Court Opinion

ID: 4142220
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:19:28.409442+00
Date Added: 2024-06-11T14:08:16.838618
License: Public Domain

No. 3107

                Oanoernlng Artlole Xv, Rouse BlllR6.         8, Aota
                Regular g~aelon 47th Leglilature,       lmppalng a ~ .
                attip tax’upori’tranafbre   cuid .dullverle’a of
                ahweb or oertlfloataa     of atook, ind holding:
                      I.  l&t the aoquisltlon     by a aurvlvlng
                rife of’an undivided one-half lritereet In atook
                formerly owned, by the oommunlty, auoh one-h&f
                Lntereat~repre.sentl.ng  her inbereat In the aom-
                tnunlty eatate,   la not subjeot to taxation under
                the above memtloned Aot.
                      R.. l’hat the eoquleltion    .by a aurvillng
                &e;,   aa heir et law of her deceased hunband
                under ,Azhestatute of deeoent end d$s~rlbutlm,
                df~‘an undivided one-half    interest   in atook,
                repreaentlng    the.husband*s lntereat in the
                oomunlty,    la.noiy aubjeot to taxation under the
                above mentfoned dot.
                .3i .,That the aoqulsltlon      by the’aurvlvlng
        ”          am l+tgsitee’yider her huabcmdra wlil,
                +f.kd;                                         of :
           + WdlvIded one-half         intereat ltx atook, repre-
           tqentlng thchueband*e       Interest  & the oommunlty,
        .: la embjeot to tax&tlon under the above mention-
          led &oti,‘and the tax le me&m&d by the till nunw
           ber oi’iharea     Leottianalerred.

m   -       e    .-~e    B    -   y   -   m   -   -   i    -   -   -   a   -:m   m   -   -   -_..   e   i   -   ,-   -   -

Hcnww&ble~Oeorge H. Sheppard
Comptroller of Pub116 Aooountd
AustW ..Te-a
,T)ear Sir:              ,.                               Oplnlbn HO;“O~4134~
                                                          Rel (a) Dpea e stook transfer tax
                                                              eoihe  under AtiioIi5 XV; Rotiee
                                                              Bill 8, Aoti Regular $eai~lon,
                                                              47th Legkaleture (Art. 7047m,
Shepperd,      page 2           Vernon's Texas Civil Statutes),
                                upon the lssuanoe of'e stook
                                oertlfloate   to a surviving wife
                                to cover 1OO'slreea of atook
                                whloh orlglnally    oonstituted e
                                pert of the oommunlty estate of
                                the deoeaaed husband and aald.
                                surviving wife?
                                (b)    IS so, is *said tax computed
                                upon 50 share8 or upon 100 sheres?
              Your letter    of Meroh 26, 1942, aubiults for our
oplnl&      the following    question whloh we quote therefrom:
             "At the time of the deeth of Texas realdent,
       ha and his wife owned ln oonmnmlty 100 aheres ln a
       domestlo oorporatlon.        The oorporetlun took up the
       original   oertlfloete    of lOO,ah¶res end issued to
       ~~ar~rvivlng      wife a new oertlfloete    for the 100.
                  Is suoh transeotlon     taxable under Artlole
       XV of Sousa Bill 8 of the Regular Session of the
       Forty-seventh     &eglsleturel    IS so, is the tax
       payable on SO shares or on 100 shares?"
               The provisions    of the Aot pertinent to thls         inquiry
&e    oouied    from Seotlon    1, Arflile 16, es Sollowai
               "There is hereby imposed end levied e tex'es
       herelnefttir    provided on all selea, agreements to.
      .aell,     or memorand@n ofsal&~,      end elldelIverlea
       or transfers     of aharea;.or    oertlfioetes      of stook,
       or oeFtlSloetes      for right8 to stook, or oertl-
       float&a of deposit representing          an interest .ln
       or re re.aentlng oer~lfloetes        made ,texable~under
       this Eeotlon In any domestlo or foreign easo-
        oletlon,    oompeny,.or oorporatlon,       or oertlf~oetqa
        of interest    In any bualness oonduoted by tyuateeE
       or truatees made after       the effeotlve      date hereof,
       whether made upon or shown'by the books of the
        eaaooletlon,    oompeny, oorporatlan,       or trustee,    or
       by any esalgnment ln blank or by any delivery df any
     ' papers or agreement or memorandumor other evldenoe
        of sale or transfer or.order        for or'agreement to buy,
       whether.lntermedlet&       or final,    and whether lnvestlng c
        the holder with the beneSlo$el         interest-ln    or      ',
        legal title to suoh stock or"8,ther oertlfloate                    .'
        taxable hereunder, or with th8 posserssl~            or use
      ,thareof     for any purpose, or ti3 seoure the Suture
        payment ofmoney or the Suture transfer of any
        su& '&oak, or oertlfloate,         ori e&oh hundred dollars
        of Saoe value or Sreotlon thereof,           three (3) oents,
        exoept In.oaaea where, the shares or oertlfloetes              ere
     Honorable George H. Sheppard,       Page 3, O-413
                                                         f

