Court Opinion

ID: 4138099
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:32:31.704051+00
Date Added: 2024-06-11T14:37:45.860631
License: Public Domain

August 27, 1940.

Hon. J. M. Falkner            Opinion No. V-673.
Banking Commissioner
Austin, Texas,                Re:   The necessity for a
                                    Texas corporation to
Attention:    "                     maintain complete
  Mr. H. L. Bengtson,               books and records at
  Deputy Commissioner               its HomeOffice rath-
                                    er than at the office   . .’
                                    of its parent company
                                    in another state.
Dear Sir:
          Your letter requesting an opinion by this of-
fice on the above titled subject matter is as follows:
            "Re:   Community Finance and Thrift
                   Corporation Dallas, Texas

     "Dear Sir:
            '"The above ,captionedcorporation is
     a Loan and Brokerage Company, organized un-
     der the laws of this State with Article
     1303b, Revrsed Civil Statutes of ,Texas,as
     amended, as its purpose clause: Its char-
     ter defines the City of Dallas, Dallas Coun-
     ty, Texas, as its principal place of busi-
     ness. The capital stock of said corpora-
     tion is $50,000.00, all of which has been
     paid in. Subject corporation enjoys the pri-
     vilege   of issuing and selling single payment
     and installment payment certificates under
     the provisions of Section 7, particle   1524a,
     Revised Civil Statutes of Texas, as amended
     by Acts of 1945, 49th Legislature, H.B. 430.
     Collateralization of certificates issued in
     compliance with the amended portion of Sec-
     tion 7 of Article 1524a seemingly does not
     apply to corporations having a minimum capi-
     tal of $50,000.00 where such sales are made
     to debtors who are at the time indebted to
     the issuer, but does obligate the Banking
Hon. J. M. Falkner - Page 2   (V-673)

     Commissioner of Texas to make examination
     to the same extent as if collateral were
     required.
         "As a matter of further explanation,
    the subject corporation is reported to be
    .awholly-owned subsidiary of the Family Fi-
    nance Corporation, a Delaware corporation,
    which corporation owns all of the stock of
    its subsidiary units and controls their
    operations through Security Bankers Manage-
    ment Corporation, Wilmington, Delaware.
         "Subject corporation has also estab-
    lished approximately seven branch offices
    in Texas and, from a supervisory rtandpoint
    as related to the examining responsibility
    of this Department, it is the considered
    opinion of this office that the corporation
    at its principal place of business, as de-
    fined in its charter, namely, Dallas, Texas,
    should maintain a system of record controls
    as it affects itself and branch offices,
    which will enable the Banking Commissioner
    of Texas to determine from an examination >
    of such record controls the financial con-
    dition of the corporation, The fact is
    that all records of the Dallas office, as
    well as those of its branah offiaes, are
    maintained at the office of the Family Fi-
    nance Corporation ,atWilmington, Delaware,
    the result of which makes it wholly impos-
    sible to determine from an examination the
    solvency of the domestic corporation with-
    out consulting the records at Wilmington,
    Delaware.
          "Therefore, the question we desire to
     submit to you for an opinion is:
     "As a Domestic Corporation, would it not
     be compelled to keep and maintain all
     books and record controls at its defined
     place of business rather than at the of-
     fice of the so-called parent company in a
     foreign State?"
     ,-

18        Bon. j. M. Falkner - Page s   (V-673)~   ..,   .,,   ,.’   .   ,

                    We are of the opinion,~
                                          your question should be
          answered in the affirmati~v'e.
                    Arti’clb 1358'~of,'.
                                     &he:Rev!i,sed, Civ.il'&at,utes,
          governing private corporations,'declaresi;::,+.:~, .,,
                    "Each corporati'onor joint -stock'com-
               pany'~ofevery description, whether organ-
               ized and acting under a,special charter or
              '3
               general law,,,of
                             'thi.s~,state,
                                          shall keep its
               principal office within this state."
                    NC& the w&d. "office" as used here does not
          mean me,rely the building and furniture. It means the
          place of transacting,i.tscorporate business in the or-
          dinary way thatcorporate affairs are transacted, and
          includes all pr,operand necessary books, records, files,
          and the like.
                    One of thereasons for this requirement, if
          reasons for.the statute.were required, has been stated
          by you. The corporation IP subject to visitation and
          supervFsion~,.Py.
                         theBanking, Commissioner, who transacts
          his official-bus:inessWithin the territorial limits of
          the State, except in those instances where,he is spe-
          cially authorized to go beyond. A further and similaP
          reason is found in Article 1366 of the Revised Civil
          Statutes, declaring:
                    "Every corporation, domestic or foreign,
               doing business in Texas shall permit the At-
               torney General or any of his authorized as-
               sistants or representatives to make examina-
               tion of all the books, accounts, records, ,min- '
               utes, letters, memoranda, documents, checks,
               vouchers, telegrams, constitution and by-
               laws, and every record of said corporation as
               oft&n as he may deem hecessary."
                    This contemplates that such examination may
          be done within the State of Texas where the corporation
          has its principal place of business and not in some oth-
          er State in the office and possession of some other cor-
          ,porationnot under the supervision, or subject to the
          examination of the Attorney General.
                                                          -.   -

Mon. J. M. Falkrier- Page 4    (V-673)

          A corporation organized and doing busi-
     ness under the lawn o$ the State of Texas is
     required to keep its books and records at its
     principal office in the State.
                                 Ycurs very truly,
                              ATTOlU?EXGElTEFtALOFTEXAS

0S:wb                            Assistant