Untitled Texas Attorney General Opinion ( 1939 )

OFFICE OF THE AlTORNEY GENERAL OF TEXAS y
AUSTIN
~gRALDc.
MANN
A---r
Hoaorabls TomL. Beauchqp
sooretery of .stete
Austfn, Texan
'D8ar sir:
out hne
malt' wina grente& oa
lw?, end perlitltt4
uot or transaot the
agent for the performawc, dr
he C T Corporation Symtuadaily presents
to this oitioo through the United 9tates md.8
applications, together rLth al;l acmmpaaylqg
pfwr~, of forslgn oorparetfone to do businms
In the StAta of TWYUJ. Aoaoarpanying tha appl,i-
oations and the eu~portfapg papers ie a letter
from the C T Corporetlon 6ystaP advising thilr
Honorable Tom L. Beau&, Page 2
offioe that 'et the lnntnaoe and request of
the law firm of Doo and Roe of Blank City,
u. S. A., the following papers are presented
to your ofrioe.*
*The writer is of the opinion that the
C T Corporation Syrtem seeks to aonduot thla
business under Artlole 13C2, Sootion 49, whiah
provides as follower
"*For any one or store or *he rollowing
purposes: To aoouatulate and lend leoney, pur-
ohese, sell and deal in notes, bonds and
securities, but without banking and dlaoount-
ing privileges; to aot as trustee under any
lawful express trust oodtted to them by
contract and as agent for the performanoe or
any lawful sot.’
"Artlole lSZ4a proridae that oorporati&
organized under Seotion 49 ahall be sub&of to
oertaln regulations whioh are oontained in
Saotlon 1 to 10, lnolu8lvo, oi said Artiole
1524a. The C T Corporation System has ooak
plied wfth all the requirements set forth in
said Artlole.
"This orfioe has bad presented to it an
epplloatlon for oharter for a domestie eorpo-
ration whioh states that the purpose for whloh
said proposed corporation is formed Is 'to aet
ea agent for the perfomanoe of any lawrul act
such as to assist members of the bar In organi-
zation, reorganization, qualirioation and repre-
sentation of oorporations including notifioatlon
service and generally sating in a statutory
oepaaity rot oorporetfone*. You will riots that
this is the ldentloel language used to grant the
C T Corporation System Its permit to do business
in the State of Texas.
"The following questions present themselves
end this Department wiehes to request an opin-
ion from you on them:
,Eonorable Tom L. Beeuahemp, Page 3
“(1) Ia the C T Corporation System, under
Its purpose olause, authorized to fender the
eerx!loes outlined above?
Y(E) Does the drawing end filing of appll-
OatiOAe for ;?crmits t0 do buslnese iA Texas OA
behalf of rorew OOrpZtItiOAf3, at the instance
end requed of members of the Bar of forelga
etetea , ,OOAStitute the praotice of law?
“(3) If you have stated that It does oon-
stltute the praotloe of law, 1s suoh preotloe
of lnw unlawful eAd in violation of iirtlale 430a
oi the Penal Code of Texas?
“(4) Would this offloe be authorized to
grant a ohartcr to a do!xestlc aorporatlon having
the ebove referred to Furpose olause?
w(5) If you have answered thiit this offloe
would be authorkzied to $raAt a oharter to eald
oorporetlon, would it be authorized to render
the same servloee for attorneys as the C T Cor-
poration System Is now rendering wlthout being
in violation of hrtlole 4SOa of the Penal Code?
“(6) Xould said domektio oorporatlon be
authorized to prepare end file applications for
perzilts to do bualnecm in the Stat3 or Texas ror’
oorporatlone, and if it would be 80 euthorlzed,
would the rendering of said service be in vlola-
tlon of Xrtlole 433~ of the Penal Code?”
Article 430e of the Penal Code reads es Tallows:
“.5x. 1. It shall be unlawful ‘for any oor-
poratlon or any person, i&m, or assoolatloA of
persons, emept natural persona who em members
of the Bar regularly admitted and lioenaed, to
praatlce lsw.
