Court Opinion

ID: 4141117
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:07:01.367704+00
Date Added: 2024-06-11T14:21:55.247560
License: Public Domain

OFFICE OF THE AITORNEY     GENERAL   OF TEXAS
                        AUSTIN

BonoFable SUlne~ I&hm
Searetar~ of State
Au&in, Foxas

Dear sir:

                                             reportu br Artl-
                                                posar a rorles

                                  to be rertrictob by,
                                    the provirlons of

                               tales vere enaoted at the ~amo
                                (Aatr 1931, 42nd Leg., p. ;
                               aquage dearly revoalr their
                          es pl&n the faat that Astiole 141s
                          I.8Artdale 7089. !Choformor Art%-

                     retary of State or en7 other State
                    oyoe, or an7 other perman, having
    la a ea e
            to any fmuehise tax report filed a8 pro.-
    vi&d by lav, including My shareholder Who ir per-
    aitted to examine the report 09 an7 corporation a8
    wovlded in SeatLon 2 hemot. 8hM.l make kxwvn in
    -by manner whatever not pm&&d     by lav the &ouut
    or aour    of inaome. rrrofita.lofloeu,eXDenU.ture8,
    or any mrtiaulnrs theroof, or any other Lnforma-
    klon DertainlnR to the firwclal aondittnn of the
Eonorable Sidney Lathes, page 2

     ctX%mratlon 8et forth or dlr0lored In 8uah rmort,
                                he not exaedlng One
     Thou8ana
        8ha11 Bo
              brlE?8ba    by a f or oanflneasnt in jail
                    8 (@,OOO.OO)
     for not exaeedlng one year, or both.' (Rupha818
     added)
The relevant portion of Article 7089 reads:
         II      Said report 8hall be deemed to be
    plvli&&**ad    not for the iri8pdatIonof th8 gun-
    era1 publlo, but a bona fide ltoakholder ovnzlng
    one per cent (l#) or more of the out8tendlng rtoak
    of any aorporatlon, may examine ruoh return8 upon
    pre8entatlon 0r evldenae of rueh Ovnerahlr,to the
    eretmy of 3tate. lo other exam&nation; dlralo-
    owe, or we. ehall be mmitted     pi raid remrt8
    exarpt in the aour8e of wme ,judiaialproaeebtngr
    la rhlah the mate 18 a partymor Ia a tiultby tiie
    st4te to aanael the permit or iorrelt the eharter
    OS 8wh aorporetlon or to oolloat penaltier f'or
    a violation oi the law8 of tU8 State, or ior in-
    fwmatloa  of say offlaer, of this State aharged
    Vlth the enroruemeat of it* &VB, lnaluding the
    Comptroller of Publla Aaaouat8, State Auditor and
    the 8tate Tax Commissioner. . . ." (@+a818
    added)
          Thu8 vh.lleArtiole 1410 make8 uIlhVful only the dlr-
0108ure of aertaln InforMtlon pert-        to the Sinmblal
aondition of the reporting corporation, Artlole 7089 8peaitla-
ally forbid8 any "examination, dlralowe    or use" of fraaahl8r
tax report8 by unauthorired perrona. Illnae80~1)of the ln-
formation required by Artlole 7089 to be lnoluded in rwh re-
port8 I8 unrelated to the finanolal QOnditlOn OS the aorpora-
tlon and 8lnae uader &tlale 7089a the Searetwy o? State m8y
require the lnclu8lon In the report8 ol additional Information,
both flnanclal and non-flnanaisJ, the re8peatlve field8 or
Artiole8 7089 and 141s are ea8lly dl8oerned. Unauthorized
examinatloia, dI8clorure8 anb u8e8 of the report8 and OS any
information acntalned therein, regardle88 of vhether or not 8UUh
lnfornutlon is related to the t-ala1     aondltlon of the corpor-
atlon, are forbidden by Artlale 7089; unauthorlred dl8aloaure8
of'flnanaial information alone are made unlawful by Article 1418.
The fact that the violation of Artlole 141e 18 expre88ly made
a miwlenmanor while no penalty tr attaahed to a violation of
xonaable        BIdna~Utham,           pqp      3

&tiele 7089 fn no vay over-ridma tka language of either or
th#M &&iUbS,    POr a008 it Ompd  wih0r tb OtrmOhUiOn that
they are aoextmulve or t&t the latter 18 rertriated by the
sorlmr. Abaenoe of a sp0alila penalty may oreate lmniunity
fez the doing of an aat pmhlblted by statute,  but it aannot
oreate authority. C~e~UOUntly, frtW f'ir#tQuO0tiOIl18 (1l1-
OVered in the MgatiVe 82kdVU are re#pOtftily    adVised th8t
*rtia& 7089 and Artiale 14le are to bo mxmtrwa    indepenaent-
4 and that the 80tr)problblted theroln differ to the extent
above Set       foCth.

