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l&n. Zollie Steakley Opinion No. WW-897 Secretary of State Austin, Texas Re: Effect of Texas Business Corporation Act upon corpora- Hon. J. M. Falkner tions whose purposes include State Banking Commissioner the trust purposes authorized Austin, Texas by Subdivision 49. Art. 1302 and Art. 1303b. Dear Sirs: Your request deals with the effect of the Texas Business Corpor- atii Act upon ceitain corporations organized under Subdivision 49 of Article 1302, V.C.S., and Article 1303b. V.C.S. Article 1302, Subdivi- . sion 49, provides in parti “The purposes for which private corporations may be formed are: ._ 49. For any one-or more of the following pur- poses:. . .To act as trustee under any lawful express trust.coinmitted to them by contract and as agent for the performance of any lawful act.” Article 1303b provides in part: ‘A private. corporation may be formed for any one or more of the following purposes, without banking or insurance privileges:. . . to act as trust&e under law- ful express trust committed to it by’s contract or-will, or under appointment of any court having jurisdiction of the~subject matter, and as an agent for the perfor- mance of any lawful act. . .” You have asked the ,following questlons: “1. Will the Texas Business Corporation Act apply after September 6. 1960, to corporations whose purposes‘include the trust purposes authorized by Subdivision 49. particle 1302. and Articles 13037 “2. ‘If the answer to the first question is ‘No’. can such corporations lawfully continue to engage in a ‘trust business’ and, lf so, what law is applicable; and if not so, can the corporations continue to engage in the other business activities authorized by their cor- porate purposes, and if so, what law is applicable?” While there is no statutory ‘definition of “trust company,” nevertheless corporations created under the laws of the State of Texas whose charters contain the purposes set
forth suprain Article 1302. Subdivision 49. and Article 1303. V.C.S.. have been classified as “trust companies-” by the appellate-courts bf Texas. Stewart v. Ramsey. Secretary of State,
148 Tex. 249. 223 S.W.Zd 78-F Barney v. Sam Houston Underwriters,
272 S.W.2d 942(Civ.App. 1954, error ref., n.r.e.). Article 2.01 of the Texas Business Corporation Act, sometimes hereinafter referred tqas the Act, provides that a trust company may not be organized under or. adopt the Act. Article 9.14A provides that the Act does.not apply to trust, companies. Art. 9.14E provides that ef- _fective September 6, 1960, the Act shall apply to “all domestic corpor- ations!’ butt this section by its very terms excludes those corporations excepted from the Act by Art. 9.14A. Since the charters of the corpora- tions referred to in your request contain purpose clauses authorizing .~them to operate as “trust companies” as defined by the Couits of Texas, we answer your first question to the effect that the provisions of the Act are not generally applicable to such corporations. The pivotal question is whether such existing corporations may continue. to engage in a trust b,usiness as specified in their charters. Our answer to this inquiry is that they may. The conclusion that ,such corporations could no longer continue to engage in the trust business must necessarily be based upon the hypothesis that (1) the passage of the Texas Business Corporation Act in some manner repealed Subdivision 49., Article 1302, and Article 1303h authorizing the creation of corporations with trust purposes and (2) there-’ fore, such repeal operates.as a repeal of the charter of companies pre- viously formed thereunder insofar as they seek to exercise powers under their’tiust.purposes. Assuming the repeal of Subdivision 4.9 and Article 1303b as indi- cated in (1) above, nevertheless, the rule is that the repeal of a general act under which corporations have been chartered does not operate as a repeal of the charters of such corporations, in the absence.of express . . Hon. Zollie Steakley, Hon. J. M. Falkner. page 3 (WW-897) intention to the contrary. Association,
121 Tex. 603, nl T 6a 53 S.W.2d.299; State v. Texas Mutual Life Insurance Compzi of Gexas,‘51 S.W.2&405 (Civ.App.. 1932, reversed on other grounds 58 cW.Zd 37 (Comm.App.); Bibb v. Hall,
101 Ala. 79,
14 So. 98; 19 C.JS. 1438, Corporations. Sec. 1654. As stated in then citation from C.J.S.: “Whether or not an enactment of the Legisla- ture shall operate as a repeal of a charter. . . is a .question of intent. ., . Repeals by !mpllcation are possi- ble, but are not favored, and the Act will not be held to repeal the charter unless there is an express intention ,to do so, or a necessary implication to that effect arising fra the enactment.” Certainly there is no express intent on the part of the Legisla- ture to repeal the existing charters of such companies or to withdraw from such companies the right to operate pursuant to their trust purb poses. With sonic exceptions not here pertinent, there are no express or general repealing clauses in the usual sense contained in the Act. Paragraph A of Article 9.16, which is the closest thing to a general ~. repealing clause, simply provides with exceptions, that no ‘law of this State pertaining to private corporations shall hereafter apply to: (I) Corporations organized under this Act; (2) Corporations which ob- tafn kuthority to transact bus~tness in this State under this Act; (3) E&t- ing corporations which adopt this Act. Nor cariany circumstances be gleaned from the terms ‘of.the Act which require a necessary implica- I tion that the Legi5lature intended for these existing charters tb be re- pealed. : Having so held, you