Court Opinion

ID: 4142364
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:21:08.080254+00
Date Added: 2024-06-11T13:19:13.446889
License: Public Domain

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 Stat-
                                   utes, end related queatlona?
          Your letter of September 16, 1941, requeatIng the opin-
ion of this depertmant on the questions stated herein, reads Ln
part as r”ollovsz
           “The above named corporation vaa rented a char-
     ter using as Its purpose SubdIvIsIon 6% of ArtIale
     1302 ‘to aatabllsh and maIntaln a line of stages.’
     Under this aubdIvIaIon the corporation her been op-
     erating buses In the City of Ulchlta F8118.
           “In order to teke adventwe of the povera grant-
     ed br ArtIalo 6548 end Article 6548a.~the oorporatlon
     baa filed an application for en amendmentchenging
     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 corpora-
     tions 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 lentenoe 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  &eng-
         ing the purpose OS the corporation by adopting the en-
         larged 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¶.ngSrom 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 lnter-
         city 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:
                      Does a corporation have a right to operata
         3   clt~ka    line un&s? Subdivision 66 of Article 13025
                “2. IS ~ubdlvlalon 66 la not tha proper subdlvl-
         sion, 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 grant-
         ed by Artlalea 6548 end ~6548s~.either by eraendmentor
         as en iouldental pover to their right to operate a
         city bus line?"
              The pertinent facts relatlvo to the WlchIta Traatlon
    Companyare 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 Companyvaa 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 azxystreet     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 Companya nev corporationvaa
        formed, the Wichita Trenalt Corporation, under 3ub-
        division 66 of Actlole 1302, vhich Corporetlon ac-
        quired 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 char-
        ter by changing its purpose clause Srom that wntain-
        ed 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'rallvayaend 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 Con-
      stitution   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,       pro-
vides 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 dlacon-
tinullnco 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     here-
tofore kxor&Jorated Sor the purpose of operating street or ,inter-
urban 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 cor-
porat 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 pag-
         a8ILger         beyond said five mile Xi&nit, under suah reason-
                     acrvvice
         able re,Yations   as may be legally Unposed from t-e    to tl,m
         by such cities and tovnr vlthfn the limit8 thereof   a& the Cm-
         mlsuionera' 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       malt the substitution of busea in
         cqnplianoe vlth Articles 65p"8 and 654&, but its charter expired
         and V8S not r8neved. The subject corporation, Wichita Tranalt
         corporatbn,     V8a orgaxilsed a8 a nev oorporationunder subdlvl-
         slon 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 pro-
         priety of the charter ammdmentvhLch haasbeen 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.
                           there appear8 to be no aubdlvi~ion~of Artlole
                         Uhile
         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 oorpora-
                   tioits for the eatablis      and mainteW!UiCeOf Stage
                   lines and Subdlvirion -t18 nov subd. 69) of,the same
                   Article, petittlng    the fOi3BStiOnOf COrpOratiOna
                   for the transportation of goods, vares, and merchan-
                   dlae, or any valuable th%ng, 1s aaah olearly broad
                   enough to have permitted the fonn.stlon of 8 aorpora-
                   tion 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 refer-
             ence 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 high-
             ways vlthln five miles of the aorporate limlta of such cities or
             tovnq.
         /              Would the proposed amen&iientso change the original pur-
             pose 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 amendmentIt voul$ only be authorized
             to operate bus lines vlthln Inaorporeted altlea end within five
             miles thereof.   That the corporationhas 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 tiCOF-
             poretlon and we must look to that lnstruawnt end applicable lava
             to determine its orIgina   purpose.
                         There la another reason this emendmentmei 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 WIlliaauJ. 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$lonthey no doubt
   aonaldered the diSf8reme b6tVOti the.operatlon of 8 line of
   stages and the operation of street r8llvaya under Su@livIslon 67
  with the enUrged pavers granted by Articl8 6548 and 65488, 8&i
  h8d same re8qn for Inaorpor8tIng for the eeleoted purpose rather
   than85 8 et~etr8Ilv8y     amp8ny. If would seem apparent that a
  person atibaorlbing to the oapltsl etook of 8 corporation h8vlng
  88 lta purpose the operation of a line of stages vould not con-
  template thet euah aoFpor8tlon vo$ld oomtruat, amlntain ind
  operate rsllwaye.    The proposed smendmetitbeing a fundamental
  and materiti &tnge in the purpose of the corporation, It should
- not be p8ltiIilh3d. 10 T. J. p. 664; FletOh8r’B Cyclopedia Corpora-
  tions, Vol. 7, p. 7607.
             Without qtlotlng in full Articles 6548 and 6548a, Ver-
  non’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 01pauburb8a rall-
  way or interurban mllv8y 8nd to c8rry passengers for hire l l l.”
  Th8t.the Aot is lirnlted In ita application to street snd Inter-
  urbep railvaya Is borne out by the title and emergenoy al8uae of
  z;a6;gg3* 43d Leg., p. 48, oh. 22, vhloh amendedoriginal Artl-
          .
             The same-oonelderatlonr an applicable to Article’ 65488.
  That statute provides, “That prlve$ aorporatlona heretofore ln-
  aor?porated for the purpose of operating street or Intmurb8n rall-
  v8ya” 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. Clear-
  ly 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 8218nsver.
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
aorporatloneorganized xmder Subdivision 66 of Article 1302, Re-
vised Civil Statutes, 1925.
                                        Yours very truly

CCC:eJ