Hon. James E. Kilday, Director Opinion NO. O-2644 

Motor Transportation Division Re: Whether Railroad CommisRailroad Commission of Texas sion is required to approve 

Austin, Texas sale and transfer of the capital stock in a corporation 

Dear Sir: holding a motor carrier permit. 

In your letter of August 29, 1940, you advise us of 

the following: 

"Dunn Brothers Inc., a Corporation, duly incorporated and exis t ing under and by virtue of 

the laws of the State of Texas, owns a contract 

carrier permit and a special commodity carrier permit heretofore issued by the Railroad Commission. 

under the Motor Carrier Law of Texas. 

"Carl H. Dunn, President of the Corporation, 

has filed an application for the Commission's approval of the sale and transfer of the capital 

stock in said corporation to Harry Gowins, Jr., 

setting out in the application that the Corporation owns Contract Carrier Permit No. 11160 and 

Special Commodity Permit No. 31981." 

You request our opinion in response to the following 

questions: 

"1. Is the Railroad Commission required to 

approve applications for the sale and transfer of 

the capital stock in corporations holding certificates or permits issued under the Motor Carrier Law 

of Texas, before such stock can be transferred? 

“2. If your answer to Question 1 is in the 

affirmative, are we required to collect a filing 

fee with such applications? 

“3. If we are required to collect a filing 

fee, should we collect only one filing fee of ten 

dollars, where more than one permit is owned by the 

Corporation transferring the stock, or should we 

collect a ten dollar filing fee for each permit 

owned by said Corporation?" 
hon. James d,. Kilday, Page 2 

Section 6 (f) of Article.'3llb, Vernon’s Civil :jt.:tutes, reads: 

“Any contract carrier permit held, owned, or 

obtained by any motor carrier operating under the 

provisions of Section 6 may be sold, assigned, 

leased, transferred, or inherited; provided, however, th:lt any proposed sale, lease, assignment, 

or transfer shall be fir’st presented in wri.ting to 

the Commission for its aoprovnl or disapproval 

and the Commission may disapprove such proposed 

sale, assignment, lease or transfer if it be found 

and determined by the Commission that su;h proposed 

sale, assignment, lease, or transfer is not in good 

faith or that the proposed purchaser, assignee, 

lessee, or transferee is not capable of continuing 

the operation of the equipment proposed to be sold, 

assigned, leased, or transferred in such a manner 

as to render the services demanded in the best interest of the public; the Commission in approving 

or dtsapproving any sale, assignment, lease, or 

transfer of any permit may take into consioeration 

,111 of the requirements and qualifications of a 

regular applicant required in this Section, and 

apply same as necessary qualifications of any proposed purchaser, assl.gnee, lessee, or transferee; 

provided, however, that in case a permit is transferred that the transferee shall pay to the Commission a sum of money equal to ten (10) per cent of 

the amount paid as a consideration for the transfer 

of the permit which sum of ten (10) per cent shall 

be deposited in the Zt-;te ,i’reasury to the credit of 

the i!ighlJay Fund of the jtaie; provi.ded, however, 

th:lt ny permit obtUned bv any motor carrier or by 

any assignee or trransferee shall be taken and held 

subject to the right of the State at any time to 

limit, restrict, or forbid the use of the streets 

and highways of this State to any holder or owner of 

such permit. Lvery application filed with the Cod]- 

mission for an order approving the lease, sale) or 

transfer of any permit shall be accompanied by a 

filing fee in the sum of Ten Dollars ($10) which fee 

shall be in addition to other fees and taxes and 

shall be retained by the Commission whether the 

lease, sale, or transfer of the permit is approved 

or not. Added Acts 1939, 46th Leg., p. 89, 61 1.” 

The Railroad Commission is given no authority regarding the transfer of shares. of stock in private corporations, 

even in those corporations holding motor carrier permits and 

certificates of convenience and necessity. This question doubtless arises out of the thought on the part of the person 
Hon. James d. Kilday, page 3 

acquiring the stock that the view might be taken that a sale 

of the capital stock is tantamount to a sale of all the assets, 

including the permit, as suggested under a particular state of 

facts in Vick v. Park, 171 S.W. 1039 (the identical opinion 

being reported -ilso in 173 :5&!. 989). However, we do not believe such a doctrine would be applied !n such a way as to reauire the Railroad Commission to approve a sale and transfer 

of the stock in a corporation owning a permit. The tangible 

property of a corporation belongs to the corpor~~tion as such, 

the stockholders merely owning intangible interests in the corporate business. 

831, Corn. App.; 

Turner v. Cattlemen's Trust Co. 215 S.:i. 

Automobile Mortg. Co. v. 

Comm. App. 

Ayub, 26& S.;:. 134, 

We do not believe there exist sufficient reasons for 

the courts to disregard the corporate fiction and treat the 

transfer of the stock as a transfer of the permit. The financial strength of the corporation itself is not impaired by the 

sale of stock. If the service is not kept up or the permit 

is otherwise abused remedies are provided in Article 911b. jee 

Section 12 (b). Under the facts as stated, your first question 

is given‘s negative answer. 

Yours very truly 

By /s/ Glenn R. Lewis 

Glenn H. Lewis, ,Assistant 

Aic'HC\VKD %iP 13, 1940 

/s/ Gerald C. Mann 

ATTi,R;d&Y GZN:&AL OF TEXAS 

Ot'INI.!N COMIMITTHE 

H'B, CHAIRMAN 

GRi:R,i:wb