          issued without designated monetary v alue; ip
          whloh
           .-.    oase _the tax ahall be at the rats of ‘three
           (31 oenta for eaoh and every share..           It ahall be
          the duty of the pereon or persons making or
          eFSeotuatlng the sale or transfer to ppooure,
          affix,    and oanoel the stamps snd pay the tax
          provided by this Artlole.       . . . The, payment of
          suoh tax shall be denoted’ by an adhesive stamp
          ,or stamps affixed    aa Sollows~      In the oas6 of a
          rale or transfer,     whei-e the evldenoe of the
          traqsaotlon    la shown only by the books of the
          aasoolatlon,     oomp&ny, corporation,      or trustee,
          the atamp shall be plaoed upon, auoh books, and .lt
          rho11 be the duty of the person making oc effeotu-
I’        sting auoh sale or transfer         to prooure and fur-, .
          nlah to the aasooletlon,      oompany, oorpcratlan,
          or truatee    the requisite   stamps;, and of such
          aasoolatlon,    oompany, oorporetlon,       or trustee    ~to
          iSSix   and oarioel ‘the same.     Where the transaotlon
          la effeoted by the delivery         or transfer of a
          oertlfloete    the stamp shall be plaoed upon the
          surrendered oertlfioate      end oanoeled; and ln
          oaaea of, an agreement to aell,        or where’fhe .s$le
          is effeoted    by dellvepy of the oertlfloate          aaalgned
          ln blank, there shall be made snd delivered by the
          seller to. the buyer, a bill or memorandumof auoh
          Sale, to whloh the stamp provided for by this Al-MA
          ole shall be affixed      and oanoeled.     . ..n
                  Alijhough traniPSera of a took, oertifloates       of
    stook, eta., by operetlop of law, are not expressly mado
    exempt by the Stook Trenafer Tax Aot, we thlnk suoh trans-
   ,Sers ere not the taxable event or transaotlti           designed to
    be reeohed by the above quoted tax levy and arci therefoti
    exoludsd, by neoeaaary lmplloetlon,        from the language
    used.     The tax la upon “all salea, agreeinen.ta to sell,          or.
    memoranda of sales, and .a11 del$ver$es or transfers ‘of
 ” share* or, oertlfloeteti      of stook” and it is “the @uty of the
    person or persona making or effeotuatlng         the sale or
     transfer . ..to prooure, affix and oenoel the stamps and
    pay the tax prqvlded~ by this &tlole.n         We think this           .~
     language oonteinplates end presuppqsaa, aa a oondltloo             to
     taxability,     only ohangea ln leghal or beneflolal      title     .~
     effeoted    by the affirmative    eota of a party or partie
  ~. thereto.
                 Thla oonoluslon finds persuealve aup 0x-t ln
     Federal   end atete authorities, oonstrulng stoo R transfer
Honorable George Ii. ihepperd,      page 4,..0-41         -.
                                                    ,y-

