**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 applicationvas acoompaniodby aopies of tho charter papera, etc., vhioh refle@%Xl the fact that the corporationhae a capital rtoak of $100,000.00,of vhich $92,60OrOOIs ommd by Uld-ContinentBanoahares, 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,lawfullydoing 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, exercisingbanking privilegee in violation of the privilegeso? 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 exercisebanking privileges**ae** providedfor 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 severalyears. It has compliedwith 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, certificatesOf inoeetmontand chose8 in action for the payment of money at a time olther fixed or uncertain,ati to receive paymmte therefor in installmentsor otherwise,with or without an allowance of intereetupon such instal1ments.s The Bank has applied for insuranceunder the Federal Deposit Insurance CorporationAct, and the Corporationhas raised the questionswhich you have submitted to us.

Mid-ContinentBancaharee, Sm. is a private corporation,organizedunder the laws of the State of Delaware,:: .‘ honorable Lee Brady - pago S



### whose oorporatepup080 Is as r0ii0r88

***To** promte 

### organhe, om, uegotiata 

### for, uqulrs aDafordispose of the industrialbanks, Industrial loan oomes, investment oompaniesand oorporationsorganized for the prpose o? aoquiring shares of stook in wch **baaka** and/or a0 **r OS#**  **and** ordinsrilyreferred 

### 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 oonnetflonrlth promoting,aaqulring., ovning or dieposingof industrialbaa&s, industrial loan oompanies, imestment ooapanlee and shares of stock or interests therein, provided,horwer, that nothing contained in this CertlSloafeshall be deemed to give the corporationthe parer to engage ia the business OS banking.’ The corporatepurposes are such larger than those abovo specified,but what ve have said is su??icient for the purposesof this opinion.

Th3 Constitution (ArticleXVI, Section 16, as amcuded in 1CW) with respect to bodies with banking am2 discountingprlvilegesprorides#

‘The Legislature shall 

### by general lavs, authorizethe lncorporatlon OS oorporate **bod** ies slth **bankhe** ad discounting privileges, and shall provideiOr a system OS State supervision, regulationand control of suuoh bodies which will adevafely protect and secure the depositorsand oreditors thereof. *lo such corporatebody shallbe chartered until all of the authorlsed oapital stook has been subscribedaad paid for in full In oash

. Buch body corporate shall 

## not be authorlred to engagein business at more than one plaoe shioh shallbe designated in Its charter. *NO foreign oorporation, other than the nationalbanks of the United States, shallbePonsrable

### Lea Brady - Page4

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 ownedandheld **by** 

### th,a Mid-Continent

Bumshares, Sm., whichcorporatlon, **as** 

### ciovestate&,is **a** 

### foreignoorpora

### tlon,and shiohhas no przdt 

### to do **buslnesr** 

### In this State,

UtW~?luenosd

by the fact thatUlddontlnent Banashares,

1~. owns the oOntrOlling interestin the shares of the **Morris** Plau 

### Bank of Fort Torth, there is no doubt **that** the honk Is lattully suthorlsed to transaot 

### thebusiness 

### for vhioh it was incorporated,lnoluding the 

### addedpowers 

### oonte.ined in the amendmentof 1939. ls are further o$ the opinion the situation is not changedby reason of the fact that the 

### Ibid-Contisent does ouu the controllinginterest in the ahares of tha **Texas** bsnk.



### said: **In** XiwoneyYE. Moroney, **226 8.**  **V. 181,**  

### if Is

sSt Is well cettlQd that a shareholder ln a corparatlonis in na sense the legal owner of the property of 

### the corporation. The corporationis a legal entity, and the title 

### to Its assets is **vested** in the corporation. The stockholderdoes own, however, his shares, 

### stock,or interestwhatsoever in the corporation,and this **oarries** with it oertain legs1 rights,but they **are** not 

### the rightso? a legal owner 0s 

### the corporatlon~s assetsin ~hola or 

### in part. Thisdistinction holdsgood even thou@ all the stookmay be 

### heldby 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 stookin a domestic corporation does not of itself ooustitute**doing** buslnessby the foreign oorporatlonIn 

### the state o? the domestic 

### corporation, even though amh mner8hip 

### is the oOntrOllingIn**terest** in the stock a? the dolpestio **COrpOratiOn.** See I7 tletohervsCyor OorporatlonLaw, 800. 24901 20 C. 

### J. 88~. l Corporation

, Sea. 

### I8411 I2 R. C. 

### L, P. 8. aCorporatlo5ssHonorableLCZ Brady - Page 6

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

This dIstinctIon,however, met be noted. If the Soroip corporationownbg stock in the aO~stiO corporationacquire6 or holds such stock as a part of and in accordancewith Its corporatepurpose -- that is, as n holding company -- the foreign corporationis thon doing business in the State of the dometio corporation. Bee Bankers aolding **Corp.** vs. kaybury, 297 P. 7401 11 **Fletch0rt6** Cyc. of CorporationLaw, Sec. 8, 490 Corpus Juris, Sec. 18411 20 C. J. Sec. *Corpora ions5 1 14 A.
Sea. 1841~ 12 R. C. L, P. 8. 5CorporationsmBee. 5.41 23Axi.Jur. 5Corporationsm,Sec. 374,

In the situation last stated. the doing of business by the foreign corporationin 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 situationis this: The &lid-Continent

hancshares, Inc. IS doing business -- that Is, carrying on Its corporatebusiness -- 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!:, tllL3Lid-Contincntts charter expresslydmies 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 corporationwithout 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 corporationto Vote that stock and participatein the management and control **of** the **bUSin ati**  **affair6 of**  such Texas corporation,as other stockholdsrs, subject to all laws, rules and regulations governingTexas corporations,and especially subject to the provisionsof 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. Ireexpress no opinion as to vhether or not the Mid-Continent Banoshares, Inc. IS larfullydoing busin066 In the stat4 of Texas. We do hold, however, that it6 notlrltle6, as disclosed by you, cl0not 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