June 2, 1939 

Hon. Tom L. Beauchamp 

secretary of state 

Austin, Texas 

Dear Sir: 

Opinion No. O-747 

Fkl: Incorporation of American Legion 

Corporations. 

We are In r&klpt of your lettbr of May 3, 1939, 

in which you request an opinion from this department upon 

the following questions: 

"The typical purpose clause of applica- 

%ions for charter for the American Legion corporations reads as follows: 

"'It shall have all the rights powers 

and privileges granted to and conferred 

upon corporations by provision of Subdivision 2, Article 1302, Chapter 1, Title 

32, of the Revised Civil Statutes of the 

State of Texas, which reads in haec verba: 

""The support of any benevolent, 

.cheritable, educational or missionary undertaking" and particularly including 

the following: 

'I'(e) To preserve and strengthen comradeship among its members; to perpetuate the memory and history of our dead; 

to support and maintain education in 

the moral, intellectual atid physical development of those who served in, or who 

mag.serve in, the Army, Navy, Marine 

.Corps or Coast Guards of the United 

States of'dmerica, in any foreign war, 

insurrection or expedition, which service shall be governed by the issuance 

of a campaign badge by the Government 

of the United States of America; and to 

maintain true allegiance to the Govern- 
Hon. Tom L. Beauchamp, June 2, 1939, Page 2, (O-747) 

ment of the Unlted States of America, and 

fidelity to Its Constitution and Laws; to 

foster true patriotism; and to malnt&l'n 

a'nd extend the institution of American 

freedom: 

"'l(b) To act as a charitable and benevolent organization for the purpose of promoting the welfare, alleviating the suffering, 

and assisting and aiding those who have 

served, or may serve, with the military 

forces of the United States of America In 

foreign lands, their widows, orphans and 

dependants and relations." 

"This department reqriests tha% you amwer 

the following questions: 

"1 . In suoh corporatton, with purpose as 

outlined above, authorlaed to incorporate under subdivision 2 of article 13029 

“2 , Are our fees for filing a charter 

containing the same or Lmllar purpose clauses 

$10.00 or $50.001 

"3. Is such a corporation entitled to be 

exempt from the payment of franchise tax under 

the provisions of article 70947" 

The purposes for which corporations may be 

formed in the state of Texas are enUner8teQ In Article 

1302, Vernont8 Annotated Civil Statutes. 

Section 2 of said article readp as follows: 

"The support of any bdnevolent, charltable, educational or mlseilonary UndertakIng." 

The first question 1s whether or not reotlon 

2 Is statutory authority for the lnoorporatlon of American 

Legion oorporatlons whom typical purpose clause 18 set 

forth in your letter of request quoted at the outaet of 

thi8 opinion. , 

We don not think there la any doubt that suoh 

objective an the following fall within the category of 

“educational” purposes : 
, 

.-- -- 

Hon. Tom L. Beauchamp, June 2, 1939, Page 3, (O-747) 

' l ** to perpetuate the memory and hlstory of our dead; l l l It 

' l * l to support and malntaln education 

in the moral, intellectual and physical development of those who served in, or who may serve 

in, the Army, Navy, Marine Corps or Coast Guards 

of the United States of America, in any foreign 

war, insurrection or expedition, which service 

shall be governed by the issuance of a campaign 

badge by the.Go~ernment of the United States of 

America; * l l 

" l * *and to maintain true allegiance 

to the Government of the United ftates of America, and fidelity to its Constitution and Laws; 

to foster true patriotism; and to maintain and 

extend the institution of America freedom: l l l "fl 

Furthermore, the following aim of an American Legion Corporation is undoubtedly "charitable": 

" l * l To act as a charitable and benevolent organization for the purpose of promoting 

the welfare, alleviating the suffering, and assisting and aiding those who have served, or 

may serve, with the military forces of the United States of America in foreign lands. their 

wldowsn orphans and dependants and reiatlons. 

+)o+ 

It la not placing a strained construction 

the following purpose clauses to hold that they are 

olent' in their nature: 

upon 

"benevIt l l l To preserve and 

ship among its members; l l l 

stnrengthen comradeand, of course: 

It l l l To act as a charitable and benevolent organization for the purpose of promoting 

the welfare, alleviating the suffering, and assisting and aiding those who have served, or 

may serve, with the military forces of~the 

United States of Amerloa in foreign lands, their 

widows 

*it* 

,, orphans and dependants and relations. 
- 

*. .-. 