tax levies subatintlally          ldentloel    to the above quoted.
one.    We partloularly       advert to deolslona of thti lnter-
mediate and final appellate          oourts of New.York,: oonstru-
lng the Stook Tqensfer Tax Aot oS.thet state, from whloh
deolslona must ponsequently be deemed to heve,been.wlthln
the ~leglaletlve        oognlsanoe et the time: 6l' the passage
of the lnstadt’ cot.         In the. oese of Phelpd-Stoke& Estates
Ino.;’ v. Nixon, 118 N.E. ,241, the. oourt, ln holding that
a vendor’s eleotlon         to pa&a title ends sue Sop .the purohase
prloe, ‘~u&n refusal df. Eurohaser to oomplete his agreement
to purohase, was .not a transfer*            oontemplatt)d by the
atatute, m+de the Sollowlng pertinent oomments, after
quoting the provlslbns         of the New York Aot oorreapondlng
to t,he one! herelnabove,,quoted         from the Texea Aotr
                       ‘.
              ?J!heee seotlons oontemplate sobthing         more  .
       then a theoretloal       ohange of tit&e.     They eon-’
       template some physloel. eot; the delivery          of a
       oertlfloete;       the exeoution Andydellve’ry of a bill
       of sale; an entry upon the books of the oorpora-
       t1O.l. It is euoh a transfer as is referred’to
       in seotlan 162 of the Personal Property Law. A~
       thnsfer      la defined   in the Century Dlotlonary apx
           ‘**The oonveyanoe of the right, .tltle or, pro&
    ~‘ty, etlher real or personal,  from one person to
     another,’ elther~ by aale, by glit or otherwlse.r
           ‘*I,   Bouvler   it, 1s aald that a transfer        1s;
            n*The aot by whioh the owner ‘OS a ,thlng
      del.&vered it tb another person with the latent     ,,
      of passing the rights whloh he has 5.n the latter.*
              *In Rex&ok   v. Dinlel,   119 @a.~ S68-S6i,
      46 S.E. 438, a transfer     ‘hovers any .aot. by whloh
      the owner of anythlng’dellvers’     or oonveys it 30’
      another with the 4ntent to pass his righter. to the
      latter.     In Peerre v. Hawkins,, 62 Texi 454, a     .’
      transfer    is said po be ‘An Aot or transaotlon    bY
      wk,~$,~~ property ‘of ‘one person is by him vested in:
                    In People ex Pel Hatoh v. Reardon, 184 ~,
      N.Y. 432 77 N.E. ,970,,8 L.R.A. (NrS.) 314, .112         .
     ‘Am. St. &sp. 628, 6 Ann. ~Cas. 616, the .oonstltu-
      tlohe&lty df the Stook Transfer hot.wae ln question.
      There is no definition     given as, to the meanlng~ of the
      word 1transfer’.      But the language of Judge Vann*s
      opinion seems to involve the ldee that B‘transfer
Honorable George     H. Sheppard,    page 5, O-41

      .wlthin  the meaning bf the htetute neoesaitetes
      some eot, euoh ee a .sele on the pert of the
      trenslerror.