Y%C. 2., Zor the purpose ot this ir6t, the
practice of lew is defined as followsr Whoever
(a) In a,repreeentntive capeoity appears as aA
advoazte or drau,a papcrs, pleadlnge, or doouments,
Ronornble Tom I.. Beauohamp, Page 4
or perSome any act In oonneotiol; with prooeed-
1~s peAdin& or prospeoClve berore a Oourt or
e justloe of the peaoe, or a body, board, oom-
mlttee, 00~it1118610~or.otrloer oonstituted by
law end having authority to take evidence in
or settle or determine oontroveraiea in the ex-
erclse of the judlolel power of the Steto or
subdivision thereoft or, (b) For a oonsidera-
tion, rewerd or pecuniary beAeflt, present or
antlolpeted, direct, or lodlreot, advises or
oounsels another as to eimular law, or draw4
a paper, dooment or instrument affeoting or
relating to seoulm right*; or, (0) For P
oonslderatlon, reward, or peouniary benefit,
present or ontlolpated, dlreot or indlreot,
does any act lo a regresmtatlve oapsolty ia
behalf of another tfiAdIAg to .obtain or aeoure.
Sor auoh othsr the prevention or the redrew
of a wrong or'the etioroement or establlsh-
ment of a right; or, (d) For a ~OOAeid8retiOn,'
dlreot or lndlreot., gives .4A opinion 48 to
the valldlty of the title to real or personal
property, or (8) ks e voo6tIon. entorees, 400
cures, settles, adjuste,or compromises de-
fauLted, oontroverted or disputed aooouAts,
olalms or demands between persona with Aeither
of whom he la tn prlvity or in the relation of
employer end employee in the ordinary sense;
1s praotlolng law. Nothing in this section
shall be construed to prohibit any psrsoA,
firm, assoclatlon ok oorporatlon, out or oourt,
from EtteAdfIIg to and caring f'or his or its
OWA buaine:s, olalms or demands, or the olaim4,
demands or traffic business ot said oorpora-
tion or of the indiVidtl31 members of said oor-
poratlons or aesoaiet~oAs; wzir from preparing
abstraots of title, aertlf:~ing, guaranteeing
,or lcsurlnp- titles to property, real or per-
sonal, or an intareat therein, or a lien or
encumbrunae thsreon, nor shall aAythlng in
this section be oonstrued as prohlbItlAg Amy
back or trust aoqnny wlthout resorting to
aourt a&ion from aotlng Zor.lts oustomsr In
eniorclng, seo@.Ag, settling or eddusting
any ltam mentioned in subdivision (8) above,
Honorable Tom L. Beauohagp, Page S
nor ah,!11 anything ln thlie section prohibit any
person or a%0ooIation of persons from puraulng
as a vocation the buainesa of adjusting lnsur-
ame or freight rate olalme; provlded'further
that nothing in this Aot ahnll prohibit any
person or assoalatlon of parsons from appearing
b&ore any Board, Comlealon or AdmInistrative
body in oonneatlon with their voaatlon of ad-
justing Insuranoe or Jkel t Rate alelms; pro-
vlded.that subdlvlslon (e? hereof shall not pro-
hlblt any ludlvlduel~~~;company, odrporatlon or
assoolatlon, owning, operatlug, managing or aon-
trolling any oolleotlng egomy, oommerolal agenay,
or commerolal reporting credit agenop within this
State, subjeot to an oooupation tax under Artiolr
7001, Chapter 2, Title 122, Revised Civil Statute%
1925, or Texas, rrom ruxmlshlng report% and ool-
leotfng, eeourlng, settling, adjustine or aom-
.promlslng, out 0r oourt, defaulted, controverted
or disputed aooounts or olalxw growing out ot
oontraotual relations, provlded,that said lndl-
iiaual, aompany, aorporatlon, or aseooletlon, oom-
@lies with the above etatute; and provided fur-.
ther that nothing in this Aot shall be ooestrued
as prohibiting real estate agents from aolleat-
lng rent% for their employer%; provided that
nothing herein shall prevent ,Notariea Publio
;~yorawIng oonveyanaea ror or without aompef-
.