Ron. Tom L. Beauchamp, June 2, 1939, Page 4, (O-747) 

Thus, an analysis of the typical purpose clause 

of an American Legion Corporation reveal8 that the manlfold objectives are each and every one wlthlh the purview 

of Section 2 of Article 1302, Vernon's Annotated Civil 

Statutes. 

We wish to cite one Supreme Court-.of Texas aut$r;t; in this matter. We feel that the case of Conley, 

Daughters of the Republic (1913) 156 SW 197 

(SU rem; Court of Texas, Brown, C.J., delivering the oplnion P is very much in point in its elucidation of the 

phrase "educational undertaking" used in Section 2 of artlcle 1302, Vernon'8 Annotated Civil Statutes. 

In the cane of Conley v. Daughter8 of the Republlo, the Daughter8 of the Republic of Texas which was 

organleed as a corporation for the declared purpose of 

perpetuating the memory and spirit of the men who achieved 

Texas' Independence, and to encourage historical research 

into the early history of Texas, and promote the celebration of Independence Day of the Texas Republic, and erect 

monument8 upon place8 made historic in the war for Texas 

Independence, was held a corporation organleed for "educational" purposes within the second subdlvl8lon of Article 

1121, Revised Statutes, which wording is identical with 

that of Section 2 of Article 1302, Vernon'8 Annotated Clv11 Statutes. The court held that "education" in a etatutory sense meant not merely instruction received at school, 

but the whole oour8e of training, both moral, intellectual, 

and physical. The following explanation of the term "educational" by the Supreme Court is governing in the present 

instance. 

"ihe Attorney General asserts that the 

corporation wa8 not lawfully created under the 

statute of thin atate, because the law does not 

authorlte the creation of uuch corporation for 

the purpose8 named In its charter. The eecond 

subdlvl8lon of article 1121, Revised Statutes, 

reada: 'The purposes for which private corporations may be formed are: l l * (2) The support 

of any benevolent, charitable, educational or 

missionary undertaking.' The purpose of this 

corporation is clearly 'educational.' Whatever 

educates &within the meanlnq of 'educational 

undertakl!U.' Education in thesense as used 

in the statute includes: "In its broadest sense, 

l * l not merely the instruction received at 

school or college, but the whole course of tralnlng, moral, intellectual and physical; is not 
Hon. Tom L. Beauchamp, June 2, 1939, Page 5, (O-747) 

limited to the ordinary instruction of the child 

in the pursuits of literature. It comprehends 

a proper attention to the moral and religious 

sentiments of the child. And it Is sometimes 

used as synonymous with 'learning'." 14 Cyc. 

p. 1230. The sentiment of regard -m- for the memm of tho=who Rave their lives for the blessu of this nreat state stimulates patriotism, 

and is in the h*hest sense educational. The 

facts to be preserved furnish the means of the 

best education for the young men and women of 

this state. The purRos6 is laudable in its influence won the present Enoration; it is 

laudable, educational, g&benevolent for the 

future citizens. This qU08tion 18 asked: 

'Should a state commit 138 interests to corporations? I This court has naught to do with the 

policy of the state on that question. All lltlganta 'look alike' here. However, we will say 

that this is not 8UCh a SOU~~SsS Corporation 

as needs to have a watch upon its actions. The 

heart, the soul, and splrlt of patrlotl8m are 

the capital employed by those women which would 

not detract from the authority and power of the 

state. On the contrary, those ladies, wlth no 

hope of gain to themselves, undertook to substitute for the state18 fund, which would have 

been created by taxation, the voluntary offerings of the people - a tribute of patrlotlsm, 

sanctified by love for the state, and reverence 

for the memory of her heroic dead. Can there 

be danger from such a car oration? 

not . ” (Underscoring ours P 

We think 

. 

It is our opinion, in answer to your first question, 

that American Legion Corporations, with the typical purpose 

clause set forth in the letter of request, derive and possess 

the necessary authority to lnoorporate under Subdivision 2 of 

Article 1302, Vernon's Annotated Civil Statutes, whloh reads: 

"The support of any benevolent, cbarltable, 

educational or mlsslonary undertaking. 

