OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

QrruOC.Mucn *-aolcnu 

Bonorable Los Br*, Comulrrioner, 

Deprrtmont of Bankbag 

AmtIn, Texas 

ed such shares 

Morris Plan Bank, 

ing taken out a 

do but3illame in 

d related quoetlons. 

of Port loi%h, rort 

ing adopted these powers, the 

to the Pederal Deposit Insurance 

for insurance of It.6 deposits. 

2his application vas acoompaniod by aopies of 

tho charter papera, etc., vhioh refle@%Xl the 

fact that the corporation hae a capital rtoak 

of $100,000.00, of vhich $92,60OrOO Is ommd 

by Uld-Continent Banoahares, Inc. of WilrdnptoD,~Delavare, a foreiep corporation, vhioh, 

10 far as ~8 can ascertain, ham no permit to 

do bueheee in this State. 
Donorablo Lee Brady - Pago 2 

?ully 

'At the requert of the FDIC we roepeotl ubxlt the folloving questlonr( 

#l. Is the Uid-Contimnt Bumhares, 

Inc. a foreign corporation, lawfully doing 

business in the State o? Tezast 

#2. Are the Mid-Continent Bane&ares, 

Inc. and the liorris Plan Bank of Fort North, 

or either or both, exercising banking privilegee in violation of the privileges o? Section 18, Article 16 of the Texas Constltution, or in violation of any other lav of the 

State of Tezasl 

.In the light of the Saote set out above, 

is the Port Worth Yorris plan Bank law?ullp 

entitled to exercise banking privileges ae 

provided for under Chapter 9 of the Banking 

Act including 6. B. No. 288t' 

The Norris Man hank of Fort Worth is a regularly 

Org8IdzOd Uorris Plan Bank under Chapter 9 of the Devised 

Civil Statutes of Texnsr The Bank has been doing businees 

for several years. It has complied with the requirements 

of Sonata Bill No. 288, passed at the regular session of 

the 48th Legislature (1989) and is now regularly authorized to do the things specified in such amendmmt, to-wit; 

'To receive money on time deposit, amd 

to purchase, sell, discount, or negotiate 

bonds, notes, certificates Of inoeetmont and 

chose8 in action for the payment of money at 

a time olther fixed or uncertain, ati to receive paymmte therefor in installments or 

otherwise, with or without an allowance of 

intereet upon such instal1ments.s 

The Bank has applied for insurance under the 

Federal Deposit Insurance Corporation Act, and the Corporation has raised the questions which you have submitted to us. 

Mid-Continent Bancaharee, Sm. is a private corporation, organized under the laws of the State of Delaware, 
: : .

honorable Lee Brady - pago S 

whose oorporate pup080 Is as r0ii0r88 

*To promte organhe, om, uegotiata 

for, uqulrs aDafor dispose of the industrial banks, Industrial loan oomes, investment oompanies and oorporations organized for the prpose o? aoquiring shares of 

stook in wch baaka and/or a0 

r 

OS# and 

ordinsrily referred to as ho1 ng mmpanies, 

snd/or shares 0s stock or interests in the 

same. To do any and all things neaessary, 

incident to, or rhlch may be deemd advlsable in oonnetflon rlth promoting, aaqulring., 

ovning or dieposing of industrial baa&s, industrial loan oompanies, imestment ooapanlee and shares of stock or interests therein, provided, horwer, that nothing contained in this CertlSloafe shall be deemed to 

give the corporation the parer to engage ia 

the business OS banking.’ 

The corporate purposes are such larger than 

those abovo specified, but what ve have said is su??icient for the purposes of this opinion. 

Th3 Constitution (Article XVI, Section 16, as 

amcuded in 1CW) with respect to bodies with banking am2 

discounting prlvileges prorides# 

‘The Legislature shall by general lavs, 

authorize the lncorporatlon OS oorporate bodies slth bankhe ad discounting privileges, 

and shall provide iOr a system OS State supervision, regulation and control of suuoh bodies 

which will adevafely protect and secure the 

depositors and oreditors thereof. 

*lo such corporate body shall be chartered until all of the authorlsed oapital stook 

has been subscribed aad paid for in full In 

oash . Buch body corporate shall not be authorlred to engage in business at more than one 

plaoe shioh shall be designated in Its charter. 

*NO foreign oorporation, other than the 

national banks of the United States, shall be 
Ponsrable Lea Brady - Page 4 

permitted to erecoiss banldq or dlsoounting 

prlvlleges in this #tats.’ 

The oapltal atook 0s the Xorrls Plan sauk 0s 

Fort lorth ls ~100,000m, all paid, OS -hiah #@2,600.00 

Is owned and held by th,a Mid-Continent Bumshares, Sm., 

which corporatlon, as ciove state&, is a foreign oorporatlon, and shioh has no przdt to do buslnesr In this State, 

UtW~?luenosd by the fact that Ulddontlnent 

Banashares, 1~. owns the oOntrOlling interest in the 

shares of the Morris Plau Bank of Fort Torth, there is 

no doubt that the honk Is lattully suthorlsed to transaot the business for vhioh it was incorporated, lnoluding the added powers oonte.ined in the amendment of 1939. 

ls are further o$ the opinion the situation 

is not changed by reason of the fact that the Ibid-Contisent does ouu the controlling interest in the ahares of 

tha Texas bsnk. 

said: 

In Xiwoney YE. Moroney, 226 8. V. 181, if Is 

sSt Is well cettlQd that a shareholder 

ln a corparatlon is in na sense the legal 

owner of the property of the corporation. 

