan Company of Galvestonwas originally incorporatedApril 15, 1890, having a purpose clause as follows:
"'Itspurpose shall Abe the erection of 'buildings and the accumulationand loan of funds for the purchase of real property in cities, town, and villages, and also for the purpose of the accumulation and loan of money.'
"Its capital stock, $500,000.00. under the original charter,was

The incorporationwas for a period of fifty years. Subsequently the charterwasanendedwithout change in the purpose of the corporation, stock to $750,000.00. but increasing the capital

Vhis company, from its inception,has accumulatedmoney through the sale of its own stock, either as a lump sum inve,r&.ment

'. or on a monthly installment basis. It has been engaged largely in lendingmoney thus accumulated to its stockholderson real property loans,which are further securedby the pledge of its own stock,held by the borrowers and paid out by them on a monthly installmentbasis. These loans have all the characteristicsof a sinking fund loan. The Association now has assets in the neighoorhood of $215,000.00 consistingprincipallyof real property notes of the character above described, togetherwith a small amount of real estate.Hon. J. T. Nclviillin, Page 2 O-2974

"Your attention is directed to the fact that the original fifty year period expiredApril 15, 1940. This company is undertaking to extend its charter under the provisions of Art. &la-21. "Article @la-1 provides in part: 'ItA building and loan associationas contemplatedby this Act is any association or corporationheretofore or hereafter formed, created,or organized,which is charteredunder any bullding and loan law, and/or is nrincinallv in the_businessof assisting itsmembers to buy, improve or build homes, or to remove encumbrances therefrom,and which accumulatesthe lunds thus loanea through the issuanceor sale of its own stock.' "Under the above facts,we respectfully submit the following question:
"Is the Galveston Building and Loan Company entitled to extend its charterunder Article @la-21, and having thus extended its charter, to ciation in this State?" operate as a buildingand loan assoYou are respectfullyadvised that the GalvestonBuilding & Loan Company's chartermay not be extended,under the facts stated Dy you. Article 1387 of our Revised Civil Statutes, dealing with dissolved corporationsunder Title 32, relating to Private Corporations, declares:
"A corporation is dissolved: "1. By the expiration of the time limited in its charter." "1.Dissolutionmay result from the occurrenceof a condition subsequentwithout State action or judicial ascertainment. Instances of this node of dissolution are found in the provision of the ,general statute which declaresthat a corporation is dissolved by the expiration of the time limited in its charter, and in a special statutewhich createsthe corporation and which operatesautomatically todissolve it."

-- 11 Tex. Jur. p. 127, 465. All corporationsare, of course, creaturesof the law and they possess just such attributes, rights and priveleges as are provided by law and no more. They are creaturesof law for convenience sake, and possess the attributes of legal entity as a person capsule of doing the thingswhich they are authorizedby the charter to do and no'more.. I

Hon. J. T. McMillin, Page 3 o-2974

They thereforepossess corporate life as a legal entity in accordance with the charter and the laws authorizing such charter. when, under the law, that corporate life has expired, there is no has expiredwith the life of the orlegai entity, for it, too, ganization or corporation. Section 21 of our Building Stat. Art. 8Hla) provides: and Loan AssociationsAct (Ver.Civ.

"Any building and loan association incorporatedunder this or any prior law may extend the duration of time for ighich said associationwas organizedby a vote of two-thirds of tht capital stock of such association representedvoting at any annualmeeting of the stockholders of such association or at any specialmeeting called for that purpose; thereupon the board of directors shall transmit a copy of the proceedings of such annual meeting or of such specialmeeting, duly attested, to the Banking Commissionerof 'Texas, who shallmake a duly authenticated copy thereof, certifying to the extension of time of said corporation. Any 'building and loan association incorporatedunder any prior law and extending the duration of time for wh~ichit was incorporated in the manner herein provided shall be deemed as incorporated under and ‘be investedwith all the power given in thisAct the same as though corporationhad been originally incorporated under it." 'The extension of the duration of time for the existence of the corporation contemplatesthe procedure of the statutewill ‘be taken by the corporationwhile it is yet a living legal entity. The statutehas no application to a case such as you put, where the corporationhas ceas~ed to exist. (SeeRev. Civ. Stat.Art. ljl5a) Extension of life while -- whether physical or legal -- is one thing, resurrection thereof is quite another thing. Our statutes authorize the one but they do not authorize the other. tie have assumed (thoughwe do not decide) that GalvestonRuilding & Loan'Company,as described by you, was a 'building and loan associationwithin the meaning of Section 21, above quoted. tie have also discussed the general statute with respect to the dissolution of private corporations,becausewe think the same is applicable to building and loan associations, there~ being no special statute touching the matter. The provision that "no involuntary liquidationof any association shall be accomplished except as above provided, that is to say, at the suit of the Attorney General on informationand request of the Banking Commissioner of Texas”, in Section 16 of theHon. J. T. McMillin, Page /+ o-2974

Building and Loan AssociationsAct has no bearing on the question since the dissolutionof an association by the expiration of the time for which it is chartered is not the "involuntaryliquidad tion" mentioned in the statute. Trusting that we have sufficientlyanswered your inquiry,we are Yours very truly ATTORNEY GENERAL OF TEXAS
BY Ocie Speer

Assistant OS:hR APPROVED DEC. 20, 1940 GROVER SELLERS FIRST ASSISTANT ATTORNEY GENERAL