HE L%~~TORNIICY GENERAL OF TEXAS

HonorableWm. J. Burke OpinionNo. WW-414 State Board of Control Austin, Texas Re: Does Article 608,Vernon'sAnnotated Civil Statutes, prohibit a residentbranch of a national company from being considered as an eligible bidder to supply the State Departmentswith staDear Mr. Burke: tionery, supplies, etc.

We have receivedyour letter of March 14th in which you ask if, in our opinion,a resident branch ,ofa national company can be consideredas a resident of Texas, so as to be an eligible bidder under the prwisions of Article 608,Vernon's Annotated Civil Statutes,which reads, in part, as follows:

"The Board of Control shall contract for a term of not exceeding two years with responsible persons, firms, corporations,or associations of persons,who shall be residents of Texas, for supplying to the State all printing,binding stationery and supplies. 0 o .I* (Emphasisadded) We shall assume, for purposes of this opinion, that the resident branches, as well as the national companies,are otherwise eligible and that such branches are actually doing business in this State under proper authorization.

The phrase Itae 0 residents of Texas. . .I' as used in such statute, does not appear to have been specif&ally construed by the Courts of this State. Furthermore, the terms "reside", '%esidingt',"resident"and "residence"are elastic and should be interpreted in light of the object or purpose of the statute inwhich such term is employed. McGrath v. Stevenson, 77 P.2d 608, 1% Wash. 160; Switzerland General Ins. C y. Gulf Ins. Co,, Tex.Civ,App,, 213 S.W.2d 161. The usual Zport of "resident" however, is a legal residence, Buchholzv. Buchholz, 115 P. fi8,63 Wash. 213.

In our opinion,Article 608, relates to the question of with whom the Board of Controlmay contract or do business insofar as the purchase of the enumerated supplies or services is concerned. Who, then, are "residentsof Texas",forpurposes of selling such suppliesand services to the State of Texas?Honorable Wm. J. Burke, page 2 U&J-414)

A Virginia statute required a license to be obtained by every person sellinggoods'by samplewho was not a "resident merchant". After holding that a person could be a resident merchant while not being a resident citizen, the Supreme Court of, Appeals ofVirginia, in Sueer v. Commonwealth, 23 Grat. 

### 935, 14 Amer. R. 

### 164, said:

I'

. . . Theword 'residence',as used in connectionwith the words 'merchant', 'mechanic'or 'manufacturer'was not intended to import a personal residence? but onlv the 'alaceof business'. 0
. 0" (Emphasisadded) In 

### 8 Fletcher Cyclopedia Corporations,Section 4029, it is said that:

,I a . . The rule universally obtaining in .bothEngland and theUnited States is that a company, for jurisdictionalpurposes,may have a domicile,both where it was created and where it transacts business." Also, at Section 4046, a corporation ". . .might have a residence in every statewherein it does business and is privileged by its charter to do business.

. . ".

This seems to be the rule in Texas as well: "'It is very generally held that a corporation is an inhabitant of the stateunder whose law it is incorporated,and that it has a resin. ' 0 0
." (Emphasisadded) v. Sullivan, F'ittsburg Water Heater& 

### 115 Tex. 

### 417, 282 S.W. 576. This rule is restated in NergenthalerLinotype Co. v. Herrmann, (Tex.Civ.App.)211 S.W.2d 633, but the distinction is made that to be such a resident, the corporationmust actually be doing business in Texas.

Inview of the foregoing authorities, in our opinion, branches of national companieswhich are actually doing business in Texas are "residents of Texas"within the meaning of such term in Article 608,Vernon's Annotated Civil Statutes.

We are not unmindful of the distinctionsbetween the various types of eligiblebidders specifiedby suchArticle in so far as theymay be natural personst* or corporate entities, but we feel that the controlling ques ion is whether they actually are doing business in Texas, and not in what form theHonorable Wm. J. Burke, page 

### 3 NW-414)

prospectivebidder may be doing business. As pointed out above, we have assumed that the resldent branch is otherwise eligible and properlyauthorized.

We are unable to determine any legislative intent, envisioned by Article 608,Vernon's Annotated Civil Statutes,to prohibit the Board of Control from contractingwith a branch of a national company, if the branch is actually doing business in Texas. SUMMARY

Article 608 Vernon's Annotated Civil Statutes, does not prohibit a resident branch of a national company from being consideredas an eligible bidder. to supply the State Departmentswith stationery, supplies, etc., if the branch is actually doing business in Texas. Yours very truly, WILL WILSON Attorney General of Texas

TIM:mg:wb APPROVED: OPINION COMMITTEE Geo. P. Blackburn, Chairman Riley Eugene Fletcher Ralph Rash 'ii. 0. Shultz 

# ,qglJ9t@LL$y

Tom I. McFarling Assistant

REVIEWED FOR THE ATTORNEY GENERAL BY: W. V. Geppert