Court Opinion

ID: 4142590
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:23:41.330495+00
Date Added: 2024-06-11T14:33:44.669618
License: Public Domain

YXmiArrrom                           GENERAL
                                               OF~TEXAS
                                              A-      11.TrxM
        *-          e-

.

             toniAbl0 Ooor*9. Ilhoppard
             acm#trolLU yf PUN10Aooowto
             Auotin, To8ao
    I

             mu WI                                       ,oplnlon to* a-6766
                                                         WI'(~) Io tho truofir oi avotia6
                                                             truot oortlfloatoa taxablotruo-
                                                             lo tio w
                                                                    8d* Ar t. lip Ii.&
                                                                                  .,8,   Ao to
                                                             47bh Log., rd., lQ4l
                                                                (Q) Io t~~Cra8of.r   oi o-book oorbif-
                                                                Loatoo thuofor   to 08d from truotooo
                                                                a -No      tranoaotlo8wdu tho above
                                                                oltod Aott

                           Your kttor of JlirJ16, 1041, oubito for our opihm            t@   alaovo1~
             qulrloo a8d 18 oozmoeblaithoroml~h you attbh a bttor tra Mr. 0. t* Botia60,
             Attomq'oi Dallao,Turro,anda 00~ oftho ~loularv8My            MO* l6r o o w8t
             a 8d~0tl8g tr o r to o riaOlvod0
                                            tlflo aWotooopy irom la ld
                                                                     laot moatlowd lottrr
             a0 tollawo8

                          nYoudl180totbloVotl~       Buot mro    0irtaU oharroof Bopub-
             110 ~tional.Lifo IWw880. tim         dopooltid-dthtruo$o.o88Wd 18 th0
             agraont, gurfl8g luoh tmotooo tho right to yoto ouoh otook. Agalnot lald
             #to&, autlfloatoo   aro ~oouod povldly    for ligh* (80) ualtr *r 080 (1)
             lh a rooftopubllo P tlo dl ufo a to o k .Tholbpulwo.lLtlonal  Llfa InnyrJloo
             OaPprpr'ootook ha0 a par nluo of Ta Dollar0 (ho@)       p0roha~~oo.thif~
             llghty (80) wita in *o Voti8g Trust would roproooat980 oharo of atook.
                            "Plow. i@vloo no houUbloloXV           of&uoo   6lll lOb.6 lfY.etotho
             trawfw      of thooo war*

                         *To break dam tho ~uootloifurthor-would it not te proper to
             pqrtho$p    w tlm prmluo    eihe,kto&rapreoented~tb     u&o l~'Wt
             tlm unit0 appur to bo 08ly a r0oolptt                            I

             lpplloatrlo
                           "I will bo
                       totwofor
                                        6Ld        tohave
                                                       yoiadvloo
                                                           aw~fulaor lf tho ta8 10 thuo
                                    at otookVOtl8g fruot OorMfl~ttiu raprroortlryotook
             mado ouholdr the dtato of ‘pmr, although tha tronoirh ot tho wlto uo mu30
             08thobooko oftho truot~odthi8~,8tati         o fTo 8@ ,That loto lay,am
             tm8obvo wdo v 8o8eooldrto to 808-ro81dO8t8oubjoot to thr tranofortax?"

                           without eIO&$dB6bZWlr,u~oonr~,'t~+~L~trurtagrr~o~
             a&   the rotly tnwt    oortifioato      attaohod   fo udrforrod to 18 tho abovo
&8.Oeorg0         t.6hoppard -          M     2 (O-6766)

latter,bat moroly roforrlng to lmo ao tho baa10 of thlo opbnlon, lviffloo
t0 lq th a t
           tlhWtdBc;
                r     bUOtthOZ'0~  O~*tUtd    Udfb     OO~~fiO&OO   ~0OU.d
therounderlro an aooordtiowiththe ordiiry dofititio8:+,aqaptatiO8of
thooo toma* Tha followly gonoraldofidtlo8 of a %otiq truot@ lo quabid
from16 Ammrlorn Juriqrudoaoo, 66Q8