                “In People v. Duffy-MdoInnerney Co., 122
        em. Div. 336, 337, 106 N.W. Supp. 878, the
        question arose whether the issue by a oorporatlon
        OS its original       ahares wes a transfer.        me
       Appellate Dlvlsltin of the Third Department said
        that the ;@ietute we8 tobb~.atrlotly          oonstrued,
        and that e sale or transfer otiot,             exoept by
        Sorbed interpretation,         be held to inolude an
        original     issue of oertlfloetes.         Wntil those
        o.ertlfloe~es     ere onoe Issued they~oannot .be
       made the subjeot of auoh sale or traflsfer as
       to bring them’wIthIn the provisions             of the eot
    ~. .requlrIng them to pay the tax.’            In the
       opinions’ of the Attorney          ffeneral for September
       30, 1914, it wes ‘said that where., when trustees
      ‘named in a will,        the title     to the truat   propertg,
        Inoludlng the stook, passes to and vests ln the
       subatltuted       trustees,   and that suoh a passing. of
       title     la. not a transfer within the msaning of the
       cot.1 ‘The title        to the stook Immediately vesta ln
       the dubetltuted        trusteea,     not by virtue OS any
       sale or transfer within the ordinary aooepted
   : meaning oft thee!. te-,             but by operation of liw+*,s’
             m Eleotrl0     R+a&& Share Compiny v. .State,’ aS
N.JT.S-..178; .eSSlrmed 274 N.Y. 625, 10 P.R. (~2d) &8S
 (1937); it was held.that       transfer to new oorporetlon,
 otieeted’by oonsolldetlon      understatute,    of shares of stook
 owned by oonsolidatlng       oorporatlonsj   wee not su,bJeot tom
 the stodc transfer tax Imposed upon @sale or transfers”
 of etook,~ alnoe the .transfer ooourred bye operatlim of law,
 Andythose: ftnnvl relate to sales or transfers rlthln          their
 tirdlnartly~ a~&oepted waning.       To the same effeot    is -the
 ease of R0okefMler Foundation v. State, 258 N.Y.S..812,
 even though new oartlfloetes        of stook,werr lsaued by the
 oorpor&tim,    es In the instant faotual situation.          With
.,reSerenoe  to the taxability~     of suoh oertlfloat  es,. the
 oourt said:
            “The oertlfIoat&s   of stook are in theelves
      OnlS- evldetioe of the transfer    of, t Itile. Ihe title
      p&a&es even if the tiertlfloates      are never’. lsaued.
      It was not neoefieary to laaue these oertlfioates                 .
      to peas tlt~le herein.    The title had already         ,.
                                                                           .   ,

 Honoreble.Oeorge    H. Sheppard,, .Page 6 , O-433
                                                  ‘I+

       passed *by operation. of law.,   The oor@olldatlon
       had been perfeoted by. order of the Supreme Court.
       The Supreme Court had deolded the queatlon of
       oonsolldatlon  In favor of .oonsolldatlon.
             “All of the neoeasary steps had been taken;
       and,  by virtue of the prov,lslona of sedtlons 50
       and 51 of ~&tlole 7 of the Membership Oorporatfon
       Law, the olaimant ‘by operation o,f lawt had be-
       ooms vested with ths title     to tha stook owned by
       the oonsolldatIng   oorpcratlons.    The lmuanoe of
       now orrtliloatea   was not a transfir,   but was
       only. a step orsatIng .the evldaOa.*
            ~Ikew’lar, transfers   “reaulti~    wholly by operation
 of laws have oonslstsntly     beenheld    to be exampt,from the
 Fedopal Stook Transfer Tax Aot.       Se4 Treasury Regulation .71,
 Artlole Sl, SubdIvlsIm     ((1).
             Oonraquantly, It 10~our opIn$on’.that if the
 ohan ss In title .obourfiiqg  In’tho Instant rltuatlon are of
 the grppe" often~ donomInated *.trariaferr by operation of lawn,
 ruoh ohanger, are not taxable.
               Although fhs phrass %ranaSer~ by ‘operation of lawn
   is often used, it la 6~ut keldom'dafined.         .'phrrll but ono
   gennera'l'defl.nltlon   o$ this phrase' Is glven:.ln iords 6c
   Phrases, ~158 *Ca&a .where~ ths title       or right to property
.’ vests In a parson, not by. his Quvi aot or’ agraement,~ but .by
   the operatlon of law, aa’ In the oare ,pf tha, devolutlon :of
   title  upon an a&sInIstrator     or where the sstatr,of       anlnte-
   state is east upon .tha heir. I1 6. Wor’da & Phraaea 1083 (quot-
   Ing from Burke vi Baokua; ‘61 .MInn. 174, 65 R.W. ,458).           In
   Terminals & Transportation      Oorporatlon v* State, ,8.N.Y.S;.
   (2d) $282,’a4 (at. ,Ol. lQS8 affirmed        afi7, A RF, tt9.i t088,
   14 R.Y.8. ,(8d) 495 (1959), bhs oourt raid &a
   transfer 1s one nefSeoted by,soma positlvr, iagal rulr or
   enaotment..:.         .    ;
       ,     & the instant altuation’tha    rlS* rboelved .an uti
 divided one-half Intstirt    ln the atook aa her portIon’ of bhe
 oomllnlnlty. Prior  to .the dlsnolutlsn  of the 6ommunlt eatate
 of husband and                                tha baneSi 3 al
 title   of eaoh to                                    and. equal.
 Moat usually the                          rake of oonvenlenoe     or
 oonvention;   is In                        law, hblds In trust .
 for hImself and for his w$fe,                 having an equitable
Honorable   Qeorge H. Sheppard,     page. ‘1, O-41

