HE A ORNEY GENERAL 

OFTEXAS 

Honorable Sidney Latham 

Secretary of State 

Austin, Texas 

Dear Sir: Opinion No. O-6045 

Re: Whether a marketing association 

is authorized t@ engage In the 

oil business or other purposes 

not specifically mentioned in Article 5740, Vernon's Annotated Civil 

Statutes, and related questions. 

Attention: Mr. R. J. Long. Head of Charter Division 

Your letter of May 24, 1944, requesting the opinion 

of this department regarding the questions stated therein is 

as follows: 

"This department has on file an application 

for a permit to do business ih Texas by the Indiana 

Farm Bureau Cooperative Association, Inc., an Indiana corporation. We are accompanying this letter 

with our complete file relative to this application. 

"This department has in its suspense fund $50.00 

as the filing fee for said application. 

"Please advise this department on the following 

questions relative to said application: 

"1 . Is a marketing association authorized to 

engage in the oil business or other purposes not 

specifically mentioned in Article 57401 

"2 . Is a foreign marketing association required 

to pay franchise taxes? 

"3 . Please define for the benefit of this department the powers of a marketing association as set 

out in Article 5740, especially the powers to manufacture, sell, supply and finance. 

"4 . Should this department approve the enclosed 

application for a permit?" 
Honorable Sidney Latham, page 2 O-6045 

The Indiana Farm Bureau Cooperative Association, 

Inc., is an Indiana corporation, organized and doing business 

under the Agricultural Marketing Statutes of Indiana, which 

are in many respects, similar to Article 5740, Vernon's Annotated Civil Statutes. Said corporation has made application 

for a permit to do business in the State of Texas, and the 

purpose of the business desired to be transacted in Texas, as 

shown in the application for a permit, is: 

"To engage in any activity in connection with 

the marketing or selling of agricultural products of 

its members, or with the harves~ting, preserving, d,rging, processing, canning, packing, storing, handling, 

shUp%, or utilization thereof, or the manufacture 

or marketing of the by-products thereof; or in connection with the manufacturing, selling or supplying 

to its members of machinery, equipment or supplies; 

or in the financing of the above enumerated activities; 

or in any one or more of the activities specified 

herein, and to extend such activity to non-members 

and their products as limited by Article 5738, as 

heretofore amended." 

The foregoing statute was amended by House Bill No. 

295, Acts of the 48th Legislature, Regular Session, 1943, 

authorizing citrus and other agricultural caretakers or organizations to organize and operate on a cooperative basis. 

Chapter 8, Title 93, Vernon's Annotated Civil Statutes, 

pertains to marketing associations. Article 5740 of this 

Chapter provides: 

"An association may be organized to engage in 

any activity in connection with the marketing or 

selling of the agricultural products of its membera, 

or with the harvesting, preserving, drying, processing, canning, packing, storing, handling, shipping, 

or utilization thereof, or the manufacturing, or marketing of the by-products thereof; or in connection 

with the manufacturing, selling or supplying to its 

members of machinery, equipment or supplies; or in the 

financing of the above enumerated activities; or in 

any one or more of the activities specified herein. 

Provided, however, any such activity may extend to nonmembers and their products limited by Article.5738 as 

heretofore amended." 

Article 5742, Vernon's Annotated Civil Statutes, designates 

a number of powers which any association organized under said 

Chapter 8, Title 93, possesses. Article 5744, Vernon's An- 
.- , 

Honorable Sidney Latham, page 3 O-6045 

notated Civil Statutes, sets forth certain requirements to be 

set out in the articles of incorporation. Article 5763, Vernon's Annotated Civil Statutes, provides: 

"The provisions of the general corporation 

laws of this State, and all powers and rights thereunder shall apply to associations organized hereunder except when in conflict with the provisions 

of this chapter. Provided, however, that any cooperative marketing association incorporated under 

the laws of any other State may apply for and be 

granted a permit to do business In this State and 

pay the same filing fee as required of domestic corporations organized for a similar purpose. Provided 

further, that such foreign cooperative marketing 

associations shall not be required to have a paid-up 

capital or any portion of the capital paid-up in order 

to be entitled to such permit,” 

Article 5764, Vernon's Annotated Civil Statutes, 

provides: 

"Each association organized hereunder shall 

pay to the Commissioner an annual license fee of ten 

dollars but shall be exempt from all franchise or 

license taxes. For filing articles of incorporation, 

an association organized hereunder shall pay ten dollars, and for filing an amendment thereto, two dollars 

and fifty cents." 

