OFFICE OF THE ATTORNEY GENERAL OF TEXAE 

AUSTIN 

-c.yu(r( --R&L 

i,. 
f?onorakle George !i. Sheppard, Page 2 

13CO outstanding 5haraS, ormad IA part qs followa: 

A own8 103 Shar48; 

A’8 Wire OWA5 508 8h5m5; 

C OWAS 104 shame. 

The mmatAin(5 shares iA *00rp0rat10n I” are dltldad WOW 

a large xslmbtr o? other persona, none ot raid other pdreona 

OWAiA& DOM than a iat? Shal’ss eaoh. 

Aooording to the information you hare given U5, 

the parties in a616 wpartnsrahlp x” hare a vote and volo4 

~;t~~;;oAtral at the partnamhip In proportlou to their 

We praauma that auoh la the oaae by virtue of 

a partd8hip agreement. 

Tcu state that A aad 0 l ra the aau?e ~+aona iA 

both *partnarrhlp x" and woorporatlon I.* 

IA d4temiAinp; whether the l t’cres operated by 

*partnership r” and those opmsbed by ~oorporatlon T” oonatitUt6 OA4 eh8IA or two aaparato ohalna, we must dooidr 

whether or not en of said atore~s am *ultlmatelJr oontrolled 

or dlreotrd by on0 mana omant o* aaaoolatlon of ultlma 

gmeAt+* S~OtfOtiO~f the %X85 Ch4iA St0la Txf zi*“’ 

ouao ill To. 18, Aots 1935, 44th legislature, 1st Called 

SeSSIon, and whioh 18 codified a% Art1018 lllld in Vemon~a 

AAAOtOtsd p4Ali oOd4 Of %Xf~6) p1pOlidU 58 rOiiOW5t 

"300. 6. The provisions of this Aot shall 

b4 GOA5tZW5d t0 apply t0 every perSOIl, WeAt, 

reocivez, trust.ee, fim, oorporation, oopartnership or assooistlon, either dcne6tlO or r0raigh 

whloh is controlled or held rith others by mejority 6tcok oWA4rShip or ultkFatsly OOAtrOli4d or 

directed by one menmg5E4At or 5SSOOiStiOA oi Ult&ate managearnt." 

980. 7. The term *atore* es used ic thla 

Aot shall be oonstruacl to eQan and inolude any 

store or stores or any msraeatile estsblfskent 

or esteblie!ments not apeoiliaallf exempted withiA t,bfS Act wh$Ch 4XC OWAdd, OpSl=Sted, !CainteiAeQ, or COAtrOll5d by the saae p6lpOOA, agUAt, r*- 

aalrer , trustbe, r inn, OO~pOl'EitiOA, oopartaerahlp 
Honorable George If. Sheppard, *asa 3 

or aesoolation, either domeatio or toreIgn, in 

which goods, wares, or merohendlae of any kind 

are mold, at retell or wholeaale.m 

IA the oaae of R. E. Butt Orooory Co., v. Sheppard, 

157 S. W. (&I) 825 (writ of error rotund) the Court oi Civil 

Appe6la at Austin, held th6t by tlrtu6 of meld 8eOtiO66 6 

and 7 ii one person ownad a majority oi the atook in two or 

more oorporationm all of the 6toror 0pemea by 551A oorporatlona oonstituted OAO ohalar end the court maid: 

*Sea. 6 was mmlfeatly lnt*ndad to prevent 

large ohslnm of stores, whloh noelve the benefit6 flowing tFOa auoh syatm (OoMiderOd red 

enumerated ln pert by tha$J. S. SUQNWJ aourt in 

State Board of Tax Com!.ra. f. Jaekmon, 805 U. 5. 

527, 51 S. at. 540, 75 I.. Edi 1248, 7% A. L. R, 

1454 75 A. L. R. 1556, ana in Hurt v. cooper, 

130 +ex. 453, 110 S. ki, (Rd) 696 auatalnlng 

the ralidlty o? the Act aa oolutjtutlng a ra6aanable olaaaltloatlon), rrOm olroumentfng the tax 

burden6 lmpo6s4 u~dor the &It, by organieing 

aepanto corporatioaa to operate them, the 

oapltal stook of whloh, or a majority Oi it, b6- 

lng owned by e.parfnt oorporetion or holding 

oompany, or by aa lndl*l6uel or l a6oclatlon o? 

indlriduala. Thus through a oommon management 

or 00Ai~ld over a number Of indiridual Unit6 Of 

oorporatlona $h! a;lear purpose of the law wo~3.A 

be Ae?eateA. 

