### NET GI~NERAIL ,,..a EXAS R-360

’ **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**  **com** m6n with ihe r&h%of marvivorlllrip. X344?Sir: ln your letter ofApril 14, 19d7, ysa **rsqwwt the**  **apixdam** of this deyartmrat upenthe **question** reorotcrdin a IetMr 

### fromMr. R&art b. Hincka, of the firm of Bur**ft**rd, Rybwn, **tunCkti &**  **Foal.** Mr. **Hfncks ’**  letter is as feflewar

“AmAtt4rney fw a **Te~me**corporbtioa, **1**have frrqueat occreion tfap8sa 0 various tr~anefers of dock, which transfers are made on the b4eks afthe Company’s transfer agent inEkllrs. “Often **we l-he**  **a transfer**  requested to the aurvivor where the rtock has **been**isswd in torenames, as tenants in common with right of eurvivership. While ,thimright 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 andwe have **mtlad**ffirt **kr** such cases the 14wof the residence lppli4r andwe make the tranmfer to the survivor on proof of t&eda&h of the ether WI@& in commor~. 3 have been unable to fidd 4 ruli4 os tawheth-

‘,’ ‘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

### orregulation on the above? * .

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lion. Goorpt H. Sheppard - Page 2

I 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 cor**poration,** or certificates of tatera& in go **bueinesc** conducted by **txustee or**  **trueteec mule**  **after the**  effactiva date hereof, whether made upo4 or Jowa by thebooks 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 tobuy, whothor intermediate or finrl, andwhether investing thaholder 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

### thefuture p4yment ofma4ay or the future tra4rfar 

### ofLnp ruch **stock,** ox certificate, on each hundred dollars of face value or fraction thereof, lbire4(3) **Centb,** . . .* After providing for the levy 

### ofthetsx uponthe 00&itiono net out in theabove-quoted portfen ofArticle ‘IQ47m, them 

### folIowe certain exceptions, to which the tu **does** not apply, The excaption nccarrary 

### for usto 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 4ndwhen no act **wcdaeary** to **&feCt** the ralc or ixawfer ia done **in** this State.

. . .” **A** constructitm of the foragoing exceptfen oU4 fer a datarmfnation ofwhether 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 th4tour 4ourU h4va oat tbul far constrwd Article **7047~ ia**  **conwction with**  **the**

### probhll pn4oated; hence this **opiaion** rest4 uponour 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 upanthe death of one 

### ofthe tenants in common, and at.:

Hon. Gvorge H. Sheppard - Peg8 3 OpiQiQnYe. v462

the time of du8th, under the 18wof the St&e inwMch thetesnn& 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 tnthis 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 ofthis et&de. But if 80, ad if,*e necee~rrty tct to affect tb4 srle or twasfer ha8 occurred in another &ate, it $8not **subjbQt to**  tax in thio State. We confine **oui** answer so&Iy to the**Qw*t&r** 048 transfer that irmree to the benefit of the survitig temt in cm in l State inwhich such ownership may arise by operation oi ina, and not by virtue 

### ofa 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** pvrrons l**8** knmt@ ia vmnmvai $6not subject to the stock transfer tanProvided inArticle 7047m, V.&S., Ifunder 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 ,oflaw 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

.,. --4 ATTORNEY GidiRJU OF %‘6L&&?

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