828 

OFFICE OF ME A7-rORNEY GENERAL OF TEXAS 

AUSTIN 

Honorable W~lllam J. Lavaon 

Seoretary of State 

Austin, Texas 

. 

Attentlonr Mr. Will Jbmn Rlaberdaoa’ * 

Dear S1r1 opinion RO. o-3989 

ROB Does a corporetion bavo a right 

to operate a cllty bus 1Ine under 

auMlvlaIon 66, Article 1302, 

Yernotlla Annotated civil Statutes, end related queatlona? 

Your letter of September 16, 1941, requeatIng the opinion of this depertmant on the questions stated herein, reads Ln 

part as r”ollovsz 

“The above named corporation vaa rented a charter using as Its purpose SubdIvIsIon 6% of ArtIale 

1302 ‘to aatabllsh and maIntaln a line of stages.’ 

Under this aubdIvIaIon the corporation her been operating buses In the City of Ulchlta F8118. 

“In order to teke adventwe of the povera granted br ArtIalo 6548 end Article 6548a.~ the oorporatlon 

baa filed an application for en amendment chenging 

its purpose alauae to Inolude thoa,e powers. It vi11 

be noted twt those ArtIalea 8pp4 to ~orporatlona 

vhIch vere formed as street rellvey aorporatlona end 

vlah nov to operate buses in plaoe of street cars. 

The street railvay nubdIvIaIon Is Ho. 67 of Article 

1302, end it Is the aontention of this Departmeqt 

that Artlalea 6548 &xl 654th apply only to corporations formed under that subdIvIsIon. If auah Is tlae 

?aae, the oorporatlon uould not aaacmpllah thla ahange 

by en ~endatent becauao of the prohIbItIona In the 

last l entenoe of Artlale 1314. 

“The attorneys for the corpomtlon, hovever, 

contends that since they have been opereting a alty 
Bonorable Vllliem J. Lavaon, Page 2 

bualineuaderSubdIvIsIon66, that theyareaot &enging the purpose OS the corporation by adopting the enlarged povera granted under Artfolsa 6548 and 6548a. 

“This Department has been of the opinion that 

SubdIvIsIon 66 vaa tha aorreot aubdlvltlon to be used 

by bus lines &wn.n¶.ng Srom one city to imther and that 

it did not authorize. the operation of a city bus line. 

It Is easy to see that a court could say that an lntercity bus line vaa similar to, end authorlted by, the 

line OS stages au~vlsion, but the almIlarIty Is not 

so great betveen a 1Ine of stages end the operation of 

city buses. 

"We should like an opinion Srw your Department 

on the Sollowlng questions: 

3 clt~ka 

Does a corporation have a right to operata 

line un&s? Subdivision 66 of Article 13025 

“2. IS ~ubdlvlalon 66 la not tha proper subdlvlsion, under vhat subdivision should a corporation 

vlahlng to operate a bus line in a city be formed? 

‘3. IS SubdIvIaIon 66 Is the proper aubdIvIaIon, 

nay such a aorporatlon have the enlarged pavers granted by Artlalea 6548 end ~6548s~. either by eraendment or 

as en iouldental pover to their right to operate a 

city bus line?" 

The pertinent facts relatlvo to the WlchIta Traatlon 

Company are set out In a letter firm HonoraBle Bennett L. Smith, 

Attorney at Lav, addressed to the Attorney General, bearing date 

September 19, 1941, are as Sollova~ ;. 

"WlchIte Traotloa Company, a Texas aorporatlon, 

ovned end operated a street rellvay system In Wichita 

/ 

Pilla MU.1 Its aharter expired under Its ovn terms Zn 

August, 1934. Prior to th&t tbue, the&arter of UlchIU 

Traction Company vaa amended to pennit t* substitution 
Honorable UIlllam J. Lavaon, Pego 3 

of huesa in compliance vlth Articles 6548 an4 65M.s. 

'Aher, the charter expired In 1934, Wichita Traction 

Ccnpany vaa not then operating azxy street rallvays 

but vaa entirely operating motor buses ln and about 

the City of Ulahlta Falls. 