% mtru   tru8t P*JIbr WBphO8OlYO4     doflzwd a0 a tmot oroatod v u yreo-
mod     btWO8
            a   ou of UO rhookholdorrof a oo ration ad tho truotoo or
4 a group of l&Poal    agroaato   btwon   iadlrl
                                               T us1 otookholdorr a8d a 0-08
trwtoo, wlwro~ it lo proddad that for a bm of y0ar0, or for a prlod ao*
bin6Oti up 08a OOF b aOYO#lt,
                         i8 Or Wtilti l@ ‘OOOI~      iI t
                                                        tomlmtod,   OOSbro3.
ovwr tho r%o& owned w nroh ~~oolrboldorr,llbhor for aorbal8 purpoooo or for
all, ahall bo lod6od 18 tpU tn\rtoo, olthor with orwlthout a roromtla     tu
tbo ownom, or porroao dorlgaatod Ipr thm, of tho powor to dlroah how ruoh
aontrelr&l1 k turd* &da ouoh a6rommC          tltlo to tho rtook ltorlf
ururlly,thou& 8ot alwayr,18 ~rm8forrOdto tho doporlQay upom tnut for
tha purporoo ,~OlflOdr”

                kQ11y  hju 58O%wb vublag trwb agroaon% aad votlq                         truot   oor-
Mfloabo     lowed %hor~undrr, ~0 lid thr four followly brmrroblorr                        or oltrur
tlom,    tho tuabltlty of aoh    wo mud dotomlno hOa’O18,

                  (1)     ZIU trrrrfw       or ourrudor W tha rubmrlkr        to   t   h8 votly
tNti    r6ZWm.b         Of @OUtifiQtQ         hid      byt~'8Wp#'.IWti@       rhUO&      Of itOOk
ia the topubllo         mt1oma      Lla     ZarUmroO  oaupuly, to rrld trurt0or with             the
o~oomt that raid @took hall k                  ouoolbd   aad 8OW otimk lrauod b$C&
kpubllo lktloml Life Imouraoo Qolapuptto raldtirwtoor, with fula m
to rote raid rtokar tb rrld trurtoor or tb mrjorl$@ of thoa mq do-
l&lrabloro
                  (8)     Tb by aad dolirrrJrto rrld 8u~orilk~
                               ll#m800                           to the
bwt,     by +ho dodw%od buH~oor, of tho dororlbodbturtoooorblt~oatrr,
%otti86 forbh that oroh lubmrlbor kr truofwrod     to raid irur$oo om
rhuo of ato& of tho IkprblioLlfb DMUWOO      6m      for laoh d&h*
wlto of tho trurtooo’              qrooQo8t."

                  (6)     Tho ;alo, a6m&t           to roll, dollwry o? Wuwfor           of tho
trurtoor oorbiflo&+ol or roM86 hurt oortlflo~too,
                                                80& atwo dororlbd,
from ow holdor to mothor*

            (4) The dolivor) .or ro4ollvorJl at tb tmnixirtlor of tho ..
tmot by raid votlq  Wurhor,    or tar& m~ooo#~ora La bw9,    Co *ho anon
ad holdorr of tho beaoflolal 18boroti, a@ roporatod   by rot186 truot
OUtifiNtO8   08 tb b&O    OfthO tFUOtOO0, Of tb rbr8W O? OOX'tifiOdOO
of @took of un mDpuloL0Irt1oluz Utr muram@ OcBgla~r

                  WdOr flrir        h&d     ~iilOi#O# 6oVOm1BJ UpFO80 tNd0,              608OtUb
ly, ad     udrr     thr
                  d0010108# ##001~10~4   loVO~Yln( YOtir& tm,tr,m   thlrk
lb my bo rtatod that wdu   tho firrt trawmtlom or rlturtloa dororlkd
abovo, only tho m&d   lr@l tit10 to t4o~arror or oortlfbdor    parood to
th     d.ol@atod        trurtQO0    uador thlr *oti86 +‘tUt rq?OW&,       t   h. qultabio
HOXI.
   aO0. H. 8hOpprd - fig0 5 (04766)

tit18 tud lmnefiolal imtoro& ud ouneVohipof ouoh ohm8 of wrtlfioatoo
ranmlting with tho oukoriboroto the tnmt agromont and the truoferoro
Of NOh OttoOk.

