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,Honorable Bert Ford Administrator 

TexasLiquor Controi Board : 

Austin, Tetis _ 

. . ~Oplnlon No. O-7039 

Rer Whether an Individual may be an 

officer in more than five car- ~ 

porations, each of which owns 

a package store permlt,and related questions. 

Dear Sir: . 

We have'received your letter of.Januarp'g, l$$,' 

.3$ikhwe quote as followstwW..L. Moody, Jr., of Galveston, and cer- : 

taln associations in and outs of Texas are the 

principal stockholders, officers and directors 

In eight Texas corporations and two out-of-stat0 .._ 

corporations doing business fin Texas. The Texas ... .., 

Liquor ControlBoard,has just discovered that it 

has issued eleven permItsto these corporations,. 

and now application for, a Package Store Permit 

has been made in the name of another~Texa .corporatlon. 

win checking the various applications and ,i~ 

'in checking the information Yurnishod this of+ 

flce'by the representativesof the various cor- 

.porations, it has now beendlsdosed that in 

several instances certain s to&holders, owri stock 

in.more than five corporations having Package 

Store Permitsr more than five of the corporations 

in some instances are represented by common offi- 

.cers and.direotors. - 

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Ponorable Pert Ford - P&e a 

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“The questions the Board wouldlike to 

&we answered are as follows: 

“1. Can one Individual bo an officer 

more than five corporations, each of which 

a Package Sotre Permit? 

owns 

“2. Can one Individual be an offlcor in 

more than five corporations, each of which OWIl.9 

a Package Store Permiteven though such individual h&no stock ownership or other monetary interest in such corporatioii? 

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more ; than 

a Package 

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“4. 

more than 

Can one Individual 

five corporations, 

Sotre Permit? 

Can one Individual 

five corporations, 

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be a director in ’ 

each ,of which owns . 

be a director in 

each of which owns 

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a Package Store Permit, eycn though such wdlvid-~ 

ua& ‘has no stock Nnershlp or other monetary hi- I 

terest In such corporation? : ‘..~ 

“5. Can one lndlvldua& own stock 3.x.1 more 

than five corporations, each of which owns a 

Package Store permit? 

~6; .Can one”indivldual have an interest . : 

represented either as a stockholder, director 

ore officer In more than five corporations 

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if 

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each. corporation has. a Packago Store Perm t? : 

“7. ‘Can one indivld&. be an officer, director, or stoc’kholder in one or more corporations, 

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each of which owns a’ ‘Package Store Permit, and a2so~ ‘. 

IndividuQly own or m an lnter.est in five add%-, - 

tional Package Store Permits? . 

“8. Could an individual uho owns five Pack- ’ . 

age Store Permits actas independent executor, or I. 

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ponorablc pert Ford - Pace #s 

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““trustee for: an’ estate that owns’ an. Interest In 

a Yackage Store Permit?, 

“9. Could an estate contlnuously’own stock 

In more than five corpor.ltIons, each of which owns 

a Package-Store Permit? a ,~ 

. “10. Could an estate am’s tack in a holding . 

corporation which does not itself owna Package 

Store Permit but does own stock in five other car- ’ 

.poratlons, each of which owx Packngc Store Peznits, 

and also be the owner of stock in a slxth corporaJ tion YhIch, owns a:Package Store ~Pcrmlt? _ 

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‘“1 de&e to refer you to Section 17 (2), paie 

27,.and the definition of *person’ on page 4 of the _., 

printed Act. . . : . . . ‘. 

“1 ,also want to call your attention to Gplnlon 

po. 3004 dated September 1, 1937,‘wrItton by Vernon 

‘Coe, A.ssis,tant Attorney Gonoral. For your .conven- . 

ience 11 attach a copy of said opinion. ‘. 

~*%our v&lued opinion as to. the above questiona’.‘, 

irill beg ~pprocIatod, ‘as a new corporation with 

‘,stockholders, officers and:dIrectors In sgyo~of the 

original ‘ten ~corpdratlons mentioned above. has made 

applic&tIon ‘for a Package ,Store Permit,.” 

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As ~jrour questions, are phrased. genorslly,:.vie shall 

answer ‘thoti accordingly aild assume that there are ne ad+ 

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tlonalfacts other ,than those which you specify. 

The provisions of the Texas Liquor Control Act, as 

recorded in Vernon’s Ponal Code of’Texas, which give rise .to 

your questions are,‘as followsl 

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.’ nA&icle ~666-17. (2) ’ It, shall Abe ‘unJ.a&l ‘1. i 

I for any person, to hold, or have ,an ~Interest in. . ,. :~ ‘~ . . 

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&moi-able Cert Pord - Paso $t 

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more than five (5) Package Stores or the busincss thereof. It shall further be unlawful 

for any person to hold or -have an ln~tercst in 

more th.an five (5) Pacwge Store Permits.” 