%hortly after the expiration of the oharter 

of Wichi’ta Traction Company a nev corporation vaa 

formed, the Wichita Trenalt Corporation, under 3ubdivision 66 of Actlole 1302, vhich Corporetlon acquired the motor buses and system formerly operated 

by Wichita Traction Company. The nev Company tcok 

over .ZX& operated the identical operationa maI&aln 

sd by 'iha predecessor. Wichita Transit Corporation 

-has since been engaged in the buaIne8s of operating 

buses fop the carriage of passengers for hire vithln 

the City of Wichita Falls. During part or +A1 of 

t!xt tL!e, the Corporation has operated buws outaide 

;f t!x City llsita R& tit.0 the suburbs.. 

"The Corporation nov desires to amend its charter by changing its purpose clause Srom that wntained in 3~bdIvlslon 66 in Article 1302 ~to 3ubdIvIsIon 

&'4efeoS, aa suppleaiented by Articles 6548 and 

. 

3ubdlvlslons 66 end 67 oS.Artlole 1302, Vernon's Annotated 

Civil Statutes, read as Sollovsi 

"66. To eatabllah end nalntaIn a line of 

a tage8. 

"67. To conatruat or aoqulre vlth paver to 

maintain and operete, atxwet'rallvaya end suburben 

rallvsys and belt llnaa of rellvaya vlthIn and near 

cities and tovna, for the transportation of freight 

and passengers, vlth paver also to conatruat, ovn 

and operate union depots, end to bw, CM, sell end 

convey right of vay upon vhIch to eonstruat raIlroada.' 

The last sentence of Article 1314, Vemonta Annotated 

Civil Statutes, reads as Sollova: 
Honorable YlllIc~n J. LavaOn, Page 4 

“ho amendment or change vIolatlve of the Constitution or lavs of this State or any provision of 

this title Or ;rhich SC changes tho original purpose 

ot such corporation as to prevent the execution. 

thereof, shall be of any fcrca or effect.” 

Article 65&e, Vernon’s Annotated C.&v11 Statutes, provides In effect that any corpporation authorized to operate a 

street or a suburban rallvay or Interurban rallvay and to carry 

gaaaen;srs for hire, Is suthorlsed, subject In every case to the 

approval and consent of the Governing body of the city or town 

where said street, suburban or Interurban railway company is 

operated to substitute for such rallvay automobile motor bus llnea, 

In vhole or in ?art, and to maintain and operate motor buses for 

the purpose of carrying pnaaeqera for hire on the public roads, 

streets, plaxs, allOTs, and hii;hvaya vIthin the corporate limits. 

Of anv * incorlxratcd cltlea or towns, tender such resulationa as 

zqv- Ye :~eocl;lbcd ‘-:y ~7 cuch cities or towns, and on the public 

roach --rid hi:rtwsys vith’a five miloa Of the corporate l*Qnlts of 

anj- such incO2~0r;ited citlea or tOvn3, -under ~such regulaslona, in 

territory outside of cltjr llmita, ns the COmmisa~onora’ Court of 

tho county nay 2roscrlbo; snd such substitutidn of motor buses 

for street car8 and street or Interurban rallvey and the dlacontinullnco of such atroet or interurban rnilvaya shall not In any 

vay Im=aIr any of the corporate powers of corporations heretofore 

Incorporated as street 0 r lnterurbsn rsllvaya with respect to the 

o-peratlon.oS other public utilities authorized by their charters 

and by statutes nov In Force. 

ArtFcle 65&h, Vernon’s AnnOtated Civil Statutes, among 

other things, In effect, provides that grivnte corporationa heretofore kxor&Jorated Sor the purpose of operating street or ,interurban rsilvaya, vhIch said private corporstlons have totally 

abandoned such operations prior to January 1, 1934, may emend. 

their charters so a8 to include as a sopsrate purpose of the corporat f On the acqulrIug, ovnins and operating of motor vehlclea 

end motor buaes for transportation of passengers for hire upon 

the ~~jlic streets and -,ublfc vaya of cltlea and towns end u>on 

the public ways of the adjacent unlncor?orated territory vlthin 

five miles frOm the limita of such cities and tovna, provided, hov-. 

ever, this limit shall not be construed to prohibit any corporation 
Honorable Wllllapl 3. Lawson, Pago,5 

.y..,: 2, coafomily vlth thi6 act from contractillg~for chartered paga8ILger acrvvice beyond said five mile Xi&nit, under suah reasonable re,Yations as may be legally Unposed from t-e to tl,m 

by such cities and tovnr vlthfn the limit8 thereof a& the Cmmlsuionera' Court of counties as mu presaribed by Article 6548. 

