Untitled Texas Attorney General Opinion ( 1939 )

OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN gooorable Ld. 0. ?lowora Becretary of State Austin, Texas Dear Sir; We are in receipt f October 16, 1989, In which you submit the followi thle DoperWent for an @Qinlon 1 tar 0r a oorpora- t1on in the erfaiament or 1389, IJubairislosl aontlnus to accrue arter nt for the benbflt of active except for xlnd1n.g ubdlvlsion 7, Rerfsed Civil Strtutoe, 19E8, ie afosolvea : -9. Whenever a ocrporatlon ugoa proper ltulloial aeoertalxmnnt ia found ta be inaolrent.a 13 iay3ie ve. ieybe, (T.C.k. 1920) 820 9. W. 897, p%alatlff inrtltudsd suit on a note erimited by Leyhc %uao C6mpary and to foreolose n lfen. After the exeoutian ot the note the layaCr Piano 54 Eon. k. G. Flowers, Page 2 Company was adjudged a b&crupt and followlq such odjudloetion -de a CornposItIon with its uneeeurea oreditors. It was held by the court: “The next propoeltlon advanced by appellants la to the effeot that nci judgment oould be taken after die- miaeal of two of the dlreotore or the oorporation. We are lnallned to think that this proposition is also well 5. it. 823. by virtue of the statute the alreotora OS the oorporatlon at the tIete OS Its dieeolutlon beoame trustee% to wind up its &faire, R.S. hrt. leoa. They act In said capacity colleatIvaly and suit oould not ba maIntaIned to estublieh a oorporate 1iab:lIty against any of them elngly.” %a have been unable to find any other oaee In this jurle- alotlon passing upon this question and must therefore re?oipllta the above cited oaee es oontrolling your first question. An assignment for the benefit of aredItore~lr en absolute unuondl~Ional and Irrevocable voluntary oonveyance OS propertf by the debtor to the assignee in trust for tho purpose ot paying debts out of the proceeds thereof. The aeeIgnea takes absolute title to the property for the trusts expressed In the Instrument. 5 Tax. Jur. p. 59. A corporation r&ay make an a8eigmant Por the beneiit or orsaltors. Uller vs. Goodman, (T.C.A. 1897) 40 S. iY. 7425. The legal enity continues to exIet notwXth6tending there nay have been an aeelgnaent for the benefit o? oredltore sInoa Artiole 1%7, Revised Civil %atutee, 192s. which provides for the dleeolutIon ot corporatI&a does not provide that suah action shall dI8solYe the corporation. Artiole 7084, Revleed Civil Statutes, 1926, provlaee that “except as hereIn provided every aomeetlo and roreI$n OCrpOratiCn hertatofore or hereafter ohartered ;or ?iuthorleed to do business In Texas . . . a?iall pay In a&vanes to the Secretary of State a fran- oblae tax ror the year ~ollowlag,~ as theraln provided. We find no exception exempting oorioratione that have made assignment8 iOr banelit of creditors. Article 9099, Revlead Clvll Statutes, 1925, rate out a alffarant formula for oomputfng the tax of a oorpow*Ion ‘aotually in prooeee of llquiaatlon.~ No doubt meiny aorporatlons whloh have made asslguments for the benerlt of ore&tore are In aotuel proooea ot’llquldatlon Jocklng. to a oomplete disfolution Ot the corporation, and would be governed by the terms of this etatute in oomputlng thair iranohlee tax. 54! yion. M. 0. Flowers, ?a430 8 Ii Ic oertaln Instancea It tight eeem Inequitable that euoh oorporatlona are required tc pay a franohlse tax, It mat be noted that they ere not wlthout remedy alma they my affect a die- solution under Artlola l?JSl, Gevlsad Civil Statutes, 1985, or make a reduotlon In their capital etock. It Is our opinion that an ordinary adjudloatlon In bank- ruptoy OS a Texas corporation Is a judiolal aeoartalnmant of in- aolvanay within the n;tenlnf: of Artlola X%9, SubdlvIaIon 7, RevIsad Olvll Statutes, 1925. fn answer to your eecond queatlon, It Is cur oplnlon that the exaoutlon of a generel arslgumant for the benefit of oradltcre by a oorporatlon does not within lf88lt exempt euoh OOrpoIUtlOn rrcmthe papent oi a iranohIS8 tax. Yours very truly ATTORNRY GR%?.CRAL OF l'RXM3 Assistant OCCIR .: ATTOFMEY GEEUW, OP !Cn