Court Opinion

ID: 4142980
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:28:13.60009+00
Date Added: 2024-06-11T14:33:55.808461
License: Public Domain

Honorable Wm. J. Lawson
Secretary 0P State
Austin, Texas,
Dear Sir:                 Attention:'
                                    Will Mann Richardson
                          O&&on No. O-3304
                          Re: Whethes th,e'Holland Texas
                              Hypotheek Bank of Amsterdam,
                               Holland, will ,bedoing busi-
                               ness~in Texas under the re-
                               cited facts.
          You,havw requested the opinion of this depart-
ment upon the question of whether the Holland Texas Bypo-
theek sank of'imstwrdam, Holland, under the recited facts,
may surrender ita permit to do business in Texas and not
be subject to liability there,altwrfor doi,% business in
Texas without a permit. Thwre was enclosed with your rw-
quest4wtter a copy of ~aletter ftiomthe attornwy for the
corporationwhich rwcitws the following facts:
          "The Holland Texas Hypothwek Bank of Am-
     sterdam, Holland, Incorporatedunder the laws
     of the Kingdom of Netherlands,was granted a
    pwrmlt to do business in Texas on November 30,
     1931, whloh permit will expire on November 30th
     of this gear, In May, 1940, the Netherlands
     waa invaded by Germany and occupied by Pores
     and as a rwsult of such invasion and for thw
     purposes of protecting the assets,oP the sub-
     jects ~ofthe Kingdom of'the Netherlands,the
     President issuwd a proclamationPrewzing all
     of said funds located within the United States.
     On May 24, ~1940,the Royal NethprlandsOovern-
     ment residing in London, promulgatedits dwcrww
     wherwbg the title to all propwrty,in the United
     Ztatws was vested In the NethsrlandsCtovernmsnt.
     Under the dwcree, the Minister of the Netherlands
    'wad appointed Attorney:inFact for the Government
     and was duly wmpower,edto delegate the authority
     vested in him.
Honorable Wm. J. Lawson, Pagw 2, (O-3384)

          "For the purpose of placing an additional
     protection around the assets of this corporation
     as against thw enemy, it became necessary to
     adopt a plan in the nature of a reorganization.
     In brief, the plan followed was to organizw a
     domestic corporationunder the laws of this
     State, said corporationbeing designated the
     Holland Texas Mortgagw Compeny with an office
     in Port Arthur, Texas. All of the assets of
     the Holland Texas Hypotheek Bank of Amsterdam,
     Holland, were transferred to the Holland Texas
     Mortgage Company. Since said date, the domi-
     cile of the Amsterdam corporationhas bwwn
     changed undwr Dutch law to Wlllemstad, Curacao.
     The,only asset now hwld by the Holland Texas
.,   Hypothewk Bank of Willwmstad, Curacao, is a
     mortagw on the assets of the Holland Texas
   " Mortgage Company which bears Interest. The COP-
     poratlon does not perform any of the acts au-
     thorized under its permit but continues to main-
     tain an office in Port Arthur, Twxas. All busi-
     ness such as erecting or repairing any building
    ,or improvwmwntand thw loaning of money, etc.,
     Is done by the Holland Texas Mortgage Compeny."
          The question of whether a forwign'corporationis
doing intrastatebusiness in Texas is essentiallyone of
fact. The casws arw legion which dwal with the problem.
Particularlyis this true where therw is the relationship
of parent and subsidiary,or one otherwise contractural.
          We cannot categoricallysay, as a matter of law,
either that the Hypotheek Bank of Amsterdam will or will
not be doing business in Texas henceforth. The statement
that the Holland corporationwill have a mortgage on the
assets of thw Texas corporation,which bears interest, sug-
gests many possibilitiesrelative to the actual relation-
ship between thw two corporations. Likewise, the recitation
that the foreign corporationwill continue to maintain an
office in Texas does not descrlbw the activities or Sunations
thereof. Moreover, the statement that the Holland corpora-
tion will not continue to pwrform any of the acts authorized
under its pwrmit or its charter is a legal conclusion,re-
quiring both a knowledgw of the provisions of the corporationls
permit and charter, together with an understandingof that
which the corporationwill continue to do in Texas.
          Certainly thw'maintenancwoften office in Texas
auggwsts the doing OS business in Texas. In King v. Monitor
.   -c

