Court Opinion

ID: 4142560
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:23:20.517678+00
Date Added: 2024-06-11T15:47:07.175828
License: Public Domain

OFFICE OF THE ATTORNEY GENERAL OF TEXAS
                               AUSTIN

Honorable Claude ii.~illiema
Chairman an4 %soutire ~lreotor
Teuo Unmploymont Gonpmmation Oola~isdon
matin, Texae

                                             equantly rtatea 3.21
thir opinion, has bea                         etaon or the
appellate aourts (388                         truotion or
Mtlolo bmtlb 17(r)(4
                                               read8 In part a8
r0ii0w8   t

                         ned ie the question of whether the
                          'owned or oontrolla4 (by leelly
       enfomoabls meant or othemiro) dlroCaly or ia&ireotly
       by the same intere88.'
            "Query: Dsea Bubso&ien 19 (f)(r) ra4.r la&
       employing unit li.abloai an employer under them tPOt#l
             Ul. A owns anQ operates an individualbusiness.
       ?ielikewise owns iOQ$ or the voting steer or a eer-
       poratlon.
Bon.    Olaude k.    Wlllar,   pa60 I

            *e. A 011110
                       end operatee an iz~Ilvi4~1buOlneee.
       b likewIre own6 51s si the voting ebook of a cormpa-
       tion.
            "3. A and b are equal prtnare In a buainsse.
       A and B likmlee own IO* Of the total rating etook
       o? a mrporatlon, A owning 8g and n owaing SO$.
             *a. A, B and 0 are equal pru'tnerein a bo~lnore.
       A ON   B raoh own8 one-third of th0 voting Btook af a
       corporalha.
                  A B and C eaoh omr one-tklrd of the vot-
       iag 022k oi a c0qwnliloa. Baoh llkOds0 ornO one-
       th ir odi th TOCIA@Ob o a bffla&her eorpratlon.~
        ArtFolo 538lb 1'1(f)(4), eupra, doiinee~aa raployor
a0 tol&we:
            "(4) &y re@oyln& wilC whloh togrthr with one
       or mare other mploy$&%@units, Se owned or oontmlle4
       (by le$eUy lnfomubl,;li,mdene or oth~ruiee) direahly
       or indtniotlyby the earn intanet, or which owae or
       eontrol8 one OS more obh~~qlo~inb; uoik (by le@llr
       onfero~able    moo&e or WkorwfW),   urb whisk, if tnrto&
       ae a 01nglo UAIO with Owh Qabd O~lplo~ln($,u~iO,  wouU
       be an auployar ux&il*r paregraph {l) of this subeeeDion;*
         In your flret hat rituatlorr,A OWIW a& eperatoe
an indlrl4u0lbwineee and aleo hmr l&0$ of t@ rotlag nt00k
of a oerpoxatlon. Wo aeeume that A ,OWAO011 of th 8Dsek
of the eorporatlonand thr8 tha p&Fame "voting       atook" has LIB
obhar meming,
                            it may bs aaid that the etaokhoZPen
         3trlotly apea'klaa;,
are not the 6wnore of tha oorpore?+epxopeS%~. $&3y do part&-
oipak to the dletributionot the WIPplue prorateiUw3anmet*.
Pmeml#Jouoa dl~.tPlbut~on,
                         their rigate are eaid to be mraly
,;yitial. 10 Lax. ;rw-,pp.,9803818and auth0riblee tbmelo
        .
          IC is eloo aaid that a partnet doe0 not own any patil-
oular interest  in 0 perlmership Ontsrprtes but bfe intelvet
mtande only to a praposti,on8*o*hard of what rar remain after
&an. Blatabe A.        William, pegs 8