Article 1529 and Article 1532, Vernon's Annotated 

Civil Statutes, are as follows: 

Article 1529: 

"Any corporation for pecuniary profit, except 

as hereinafter provided, organized or created under 

the laws of any other State, or of any territory of 

the United States, or of any municipality of such 

State or territory, or of any foreign government, 

sovereignty or municipality, desiring to transact or 

solicit business in Texas, or to establish a general 

or special office in.this State, shall file with the 

Secretary of State a duly certified copy of its artlcles of incorporation; and thereupon such official shall 

issue to such corporation a permit to transact business 

in this State for a period of ten years from the date 

of so filing such articles of incorporation. If such 

corporation is created for more than one purpo!e, the 

permit may be limited to one or more purposes. 
Honorable Sidney Latham, page 4 O-6045 

Article 1512: 

"Such corporations, on obtaining such permit, 

shall have and enjoy all the rights and privileges 

conferred by the laws of this State on corporations 

organized under the laws of this State." 

It is not necessary to determine whether the charter 

and the various amendments thereto authorize the above mentioned corporation to engage in the oil business and other 

purposes not specifically mentioned in Article 5740, Vernon's 

Annotated Civil Statutes, in States other than Texas. It is 

clear that the corporations would not possess such powers 

in this State. Generally speaking, apart from the limitations 

which have been established by express enactment, the power 

of any particular corporation Is limited by the purpose for 

which it was incorporated as expressed in the special statute 

authorizing its creation or in the charter filed under the 

general corporation statute. The principal rule that has been 

formulated for the interpretation of charter powers is that 

only such powers are given as are clearly embraced in the 

words of the Act or charter or derived therefrom by necessary 

implication in view of the object of the grant. 

In every grant of corporate powers, there Is implied 

a power to do whatever is necessary or reasonable, appropriate 

to the exercise of the authority expressly conferred. There 

are numerous authorities supporting this statement , and we 

deem it unnecessary to cite such authorities herein. 

After carefully considering Chapter 8, Title 93, Vernon's Annotated Civil Statutes, it is our opinion that marketing associations organized under said chapt,er. can beg organized 

only for the purposes as specified in Article 5740, and that 

such associations possess only such powers as are set forth 

in Article 5742 and those Fmplied powers to do whatever is 

necessary or reasonable, appropriate to the exercise of the 

authority expressly conferred by said statute. It is our 

opinion that a corporation organized under Chapter 8, Title 

93, does not have any legal authority to engage in the oil 

business or any other businesses or purposes not specifically 

mentioned in Article 5740, and has the implied powers to do 

whatever is necessary or reasonable, appropriate to exercise 

the authority conferred by statute. 

Specifically referring to your first question, You 

are advised that it is our opinion that a foreign corporation 

organized under statutes similar to the StatUtes contained in 

Chapter 8, Title 93, supra, when it procures a permit to transact business in this State, is not authorized to engage in the 
. , 

Honorable Sidney Latham, page 5 O-6045 

oil business or other purposes not specifically mentioned or 

Implied in Article 5740, although the charter of any such 

foreign corporation may authorize such corporation to engage 

in the oil buslnesa or other businesses not specified or 

mentioned in Article 5740. Referring to Article 1529, Vernon'8 

Annotated Civil Statutes, in the case of Western Public Service 

Corn any v. Meharg, 288 3.W. 141, (rehearing denied 292 S.W. 

168 P it is stated: 

"In view of the comprehensive nature of the 

first declarations expressed in article 1529, it appears to us that the concluding sentence is permissive in favor of the corporation so long a8 the 

purposes named in its charter do not include some for 

which franchises are not grantable to domestic corporations and does not include a combination of purposes not permitted to domestic corporations. So 

long as the charter purposes are within this legltimate range, the foreign corporation is entitled to 

get that for which it asks. * l *" 

As heretofore stated, a domestic corporation organized under Chapter 8, Title 93, would not have the legal authority to engage in the 011 business nr other purposes not 

specifically mentioned or implied in Article 5740, and in 

view of the opinion cited In the preceding paragraph, it Is 

the opinion of this department that a foreign corporation 

could possess no greater powers than those of domestic corporations. Therefore, we respectfully answer your first question 

in the negative. 