The corporation is a legal entity, and the 

title to Its assets is vested in the corporation. The stockholder does own, however, 

his shares, stock, or interest whatsoever in 

the corporation, and this oarries with it 

oertain legs1 rights, but they are not the 

rights o? a legal owner 0s the corporatlon~s 

assets in ~hola or in part. This distinction 

holds good even thou@ all the stook may be 

held by a single iudlridual,s 

Upon this +nolple It 1s the general, if not 

the universal dootr%ne, that the mere ?a& that a foreign corporation holds stook in a domestic corporation 

does not of itself ooustitute doing buslness by the 

foreign oorporatlon In the state o? the domestic corporation, even though amh mner8hip is the oOntrOlling Interest in the stock a? the dolpestio COrpOratiOn. See I7 

tletohervs Cyor Oorporatlon Law, 800. 24901 20 C. J. 88~. 

l Corpor a tio, n Sea. I8411 I2 R. C. L, P. 8. aCorporatlo5ss 
Honorable LCZ Brady - Page 6 

mo, &&J 23 Am. Jur. 5Corporatlono6, Sea. 374. 

This dIstinctIon, however, met be noted. If 

the Soroip corporation ownbg stock in the aO~stiO 

corporation acquire6 or holds such stock as a part of and 

in accordance with Its corporate purpose -- that is, as 

n holding company -- the foreign corporation is thon doing business in the State of the dometio corporation. 

Bee Bankers aolding Corp. vs. kaybury, 297 P. 7401 11 

Fletch0rt6 Cyc. of Corporation Law, Sec. 8, 490 

Corpus Juris, Sec. 18411 20 C. J. Sec. *Corpora 1 ions5 

14 A. 

Sea. 1841~ 12 R. C. L, P. 8. 5Corporationsm Bee. 5.41 

23Axi.Jur. 5Corporationsm, Sec. 374, 

In the situation last stated. the doing of business by the foreign corporation in the state other than 

that of its doudcllo is not the doing of the business of 

the dosestic corporatloc, but It is the doing of Its own 

business. Concretely stated, the situation is this: The 

&lid-Continent hancshares, Inc. IS doing business -- that 

Is, carrying on Its corporate business -- in Texas wben 

It acquires and holds the capital stock, or any part 

thereof, of the borris Plan hank of Fort Vorth, but such 

business Is that of holding stock, emi not that of conducting a basking business. In trut!:, tllL3 Lid-Contincntts charter expressly dmies to it the right to carry 

on a banking business. 

We have an express statute In this Etato-somtines referred to as the Stan&ard-Humble Act -- which 

roads as follow6t 

'IShen any foreign corporation without a permit to do business in this State lawfully own8 or my lawfully own or acquire 

stock In Texas corporations, it shall not be 

uu.lawfW for such foreign corporation to Vote 

that stock and participate in the management 

and control of the bUSin ati affair6 of 

such Texas corporation, as other stockholdsrs , subject to all laws, rules and regulations governing Texas corporations, and especially subject to the provisions of the 

anti-trust lavs of the State of Teras.. -- 

Rev. CiV. Stat. (Vernon'*6 codification) 

Article 5333a. 
.: 

Honorable Lo0 BraQ - Pago 6 

me tJIpM66 00 OpiIdOn a6 t0 the effect of this 

StPtUt0 other thUl in r66p6Ot t0 the ri@lt Of such forelm corporation to vote such Stock and otherwise partlcipate In the managemsnt Oi the affalrs of the domsstio 

oorporation as any other shareholder. 

Apply* these prlnolples, and upon these considerations, we rsspeotfully answer your questions as follWD, 

1. Ire express no opinion as to vhether or not 

the Mid-Continent Banoshares, Inc. IS larfully doing busin066 In the stat4 of Texas. We do hold, however, that it6 

notlrltle6, as disclosed by you, cl0 not atieot the StatUS 

or rights of the Iborris Plan Bank of Tort Worth ns n Texas 

corporation to carry on Its corporete purposes and affairs. 

2. This question should be answered in the negative as t0 both bStitUtiOn6 -- the &id-Continent Banoshares, Inc ., and the YOrrls Plan Bank of Fort Worth. In 

this connection it 16 pertinent t0 gay the inCOrpOratiOn 

of the Morris plan Bank of Port Worth Should not be considered n subterfuge or scheme for the carrying on of the 

Uid-Continent Bancshares, Inc. busine65, for the bUSln058 

of the two corporations -- that is, the corporete purpose 

-- is not the same. The corporate business of the Liorris 

Plan Hank 16 that of a banking oorporatlont whereas, the 

oorpornte business of the blid-Continent (insofar 86 pertinent here) is that of n 

Trusting that 

answered your questioos 

holding corporation. 

what we hare written ~111 

6atl6factorlly, we are 

hnoe 

Very truly your6 

ATTOJUW G.m#DRAL OF Ty 

BY