pay&At o? the debts of the putnorehlp   em4 8ho SJdtlWOAt of
its aooouate. Sherk v. Bank, SO6 6. Vi. WT.
         The ~oau of Tua8 ~AOEBp~o~~At hnpmeatlon (bmi.eeioA,
et al la. &as, 151 J. ki.(ad) SW (Sup, Ct. of Texas) involved
three   pwtnerehipe.        A,   B end 0 eomporsb cno   partnerehip,   A,B
C and D oomposed en&her and A, 8, C an6 E eompoeeQ the third
partnuehip. IA holbllrqthat thou thou p8rtneTehipewere
not owned by the leme Interdot within tti aeening o? Artlole
UEBlb 19 (f)(4), mupIa, kantice Grits ea54;
         *It la erldont ~thattheao thrsa oen*drneare n&
    owned by the same *lntereBt.*  This 18 baoauee there
    lo a partnar in No. 0 who has no lntueet iziNc. 1 or
    No. $1 aniltheso lo a paHn4r In Ho. S who he8 no
    Interest in 3Jo.1.or No. 2. I8 follows that,;? thus
    6oaoeMe oonrtltut~  OBI *Ilrqplartr,@ tt met be be-
    6auee thy (m un&er the ~oo~tL”ol~ of the *earn
    intorut  * wlthlo flu meenlqj ef the above quet&
    0tatute      .4
          This lamgaage lndlretu to us that partners eaa own a
buBlAtO0      within
                 the menlAg  of &t5010 liEB1b17(r)(r)  gugra.
This being true, itwt3uid ?ellov ttlettha OWAUO o? rir tm
#took of LIrorpooatlon own the OerxWatlon withli the aeen-
ing of th8 same statute.
          In anowor to pur uueetton based upon the fimi fast
altuetion,we ere;o? the opltien that  the iadlvldaalbuMno
end the oorporatlonare ewe& by ths eamo interest rith5n the
aemnf~y of Artiole E&&lb 19(i)(4), supra. St ?oll@we that
eaah emplop5ng unit lr aA amp~oyef aa drflne6 by the Unemplof-
meritAot.
        In your awmd fast eittr*tlon,  A owns and ojwrat~e en
individualbualnese and also own* Sl$ of the Yatirigstock a? a
oorporatlon.
         iyewish to point out bar* thet thraughout this opinioa
we hare assumed that the oorparetloaementioned bat** ~eeoeil
only one tpgo oi eteok  and that tb0 phrase wvotlng etoe+kw bar
A0 Other BKWi~.
Hon. Olaude A. Willinns,    page 5

situation based upon Q&mll;arstaDuts8 as i.nvo2v4 bare. It3
that eaw, one tie A. fiicaiadlv~duallyomrnd an& gperatad a
telephona ryatem saploying sir IfPLlvidu(Lla.Eisliketise
ownsd 449 of the bob outmtandlagshares of steak In a corpora-
tlon owning and operating a telephone sgrkpl which lmgle)rrd
sovan indiriduale, Bssides annisg 440 ahsres oi stock in ths
oorpcraOlon,cm&e being SO, ot all the stoat, Mea was alac
Proridmnt, dirsotor and general masa&rr of ths corporatloa.
The wire and father or Bioo owned the,othef 51 sham8 or steak
In the oorporation.
         In holding that the above emu&orated taots bid aot
ooqwl the oonolusion that Bias aoatxolledthe aorpora~lonby
legally anfcrsaablsmans or othsmmise, the &proms Court ot
Yiesoux+ saidI
          “DO the ooaaadsd Fasts in this sare soqpel ths eon-
    elusion or fast that respondeat serpo~atlonwad *man-
    trolled* by Dse A. Bioet AppQltaatr r&J on t5Q usas
    ot the atatutsr *ConWoUUed by lagally eniorseable
    mean8 or otha#uisQ,dlnstl~ w i&IireetLJ,b; the
    oama intorwts.* JIlthougbtha awideneo may have beea
    ruah that an 5aremumr of raot aouLd have basn drawn
    to tha orfeet that    ‘respondent oorporatlonwas OQQ-
    trolled by Gee A. ,%ae the iairreaes was not (Lram
    fmm the evidence by the trial        o6urt, and ths Qvl(leneQ,
    as eonsedod stidentiary       fasts, was not woh as to w
    th.  O@EdiUiOtl Oi   iaot that res emdMbwa8            a0 sontm r a&.
    Then was no eridenee       that he 1‘ Pie* vor;a& hi0 440
    aharas or rtock in rr8pondsnteer ratton or that hs
    aentmlled the eor~poration*s      War r ot dfTeettc8. *ho
    mara faat that he was rniplo~edas manager of the aQPp.Wa-
    tion, and was its prasldeat snd was one 0r Its three
    direotors,dose aot coaps~ tha aonohrlon that                he ma-
    trolLad ruponbent by legally Qziiorasebls            maan of othet-
    wise, direotlf  or imlirwtly, or that he QzOSC?i8Ql             ths
    power to control that was hia by reason ai his otneX8hip
     of a majortt~ or respon&erd*rrt~ek, and 8Wh fa8t Us
    not oonaeded by the respendeA6.:        Proor tha6 bhr
    of tha two 'a~Qloyft&~1~8’         Wat$ u~+LLCilPatch]l Ted
     the 'muse ~LiCeTeS68,'   ?&A&hha6 b&h @otid~bO o~~~~ll~d,
    did not coqml the oonolw~n tha6 bsth sai~ls~inl,               ~~%tQ
    were controlled    by the ‘“ae     iat8nstQ.'
         "l'haholdsn c# a wsjox5ty ,@ithe stock Of Q OQE-
    ~CIX.E~IO~
             ST* ,Qr oourso, QntftlQd to dieaclteits polisr
    and sonduot it8 busiar88 In thslr OWB WW QB &Q&S a8 OhW
Hon. Claude A. ullllau, paga 6