 title.    Rut regardless      of ln whose name the legal title
 rests,   the equitable     title of the spouses la equal, although
there oan be no partition          of their Interests     until dlasolu-
Clan of the oommmlty          estate by death or dlvoroe.       23 Tex.
 Jur ; 101-103.     Upon the termlnetlon of the oommunlty estate
by the death of'the husband and the oonsequdnt dissolution
of the marriage, the moiety of the surviving rife In the
oommunlty estate is oonverted into and~beoomes the aepar&te
property op the wife. 23 Tex. Jbr. 102. guoh a ahange Ii
effeoted    solely by the provisions         of Artlola 2578, Vernonrr
Revised Ulvll Statutes of Texas (D?S),              and oan in no way.‘
be elthbr altered or aided. by,tiy affirmative              sots of the
husbsnd; as suoh, it 1s e ohenge effeoted              by law and ls.not
subjeot to ae stook trenefer           tax.    Th1.s oonoluslon lr in
aooord with that reaohed by the Federal Bureau of Intgrnal
Revenue In asoertalning          the taxability,    under ths Federal
,Sto,ok Transfer Tex Aot, of indentloel           ohanges odourrIng
under the Texas, Louisiana end Cellfornla              oommunlty pro-
   erty a tatutes . See 1940 O.GAI. Federal. Tix Servloe
p [ SS84 (Texas),
                ._~~_.. SlSl.- (CellSornla),     6064. (Loulalana~.
            With referhoe    to the re&InIng     &divided
one-half   Infer&f   Iii the etook In question,     it must be
assumed from .the feotual    situation   presented,    that’ the
surviving wife reoelved title to and beoame the ownsr of .
the same etther en legatee,      under the testamentary dlaposl-
tlon of the hmband,~ or es dlatrlbutee        under t@ statutes of
desoent and dlstrlbutlon.       In either event titls. to thi8
stook; ,rhIoh oonitituted    a pee of the oommunlty ‘estate ,~of
the~deoeased huabsid, vested In the eurvlvlng rife           rather
than in the exeoutor or admInlstrator ~of ths estate bf aald
deoeased huab,end, aooording to the disposition         required w
&tlole   3314; Vernonts Texas Clrll Statutes,         providing,    in
part, as Sollowar       _                                              .
             men     h person dies', lsevl&      a lawful will,
       al.1 pf hIa e&ate devised or bequeathed by auoh
       wl1l.j ah&l1 vest~Immedlatel.y ln the devlseea or
       legateesj    Andyali the estate of cluah person,. not
       devleed or bequeathed, shall ‘vest immedI0tely in
       his helra’et    law; aubjeot however, to the pagment           ’
       of the debts of.@& testetory          or Intestate,    exoept ~
       suoh es may be exempted by lau; and whenever a
       person dies krtestete,      011 of hIa:eeta.te      tahall
      .vstit mdlately        In hla heirs at law, but with .tha
     'exoeptlons     aforesaid   shall.atlllbe      .Uabls   and
       subjeot In their ‘hands to the payment of, the ‘debts
       of the. Intestate;     but upon ths lssu&noe of letters
Honorable George Ii. Sheppard, page 8, O-413