We now consider your second question. Article 7084, 

Vernon's Annotated Civil Statutes, requires that every domestic 

or foreign corporation heretofore or hereafter chartered ore 

organized to do business in Texas, or doing business in Texas, 

shall pay a franchise tax according to the applicable provisions of said statute and the applicable provisions of Chapter 

3, Title 122, Vernon's Annotated Civil Statutes. (Article 

7084 being contained in said chapter and title) 

Article 7094, Vernon's Annotated Civil Statutes, exempts certain corporations from the franchise tax heretofore 

mentioned. However, corporations such as the corporation under 

consideration Is not exempt by said statute. Domestic corporations organized under Chapter 8, Title 93, Vernon's Annotated 

Civil Statutes, are exempt from franchise taxes. It i8 well 

established that the franchise tax 18 not a tax upon the property of the corporation nor upon its income, but is a'oharge 

made by the State against the corporation for the Privilege 

of doing business in Texas. (See RiMebrand, Texas Corporations, 
Honorable Sidney Latham, page 6 o-6045 

Vol. 3, page 420 and the authorities cited therein) 

Article 7084, supra, requiring corporations to pay 

a franchise tax is a general statute. 

Article8 7094 and 5764, Vernon's Annotated Civil 

Statutes, exempt certain types of corporations. In order for 

a COrpOratiOn t0 avail itself Of these exemptions, it must 

clearly show that it comes within the exemptions. 

In the case of McCallum, Secretary of State v. Associated Retail Credit M-en of Austin, 41 3. W. (2d) 45, Feferrlrg to Article 7084 and Article 7094, Vernon’8 Annotated 

Civil Statutes, Judge Crftz said: 

"The rule Is that where a tax is levied by a 

general law and one claims an exemption therefrom by 

reason of some exemption Statute, he must bring himself clearly within the exemption. In other words 

an intention on the part of the Legislature to grant 

an exemption from the taxing power will never be implied from language that will admit of any other reasonable construction. Such an intention must be expressed in clear and unambiguous terms, or must appear by necessary implication from the language used." 

We do not think that the corporation under consideration comes within the exemptions contained in Article 7094 

or Article 5764. Therefore, it 18 our Opinion that a farm 

marketing association having a permit to do business in this 

State is subject to the franchise tax a8 required by Article 

7084. In connectlon with your second question, we have also 

carefully considered Section 1, Article 8 of the State Constitution, regarding equal and uniform taxation, and the authorities cited under said provisions. It is our opinion 

that OUP answer to your second questlon Ln no way contravenes 

the provisions of the Constitution heretofore mentioned. 

Your thLrd question is 80 broad and general that this 

department can serve no useful purpose by attempting to answer 

the same. If you have any particular question concerning the 

powers of marketing associations to manufacture, sell, supply 

and finance as mentioned In Article 5740, Vernon's Annotated 

Civil Statutes, we will be g,lad to give same our prompt attention. Therefore, we respectfully decline any answer to your 

question number three. 

With reference to your fourth question, you are respectfully adViSed that It Is the opinion of this department 

that you should approve the application of the Indiana Farm 
Honorable Sidney Latham, page 7 O-6045 

Bureau Cooperative Association, Inc., to a0 business in this 

State. It will be noted that the purposes of the business 

said corporation desire8 to transact in Texas are such purposes a8 are mentioned in Article 5740, Vernon'8 Annotated 

Civil Statutes, and the purposes Stated In Said appllcatlon 

do not reflect that the corporation desires to do In this 

State an oil business or any other businesses not specifltally mentioned In said Article 5740. A permit granted under 

the application would not authorize the foreign corporatFon 

to conduct an oil business in this State or any other business 

in this State not authorized by Article 5740, Vernon's Annotated Civil Statutes. 

When the Indlana Farm Bureau Cooperative As8oclatlon, 

Inc., adopt8 the provisions of the Marketing Act, It adopt8 

either intentionally or unintentionally, the above quoted 

Article 5740 a8 its purpose clause thus acquiring all the 

rights and privileges afforded by the Act, a8 well a8 becoming 

bound by Its limitations. 

The term "Oil bUSine85" a8 USed in this opinion is 

used as such term 18 ordinarllg defined and UnderStOOd, and 

a8 used ln Subdivisions 36 and 37 and 38 of Article 1302, 

Vernon's Annotated Civil Statutes. 

We are returning herewith the entire file accompanying your Inquiry. 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By s/Ardell Williams 

Ardell Williams 

AssIstant 

AW:EP:wc 

APPROVED OCT 4,. 1944 

s/Grover Seller8 

ATTORNEY GENERAL OF TEXAS 

Approved Opinion Committee By s/BWB Cha.irman