NET GI~NERAIL 

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EXAS 

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Honorable G44r 4 H. Sheppard 

cosrkptroller ef p-u blic Accounts 

Austin, Texar *inion we. V-A82 

E4,: The applicability of tha 

Taut Stock Treaefer ‘kc 

Law to transfer wf stock 

to the .rurvivor whan the 

ato& ~44 issued to twe 

permom as tenants in comm6n with ihe r&h% of marvivorlllrip. 

X344? Sir: 

ln your letter of April 14, 19d7, ysa rsqwwt the apixdam 

of this deyartmrat upen the question reorotcrd in a IetMr from Mr. 

R&art b. Hincka, of the firm of Bur ft rd, Rybwn, tunCkti & Foal. 

Mr. Hfncks’ letter is as feflewar 

“Am Att4rney fw a Te~me corporbtioa, 1 have 

frrqueat occreion tfa p8sa 0 various tr~anefers of 

dock, which transfers are made on the b4eks afthe 

Company’s transfer agent in Ekllrs. 

“Often we l-he a transfer requested to the aurvivor where the rtock has been isswd in tore names, 

as tenants in common with right of eurvivership. 

While ,thim right of survivorship is not log*1 in Texaa unleis supported by a contract in the lffetime of 

the partia8, it is legal in IIYA~ states and we have 

mtlad ffirt kr such cases the 14w of the residence l ppli4r and we make the tranmfer to the survivor on 

proof of t&e da&h of the ether WI@& in commor~. 

3 have been unable to fidd 4 ruli4 os ta wheth- 

‘,’ ‘er or not the Texas Stock Transfer Tax Law apples 

to the above transactions. The Federal L.aw exempts 

,them from skdk transfer 64s as a transfer ariming 

by operation of law. 

“Would you be kind en&&to render me a finding or regulation on the above? * 

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lion. Goorpt H. Sheppard - Page 2 

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Opinion No. V-W 

Article 7047m, V.C.S., provides in part as followr: 

“There ia hereby imposed and levied a tax as 

hereinafter provided on all aales, agreements to 

oell, or memoranda of @alas, and all deliverfas or 

transfers of shares, or certificates of stock, or 

certificatea for rights to stock, or certificatir of 

deposit representing an interest fn or reprt#cntfng 

oertificbtor made taxable uader this Section in any 

domastic or foreign assocfrrtfon, company, or corporation, or certificates of tatera& in go bueinesc 

conducted by txustee or trueteec mule after the effactiva date hereof, whether made upo4 or Jowa by 

the books of the association, company, corparatiun, 

or trustee, or by any asrigament in blank or by u~)r 

delivery of any papers or agreement or mamorandum or other evidaace of rale or transfer or order 

for or agraament to buy, whothor intermediate or 

finrl, and whether investing tha holder wfth thebenaficial fntarest in or legal title to such shck ar c&hat 

certificate Cuable harelurler, or with the pos~~sior 

or use theraof for any purpeee, or to mecure the future p4yment of ma4ay or the future tra4rfar of Lnp 

ruch stock, ox certificate, on each hundred dollars 

of face value or fraction thereof, lbire4 (3) Centb, . . .* 

After providing for the levy of the tsx upon the 00&itiono net out in the above-quoted portfen of Article ‘IQ47m, them 

folIowe certain exceptions, to which the tu does not apply, The 

excaption nccarrary for us to ceader here is ae folbwr: 

* * . . if neither the sale, nor tie order for, nor 

agreement to buy, nor the agreement to sell, aor the 

memorandum c&f rule, nor the delivery ip ,ynads tn 

tbia St&e 4nd when no act wcdaeary to &feCt the 

ralc or ixawfer ia done in this State. . . .” 

A constructitm of the foragoing exceptfen oU4 fer a datarmfnation of whether or not-the sale, the order far, the agreement to buy, the agreement to sell, the memorandum of aale, the 

delivery, or any act nacessary to effect the s4le or trmsfe,r, is 

done in this State. 

A careful research rcva4lr th4t our 4ourU h4va oat 

tbul far constrwd Article 7047~ ia conwction with the probhll 

pn4oated; hence this opiaion rest4 upon our oap oamatnrotfo4 d 

tha Act applfcabla to tha problem prceanted. 

If a certifioate of stack has been issued to two perlolu, 

ab tenants in common, with absolute right of ownership vestfng in 

t&3 survivor upan the death of one of the tenants in common, and at 
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Hon. Gvorge H. Sheppard - Peg8 3 OpiQiQn Ye. v462 

the time of du8th, under the 18w of the St&e in wMch the tesnn& in 

common reside, the ownership pasws unconditionally to the aurvi- 

~1: by operation of law, then we are of the opinion that there dws 

net remain any further act necessary te effsct the srle or transfer 

tn this St&e. Indeed if the title passes to the survivor by e~eraW 

of law, we doubt if there he been s arle or transfer vithfr t&i pusview of this et&de. But if 80, ad if ,*e necee~rrty tct to affect tb4 

srle or twasfer ha8 occurred in another &ate, it $8 not subjbQt to 

tax in thio State. We confine oui answer so&Iy to the Qw*t&r 04 8 

transfer that irmree to the benefit of the survitig temt in cm 

in l State in which such ownership may arise by operation oi ina, 

and not by virtue of a contrrct ,made in the lifetime of the parties a6 

required in Tex&s before the surviving tenant in common may cl&fan 

t&e full +xnseriliip of the stock, Article2580, V.C.S.; Chandler v. 

##urJw, 139 6. W. (26) 327 (tiurt of Civfl Appeals). 

SUMh4ARY 

A wvtWk@e al ntwk owned by two p vrro ns l 8 

knmt@ ia vmnmvai $6 not subject to the stock transfer tan Provided in Article 7047m, V.&S., If under 

the 16~ of the St&e where such tenurta in cornmon 

reside, &s&ate ownarship vehs in the survivor upon 

the de@.& of ens of the owners by operation of law. 

This ruling ins applicable only to the States in which 

by operation ,of law the survivor acquires complete 

ownership of rtock which he owned with a tenant in 

cemmvn rt the time of the death of such tenant, 

Very truly youra, 

ATTQRNEYGENERALOP~ 

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LPL:mmc 

APPROVED MAY 5. 1947 

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ATTORNEY GidiRJU OF %‘6L&&? 

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