     testamentery~or    of admlnlstretlon   upon any such                ,.
   : estate,   the exeoutor or administrator    shell have
     the right to'the posaesslon of the estate ~es'lt
     exlated et the death of the testator      or Intestate,
     with the exoeptlon aforesaid;      and he shall reoover
     ~possesslon of and hold such estate In trust to be
     disposed of ln accordance with law."
             It has been~held that the legal oonsequenoe of
the above statute is to oest the legal title        to property,
both reel and personal,     direotly  upon the heirs or
dlatrlbutees,    In oases of intestacy,    and upon the devisees
and legatees under a last will and testament; subject In
eeoh.oese to the payment of the debts of the deceased.
Ithes    also been held that adminIstration     Is not neoess,ary             :
to the vestfng of title,      but that title  vests Immediately
upon the-death of the deoeesed, subjeot to payment of
debta, family ellowanoe,      Sunerale xpenses'and expenses
of edmInistretlon,~IS    and only,If    an administration   Is
deemed neoeasery.     Rorrell.v,   Ramlett, 24~S.W. (26) 531,
Rlohardson v. Vaughan, (Sup,,Ct.)       23 S.W. 640; Lean vi
Leas,,291 S,W. 340,'lS     Tex. Jur. 595, 1STex. Jur; 172-173:
             Artlole    2578, Vernon's Revlaed blvll~Stetutea
(1925), provides that the entire oommunlty passes to the
survlvIng apouee, fin oese pf lnteateoy,        lf'there   be no
childrenor      their desoendants.    ,When thIs~provlslon     la
coupled'wlth     the provlslons   of ArtIole 3314, supre, it Ls
seen'thet    if the husband's undivided one-half Interest In
the atodk In questcon passed by Intesteoy,           the wife obfelned
tltle~thereto     solely through the oomblned effeot .eC these                :
two articles.      Here too .our oonolusion la ln eocond ntth
that reached by the Federal and New York oSSlolela            9x
oonstruIng theirrespective        statutes.   See C.C.H. %deral
Tax Servloe,        1 6384 (Texas Intestaoy law); 6162 [@elIfoE&
Intesteoy law ! : Opinion of the Tax CommIssIon of Ne.wYe&,
August'21,, 1940 (Texas intestaoy       law).
            However, if the husband's undivided one-half
interest passed to the wife, not by Intestaoy,     but rather
by virtue of e testamentary Instrument, executed by the
husband, the transSer,was not effected     by law. Although .-
Article  3314 would operate In 'this .sltuatlon to vest title
In the wife immediately upon the death of the hsuband, this
artiole  would not be the sole operative faotor Involved in
the ~trensfer, since an a'ffirmatlve  eot of the husband, the
executionof    the will, would have been necessary ~io,oall
the statute into operation and such a transfer would have
 Honorable George H..Sheppard,;page         9,
               %