** * * The ownership by Butt oi W% of, the 

stook in 0118 oorporetion, 6Ad of 75% Or the etook 

in the other, grva him auoh u~liied OOAtrOl of 

both oorpor5tion5, through such atook ovmsrnhlp, 

as to bring the atarea OuAed 5Ad oontrolled by 

6uOh separate oorporatione under the provisionm 

0r the Bcti end required thatt9e]r gt treated 

as one chain for tar purpOOOB+ 

In this 0551) you hare asked about, no 0110 person 

owne e majority of the stock or lntereat in both the partnership aAd the OOrporatloA, or even in one of the& A, 0's 

wife, and C, together, own a majority of the atwk in *oarporatlon Y-i and A aad C, together, own a majorfty of the 
717 

lnter68t in *partn*r*hip X*. 

In Attorney Uenaml*~ OpiniOa Be. 0400, dated 

Yarah 10, 1939, we mede a holding in lmguye a8 folla81 

"It in our belief that tbo phn8o '*hioh 

18 l * ' ooatfollmd l * * by OIU mnag8men~ or 

a88oOi8tiOB of tith8t8 DwMgem8Bt’ in Ek6tiOB 

6, 8nd the phrase *storm * l * oontrollod by 

the 88nie oopartnerebip or aaaooiatlon~ la S~Otion I, doe8 not ncwn that tbm eontool or managsment rust be In on8 indivlQual pweon, but 

it mean8 what It 8aya. and that la the *tom* 

81% in thr ewe ohaia if tbo oontrol and man8gemnt 1 8 in ,tha6 mml o rrooiatia or OOQU%BOTship. Ey the SIQU a8soaiatioa or oopwtaermhfp 

a6 used there 18 waat the *am group of peopXo. 

*rr a grouQ of threr IUB, or aay othar amber, could rent?dn or govwn, or had l uthoritf 

over 88~8~~1 8toxw, having authorit? @vet MU 

of the rterea by ~1x4~8 of own@& a majority of 

the ateok or the rorpor&loa that b&d tbbr tltlo 

to those l tore8, and batiry author&W over thm 

othot atom&by rirtao of boily; mrJorlty HOPI 

of the part&r&i that onnod thea, than there 

rtorea would all & in the ume ohaia jaot thr 

mama a8 ii oae lndirldadl person eontmlled CL1 

or the l ta ~a .í 4 -., ~

we 8till 8dlmw ta that oplaloa. R8 bellw8 iti i8 l xpporbed by the reornt oa80 or Florida Iaduatrfal Ck?mmi88loa v. 

Gary-Lookhart Drum Capany, Ino,, (Sup, CL o? yla,) 196 

80. 868, in nhiah it wa8 helQ thet fopr 8eparate aerporations rhould be considered a8 on8 aploymnt onit for tax 

purpose8 under the Florida Un8mpleym8nt Caapan*ation Law 

by virtue 4f the f8at that the 8am mwup oi pornon owned 

a majority of the atoak in l aoh ot the 8orporatioB8, altbowh no d.ngle per8on owned a majority OS the *took In 

any of maid oorperatlon6. In th8t oa8e the oourt 8aidz 

“The ownershfp of stook ln the faur 8orp~~&wna, ata 4i801088d by the m,oord, ir a8 

: 

a*Ferry CorporatlanI 
I4onorable Oeorge H. Sheppard, Page 5 

**Egtate Of G. i?. til@y 69 *ban* 

*'-f". 6. Loakhut 

**Claude %. Oary r :2ft 

** Celia J. &ry 1 share 

"(oaoh sham of o~ual value) 

Vol8y Corpor8tioat 

Wary Estate 'SC) ShnS 

WP. 0. Loekhart S?,ShaZ'W 

*(1. 0. 8Wl2@~8 8% 8har.S 

“Celia J. Wry 1 Sh4l'a 

*(*aoh ahan of ocwl r8luo) 

mPoti at. Joe CarporatIon! 

rOella J. Oaa S ShW'OS 

=p": 0" %hat 

86 *barra 

V3wnice Lookhart "I :2r 

“thiSsUed ssShW'@O 

*(oaoh sham ef Mual t3k10) .a?:: 

“Leeebusg Corporatlont 1., ,;, _~_ 

*K. il.: Taylor 8s 8h-E 

"I'. 0. Lsokhart 88 Shalul# 

-2. w. oary 84 *ban* 

“(eaoh ShlW 0r apu8l raluo)' 

-No one or tha four oorpratlaa8 atpleya 

am many am eight people, but wmulsfi~ the 

iour am a rir~glo a@lO~nt unit, sight proph 

or more me employed. 