       not in good rafth and thalr nets 'areintra firas, but a
       mere 8dsl8eSoa that the 0wni2vshlp0r a majority or
       re8pOXldsnt's Gtook wad in &a A. Rioe ~186not 6n ad-
       z;;ion   that euoh individual 'oontrollsd*tha corpora-
               k1thouCh a oorporation  may conduot buainaar
       throigh its pFe8idantand other ofrioere tha ultimate
       sour:06 of all authority lies in t&s board ot dirsctors
       Who Stand iKIths pia     Or the individualstookholderr
       in tha Qen8e of oontrol thqoxeroity     over oorporata
       affaIr8.    ha adtEiQ8iOnthat u.8 A. hi00   11168PrWBidOnt
       and manager of the oorporation -8 not an admi8Qion
       that he oontrulledthe aorporation.'
         In ths h88 0880, 8up~-a, .hItioe hits quotes f~ra
the Doniphab U.ephona Cospany onea, Qupxa, a8 rOuOW#t
                          that ths OOnt%d OS th8 tvm "sm-
            "'+ * * Pl'oOl'
       playing units* was ultisabalyrested in tha %amQ
       ihtQ1YQt8,"and that both am&l be oatroiled,    did
       not ooapal the oonolu~ion bha8 both enployia~ unit8
       were   00m0u3a    by theYasia illtaralt8".*"
         On the basis or t&e abare aitad OQ%Q8, wo oonslude that
the ownerstip 0r al% or tha Qtaok 0r a aorperation  by an in-
divid~al does not of itself JlQOQ8QQril~ eo@psl the Qona1usion
that rush iaaivldual contxols aaid earporationwithin the man-
ing or &tlcle 866lb 17(f)(4). “P US,   inlftwt, an8wws pour
qW#tiOfl      ba8ed Upon the QeOOBd facltQit@atiO$&.
         In pfiurthird raat Qltuahibn,A and B are lpual part-
nerr in a buelnese aad liksd80    owa,lOC$ of the atoak Of a
eorpuratlon,k owning bC$ and B crrningW$.       38 are or the
opinion that tha partnsrrbip   and the aorporatlonare ownad by
;$ 8ame intereat within the mesain& of ArticZo WDlb 17 (i)
     mpra, for the Qama rmQonQ as cwtained ih the amwer
ta $Our question based upon the first iaot situation.
          Xn your fourth fast situation, A, B and 0 are aqua1
partners in a buelneas, and A and B qrs east the ownsrs of OR+
third or the atook or a oorpcraticn. For the raa8oaQ point04
out in the answer to pour quesaion  based upon the ascend Paot
situation,we aoncluds   that th,aownership of one-thirdof the
rtoak by eaoh, A and B, d-8 hat of itself nQoss8eri1yoonpol
the coaolurion that they cwu or aontaol the Qorporationwithin
ths m8asiag or ArMale 5aelb 17 (r)(r),   supra, This answers
your question  based upostha rourth raet situation.
Ban. Qlada A. Williams, puim b

         Xn your fifth iaat sl8uafiion,A, B and C oaoh owna
oaa-third of the stook in two dlrfrrmt oarporatlona. kt aro
or tha opinion that both ~orpomtfonr are owned by tho aam
iAtOF.Et within thE rceanlng0r Article SZ2lb 17 (r)(4),
aupsa,   ror the   masons   aatsd   in the anner   to the question
in your first ract situation.

                                       Youra 7ery ttruly
                                    bTTORlQ3YOZXERALOF T3W.S
 FIRST ASSISTANT
 ATTORNEY GEU~L