"SEC. 3. It shall be unlawful for any oor-
poratlon to practloe law as derlned by thla Aot
or to appear as an attorney ror a@ person other
than ltselr in any oourt, in thie State, or before
any judicial body or any board or oomiaisslon of
the state oP..Texa%; or hold ltselr out to the
pub331 or advertise a% being entitled to praotlas
law; and no oorporatlon shall prepare oorporate
oharters or amendment% thereto, or other legal
doouments no$ relating to Its authorized busl-
nes%, or draw wills; or-hold kt%elf out ln any-
manner dlreotly or lndlreatly as bekg %ntItled
tp do eny or the foregolns aota; provided,
that the foregoing shall not prevent a oorpora-
tion, person or assoolatlon of person% rrom
Honorable Tom L. Beauohamp, Page 6
8mpLoyfng an attorney or other ag%nt or repre-
sentative In regard to its o%,n affair% In any
hearing or Investlgatlon berore any admlnl%-
tratlve orrlolal or body.
"Provided, further, that the above prwl-
slons of tbls Aot shall not be oonstrued to
prohibit a person or corporation aotlng in a
tlduclarf capaolty from transacting the neoe%-
aary olerloal busineea Inoldental to the
routine or usual administration of estate%,.
trust%, guardianships, or Other slmllar ildu-
clary capaoltles, or riling aooount9, prepar-
ing and tlllng tax returns of every nature,
and other such admlnletrative'acta, nor from
partlolpatlng through his or Its own agent
or attorney, in oooperatlon with testator's
attorne-7, In the preparation ot teatator's
will, where no oompeneatlon 1s oharged for
suoh servlae and no aompensatlcn whatever is
charged or reoelved, other than the ueual
commission allowed by the aourt ror admIni%-
terlng the estate or trust, or provided for
by the lnetrument oreatlng the trust or other
rldualary relationship.
WAnd provided, further, that nothing here-
In shall prohibit any Insurance company from
causing to be defended, or proseauted, or from
offering to aause to be defended, through law-
yers of Its own seleotlon, ths lnsureds or
assureds in polloiea issued or to be issued by
It, lo aooordanoe with the terms of suoh poll-
cIes;l and:shall not prohibit one suoh lloensed
attorney at law rrom aotlng ror several como5
c;:rrlers or,other oorporatlone and a%%oalatlone
or any of It% subsidiaries pursuant to arsange-
ment between eald oorporatlons or assoolations.
"SEC. 4. It ahall be unlawful for any at-
torney at law io share any fee or ie%a earned
or received by him for legal servloea with any
person or firm, not a licensed attorney or at-
torneys, or with any asaooIatIon or oorporatlon.
Honorable Tom L. Beauchamp, Page 7
"SEC. 5. The oounty attorney and/or Dle-
trlot Attorney and/or Crlmlnal Dlstrlat At-.
torney of any oount? In Texas shall on his ow5
Initlatlve or upon the applloation of a5y Bar
Assoalation In~the State of Texas bring mob
aotlon in the name of the State of Texas in the
proper aourt to enjoin a5y suah person, oorpora-
tlon, or assooIatlon or persons rrom vlolatlng
any of the provisions of this Aot, and It %hell
b% the duty of the aountg attorney% and/or
Dlstrlot Attorney and/or Criminal Dlstrlat At-
torney of this State to rile aomplainte In the
proper court agalnrrt any person, oorporatlon,
or assoclatlon of person% upon the reoelpt oi
Intormatlon or the violation or any or the
provisions or this Aat.
wse. (1. Any person, rirm, aorporatlon, or
association of persons vlolatlng anyof the pro-
visions of this Act shall be guilty or a tie-
demeanor. Ir any provision or this Aot Is via-
latad by any person lndlvldually or by any person
or persons representing a aorporatlon, or a9so-
elation, or by a'aorporatlon, the defendant or
defendants upon oonvlation shall be pirnishod by
a rlne of not more than Firs Hundred ($500.00)
Dollars nor lees than One Hundred ($lO(!.OO)
Dollars.