            "Would th8 di80108UN Of th8 -8      ody Of
      OorpOratiOM fiu7&& trurohiae tax ZOpOrtS t0 pW-
                              to lu0h reports by the Nat-
      lo nu no t @ ten la o e88
      ate be a vlolatlon OS tbu prov~10xu of either
      Artlolb 7089 or 141etn
                %%a ItmS Of th0         repQFt$.Ug OwpOMtiOII 18   Or OOUPSO,
a part     of   the lnf0rmatloa         to ba touad in the franfdire tax re-
&3WtU, Uldthe~U        Oi OW OMtiQM       VhiOhhWe tiid awhre-
aorta c a on  nlyb e          Jl
                    o b ta Iiimd  Ulin$    the report8  and by ‘di#-
alo8*’     a part of the information eontaiosa therein.      IanoauLt
and unproduotlve of evil though 8unh a ume aad dlraloaure
mt     See8, MV~~th8bSS    Ye t-1    tbst  SUiih OOlldUOt18 OOQWe-
headed by &tla.le 7089.    Ocmrequentl~, with referenae to Arti-
de   7089,  yOUr 8WXId QtuStiQU   i8 moered      in the #firmatiVe.
                Esxt you *tire;
                *wouldthe         d~80108~
                                 0i th8 lrpue   0s OOC-
         porationa       that    have filed
                                rwh  ro    t8,  togethm
      rlth a 0tatemat OS vhotbar or no ?- all fFqpOhi#~
      taxer due had been paid by luah uorporatlonr be a
      ;f;i:$lon of the tiermuOS eAther Artiole 7089 or

                The filing of Srsncrhiw tax   and the pati  reports
Of fl’~OhiSe         taXe#      @l’O Si?p8MtOaOt8 whlah IWed
                                                    al¶d di#tinOt
not coincide. Although Article 7089 requires  the tlllng of
franahlae tax reports brtveen January 1st and llarah15th of
eaah year, under the tem8 or Artial8 7084 the tax itself maa
not bs p0ld Until my let. Yhsre th8 tu 3.8 @?bid#Ub#aQwnt
iionorableSidney latham, page 4

to the filing of the report, obvlouJly it 18 impOS#ible for
the report to refleat whether or not the taxer have been pala.
Moreover, with the form of report currently eEployed by your
offioe, even vhere the tax is paid at the time the report 18
mede, no evidence of luah payment PppefWS on the report. Al-
though lp4ae is provided in 8uch report for the oorporation
to oompute its tax md to reveal the amount 0r the tax aaaord-
ing to its oolnputrtionr,nowhere on auah report can it be as-
aertained whether payment ha8 aoaoBQanled the report, vhat
amount, if any, ,&asbeen pia,  or even vhether the mount of
the tu as aomputed by the corporation is the true amount of
the tu a-.
           It will be noticed fihntArtlole8 7089 and 141e oon-
fer a privilege anl7 upon the report ind upon the l.nforBatlon
contain0a therein. The tact that taxer have or have not been
pala aan be dotermlned neither by azt "examinatj.on,"a 'die-
aloaure" nor a Qne" of luah reports. Conr~uently, we are
OS the .op%niOnthat a revstition of awh fast i8 in no Way a
vlolatlon of either of the Artialea i.Aque8tionr lotdoe, how-
ever, that we are 8 aking only of a revelation of whether or
not tih0 t4XeS have k WUI pIbid. nothing raid hereill18 to be
aomtrued a sluth o r lslng a diralo8urs of the amount of the
t-8   y&d, ii such t-8      have bOen wholly paid, the uto=tS
Of t4UeS paid urd dUt9,if 8uah t-8     brrVebeen &Wtiall7 paid,
or the WUlltS oitue0      due or QllnqUent, ii Swht~s      have
not been paid.
          It i8 appulent that WIy di8OlO8~e Of the faOt that
tax08 have or heve not been peld by a given OorporatloA nee-
t388~ily Vill, in OM 88XlSO,lnvolvo a di80~08~e or the name
of luah corporation. liefeel that this latter bi8alo8ure
al80 18 authorized urd that OUl'pOSitiOn ti th18 re#peUt in
no Way OoniliOtS with OUX'(BIuWert0 your SeOand qUeStiO!l.~'IIlLeS
of oorporrtlons Sillng reports o8nnot be diaalored beaause luah
Mm98 cm be a#OertaiMd only by a prohibited we ana dia-
closure of the report and the infoxmitlon thereini however,
the name8 of oorporatlone          fran&lae taxes aan be deter-
-d    without reierenee e         0 the report or to rush in-
forMtion.   Iior,  ve feel, a068 the fact that the tvo groups of
11111008
      normally vi11 be ldentloal (though not always, atice a
oorporatlon lrury ill.6a report without paying the tax pad, ltu-
probably but aonoeivably, aould pay the tnx without filing a
report) mflltate a@n8t     this conalu8ion. We see no re88on
why the fact that lnforaretlonobtained from a non-privileged
eourae happens to colnolde vlth that whloh aould be obtained
from a privileged source should preclude recouroe to ana employ-
ment of the former.
Honorable Sidney Idham,        page 5