         The Yotl8g truot OeHAfloate or tru”tee8’     oortlfloato   loouodoad
dellarod under the oeoonddtuatloa or trawaotloa me8tlonod#boos,war
merely tidontlaty of tIm roopmtltn 18tueoC        rhloh the put108 to the
trurt agnwaat had l8 bd to fb #to& of th0 C0m~~              that lo to lay,
tlyllegaltltloraulwd dfh Un truotooo but th ok neflo or             lel
                                                                      lquitablo
titleroaslnod dth the ouboorlbro or their $rwforoom,           with tha right to
rooolw dhldrdo Ln aooordoaoowith ruoh l~teroato~
          lQh0third trmOwtlo8 or oituatloa,oo&omplrting a traarforapr
ralo, &if% or othenioo of tho votbg truot outlfloateror truoteeo~oer-
+~lflocboo frcdnold holdor or war to m&her, 0801g8rbloupor h;M booko
and reoordo of *ho truntero,nrulto in a traroforof the lqultrbletit18
or knof%oial rl&tr ad umorohlp of ruoh rhuwr or ooH~U’loai~oo of tho
t,publlo  ~tlooal  IAfo PouranooQompupr,nproooated w ouoh truotooo1
oor%lfloatoo; tit 806 +maafw ai tho legal tltlo t9 ouoh ohano oooura
thore’by, boauoo 8mo rem188 with the wbl8g trwteoa.

        Tho fourbh tbrurOarblo8 or rltuatlaolo fb ooa~or@oof the flrrt,
l8dlf'fratoth trmafor of bho logrl~l~lo te tho oharoo oroorblfloatoo
02 tho Ropubllo lWlo8al Llfr mourmoo Omnpaqrbdc into the holdoroof
tho lmrflold   lxbo~8t, or their r8olg8oo8or tru18hr888, thorew rrot-
186 ;:I thw b&h th0 10&J R 8d %OlqUitdO    tiblO*

           ador   thlo u&y&      of the pomlblo tunblo tmnmotloao wdu
th0    obtod @tOok %XUlfOr    &O$, Wl81n6 &WthO YOtb6 tr UOt  l& OQQt
boforo UN, wo ooroludrtht the flrrb, third ud fou~h~~of~Ouo& tirnrao-
tlcm  or truroforo aro nabjo& to tho lxolro rbap tu ltiod  therog,
tmt tho rooond trunoaotla lo not tuablo thoroundor.

         ThiO 00801U8108 1; grouadod Up08 *ho lX~OO lo?ayQo of 0OOt108
1 of tho HoaL Trmofor Aot, whloh qpoar8 drrlsned 60 roaoh jurb luoh a
rltnrrbloaa8 thlra Wo quob, rrPdrrllnlng  the porbi80at porblonot

%arr   lo horoby &pored a8d lerloda tu a8 hard&tar     provldod oa all
raloo, a&rommtI to 0011, or moawasda of oaloo,ad all dellvwnrioo or
truwfero of rhuor. or oorblfloato8 of atrook.or oortiftoatorfor rlr&to
to ntock, or orrblfiortor of domelt rwr0108be  u 18toromt 18 or rip
ro"wt1~ 8orblflorto0 amdOtW%. UW thlJI Iootloq 18 rrly dmootl
or forrim r8oooiatio~    -pay,  or oo&tlo8.   or artlfloator of &
t08'08ti& Uqr ~Oi888O-Q8bWtOd          bytZ'UitO0QT kRLOtOO8ati0 &tar t&
lf?ootlvw data hrrwf,     wbathorwdo     up08   or   rhow8   bybho   book8   of   the
a88ool~tlO8,oo;mpupl,   00rpO8'&‘iO~,   Or tl'U8t00,   OC 'Ip,av a8Oi@!QO8t18
bla&   or 4    q  dellvorJrof ay   prporr   or ogrowmt      ot aomorudw or
Otbrr  nld0800   of lale or trurfu      or order for or agroaumt to bw,
whothr lntemedlato or flml. ad wh&hor iavootlaitho                holder rib6 tho
   ae 'lolal18torort la or logal tit10 to ouohotodr oc other carbiEt-
Vta
u
         ublo horoumdor, or wlth *ho pooooomio8        or uoe th oroof for my
                         the futurepqment of nomy or &a future truafer   of aq
                               08 eaoh hundnd doll-8 of fao8 nlue or f~aot.108
                            . . .* (~dorlimla6 oun)