‘been  sffeoted    thrOu&   the oombined effeot o+ the statute
and the hfflPmatlve       ao,tlon of the hujband.    &I war aald by
the Bureau of Internal Revenue with rsfersnoe           to the
Federal statute,       "where stook 1s dlaposed oi by general br
speolflo provlslotr~. in the will of a' deoedent, the tranrfer
of'legal     title  thereto does not result wholly by operation               (
of law but la.brought       about through an lot of the part1413
and ruoh trmfar         to the beneflolarlea.la    rrubjeot to the
atamp tax. . . . * 1940 O.O.H. Federal Tax servloo         ( 616&
Noreovoc, In tlila event the meaaure of the tax 1. the full
number of sharer trwferrsd,          alnoe prior to the huaband@r
death neither spouse oaed a ahare outright,           but laoh had
a tie-half      undivided intereat   ln saoh.ahare.     8.0In , looord
19lrq a.C.R Feder,al Tax Servloe,       I 8064 (Loulalana oonmunltf
propertr) .~
             In our oplnlon No. 0-4129 we held tiat.a. &obk
 trarjafer   bax looru+I),   xmder thla Aot,. upori a' tramfer         or atook
from an idmiqlstrator         to the'helra     at law; and l.n our o in-
ion No. O-5620 we 'tiled that, although auoh a fax ia no e
qolleotlble     on wanaiers      of rtook from a deoodent 'to the
admlnlatratop or sxeou.tor of the eatate, thwtax ia ool-
leotible    Ii auoh pe~ronalrspreaeatatlve             is also a legate8
OP dl&itrlbutee~and ~~oelvea rhares.or              atook a8 ruob      ‘Them
op$nlona reauited from a.regrettable              failure    proper~l~ to.
appraolate the full.~effeot         oi the provlalons        ~elatlng to
the lmmedlate vesting of title .to 8took patssing to helrr                 0~
dlatx$buteea under Artlole          SS14, aupra, and from a mlafaksn              .
bsllef'that    l 'transfer     OS title   fron’the       Qord+     to the
adminlatratop and thanoe frm the latter~to                  the heir@ or
distributeerr    Is neoeaaary under,Texar kiwi Aooovdln &rW
otirruled‘our     o lnlor.No.     O-4189 ln ltr antL*aty an!I OUP
oplnlon No. O-S kt90 ln ao far as,lt-la             inoonsllrtant with,
tbla‘.op'Snlnion~ The portion oi opLnlon No.O-3590 holdlng.that
the tramfee      of atook iporn a deoedent to h&r sreoutor oc
admlnlstra$or     1s not taxable Is oorraot            ln ita raault, but
1s baaed'on untariabld preml~a~.            No tax 8oUl’d 8oorUe hem
beoauts~ano trannfsr       by operation of law wothamiaa;
would ooour*      Upon be death of 'tie .owner, hlr atook, eb
kr~tantl,~beo~mar       the'propetiy     OS hlr ,helCa or legeteerr
rf setjok oertllloater:rhould          iOr owe rearix~~Slrue to the
exeoutor or admlnlatrator,          no tai would lo o r ue      ~eo a ~tw,'
ln faot, the rdpz%rrent#lve reoelved              neither legal nor
equltable title      fy”    ,&ha reemlng    tr’ansfer.
            In o\iti opinion No. O-4319 we held, titer alla,
 that if a huabend~valldly~oonvaysd    i&IO sharea of atook,~
 forming a'part of hlr aeparate property,   to the. oommunlty,
 a stook tranarer tax la payable only on 500 rharea, on the
Ronorable    George H. Shepptird, page 10, O-41
                                                    f

theory that the wife receives     such shares while the
husbend’retalns    the remainder.   This portion of Oplnlon
O-4512 overlooked that fact that neither spouse om’an-
entire share during ooverture since each possessed but an
undlvlded one-half     interest Ln the total shares owned by
the oommnlty.      Since this portion of opinion No. O-4312
~is.dlreotly   opposed to the opinion herein expressed dnd
is oontrary to the conclusion     reached by-the Federal tax
offlolafs    ln 1940 C.C.H. Federal Tai Sei~loe,   1 6064, the
oplnlo~ la overruled ln so far as it ‘la lnoonslstent     with
this opinion.
             Consequently,   you are respeotfully        advls~d’thatt
           (a~) The aoqulsltlon    by the survlvlng.rife~of  an
imdlvided one-half  interest    in the stock, representing  her
interest  In the oommunity estate,    1s not subjeot $0 ~.
ta%atlon under the Texas Stook Transfer Tax Aot.
            (b,). The acquisition   by the survlvlng wife, aa
heir 'at law of her deceased husband under the statute of
d6soent ana distribution,      of an undlvlded one-half ln-
tierest. ln the stook, representing    the husband’s interest
in.the ~oommunlty, is not subject to taxation under the
above mentioned Aot.
            (0) T& aoqulsltlon   by the survlvlng. rife; as
le&atee. under her husband's will, of an undivided ona+alf
:lnterest ln the stook, representing  the husband's interest
$.n the oommmlty, 1s subjeot 'to taxation under the above"'~
mentioned Aot, and the tax la measured by the full ntiber
of shares so transferred.
             Trusting’ that the foregolng,fully         answers, your
lnqulry,    we are
                              Very truly   yours
                        ATTORNEY
                               GRN-         OF T&AS

                        BY
                                 R. Dean Moorhead
RDN:GO/og                               Assistant
     .I   .This oplnlon has been oonsldered in oonferenoe;
approved a@ ordered recorded.    Sep. 4, 1942.
                      s/Gerald C. Manna
                      Gerald C. Mann
                      Attorney General of Texas                          .