           SiAma YOU QUOStiOA 18 OOWh8d in tW'E# Of diB&Or-
ing the AR8IeSOf eOrpOratiOM rbi0h hrVe riled th0 FqKh     end
of lcevealing vhether such aOrpOratlOA8 have pald their taxes,
Ye SUlStanswer your ~UOStiOA in the 8ftlrruktlve. Hov*ver, ve
are of the opinion that you may divulge the nanma 0s those
aorporation8 which have p8ia their frMahl#e taxer and nm7,
with reapeat to a given oorporation, dl#UlOse 8hether or not
it ha8 paid 8uCh tax.
           YOUC iOUt%    QUOStiOA iAQUir88:
          %Odd   a di8UlO8LWe Of the ABRie Of OffiOclFS
     end dlreatora of any corporation as 8hown on luoh
     report be a vlolatlaa of the term8 of either of
     SUCh al’tiU~S?*

          Article 7089 reptires,   inter alla, that 'eaah report
8hall be sworn to by either the preSideAt, vlae pe~rldent,
lea r eta rtreasurer
             y,      o r general -or,      and 8hall give the
mm8 and aadre88 0s eaah ofriaer aa dlreator." SlAoe the
ABJ8eS.OfOffiCWrSand dlreotOr8 are lXpreS#ly m       a pWt Of
the information to be aontalrmd in franohlre tax reports, we
feel that rush lniorm&lon meiynot be obtained from the ze-
ports ULcr,
          divulged to unauthorioed peraoA8. GanieQuently,
vlth r6fersnae to Artlole 7089, this question 18 answered in
the affirmultiVe,aAd YOU are re#peCt~ly     AdViSed th8t SuOh
hfOrmtiOII may not be di8~108ed.

           b%Stly   YOU aOk:

          ‘lihat offiaerr are inaludea within the mekn-
     lng of the word8 'sng officer of this State charged
     vlth the eAforaea&mt of its laWat 88 rued in &ti-
     ale 7089?”
            Our Constitution and statutes are replete vlth refer-
ences to "state offleers ' *offiaerr of the state," *offloera
Of the St&e gOVeF2USMt,I 'offiaer 0s this state’ and 8i1nilar
expre0010A8. Llk0~188, ao8t of thew expre88loA8 have xwelved
both statutory   and judicial deflnitlOne. See 34 Tex. Jur. p.
321, et seq. However, all of these definitloA8 hme been
enunoieted efther expre88~y or impliadly with referenae to the
context in whloh auah expreeslon8 have been elpployed.   T$ua,
for example, our 0Ae statutory definition 0s the phrase or-
ficer of this state,' COAtai.Aedin &tiole 369 of the Penal
                                                                         43

