TEKEATTORNEYGENERAL 

OFTEXAS 

AUSTIN x~.TexAs 

W’ILJL. WILSON 

AlTORNEYGENERAL 

June 7, 1960 

The Honorable Zollie Steakley 

Secretary of State 

Austin, Texas 

Dear Mr. Steakley: 

Opinion No. WW-841 

Re: Whether the Secretary of 

State can rescind a final administrative forfeiture of a corporate 

charter done under the provisions 

of Article 7096. V.C.S. 

We quote from your Opinion Request as follows: 

“Southwestern Wire and Cable Company was 

incorporated as a Texas corporation in 1952. The 

corporation failed to file franchise tax report as of 

May 31, 1956, and the usual notices from this office 

were forwarded to the corporation at the address 

shown on the 1955 Franchise Tax Report. Default 

continuing, this office forfeited the right to do business of the corporation on July 2, 1956. The corporation delinquency was certified to your office 

under our regular procedure and on February 1, 

1957, inquiry was made of the Tax Assessor of Dallas 

County (the home office of the corporation) concerning assets on the tax rolls from which a judgment 

might be satisfied for the franchise tax delinquencies; 

the office of the Tax Assessor replied in the negative. 

“Pursuant to the provisions of Article 7096, 

this office in December, 1957, determined that Southwestern Wire & Cable had ‘no assets from which a 

judgment for the franchise tax, penalties, and court 

costs may be satisfied;’ your office approved this 

finding on December 3rd and on December 9, 1957, 

this office forfeited the charter of the corporation in 

the manner provided by Article 7096, the forfeiture 

being consummated without judicial ascertainment 

by entering upon the charter of the corporation the 

words ‘Charter Forfeited.’ 

“Under date of September 8,~1959, one Mr. 

William Kearney applied to this office for the corpor- 
Hon. Zollie Steakley, page 2 (WW-841) 

ate name reservation of Southwestern Wire & Cable 

Company and on October 13, 1959, a certificate of 

name reservation was issued by this office to 

Ke,arney pursuant to Article 2.06b of the Texas 

Business Corporation Act. 

“Is the statutory act of forfeiture by this 

office on December 9, 1957, of the charter of Southwestern Wire & Cable Company pursuant to Article 

7096 a final act with the statutory result that the 

name Southwestern Wire 81 Cable Company thereafter became available, wherefore the certificate 

of name reservation issued by this office on October 13, 1959, of Southwestern Wire & Cable Company 

was valid and the Secretary of State is without power 

to refuse to approve the tendered articles of incorporation of Southwestern Wire & Cable Company?” 

The laws pertaining to the amount, administration, collection and failure to pay franchise tax were contained in Articles 7084 

through 7097, V.C.S. (Repealed by the Acts of 1959, 56th Legislature, 

effective September 1, 1959, now incorporated in Title 12 2A Taxation - 

General) 

Failure to pay franchise taxes has always subjected corporate 

charters to forfeiture. Prior to h4ay 17, 1951, judicial forfeiture was the 

sole method provided. However, in 1951, Article 7096, V.C.S., was amended 

by adding thereto a second paragraph providing for an administrative forfeiture as follows: 

“Upon determination by the Secretary of State 

that any domestic corporation whose right to do business has been previously forfeited by that officer, and 

which corporation has failed and refused to have its 

right to do business revive,d pursuant to the provisions of this chapter, and which corporation fails to 

revive its right to do business prior to the first day 

of January next succeeding the date of forfeiture of 

its right to do business, and which corporation has no 

assets from which a judgment for the franchise tax, 

penalties, and court costs may be satisfied, and 

approval of such determination by the Attorney General, the charter of any such corporation may be for- 
Hon. Zollie Steakley, page 3 (WW-841) 

feited. which forfeiture may be consummated without 

judicial ascertainment by the Secretary of State entering upon the charter of such corporation filed in his 

office, the words ‘charter forfeited.’ giving the date 

thereof and citing this act as authority therefor.*’ 

The role is generally accepted that the officers of a board 

or of a department have the power to rescind their action on a matter 

that has not become final. See State anking Board of Texas v. 

McCullough, et al., 316 S,W.2d 259 (Tex,Civ.App, error ref. n.r.e.). 

The fact situatron recited in your bequest states that all the necessary 

conditions of an administrative forfeiture existed and that all steps 

prescribed by the statute were followed, including the entry of the 

words, ‘“charter forfeited” upon the corporate charter in question. 

This was a final act, and not capable of being rescinded by the Secretary of State unless such authority is granted therefor. 

No provision is made in this article or elsewhere for the 

Secretary of State to review an administrative forfeiture of corporate 

charter. You have stated that your department has construed the lack 

of express authority in the statute to permit the Secretary of State to 

review his action, as precluding any reconsideration or review by the 

Secretary of State once he has acted in compliance with Article 7096 

and has forfeited the charter of a corporation. In this construction, 

we concur. 

The general rule is that administrative departments and 

agencies have only such power and authority as is conferred upon 

them in clear and unmistakable terms by the Legislature. Commercial 

Standard Insurance Company v, Bolad of Insurance Commissioners, 

WApp. , 0 1931, wrrt ref.); Teacher Retirement 

System, et al, v. Duckworth, 260 S.W.2d 632, opinion adopted by the 

Supreme Court m 264 S . W . 2 d 98 (1954). For an exception to this rule, 

not applicable here, see Southwestern Savings & Loan Ass%. of Houston 

v. J. M. Falkner, 331 S.W. 2d 917 (1960) e 

Therefore, it is our opinion that the forfeiture of a corporate charter in compliance with Article 7096, V.C.S.. is a final act 

and cannot be rescinded by the Secretary of State. 

It follows that the corporation Southwestern Wire & Cable 

Company ceased to exist and thereafter ( its name was available. 

Article 2.06b. Texas Business Corporation Act. A certificate of 

reservation for this name issued by the Secretary of State in com- 
Hon. Zollie Steakley, page 4 (WW-841) 

pliance with the law would be valid, and, therefore, the Secretary of State 

is without power to refuse to approve the tendered articles of incorporation of Southwestern Wire & Cable Company, if such articles meet all. 

of the requirements. 

Questions concerning the equitive between the parties, including estopN$ and constructive trust. are not administrative but judicial 

and, consequently, the Secretary of State has no jurisdiction to determine 

them. 

SUMMARY 

After the administrative forfeiture of corporate charter pursuant to Article 7096, V.C.S., defunct corporation’s name became available; and a certificate of name reservation issued by the Secretary of 

State in compliance with Article 2.06B of the Texas Business Corporation Act is valid. Thereafter, the Secretary of State is without authority 

to refuse to approve tendered articles of incorporation under said reserved name if such articles meet other requirements because the 

Secretary of State cannot rescind a final administrative forfeiture accomplished pursuant to the provisions of Article 7096, V.C.S. 

Very truly yours, 

WILL WILSON 

Attorney General of Texas 

RAW/pe 

BY 

Richard A. Wells 

Assistant 

APPROVED: 

OPINION COMMITTEE: 

W. V. Geppert, Chairman 

Wallace P. Finfrock 

John Reeves 

Marietta Payne 

Marvin Sentelle 

REVIEWED FOR THE ATTORNEY GENERAL 

BY: 

Leonard Passmore