                  Thrt    it   m@   tt,O
                                       le g i#la tiYe
                                                 i8t.dt0tOXtr uOfU8Oflh UOO
or oort1florteoof @took toad w tru8toeo,lneludlslg t~8iiOOOof u Oxpre80
votlq taunt, 10 further lndlatod by the faot that 18 oreatl86orrtalnsop
tiOn8 or exea@loaO fromthe abov0 quoted tax levy, u uoeptlo8 wao oonforr~d
up08 ltraaOferOof oO~~l~e8    fr c m l fiduolaryor frowno8e 8dnee of auoh
fiduoiaq to another, propidodthe OOm oontl8ue to be held by luob naulwo for
t& ame purporofor vhiohthq would be held If re+alaodtgrluoh iiduolaq.*
Iq Oon~Oti08 withthin OrpreOoexOeptiOnimlting flduolarlrror trWte80,.
it ia oi@floant to nob that no exanptio810 oroaixdwith refersnooto trnu-
Per8 of sto& or rtoak oortifloate1to or tglauohtru8feOO or flduolarirr,but
ruoh exQptlo8 oomro only tranoforoto tholr nomiaecm

                  lb thoroforrmubnltthat a fmble       framaatlon or wortuality
ir oreatedwder l&a 8took Trmafer Aot v either a “#ale, apeomet to l   en,
dellveryor tnnofer upo8the b o b a d mo o r doof,lh a r em
                                                        or~oWAfloatoo   of
atook. or oert1floatoofor'rkhtr to stock.or oerblfloateoof dewoalt r~maeat-

                      6upportlryour 0088~rUO~i~ Of the tub of the #tafutO,m fi8d
the parauaOiv0authorltlooof 6h ootir of lart rororli of the 6tatO of I& York
ooartruiag     %ho 6took Trmofor Aot of that Btate (from rhlohro underotaadthe
T0n8 Ifotto k adopbod)ud oerbal8deOl8lon8of %ho lMmmdl~to Fedoml oourt~,
lavolriaga8 Aot Of @8~?008 OUbOtQtilaly OiBIilU i8 thi8 re(Udo It ho boe8
otatid that a mphraoo, provloio8 or rtatuk adoptedfrcm the laws of another
data or oouatrywill ordimri4 be 61-r the @me oo80truotlo8la Toxao that lt
had noolvmd      18 the $ariodiotilo8 frclDwhloh it m8 borromd~     If lt had boo8 61~08
a f&d      old doflalto meti       4 th0 oourtr oftit jrulodlotlon,   it muld bo 61-8
thr OW meal86 18 Texaoo ThiO l”dO ?eOtO Up08 the ~OURQt108 that th txO&iO-
laturrno anaro of the judloiallnferprmtatlm glvr la th0 jurlrdlotlo8 fran
tiloh ths @tatut# ‘1118   t&a,     Wd that 18 adopt186 ouoh OtatutO,it lntaded al00
to aooopt ouoh oonOtruotlon.nSO Tax. Jura 2Q4-886.

                  Thormfon,'re hold that the firottraaraotloamentloaedabove
lo tuablo rondrrtho A&, booau80 it lnrolvoda truafer    of the lo6al tltlo ta
ihwoo or 6orblfloatoo of Took of the R~publlol&tlo8alLdfo Ymw~ao~ aQpaay
to tb tX'u"t000 aumd 18 the YOtly tX’Wt YXUmt,       oYo8.thoU5h the qtitabl0
title or karfioi~   itiO?oWb raai8Od with the OUk~k~       Or tX%8do?ori~
Wllllom F. Eonbright & 00. Y. 6t8t0,161 ?LY. hp. SIB Oliffo Qorp. Y. Bltod
hteo, 106 Fed. (8d) 77a                                                   I

                 V&i tho mw baa10 of roa8oaln(;, m hold that the fourth
traaraotlomdooorlkd abme iIWO1VO8 a twcablo%mOfO?, belag menly the WII-
vu88 oftho flrot rituation.~~~ Ohioago Wart Ilorfom Ibr* 00. Y. Otate,16Q 8. Y.
6. 467, afflmod, 166 & 6, Q60*
Hon. (560.& Shepprd - Rage 5 (O-3765)