are further advised that .the Texas Business C~orporation Act would apply to such corporations to the extent indicated by the proviso of Art. 9.14A, underlined below: “A. This Act does not apply to domestic~corpora- tions organized for the purpose of operating banks, trusty companies, building and loan associations or compa$es. insurance companies,. . . corporate attorneys in fact for reciprocal or inter-insurance exchanges, railroad compan- ies. cemetery companies,~cooperatives or limited coopera- tive. associations, labor unions, or abstract~and title insur-. ante companies. . .; provided. however, that if any of said + excepted domestic corporatrons were heretofore or here- after organized under special statutes whrch contain no provisions in regard to some of the matters provided for m this A c t *. . . . or If such special statutes specifically ,:: .., Bon. Zollie Steakley, Hon. J. M. Etilkner, page 4 (WW-R97) provide that the general laws for incorporation. . .~ shall supplement the provtsmns of such statutes, &en the provisions of this Act shall apply to the ex- tent that.they are not inconsistent with the provisions of such specml statutes. ’ (Emphasis supplied) The question has been raised whether such corporations would come withii the terms of the proviso,.the argument being that such corpor- ations were ‘not “organized” under “special statutes," but rather under the provisions of Title 32, R.C.S., 1.925;the previous “general” corporation laws., This conclusion applied generally would lead to much confusion and uncertainty and to varying treatment of the differ- ent classes of excepted corporations where no intent to differentiate is apparent. For example, it could be said that banks,. insurance com- panies, title insurance companie’s, and building and loan associations, all .“excepEed” corporations, clearly. come within th,e proviso for each is formed under particular laws which provide the.manner and means for their organixation. But even these types of corporations have been tog&e extent governed and even dependent upon the general. incorpor- -ati&n laws for taeii creation. The iem a in mg excepted corporations are to a varying -degree dependent upon the general corporation law for the means of their creation. Prior .to the Texas Business Corpora&n Act “1303b” and!‘section 49” corporations were entirely dependent upon the general’corpo,ration laws for the manner and means of their creation with Articles 1303b and section 49 of Article 1302 providing only that corporations with the purposes described could be formed. Though not immediately apparent, .cemetery corporations are iti.the same position for although extensive regulatory provision has-been made for ceme- .. teries (Article 912a-1-27, V.C.S.),, no pfovision is made fm the manner and means by which such corporations are to be created. . In WW.490 we have previously discussed the meaning of the term “special statute” bt$ing: ‘. . . .While the’term ‘special’ statute sometimes refers to acts which regulate the rights or interests of a particular or designated person or which relate to a ‘ii parttcular%person or thing of a~class as. distinguished ftom an act whtich applies uniformly throughout a class (39 Tex. Jur. 29,‘Stats., Sec. 12). it is also f.requently applied to statutes such as the. Insarance, Code that pertain to a lim- itcd 01 subclass of persons or things or corporations. . . From the reading of the statute, it can be seen that all of the excepted corporations are governed by statutes.that are ‘special’ in the latter sense. Accordingly, the term ‘special’ statute ‘as used in Article 9.14. T.B.C.A.. must .’ i - i Hon. Zollie Steal&y. Hon. J. M. Falkncz, page 5 (#,W-897) be used in the same sense so that insurance companies organized after the effective date of the Business Cor- poration Act would be a corporation ‘hereafter organ- ized under special statutes.’ ‘* In our opinion, there is nothing to indicate that the Legislature intended to ~treat the various classes of excepted corporations.differ- ently with respect to supplementation by the Business Corporation Act. Statutes relating to insurance corporations, banks, and other related excepted corporations are not “special” because they provide the means by which articles of incorporation will b& filed, but only because th5y pertain to certain limited classes of corporations which are generally excluded from the Act, the now existing general corporation laws, and it is in that sense that such laws are “special.” We have no difficulty in concluding that a CO rporaiion chartered pursuant to Article 1303b or Subdivision 49, Aiticle 1302, containing the trust purposes, is an “excepted domestic corporation. . iorganized under [a] special statute*’ pursuant to the p:oviso of Article 9.14A. As the’ remaining inqniries were predicated on answers diffe’rent from those given above, they will not be answered. SUMMARY Corporations previously organized under ‘the provisions of Subdivision 49 of A&& 1302, and Article 1’303b do not lose their corporate existence or their power to engage in the trust business by virtue of the passage of the Texas Business Corporation Act. Though not generally.applicable to such corporations, the Act does apply to the extent pro- vided in Article 9.14A. Very truly yours, WILL WlLSON~ Attorney General of Texas BY Assistant Attorney General APPROVED: OPINION COMMITTEES: Houghton Brownlee, Acting Chairman R. V. Ldtin, Jr. Martha Joe Stroud Torn McFarling Charles Cabaniss REVIEWED FOR THE ATTORNEY GENERAL BY: Leonard Passmore
Document Info
Docket Number: WW-897
Judges: Will Wilson
Filed Date: 7/2/1960
Precedential Status: Precedential
Modified Date: 2/18/2017