Court Opinion

ID: 4138586
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:38:05.596144+00
Date Added: 2024-06-11T14:36:37.396726
License: Public Domain

;.. -                                                       R-399

               TEXE    A&ORN&Y              GENERAL
                             OFTEXAS
                             AUSTIN.TEXAS

                               May 5, 1947

        Bbn. Paul H. Brown         opinion RO, v-185
        Secretary of State
        Austin, Texas             Ret   Is a oorporatlon or-
                                        ganized under Subdirl-
                                        81011 39, Article 1302,
                                        R.C.3,, 1925, limited
                                        to retall business?

                  You have requested the opinion of this De-
        partment lo to whethbr w not i oorperatlonorganized
        under the provisions of Subdivision39, Article 1302,
        Revised Civil Statutes, 1925, is limited to the con-
        duct of a retail business only.
                  Subdlvlslons39 and 40 of Article 1302, Re-
        vised Civil Statutes of Texas, 1925, ape as follows:
                  'Article 1302. The purposes for which
             private corporatfonsmay be formed are . * n
                  "39- To )urchLse and sell goods, wares
             and merchandise, and agrlCultural~andfarm
             products.
                  "40. To buy and sell goods, wares and
             merchandise of any description,by wholesale
             OP wholesale and ret&l, with h capital stock
             of not less than twenty thousand dollam;
             provldea. such wholesale and retail business
             shall not be conduoted apart or ig semrate
             establishments." (Fimphasls added)
                  Because of the unrestrictedlanguage of sub-
        division 39, supra, It would appear at first glance that
        a corporation organlzed under its provisions could en-
        gage fn either a retafl OP wholesale business or both.
        However, when construed In parf titeria with the provi-
        s%ons of subdlvLsion40, and particularly the ~emphasfzed
        portions thereof, it la apparent that the Intent of the
        Legislature in enacting subdivision40 was to restrict
        the terms of subdivision 39.
                                                           -   ._,

Hon. Paul B. Brown    - Page 2                    v-185

          It ia a cardinal rule of statutory construc-
tion that the Intent of the Legislaturemay be ascer-
tained from the legislativehistory of the act in ques-
tion.
          Artlole 566,-R.c.~.,1879, (Artlole 1302,
R.C.S., 1925) did not Contain the specific purpose'
clauses contained in subdivisions39 and 40, supra, but
dla aontain subdivision27, which Is as follows:
            "For any other purpose lnteuded fop mu-
       tual profit or benefit not otherwise espe-
       cially provided for and not inconsistentwith
       the constitutionand laws of this state."
          This subdlvl~loawas repealed by,Chapter 61,
Acts Nineteenth Legislature, (1885), p. 59, (see Bmpire
Mills v. Alston Grocery Co. 15 3. W. 505, 507),and the
Twentieth Legislature in 1867 amended Article 566 by
enactln$ Subdlvislon24, (Chapter 58, Acts 20th Lugls-
lature, p. 41) as follows:
            "The pwchase and sale of arrrlcultural
       and farm vpoducts. goods. wares and merchaa-
       u:     Provided further, That the number of
       persons incorporatingfor such purposes ahall
       In no instance be less than ten, nor shall
       any person hold or own more than five hundred
       dollars of such stock; and any person owning
       more than five hundred dollars of such stock,
       shall be liable for all the debts of such
       corporation." (Emphaslaadded)
          The emphasized portion of the above quoted
subdivision is practically Identicalwith subdivision
39 of the present revised statutes, and would apparent-
ly permit the conduct of either retail or wholesale bus-
iness, or both, and It Is evidence that the Legislature
in 1891 was cognizant of suoh interpretationsince it
amended ArtSole 566, R.C.S., 1879, by adding subdivision
25 (Chapter 401, Acts Twenty-secondLegislature,P.
164) which la as follows:
            "Iporthe purpose of buying and selling
       goods, wares and merchandise of any descrlp-
       tlon by m;         but the llmlaitatlons
                                              upon
       stock and stockholders in corporationscre-
       ated under subdivlslon24 of this article
       shall not apply tb corporation6oreated un-
       der this subdivision." (Emphasisadded)
Hon. Paul H. Brown   - Page 3                   v-185

          In 1895, subdivision24 and 25, Article 566,
R.C.S., 1879, were again amended by Chapter 105, Sec-
tion 1, Acts Twenty-fourthLegislature, p. 190, to read
a8 follows:
         “24. The purchase and sale of goods,
    w&es and merchandise and agrloulturaland
    fam products.
          “25. For the purpose of buying and
     selling goods, wares and merchandise of any
    desarlptlon by wholesale or wholesale ang
    retail; but the llmitatlonsupon stock and
   _ stockholdersin corporationsareated under
     subdivision 24 of this article shall not
    apply to corporationscreated under this
     subdivision: Provided, that no oorporatlon
    created under this subdivision shall be
     chartered with a capital stook of less than
     twenty thousand dollarsa And DDrovided.fur-
     ther, that suah wholesale and retail busi-
    peas shall not be conduated apart or in SBD-
    arate bstablfshments." (&phasis added)
          The amendment of 1895 was carried forward un-
changed into the Revised Civil Statutes of 1895, 1911
and 1925, exoept for changes in Art1018 and subdivision
numbers.
          Considering the foregoing legislativehistory
of subdivisions39 and 40 as a whole, it is alear that
by the amendment of 1891 creating SubdiviSIOn25, supra,
now subdivision 40, the Legislature intended that aor-
poratlons chartered under subdivision39 were authorized
to engage in retail business only, while those chartered
under subdivision0 were authorized to engage In whole-
sale business only.
          ROWBVBZ?,in 18%~ th8 Legislature areated an
8XC8ptlOn to subdivision25, now subdivision40, by per-
mitting a corporation to engage In both retail and whole-
sale business, only When such businesses w8re conducted
together in the SBm8 establishment.
          It is th8 Opinion Of this Department that a
corporation chartered under the provisions of subdivlslon
39, Article 1302, Revised Civil Statut8s, 1925, IS res-
tricted to the conduot of a retail businees Only.
Hon. Paul B. Brown   - Page 4                               V-185

          A   oorpowtloa ohartered under~subdivf-
     si0d 39, Artiole 1302, R.C.S.,    1925,    ia   res-
     trlctad to the sonduct of a retail business
     OUJ.
                                      Yourm very truly
                                ATTORRZY WIVEFUL OF ZRM

                                BY
                                               Ce K. ,Rii\hards
                                                    Assiataat

                                APPROVID HAY 5, 19%'