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 

charter has expired by ' 

expiration of time. 

We have your letter of December 11, 1940, asking for a legal 

opinion with respect to the above captioned matter, which letter 

is as follows: 

"In Galveston Building and Loan Company of Galveston was 

originally incorporated April 15, 1890, having a purpose 

clause as follows: 

"'Its purpose shall Abe the erection of 'buildings and 

the accumulation and 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 incorporation was for a period of fifty 

years. Subsequently the charter wasanended without change 

in the purpose of the corporation, 

stock to $750,000.00. 

but increasing the capital 

Vhis company, from its inception, has accumulated money 

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 lending money thus accumulated to 

its stockholders on real property loans, which are further 

secured by the pledge of its own stock, held by the borrowers 

and paid out by them on a monthly installment basis. These 

loans have all the characteristics of a sinking fund loan. 

The Association now has assets in the neighoorhood of 

$215,000.00 consisting principally of real property notes of 

the character above described, together with 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 expired April 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 association as contemplated by 

this Act is any association or corporation heretofore 

or hereafter formed, created, or organized, which is 

chartered under any bullding and loan law, and/or is 

nrincinallv in the_business of assisting its members 

to buy, improve or build homes, or to remove encumbrances therefrom, and which accumulates the lunds thus 

loanea through the issuance or 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 charter under Article @la-21, and having thus extended its charter, to 

ciation in this State?" 

operate as a building and loan assoYou are respectfully advised that the Galveston Building & Loan 

Company's charter may not be extended, under the facts stated 

Dy you. 

Article 1387 of our Revised Civil Statutes, dealing with dissolved 

corporations under Title 32, relating to Private Corporations, 

declares: 

"A corporation is dissolved: 

"1. By the expiration of the time limited in its charter." 

"1. Dissolution may result from the occurrence of a condition 

subsequent without State action or judicial ascertainment. 

Instances of this node of dissolution are found in the provision of the ,general statute which declares that a corporation is dissolved by the expiration of the time limited in 

its charter, and in a special statute which creates the corporation and which operates automatically to dissolve it." 

-- 11 Tex. Jur. p. 127, 465. 

All corporations are, of course, creatures of the law and they 

possess just such attributes, rights and priveleges as are provided by law and no more. They are creatures of law for convenience sake, and possess the attributes of legal entity as a 

person capsule of doing the things which they are authorized by 

the charter to do and no'more. 
. I 

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

They therefore possess 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 

legai entity, for it, too, has expired with the life of the organization or corporation. 

Section 21 of our Building 

Stat. Art. 8Hla) provides: 

and Loan Associations Act (Ver. Civ. 

"Any building and loan association incorporated under this 

or any prior law may extend the duration of time for ighich 

said association was organized by a vote of two-thirds of 

tht capital stock of such association representedvoting 

at any annual meeting of the stockholders of such association 

or at any special meeting called for that purpose; thereupon the board of directors shall transmit a copy of the 

proceedings of such annual meeting or of such special meeting, duly attested, to the Banking Commissioner of 'Texas, 

who shall make a duly authenticated copy thereof, certifying 

to the extension of time of said corporation. Any 'building 

and loan association incorporated under any prior law and 

extending the duration of time for wh~ich it was incorporated 

in the manner herein provided shall be deemed as incorporated 

under and ‘be invested with all the power given in this Act 

the same as though corporation had been originally incorporated under it." 

'The extension of the duration of time for the existence of the 

corporation contemplates the procedure of the statute will ‘be 

taken by the corporation while it is yet a living legal entity. 

The statute has no application to a case such as you put, where 

the corporation has ceas~ed to exist. (See Rev. 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 (though we do not decide) that Galveston Ruilding & Loan' Company, as described by you, was a 'building and loan 

association within the meaning of Section 21, above quoted. tie 

have also discussed the general statute with respect to the dissolution of private corporations, because we think the same is 

applicable to building and loan associations, there~ being no 

special statute touching the matter. 

The provision that "no involuntary liquidation of any association 

shall be accomplished except as above provided, that is to say, 

at the suit of the Attorney General on information and request 

of the Banking Commissioner of Texas”, in Section 16 of the 
Hon. J. T. McMillin, Page /+ o-2974 

Building and Loan Associations Act has no bearing on the question 

since the dissolution of an association by the expiration of the 

time for which it is chartered is not the "involuntary liquidad 

tion" mentioned in the statute. 

Trusting that we have sufficiently answered 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