Your second question asked whether the fees of the 

Secretary of State for filing a charter containing the same 

or elmllar purpose clauses to that quoted in your letter of 

request are $10.00 or $50.00, 

Article 3914, Vernon's Annotated Civil Statutes, 

prescribing fees of the Secretary of State, provid68, in part 

as follows: 

. 
Hon. Tom L. Beauchamp; June 2, 1979, Page 6, (O-747) 

'Upon filing each-charter, amendment, or 

supplement thereto of a corporation for the 

support of public worship, any benevolent, charitable, educational, missionary, literary or 

sclentlflc undertaking, the maintenance of a 

library, the promotloc of public cemetery not 

for profit and the encouragement of agriculture 

and horticulture, to aid its 'members in producing and marke~tlng agricultural products, or for 

acquiring, raising, breeding, fattening or marketing live stock, a filing fee of Ten ($10.00) 

I)OllarB, end for filing the seml~annual flnanCfal 8tat6m6nt Of such 6SgrfCUltUral prOdUCt 

or live Stock corporation, Ten ($10.00) Dollars, 

which shall include the annual license fee." 

Since we have held'thet an American Legion Corporation with the purpose clause as set forth in your letter of 

request, may bs incorporated under Section 2"of Article 1302, 

as within the purview of "any benevolent;charltable, educational or mlsslonary undertaking", it follows that in answer 

to your second question the fee of the Secretary of State for 

the flllngof the charter of such corporations would be $10.00, 

as prescribed in the second 8 article 3914,‘above quoted. 

"opinions of Attorney General, biennial report, 1914-1916, 

See 

p. 471." In this opinion it was held that a corporation, the 

purpose of which is stated to be the accumulation end loan of 

money to young men to defray their expenses while studying 

for the christian mlnlstry and to young women to defray their 

expensea while studying to be christian missionarlee, where 

such corporation is organiced for charitable purposes and not 

for profit, may be incorporated under SubdiViSiOn 2 of article 

1121, Revised Civil Statutes; and that the fees for filing 

the charter of such corporation is $10.00; and finally that 

such corporation 18 nO$ subject t0 8 franchise tax. ArtfClSs 

1121, 3838 and 7403, ROViSOd Statutes, 1911, were considered. 

The~thlrd' question asked in your letter of request 

Is whether or not such a corporation incorporated with a purpose clause, such es that quoted in the letter of request, is 

entltled'to be exempt from the payment of a franchise tax under 

the provlslons of artlole 7094, Revised Civil Statutes, 1925. 

Artlhle 7094, Revised Civil Statutes, 1925, read8 

88 fOllOW8 I 

"CorDoration exempt.- The franchise tax lm- 8 

posed by this chapter shall not apply to any insurance company, surety, guaranty or fidelity company, 

or any transportation company, or any sleeping, 
. . 

*m-. .‘i- 

. 

Hon. Tom L. Beauchamp, June 2, 1939, Page 7, (O-747) 

palace car and dining car company which is now 

required to pay an annual tax measured by their 

gross receipts, or to corporations having no 

capital stock and organized for the exclusive 

purpose of promoting the public interest of any 

city or town, or to corporations organized for 

the purpose of religious worship, or for providing places of burial not for private profit, 

or corporations organized for the purpose of 

holding agrlcultural,falrs and encouraging agrlcultural pursuits, or for strictly educational 

purposes, or for purely public charity." 

Under this statute corporations organized "for 

strictly educational purposes, orfor purely public charity" 

are exempt from the payment of a franchise tax. The corporations under consideration are formed for educational and 

charitable purposes. It is our opinion that the American 

Legion corporations with purpose clause set forth in your 

letter are brought within the exemption, and ere excused 

from payment of the franchise tax under the provisions of 

article 7094. It wes within legislative contemplation that 

just such American Legion Corporations be exempted, since 

they are to a high degree of a benevolent, charitable, educational and patriotic nature. See opinions of Attorney 

General, biennial report, 1914-1916, p. 471, supra. 

It is, of course, recognized that corporations 

organized under Section 2 of Article 1302 have no capital 

stock and are non-profit legal entitles. 

Trusting that the above fully answers your lnqulries, we are 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

DS:omb:eac 

APPROVED: 

/s/ Gerald C. Mann 

BY /s/ Dick Stout 

Dick Stout 

Assistant 

APPROVED 

OPINION 

ATTORNEY GENERAL OF TEXAS. COMMITTEE 

BY /a/ H.Q.B. 

CHAIRMAN