“Art&&e 666-30. ‘Persons’ shall mean and 

refer to any natural person or association of 

natural.porson~s, trustee, recelvor, partnership 

corporation, organization, or the manager, agen c 

servant, or employee of any of thorn.” 

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Under the foregoing statutory provisions, a nat- 

’ Ural person or a corporation may (1) hold or (2) have an 

m,in a maximum of five packagc stores or package 

store permits, provided all other requirements of the 11:. 

quor A& are fulfilled. Although. the term *‘holdoF is not 

defined in. the Mt, it is the person who makes .appllcatlon 

for and receives. the permit,- 11 co~i-poration, being a sopa- 

‘r,ate entity under the laws of this State, is reoogtized as 

a person capable of holding, a package store perhit. Xs’ It 

is the corporation that holds the peruit, it follows that 

neither the ‘officers nor the stockholders of ‘the corporation are.the ~Sndividual holders thereof. The problem here 

then is. the ‘nature’ of. the ~interest.,a stockholder and- ~offi- 

. Cer.,of the corporation has in the permit held by the car- :._ 

poration. ‘. 

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The issues you present her~e in your. first s5.x 

.qnestions Involve ~princlpally that. of common corporate .~ 

stockholders, dir.ectors and officers ‘ln~ more than ~flve ,‘~ 

cor$oratlons, each!.of~ which is .the holder. of a package 

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store permit, land the ~effec.t thereof- upon ap lying the 

provisions of that part of Article 666-17 (2!, which 

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reads: . . 

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“It. shall be unlaw’ful for any person to . . 

have ‘an interest. in ‘more than five (51 package 

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stores . . .,‘Or 4 , . more.than,flve (5) package ~store permits.” .‘= 

The holding in 

ment to which you refer, 

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a previous opinion of this d&.x& 

No. 3006, 1s ,appllcable t, the 

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. ponorahle. Bert Ford - Paae $5 

. circumstances here. It.was ~thcre held that ownership by one 

gerson of stock In three corporations did not violate the ,provisions of Art. 666-17(2), supra, even though the three corporations together owned more than five package store permits. 

The reasoning in that opinion’ was based upon a no11 defined 

line of Texas authorities holding that a stockholder ln’a 

corporation dms. not own an interest in the~assets of a going 

corporation:and consequently the stockholder does not own an 

Interest in the package store tho business thorcof, or the 

package store permit hold by Che corporation. lO.Tcx. Jur. . 

781, Se& 3; Prcsnall vs. Stockyards National Dank 15l S.W. 

873, 8763 Automobile Mortgage Company vs. Ayub, 26b S.Li. 134. 

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This dopartment has previously constrkd “intcrestn 

as used in Article 666-17(2) according .to’ its legal rather 

.than to its popular usage and as beini: synonymous with legnl 

title or equitable title, or both, pursuant to the. interpretation placed upon the term by Texas Courts and those of 

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’ other jurisdiction.’ XcAlllster vs . zdip~e ,oii Company, 98 

S.W. (2d) 171; :lO Tex. Jur. 780, 781; Automobile Kortgage Co. 

vs. Ayub, 266 S.W. ,134, U. S. vs. Delaware & Hudson Company, 

21.3 U.S. 366; ~Byerly et al vs. Camey, 161 S. W. (2d) 1105. 

Although officers and directors gonerally manage corporate 

affairs, it is our position that a director or officer of fhe 

corporation occupys the same position as the Sockholdors 

vith.respect~ to their ninteres.tn in the corporation under 

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this statute.. An officer’s position with.respect to the 

corporation is brieflp’.statcd:in 19 C.J.S., Corporations, Section~741 as followsr 

%‘he officers of’a private corporation have 

no franchise in their.offlces; they are mere17 .. 

representatives. or agents of the corporation.e 

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Consequently, applying the holdlngbf the opinion 

.cited above and our construction of the word. “interest?, we 

arrive at the conclusion that a stockholder, :officor ,or direr 1 

tor of a corporation, regardless of his stock ‘ownership, may. 

belong to more than five corporations each corporation ~holdlne a package store permit. Wc therefore answer your f lrst 

81x questions In the af firnative. 

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It is our further opinion that 8s adirector, officer 

or stockholder tn one or more corporations, each corporation 

holdinf: a nackarre store normit. has no leEa interest in the 

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I going corg&a.ti&, then he may’lndividualiy’and personally 

.hold the statutory m~xlmum of five package store permits. We 

therefore answer your question nu?ber 7 in the affirmative. 