The Wichita Traction C~snpany vaa a&arently Orgadz8d 

for the purpose8 set out ln Subdivialon 67 of Artlole 1302 and 

had smended its charter to 

cqnplianoe vlth Articles 65 p" 

malt the substitution of busea in 

8 and 654&, but its charter expired 

and V8S not r8neved. The subject corporation, Wichita Tranalt 

corporatbn, V8a orgaxilsed a8 a nev oorporation under subdlvlslon 66, with its purpose clause readings "To operate a line of 

stagea," and although thlr corporation 8cQuired all the property 

of the Wichita Traction Cm-, vhlch at that time vas .operatlng 

only bUSBS, the povera of Wichita Transit Corporation and the propriety of the charter ammdment vhLch haas been submitted mast be 

tested bp the charter of the present corporation snd the lava ap- 

?licable thereto, and not the charter and lavs applicable to the 

expired Wichita Traction Company. 

Uhile there appear8 to be no aubdlvi~ion~of Artlole 

1302 vhlch expre88lj m6ntlozis the oper*tlon of bun liner .betveen 

clticts, lt would seem that the State Department'8 construction 

of Subdlvlaion 66 88 lncludlng the ~operatlon of titer-city bu8 

lines 18 correat. It does not follov however that this excludes 

the operation of a line of stager or buses vithln cities. In 

this conneotion ve refer to the caue of staacke v. Routledge 

(sup. Ct. 1922) 241 s. w. 944, vhlah involved the burlnesrr of 

renting automobile8 with driver8 ln the olty of San Antonlo under 

subdiviafon 64. The court in ltr opinion. stated: 

"Subdlvlrlon 10 of Article 1121 (nov Subd. 66 

of Art. 1302), outho~laiag the areatlon of oorporatioits for the eatablis 

lines and Subdlvirion -t 18 

and mainteW!UiCe Of Stage 

nov subd. 69) of,the same 

Article, petittlng the fOi3BStiOn Of COrpOratiOna 

for the transportation of goods, vares, and merchandlae, or any valuable th%ng, 1s aaah olearly broad 

enough to have permitted the fonn.stlon of 8 aorporation for th8 tranaportatlon of paa8sngers for hire, 

or to engage in the bue%nesa vbich defendant in error 

alleges uas the bualnesa Polloved by the Rambler 

Automobile Company." 
Honorable William J. Lavaon, Page 6 

.‘.>~. If the court vaa correct ln Its exprssalon with reference to Subdlviaion 66 in that case, we know of no resaon vhp 

t-8 Subdivision would not b8 auff$clantly brasd to permit-the 

OperatiOn Of a 1bl8 Of Stage5 or buses within aa well aa betv88n 

Cit.185 end tovIm. This ststement by th8 court yaq probably not 

necessary to the deciaicn of the case but It does furnIah a 

guide in construing the statute. ; 

Although there may be other Subdlvlslona 3n Article 

1302 which vould be mor8 appropriate for the operation of city bus 

lines, e metter vhioh ve do not nw determine, It 1s our opinion 

that it Is sufficiently broad to include the orwation in question. 

Under the pwaent charter of the Wichita Transit Company 

'it nay therefore operate bus lines or stages vIthIn cities or 

tovra end between cities or tovm without any llzltatlon 3poa the 

distance which it may operate Ita bun llnes from the corporate 

1inita Ff cities. Subdlvlaion 57 authorizes the operation of 

stzwzt ?~sllvqa and suburban rsllveys vlthln end near cities and 

~tovns. 3y -m+.ue of Articles 6548 and 65488, Vernon's Texas Civil 

Statutes, street railway corporations m&y extend their charter 

powers so as to substitute motor burr68 for their reilvaya vlthin 

the corporate limits of cities and tovna end on the pub110 highways vlthln five miles of the aorporate limlta of such cities or 

/ 

tovnq. 