          !I?158
               interpretation,upon substantiallyidentioalstatutes,appears
from the adm5nirtrat5veruling and regulationsof the IL So TreasuryDeprt-
ment and of the states of Maassaohusetta
                                       and New York, holdingthe transferof
sharesor oertlficatesof rtook to and fram voting trusteesto be taxable.,
see, iafra*

          Rb hold the third trnnraotionnamed atwe to involvea taxable trana-
far, even though the legal title to the steak does not pass by the transferof
the voting trust oertifioatebut remainswith the trwtees, The statute olearly
intendsto make taxable the transferof the mere beneficialinterestor equitable
title to stook, uvidenoedby a voting trust oert5?icateo This oonstructionis
supportedby oertaindeaisionsand by the rules and regulatianaof the taxing
authoritiesabove mentioned.holdingthe tnnofer of voting trust oertifioatas
to be tuublo. United Stat& v. Baker, 115 Fed. (2d) 129gJU-t.15 (7), (14) of
InformationRelatinrto the Stook TransferTPX Law. (New York);    Regulations71
U. S. Treas. Dept.,-kt. 34(b) and (o)~                    0 .- -

          Booause such voting trust oertifioateoare desigaedto merely avidenoe
the beneficialor equitableinterestsof the holdersof such oertifioateain the
actual shar%s of certificatesof stock of the RepublioNationalLWe Ynsuranoe
Company,the tax looruingupon the ttinsferthereofwill be computedon the basis
of the ppr v:nlueof such stook, to the extent that smne is representedby the
unite ooveradby said vuting trust oertificateso

          The fourth transactioninvolvedin the instantfacts, that is, the
irsuanosand deliveryof the voting tursteesof voting trust oertifioates,io
not a taxabletransferbeoause name ir tantamountto an originallcrsueof
ntook, ddoh haa been held not to be wbjeot to this tax measure,Iprour
OpinionNo. D-3594,direotedto you* Ry the issuanoeof suob oertifloatoaby
tha voting trus+ees,ao transferof the legal or equitaue title to aharea or
oortifioateaof rtook or intereststherein oooura,but suoh rertlfioaterare
merely ev5deatiaryof the righta ore&ad Iy the voting trust lgraamntt.

          Annwring your last question,you ara adoiaedthat the three tram-
aotlono ortraaafers held to be taxableherein,will be govamod by the prin-
oipleoannounoadin our opinion NDo O-3713 direotedto you0 Tran8fen by non-
rerldentoto non-resident8of stook oertifiaateror voting truet oortifioates
will be taxableif aa, one of the four taxabletranaaotlonoor evnnto nomad in
the otatuterand in raid opinionooour8 or transpiresin the State of Texas.
Idoraopoolfloally,if the trawler6 of the unit8 raprerated bthe voting
truot oertifloatao56suedin the inatwt oaoe are reoordrdupon the book8 and
reoordrnocrdo requiredto bo kept @' the ro%incgtrurtaeawithin the State of
Texar, under the exprorrtemr of the votiag trurt l gnmnant, or lf the tran~-
for of tha a,haroror oerf5fioateoof atook of the Hepublio NationalL5fe
InouranooCanpeny by or to said vuting trurtees,ir made up08 tha transfer
                 of said oo&pemyin Torah,then, under our opinion I& O-3713,
bookr andanstrordo
a rtooktranrfer tax aoouzw, even though the agreementor oontraotinvolving
      _

Eon. woe H. Shepprd - Rgo 6 @-3766)

tb al8 or trmsf8r of mob 8-8     or wtiag %rurt artifloatu, the
a & ua l
       lleor kaa8fer of 8uoh 8-n                   ud tholr de-
                                    tx oo1-llfioato8,
liwrp, uoh and all drurp&rd  iaitrukfr~

                                                  aalwr8 your laquirio8,
                Trurtiagthe for8goiagratirfkotorily
war8
                                              Yourr-m~truly

                                             By /I/ Pat b      &if, Jr0

                                                   Pat   k.    hff,       Jr.
                                                              li8818t8d

&PP?#VBD 8Ep 4, Is41
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