The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1899-07-23
A PERMIT WAS REFUSED
To Corporation Chartered in West Vir.
GINA to Work in Texas.
MANDANUS IS TO BE ASKED FOR
Secretary of State Hardy Gives His
Rensons for Refusing
the Permit.

Austin, Texas, July 22--Secretary of
nit to the Texas Planters company to do
business in Texas. The company is in
corporated in West Virginia. and is a big
compress concern and realizing that he
was possibly facing a mandamus proceed
ing. with his usual caution, freely con-
suited the attorney general before pass
ing on the same. The attorney general
advised him to refuse the permit to the
company The secretary gives the fol-
lowing as his reason for the refusal:
The articles of incorporation on the
face show that of the 10000 shares OF
stock, S31 shares are subscribed for and
owned by thrty-five individuals and 20
1863 shares are subscribed and owned by
another corporation, towit: Planters Com
press company OF Boston, Mass. The
charter further shows on its face that II
Is subscribed by nineteen individuals and
by the one corporation, Planters Compress
company, by its president and treasurer.
Thus Is presented articles of incorpora-
ton whereof the incorporators are COM,
posed partly Of individuals and partly of
another corporation, the signing corpora
ton owning more than 95 per cent OF the
and the signing individuals lees than per
cent thereof. The Statutes of Texas say,
article GIL: Private corporations may be
created by the voluntary association OF
three or more persons for the purposes
and in the manner hereinafter mentioned =
| Constituting this statute with all the laws
OF the State bearing upon the subject I
am clearly of the opinion that the word
persons used In this Statute means ct
clusively natural persons that is, in
dividuals, The laws Of Texas, as COLI
strue them, oppose the formation of cor
poration by other corporations, and the
public policy OF the State clearly forbids
the existence and operation of such cor
poratlons Ia this State. The statutes and
the public policy of the State are there
! fore to my mind. clearly and positively
opposed TO the formation of a corporation
/ In this State composed in any part OF other
I corporations
THE statutes further provide the meth
cd and manner by which corporations
formed In other States and countries may
obtain permit to do business In Texas.
They are meager upon this subject, but
are to be construed when points arise on
which there is no positive direction. in
connection with other laws relating to
| corporations and under what may be de-
termined to be the clear public policy of
the State as TO corporations.
Il can not conceive that the State OF
Texas in providing for the creation OF
domestic corporations, and In providing
for the admission to this State of foreign
corporations intended to grant to foreign
corporations rights and privileges not
granted to her domestic corporations. or
to permit foreign corporations to operate
I In this State whose existence and torma-
tion in another State is in clear contra
vention OF the principles on which he
recognizes the proper existence of cor
poratlon, and on which, as matter OF
| policy, she consents to create corpora
lions. Since therefore. the laws of this
State do not permit the creation OF n
corporation in whole or in part by other
corporations, ! can not construe the stv-
utes OF this State with reference TO grant
| ing permits to foreign corporations 10
mean that a foreign corporation formed
and created In part by another corpora
tion is entitled to permit TO do bust
ness In Texas.
again. further reason that supports
me in refusing the permit applied for In
this case Is that our statutes, subdivision
/ So of article 6i2. requires OF foreign cor
porations as well as OF domestic that 80
per cent Of the capital stock has been sub
scribed and 10 per cent paid in, SUBJ
scripton, in the meaning OF the law,
must be valid subscription. Your articles
I OF incorporation on their face show tnat
29,169 shares OF the 10000 are subscribed
by the corporation OF the Planters Com
press company OF Boston. Since one cor
poration can not subscribe to the stock
OF another, It Is therefore impossible that
there can have been a valid subscription
Of 50 per cent OF this 10000 shares. The