We proceed to your question number 8 relative to un 

5ndividual who owns five, package store permits and at tho same 

-‘time acting as lndepondent executor or trustee for an estate 

that owns ‘an interest in a Package Store Permit. A permit or 

license -granted uuder the terms of the Toxas Liquor Control 

Act,.ls a personal privilege and does not constitute. propor~fy, 

nor does It descend.by the 1~s of testate successionbut 

ceases upon the death of the licensee or permittee. However,. 

the. Texas Liquor Control Eoard may prescribe regulations where-’ 

by a new license may be applied for and Issued wit&but payment 

of, additional fee as to unexpired periods of affected ‘licenses 

upon the death of the holder of said license to the end that 

the value of the,unexplred portion of the license shall not. 

be lost to the sudcessors :ln interest of any business: Involved 

and that. the conduct of said business may he eontinuod without 

~&ntdrruption. SOQ Art. 666-13, V.A.P.C. Said Article- further 

proviUes nthat any successor in Interest must ~.meet all reqtire- 

~ments.of law applicable to.the holder of a permit or license 

.under the termsof this act, except that the executor, ad+- 

lstrator, trustee or receiver acting under any judicial ~proceedlnes shall not be required to be domiciled in the county 

in which’ the business Is, louated.” 

Due to the .fact that the. quoted wording In the &ova 

stat&creates an exception a’s to executors, it would seem to 

‘imply an assumption t?at an executor is a”succcssor in interest?- 

‘to the deceased’s estate. however, whether an individual who 

already holds s maximum of five package store permits can legally act as indepondent executor or trusteo for sn ettate * . 

having a package store permit will depend upon his &? crest 

as’axecutor in said estate according to our prior definition of 

the term$ntcrost under Article 66~17(2); namely, a legal 

interest synonymous wlthlegal or equitable t$tle~. 

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ponorable Bert Fort - Page 97 

Proceeding then 

th$t tihen a person dies, 

we find by Article 3314: V.A;C. S., 

leaviny: ~a lawful will, ali of his 

estate devised or bcqucathod by said will vost ln~cdiatolp 

~jn thn devisees or leR:atees; that upon the issuance of lottcrs~ testamentary or of administration, the executor shall 

have the right of possession of the estate and shall hold 

said estate in trust to be disposed of in accordance with. 

law. We find further by Artlclo 3’+27, V.A.C. S., the executor has broad discretion in m3naglng the business of 

the deceased for the welfare of the estate. Under these ’ 

statuteo, an independent executor is entitled to possession 

.of the entire estate. r’oal ns well as norsonal. (horroll . 

vs. Iianlett, 24 S. W: (2d) 531; Caufleid vs. New&n,. 265 ~* 

s. w. 1052). The independent executor or representative 

has nothing more than a temporary right to possession of the 

proparty of the estate. Tine nature of .his possessionls 

declared to be In trust, to be disposed of pursuant to law. . . 

horrell VS. Uamlett, 24 S. W.. (2d) 531; 13 Tex.’ Jur. 7 2; 

Bra-.in vs. Canal Bankand Trust Company l 

Fed.“2d 832. 

C.C.A., La., 1 1~ . 

It is therefore ‘our, opin i on that an lndepdndent executor or trustee, assuming that he has rccoived no 

legacy or devise in the business of selling liquor by the ’ 

terms of the will, does not have a legal interest in the 

assets of the estate to be distributed, as we have horetofore defined the term lntercst under Article 666-1X2). 

Consequently; we enswer your eighth question in the .&fir-. 

mative . 

., As .we ‘&ve already determined~ tho nature of the ‘- 

$nteres$ as set out in Article 666-17(2) eland, found that a 

stockholder does not have such an Interest in a corporation, 

it is.our further opinion that an estate would occupy the 

same .position as an individual in that respect and ownership by the estate of stock in five or more corporations, mch 

holding a package store permlt, IS’ likewise not a violation 

of Article 666-17(2) supra. Ne ,therefore answer your ninth 

and tenth questions In the -affirmative. 

Ve are’ not unmindful of tho strong and growing ’ 

line of. legal authorities preventing the use of the fiction 

of corporate.ldenity for Illegal purposes. The courts till ?# 

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Bonorable Eart Ford - Pase #a : 

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look 3cyond the.&pbrite..forin to the’ purposa of it as well 

as to the officers ~assoclated.t;lth that purpose In order to 

eetemine If the corporate fiction is relied upon. to circumVent the provisions of a statute. Here 

have presented no facts which would lea d 

houever, as you 

us TV such a conelusion this opinion must rest solely ubon.those facts set 

out In your letter.. 

to you. 

We trust our findings bo,roln will be of assistance 

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0 Very truly yours 

ATTOIUiEY C&ERAL dF !CEC&~ 

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Jack IL Aper’ ; 

Assistant ‘. ‘~ 

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This opinion 

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approved in 

. Limited 

’ I Conferences