Would the proposed amen&iient so change the original purpose of the corporation 85 to prevent.the execution thereof? We 

think It vould. Under the orIgiPa1 charter the corporation Is 

authorized to operate both inter end Intra aity buses or atage 

llnea but by the proposed amendment It voul$ only be authorized 

to operate bus lines vlthln Inaorporeted altlea end within five 

miles thereof. That the corporation has been operating buses 

solely vlthln the city of Wichita Fella end its suburba ir not 

aontrolling for the charter eeta Out the pUFpOB8 Of it8 tiCOFporetlon and we must look to that lnstruawnt end applicable lava 

to determine its orIgina purpose. 

There la another reason this emendment mei not be made. 

~otvlthatltaadlng both Subd.lvialona 66 and 67 deal with tranworta- 

/ tion, they contain radioal , substantial and fundamental dlffer8ncea. 

Rot only does the paver to operate 8 line of stages tietOrIelly 
Bonorablo WIlliaau J. Lavaon, Page 7 

differ, as a m8tter of fast, frar the,pover to aonatruot and 

operate street, suburban pnd belt line rallvaya snd to bug’, ovn, 

~~ sell and convey right-of-v8y, but the statute itself h8e amde 

the diatinatlon end ve o8nnot say that theed purposee are fund8- 

mentally the some. When the Saaorporatore qf the YIahlt.8 Tr8rb 

sit Uompuiy oh086 the purpose OS the aorpora$lon they no doubt 

aonaldered the diSf8reme b6tVOti the.operatlon of 8 line of 

stages and the operation of street r8llvaya under Su@livIslon 67 

with the enUrged pavers granted by Articl8 6548 and 65488, 8&i 

h8d same re8qn for Inaorpor8tIng for the eeleoted purpose rather 

than85 8 et~etr8Ilv8y amp8ny. If would seem apparent that a 

person atibaorlbing to the oapltsl etook of 8 corporation h8vlng 

88 lta purpose the operation of a line of stages vould not contemplate thet euah aoFpor8tlon vo$ld oomtruat, amlntain ind 

operate rsllwaye. The proposed smendmetit being a fundamental 

and materiti &tnge in the purpose of the corporation, It should 

- not be p8ltiIilh3d. 10 T. J. p. 664; FletOh8r’B Cyclopedia Corporations, Vol. 7, p. 7607. 

Without qtlotlng in full Articles 6548 and 6548a, Vernon’s Texas Civil Stat&en, ve think it 1s aufflclent to point 

tit that the firat mentioned statute by Its expreaa l8ngu8ge does 

not apply to the corporation In question for it appllee.only to 

.“Any oorporatlon authortied to oper8te a street 01p auburb8a rallway or interurban mllv8y 8nd to c8rry passengers for hire l l l .” 

Th8t.the Aot is lirnlted In ita application to street snd Interurbep railvaya Is borne out by the title and emergenoy al8uae of 

z;a6;gg3* 43d Leg., p. 48, oh. 22, vhloh amended original Artl- 

. 

The same-oonelderatlonr an applicable to Article’ 65488. 

That statute provides, “That prlve$ aorporatlona heretofore lnaor?porated for the purpose of operating street or Intmurb8n rallv8ya” may em& their ah8rtera so as to provide as 8 eepar8te 

purpose for the operatlond motor bwee. See also the title 8nd 

emergenay almae of Aata 1937, 45th Leg., p. 675, oh. 337. Clearly these statutes do n& 8pply to aarporatlona organlted under 

3ubdlviaIon 66. 

Tour first question 1s enrverad In the affim8tlve and 

the second does not require 821 8nsver. 
Honorable Wllilam J. Lawson, Page 8 

In snaver to your third question, it la our oplnldn 

a corporutlon having as its purpose Subdlvlalon 66 of ArtiCl8 

1302, Revised Civil Statutes, 1925, may not emend its charter 

so au to change its purpose to that set out In SubdIviaIon 67 

of said Artlcle‘aa enlarged by Artlclea 6548;and 6548a, Vernon's 

Texas Civil Statutes, .snd ~that the lset~ two &entioned statutes 

are not applicable to end do not affeat the corporate povere of 

aorporatlone organized xmder Subdivision 66 of Article 1302, Revised Civil Statutes, 1925. 

Yours very truly 

CCC:eJ