"It is a&altted on tha r8bco1-4 #at 8 em@* 

Sty of the 8took in woh ot the four oorpentlona &I aaed by a ocmmen iatrnat unit, fs-wit, 

?'. 0. Lookhrfi Slid th0 ckry 21 St&. 'f'b8 6t8tUb, 

SUPM, prOrid@ thrti - h&b&O 

fi 

g WBit, togather 

with one or ram auplOybg UB t8, WhOa Omd Or 

controllo dinotly or lndixvo%lr br the nm lntere8t8, or rhioh ownm CTr oontm~s OM Or Iore 

other eiripla in(c uttltr~, aud rhiah, if trmatmd am 

a mingle un I t with oth8r m@loyin@ unita o+r*lntere6t8, er bath would be an 8W?lplbMT. 

the OOneluSioBx~ i 8 inorltable that hh# LOU 
Hononble George 8. Sheppard, Page 6 

OOTpOrt3tlOnS are 411 emsploymnt unit bOOeU88 

they are OaCh !ukIeI! the COntXWl 8kId ownership 

Of the Sama inter~8fSh to-ritt f'. 0. halchart 

and Gary Estate. w 

fn this oaao A and c together hav8 th8 oontml 

of *paktnerahlp'X" by virtue af toðer owning 64.14# et 

th8 intBre8t in raid pastnerahip. A8 StSt8d ab0r8, in this 

partner8hip eaoh partner ham 8 vote and voloe In the mana&bment Of the parbnershlp In prOpWt:OB to hi8 :ntO#at. 

EOwever, u00rpor6tiorI F is not ooatrolled aby 

the 8ame oopartuarahip or l 88o01at1on,* to-wit, A and C 

unl888 the StO@k ~rm8d by A'S Wfh 18 doemrd In law to br 

tinder the control of A. Aand Ctoðer own Eo9 sharer 

of rteok in said corperatlon but there are 1300 outatandiE& ahWe& A'8 tit8 OWtMJ 868 BUT88 of StOOk in 8aid 

oorporetlaa, and it A io deemed in law am oontrolllug th8 

8taok Owaod by hi8 M.fS, thou A and C oontrol a to$al Of 

116 l bare8, and would thrraby togother cm a majority oi 

the rtook and would oontlal Miti aorparat~io& 79~8 answer 

to thl8 queatlon d8pWIde on rhother the etoek owfM6 by 

A’s rite is ths oo88!unity property of her an4 hei hprbnnd 

or ir bar **parate property. 

'Ths St8tW.8 (Artloh 4619, 17. 0. 8.1, l xo*pt tar 

a short tinre -* from 1913 to 1985 -- has always VeatSd th8 

Tight Of QOntKBl and diSpOS:t:OB Of th8 OOEIIUBit~ pTOp8rty 

in the hueband." OJ 5%. Jur. 109, =~StSlOT 18 CORWllitf 

property 18 under the eontro1, miI&gelaent and di8QO8ttiOE 

Of the hUebard iLOBS, whether it b8 the earnings Of both 

jointly, the earnings of the ~huabaud alone, or the,oaTuln68 

of the wit8 alone." BS Tax. Jur. 108. The two foregoing 

SentSMSS am baaed On Art:018 4619 Of %2tlOtl'S knnOtat@d 

ROVi88d Glrll &8tUtSS Of 'feXa8, of which %3OtiOu 1 8aySt 

"$80. 1: All property 8oquind by either 

the humbend or rite duriiq m8rrie$8, OXOept that 

whloh la the separate pmperty Of either, shall 

b8 deumd the omnOn property of the husband 

and wife; and all the etteota whlah th8 husband 

and Wit8 PQSSeSS St the time the lBWTiw8 lyIy 

be dl88OlVOd shall be ZWgWdOd am oC~BEOB OffOOt 

or gains, unless the contrary be 8atisf8OtoTily 

proved ) Outing aoverture the common prOpSr0y 

of the husband and nits my Abe di8pO8ed a? by 
720 

Honorable Dsorne E-r. shespaI-4, P4fce 9 

the hurbnnb only; pe~lded, haer~r,.if the 

huabaad ahall hate dlrappeand and hi8 whereaboutr &ml1 hare beon 444 r4m4in uaknom to 

the tire oontinuouely ror more than twelra 

mOnth8, the wife ah&l1 4ftet auoh twelie month 

porlo4 an4 until the hueband returns to her 

and the l ftld~rit hereinafter proddo& ror in 

made atut file4 ror rc8ord. hare lull oontrol, 

SWUgOMnt UNI ui8pOBitiQn Oi th0 CCSBFQtULity 

property, 4114 ehall hate the same power. with 

refsrenae thereto l e me oanfe2~e4 by law upon 

the hwbund, 4nU $ez =,Ots ehall be 44 thou. 

0r 4 femme sole. 

In the 0464 0r Coleman v. ~0h4n, m 6. w. 695, hit 0r 

wmf nfuse4) the cmlrt 0r Clrll ApFeal* et 8ml Antonio 

"+ * * The nor48 aommuuity property with ~8 

4re rueh 88 r&de to property owxwd in ammoa 

between the husband em4 wife, a kind of marital 

pwtaerrhlp, an4 by our rtatutes defined in 4rti01e 4619, R. S. 

the 

Qf auoh property, both under 

oft11 law an4 our atatuter aerteinlnnn therewhere th-ere ire no restrictions. The wit*. l -8 

to hat8 had only the right or partAt$$netpon the 

tenalnation 0r the marital rights. 