Eomrable       Sidney Utbaa,   page 6

code, 18 expre88ly     iimiba    to the USA 0s that q1r088i~n     ia
the C?OAtOXt Of the b@tidlO      %mSSdiately   preOediII&   AS i8 #rid
in 34 Tex. Jur. pp. 334-335;
            "IA a popular sense 8 State offloer is one
      whose jUPi#diCtiOq, dUtie8 and funatianr luleao-
      extensive with the Stat&j but in S larger ae~ae he
      18 one who reoelvea his authority mder state laW8
      rpd perfom8 same of the govemmentel ruA0ti0AS of
      the State. In this aen8e offlaer8 may be state or-
      flUera though the%r Juri8dlotlon or powers are oon-
      finsa t0 the li.ISitS Of the aOUAty w et811 t0 OIU Of
      its politlaal 8ubdlvi8lonr. TM term is gerural-
      17 USed %,Athe COAStitUtiOA SiAdStcltUteSiA it8
      PpUhr    SefiSe a8 iwlUdb$    Old7 t&OS* Offi~WS
      whore dUtie8 urd fI&AOtiOM al'eOOUteMiVe With
      the bouudorloa 0s the state, QF such geAera1 0s.
      ricers as immediately belong to ore of the three
      OOAStituQAt bWMhe8      Of th8 Stat, $OVWTl8l8nt. %&t
      it may reter to the eharaoter of the offloe rathm
      than to its territorial extent 0s vhethw the of-
      floe 18 OMJ for whioh the Whole State Vote8    Op
      Ml'aly 8O8tb SUbdiViSiOn thereof, #k&ahS8 a dir-
      trlct cz countg.*
Illustratlvr or the broad aa4 0sluah term are tha oases of
JemQan   v. Finley 90 Tex. 205, 38 S. Y. 24, urd 0-0~. v.
Zaokry, 115 8. V. $67, 117 8. Y. 177, both of whlah hold that
a# t0 the #Oh001 fond a UOMtiy Offiaer 18 aA 'OffiaeF Of thS
State," and b pate baoey, 93 a).W. 538 (Cr. Am.), holding
that a ahlef of police anb a poliae-   are 'state OffieOrSD
Or %@88i State OffiUerS.”
          We feel that this @Mae   Was employed in &tiob
7089 in the broad MASS mentlolledin the above quotation.
It will be noticed that this ktiole biers   to officers of
the state *ahargea vith the enforoement of its ISus.* Slaae
offioera 80 charged are co~flne6 neither to those whore powers
are aoextenslve with the boundaries of the state POP to those
who belong to one of the t&e@ brulrrheaof state governvwnt
or who are elected by the entim state, this added clauae is
iadloatlve of the broad sense in which the phrase 'offiaera
Of this State" Y88 USSd. Horeover, under brtiale 708& iran-
chiss tex reports nay be examined, dfaalo8ed 01)u88d in the
Hommable   bidaey   I&ham,   page 7

oourse of some judicial
                     _._    ._prooeedlnga
                                -..       .   in vhloh
                                                  a ._ the State
                                                             _.   la a
party   or Ilr a atit   Dy tne atate      to wumea tna peraut or ror-
felt the oharter of awh aorporatlon or to oolleat penalties
for a violation of the laws of this State.” Sinoe some of
these emaerated suite may be inatltuted and prosecuted by
county or dietriot offloera, and indeed, in some fnatanoea
mat be brought by these offlclala, a restriction of the
phrase “oifioera      of this state” to offloera of the state
  overnmeat eanuot find praetloal juatlfioation. Conaequent-
fy, ue are of the opinion that         any offloer,   be h isleleotlon
and authorfty state-wide or aoaflned to a dlatrlot, oounty,
munlai9allty, or other polltloal or geographloal aubdlrIalon
of this Mate may be lnoluded wlthln t&la portion of Artlole
7089,pcrovldedhe is aharged vlth the enforoement of any of the
l&v* of this Btate. We ~8910~ the word “amy” advlaedly in the
pr*oedS.ngaentenoe beaauae ve feel that the mere iaot that one
la an offioer of this btate oharged with the enforoement 0S
ita lame does not oonfer a oarto blanahe authority            upon.hU
UIth reopeat to the examination of franohlae tax reports.
Rather,    we feel, his prlvllege to make rush an exaninatlon
la llalted    bg the requirqment     that    the purpose of a*uohma&-
nation be oeaaonably related to the enforoeakeatof the rt&t-
ute airstatutes wit&In his ohargo. A deaonstratloa of luo h
relatlonshlp la, we feel, a necessary prerequL*lte to aa
examlnatlon of f’ranohlae tax reports by auah an offiolal. We
fully reallee the generality of these statemeats, but PO feel
that the task of making a ooqlete and detailed list of luah
oSil0era    and 0S aomplllng an all lnolualve enumeratloa of
the varloua lava with whose eaforaement they mat be olaer ed
la both futile md impoaalble.            We ahall, of Course, be 9feased
at aay time to give you our oplnlon 8s to vhether any e~olfio
oiflOer,or group of offlaera, la, with rea ot to imy given
law, lnoluded within thla portion of Artlap"         e 7089.
          Trusting that the raregolng,fully anavers your In-
quiries, we are
                                               Very truly yours
                                        ATTOR88Y GltUSlAL09 TEXAS
                                           -       A      \               /K

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