         Honorable Wm. J. Lawson, Page 3, (0-3384)

         Drilling Company, 92 9. W: 1046, 1047, 1048, it was said:
                   "And unless a foreign corporationis trans-
              acting or solicitingbusiness in this State, or.
              has an office here, it is not rwquired under Eese
              circumstancesto havw a permit to do business to
              enable it to sue in our courts * * *w (Jbnphasis
              ours)
                   In Morton v. Thomas & Sons Company, 93 3. WI 711,
         712 (citedby the corporation*sattornwy'inthe ,abovwmen-
         tioned letter), the sign;niSicance
                                          of the maintenance of an
         office was recognizedby the court as follows:
                   "Thw petition disclosersthat plaintiff, a
              corporationorganized and,doing business in Ken-
              tucky, holds the two notes executed and delivered
              to it by defendant in Texas and made payable in
              ,Galvwstonof that State. It is not disclosed that
              it had been doing business in this State, and such
              allegationsdo not bring it within the operation
              of the statutes.:The case of Chatman v. Hallwood
              (Tex. Civ. App.) 75 S. W. YbY, does not control,
              f   th    the plaintiff corporationalleged that
              i?had'%oSSice    in Dallas County, Twxas, thus
              bringing itself clearly and affirmativelywithin
              %hw terms of the statute. The exact point was
              a id d b thi        t in line with our present
              c%cl~sio~ in &TV.     Monitor Drilling Co. (rw-
              cwntl  decided by this court) 92 8. W. 1046.
              * * *' (Emphasisours)
                   In Bank of America v. Whitney Central Matlonal
         Bank, 261 U. 3. 171, the Supreme Court of the United States
         held that the corporationwas not doing business in New York,
         and speaking through Mr. Justice Brandies said at page 173:
                   "The Whitney Central had what would populat-
              ly be called a large New York business. The
              transactionswere varied. important and expen-
              sive. But it had no place of business in New
              York. * * *" (Emphasisours)
                   Perhaps, however, the fact of thw maintenance of
         an office of itself is not conclusive of thw question as to
         whether the Holland corporationwill be doing business In
         Texas. As said by Mr. Justice Holmes In Edwards v. Chile
         Copper Company, 270 U.S. 452, "the activities and situ-
         ation must be judged as a whole".
                                                                -   ‘_

Honorable Wm. J. Lawson, Page 4, (O-3384)

          The general rule touching the question of whether
a foreign COrpOratiOnis tPaXMactiIIg business in a state
is summarized In l&a Corpus Jurls, Pagw 1270, Section 3977,
as follows:
         "Thw general rule is that when a foreign
    corporationtranacts some substantialpart of
    its ordinary business in a state, it is doing,
    transacting,carrying on, OP engaging in busl-
    ness thwrwin, within the meaning of the stat-
    utes under consideration."
          An interminablediscussion'couldbe had upon this
question in the light of the numwrous casws in which it
has been involved. We do not, however, bwlieve that such
would swrve a useful purpose in this opinion, The cases do
demonstrate,howwver, why this department cannot with pro-
priety categoricallyrulw upon the quwstion of whether the
Holland Texas Hypotheek Bank will be doing bUSinWSs in Texas
under the limited statement of facts before UB.
                                     YOUPB   very    truly
                                  ATTORREY GENERAL OF TEXAB
                                  By /s/ Zollie C. Stwaklg
                                         Zolllw C. Stwakley
                                                  Assistant
ZCS:LM:EAC

          APPROVED MAY 1, 1941                       APPROVED
                                                      OPIRION
             /s/ Glenn R. Lewis                     COMMITTEE
          ACTING ATTORKEYGERERAL                    BY B.W.B.
                                                    c-