(%ndcrsooring our01 

See elm the oa8e or Stow v. Jaokwn, 109 Tex. 58S, E3.0 s. 

W. 953, an4 the text %nw or K4rital Rightr In Tens, Jr4 

Ed.” by 6poer, jmgs 193. 

On the other ban4 tha Constitution of Texan (Artitle XVI, S~eotlon 15) provides that 4 mrried wm4n oan 

own IO arate property, an4 the rtotute (Article 4614, R. 

c. 6.' 3 give8 the control of the wffe's regarate property 

l xolueivcly to the rite. Artlde 4614 Or ~0~3IQn’8 AnnQtata4 Revised Clvll Statutes of Taxer,, s4g4,t 

-'All property or~thc wife, both real en4 

personal, owned or olallced by her before Ifarrlmge, 
.~. :> i* _ 

721 

Rmorable George R. Sheppard, Fag* 8 

and that aoquirrd sfterrrard by gitt, devise, or 

desoent, a6 slso the lnoreass of all lands thus 

aoquirsd, ehall be the separate property oS the 

wire. The wire shall hare the sole &anagement, 

control, an4 disQ~sltiQn of her separate property, both real and personslt grQrl4e4, howover, 

the joinder of the husband ln the manner naw 

provided by law for aonveysnae8 OS the 6epsmts 

rwl estate of the wire mill be neoessary to 

the 15ou&%brsnO6 or aonveyanoe by ths wife of 

her lsds, and the joint rignature of the husban4 and wit* shell be neoesw to 4 transfer 

of stocks an4 bon48 beloaglng to her or Qt 

which she may be glvon oontrol by tbls.~law.” 

In the o48eof Levln v. Jetrers, leg Tex. 83, 8% 6. W:. (84) 

81, the sUpx39@0 CCrUrt Qi %x48 saidt 

** + * The gre4ntlng to the tire oS the 

sole oontrol an4 management ot her separsto 

prQpOrty by n800884ry iE@liaatiQn ClOti hot, 

in the making or aontracts in respeot thereto, 

with all suah lnoldentsl power 48 will render 

effeatual the parer expressly grsnted. It must 

be remembered that a marrled runan owns 5~ her 

own right her 6eparste property. E%en as swh 

In a discussion of the right of a married wo~~sn to own an4 

control separate property in 23 %x. Jur. 88, It *St 

"* * * she may own stock In a raIlma or 

any other private oorporetion, en4 she may a~- 

qulre the e&le in any OS the way6 usual, a6 by 

gurohaee, gift, devise or desoent. 2hs nay In 

the same manner becor?le the owner of benk stook, 

and a6 such 16 subjeot to all statutory regulations an0 assessments. InBee&, Our statutes 

expressly deolan, that chsrters sag be subacrfbed by marri*G women who nzieg be stoakholders,, 

officers and elrsotorv In private corporations. 
722 

Honorable George HI. Sheppard, P4ge 9 

Our statutes of oonrey~os by ths wire or 

atooks an4 bonds owned by her nsoem~arily recognize her right of lndlvi4ual ownershlp.~ 

Whether the stock owned by A’s wife is oommunlty 

property or her 8epuets property Is 4 f4ot question on 

wbioh you have not given u6 sny inrormation. fr this stook 

Is oomuuslty property lt Is rubjeot to A’s oontrel, and ln 

such bass A and 0 together oontrol both apartnsrship P an4 

Woorporatlon P. In other word8 *partnership F snd *oarporation Y” are ~oontrolla4 by the same oopartnership or 

4ssooiatioa.” %wevcr, if the *took owned by A’s wife 18 

her sepsrate property she oontrols it, and A 4nd C 40 not 

oontrol Woorporation Y.” 

It Is appsrent by the rorsgtolng dlsousslon that 

we oannot answer your questloss a4tegorlaally. we 04n odlf 

say that lr the stook la %orporstfon P ownti by A’s wife 

Is the oammfty property or her 4nb her husband then the 

two Qrganlzatlons are *oontrollsd by the ssme aopartnersblp 

or easooiatlon,* to-wit, A and 0, an4 all of the stores 

operated by the two orgenizatlcdxv constitute one ohain; but, 

if the stook Is the sepawte pro erty of Atit Wit0 then tba 

two organlzatlons are not contra s led by the seme oopartnership or association, and the 8tons QpsNted by the two 

argaulsetlons oonetitute separate ohalns. 

Yours very truly 

ATIQRXEY QJhtAL OF TEXAS 

BY &-@k 

Ceoil .C. Hotsoh 

AsSistant