**OFFICE OF**  **THE AlTORNEYGENERAL**  **OF TEXAS**  **AUSTIN**

Hon. %I. J. Lavaon Seoretary 

### or State hrtin, Texas

n Richardron

oducte berore

Dear Sir:

an e!nendmen~inereaalng the authorized capital stook to iS,OOO,OOO.OO forwh-llch the correct g2.60 filing fee har been paid thie Department. “Thsamendment anpears fc be in the pmper form, but 

### its rtook isdivided into two olaeser

-- 100,000 ehsree of coszon etook and 25,000 eharen or preferred ntook. noth oommon and preferred are voting etook and both olagsea of stook reoeire dirldendn not to exceed 8%per ennua, the only

# , 811

Bon. Wm. 

### J. tareon, Page 2

difterenoe between the ooimnonand preferred @took Ir that the preferred may be redeemed or retired upon EO days 

### notloe end that 

### It shall beprererred
an **to** 'amset and the dlrldendr oumuletlve'. 'Thaplan of operation is to eel1 the oommon rtook to producers, but thepreferred stock nay be Bold to non-uroduoers. So far 86 we know, thlr im the rlrst time the cucstlon hsr erlsen a6 to preferred stock having the rlght tovote end being rold to non-producerl. 'booordlng **to** Article 6743 of theRevised CIvIl Statutes, 

### xeabers of the oorporatlon **or** common stookholders **must** be prod~ucers. ~rtlole 5750, hoverer, provide6 'any e6socIatIon oresnlced vlth stockunder thi6 law **EAJI** 16eue preferred **stock** with orwlthout the rlght to **vote'.** “The ouestton In this connection lawhether, when thepreferred stock **ha6** the right tovote, ltr owner6 are therefore member6 of the corporation and murt be

### prOdUOOr6, orwhether being preferred **Itook** holderr ther need not be produoere. ‘8inoe the pmjeot **16** the large63 one tobe 6ublltted to thi6 Eecartaent under the Cooperative &rk6tlng bOt, we requeet an opinion rrom your Department on this point berore the charter mendsnent la **approved.** The ChArter 

### amendment 16attached hereto for **your** OOn6ideratlOn." 

### Article 5743, Vernon's Annotated civil Statute8 

### reeds a@ro11orr:

**‘ (A)**  Under the term6 and conditions WescrIbed illit6by-laws, en aaeoclation may admit anmembers, or is6ua aomaon 8took, only topersona engaged in the production of the agricultural products tobe handled by or through the eesociatIon, lnoludlng 

### the lealeer and tenant6 of land **U66d for**  theproduotlon of 6Uch pmduots and any lessors end land Ownere who receive **a6** rent art of the croo raised On the leared preaI6e6. (by

### xi a member of a non**6took** a68oolatlon b6 other than a natural pereon,I 

## 812

Hon. Wm.J. Lawson, Peg0 

### 3

suohmember **may** be presented by 

### any lndlvldual, assoolate orrloer or member thereor, duly author**ised** inwrItlng. (01Any aeeooletion es derlned InArtlole 5738 (01may beooao **A** member cr **6tock** holder of any other .a66ociAtion or as6ooietlons organized hereunder.' 

### Article5744, Vernon's Annotated civil Statutes, 

### provldes In 

### part as roilowrt



### I

. ff organized with cacltel stock the amount'oi suoh oaoltal 6tock end the number'oi rhare6 Intowhloh'lt 16 divided end thepar value 

### thereor. The capital 6took 

### maybe divided 

### into preferred And common #took. If 60divided the 

### Artioles of Inoorporation must 

### oontain a statement of the number of shares of etock towhloh preference Is granted and the number of 6hares of stooli

### towhloh 

### no preferenoe 18 granted 

### and nature and extent of the preferenoe undprlvllege6 granted to eaoh.
. .* Artiole 6750, Vernon's 

### Annotated Clvll Statutes 

### provides 

### lnpart:

0

.Any as6ooLation organized with stook, under ih;s law, may **186U6** preferred stock, with 

### orwithout the right tovote...' 

### Article 6720, Vernon's Annotated Clvll 

### Statutes among other things provldesr

'(1) That nomdxber of the aesooletlon 16 tiloded 

### more than one vote beoauee Of the amount 

### of 6t:ok or

### membership OapitAl he sey own ther6ln

. . . 

### It 16 apparent that under Article 6743, eupra, oomaon rtook can be 166ued only to pereons enyased in the production of agrioulturel products to be hAndled by or through the arsoulation, eto. ~onsldtrlne Articles5744 end 5750, muera, together, it 1% evident that oomDanlt6 or acsooldtlsne organIred under the 'Cooperative l.;ar'ketIng Aot* may Iscue preferred Stook, rlth or ulti-.Dut the rlght tovote. Itwill **be** noted.



### Bon. Urn.

### J. Lawon, 

### P*gr 4 ,

that thr ?&operative ~brketing hot’ **does** nOtircqulrs 

### the ouners of preferred **stock** 

### in assoolatlone or convsnlelr orgsnlsad under the aot to be produoers or enrage in the produotlon of aqrioultural vroducte ta be handled by or through the aeroaiatlon or company. At, as above etated muah aesoolstlona or companlee may :seue Drererred 8took, wlth orwithout the rlghf!to vote. The charter amendment o? the **I ”** **smere** and **"On.9umcrs** Con&any reads Inpart am follows:



### #Said rharea are to be dlvlded into two (2) claeses, to-wit: Ccmson and ireferred, ofwhich l.gO,otJO Bharclrshall be 

### commonand 25,000 &ares ahall be preferred. Lath 

### holder 

### ofoomson stock bnd each holder of preferred stock #hall be allowed one vote regadlsse of the amount 

### of stock owned by such ehare holder.
. .”
In view of the

### foregolnp statute, the

### Farmers and ConcrumerrComoany may lesue preferred etoakwith 

### or without the right to vote, but It 1s act?arentfrom the above quoted portion of the charter amendment that the bolderr of thepreferred stook are allowed to rote. l’herefore, the above stated question la respcatfully answered in the negative.

Trusting 

### that the foregoing fully anewere your 

### inquiry, we are 

### Yoursverytruly, 

### x1 / 1 ATTORNEY ‘XHEFUL**OF**

### TFXAB 

# FIR ;TAS’SIS”ANT ATTC )HMEYG%W.AL
Aullh Ardell Yilllams Asslatant