"SEC. 7. by agreement by any person, oor-
poratlon, or assoolatlon In violation of this
Act shall be illegal and such person, aorporatlon,
or essoolatlon shall not be able to reoover for
any services rendered in violation of this Aot,
either on the contraat or a quasi-aontraatual
obllgatlon. Ii any person, oorporatlon, or eei-
soaiatlon of persons shall, by any eot or 01&s-
~105 in violation of this Aot, aause any loa%,
damage, or Injury to any person, oorporatlon or
assoolatlun of persons, suoh person, oorporation,
or aesoaloU.on of perf.ona, shall be liable in
actual damages therefor to any person, oorpora-
tion, or assooiatlon of persons who sustained
any suoh loss, damage or injury; and suoh lla-
blllty ahall be absolute and not dependent upon
any queetlon or showing of want of &kill, oare
or UIlIgeno%.
Honorable Tom L. Deauohamp, Pag% 8
“SEC. 2. All laws and parts or laws In-
aonslstent herewith are hereby repealed, and
in oass sny seation, subdlvlslon, paragraph,
or sentence of this Aot 1s deolared umonsti-
tutionr:J the validity of the,,rest of this Aat
shall not be affeoted thereby."
SeotIons'48, 49, and 50 of r.rtlole 1302, Revised
Cloll.Statutes; read as follows:
"48. To aaoumulate and lend moneywlth-
out bankinG or dlscountlng privilege%.
"49. For any one or more of the rollorr-
Ing purposes: To aooumulate and lsnd PIoney,
purahaae, sell and deal 15 note!, bonds and
seourltles, but without banking and dlsoount-
lng privileges; to aot a8 ttistee under a5y
lawful express trust oolnmitted to them by
oontraot end as agent for the performsnoe of
any lawful eat.
"50. To subscribe for, purohass, invest
15, hold, own, assign. pledge end otheralso
deal in and dispose of sharss or~aapital
stook, bond%, mortgages, debentures, notes and
other seourltles, obligations, oontraots end
evldenoee of indebtedness or foreign or domea-
tic corporations not oompetlng ,tith eeoh other
in the same line or business; provided tho
powers and authority herein Oonfsrretd ehall
In no way arrect snp provlalon'of the ant&
trust laws or th:s State."
Article 1524a, Revised Civil Statutes, embreaes ocrpo-
rations heretofore oreated and hereafter oreated having for the**
purpose or purposes any or all the powers LJOW euthorlzed 15 sub-
dIvislon% of 48, 49, or SO of Artlole 1302, Revised alvil Stet-
utes of Texas, 1925, and hexetofore or hereafter qr.Qreated
having in whole or Ln part any purpose or purposes :5ow euthor-
lsed In Chapter 275, Senate Bill No. 232 of the General and
Speolal Laws of the Regular Session of the 40th Legislature.
In the case of In re BraI5ard, 26 Paa. Rsp. (2) 769,
Honoriblo Tom L. SeauohamPp, Page 9
where a former probate judge who, for oo~~etensation,without
being edqltted to practloe law end without paying llaenae
fees, advlsed persons in probate matter6 nnd prepared and
filed paper% In oonneotlon therewfth, and who prepared a&l-
010s of lriaorporatlon for corporate organizers, whloh work
wa% neoessax to olear titles in loon transections, the Su-
preme Court of Idaho held that the for%er judge wasengaged
In the praotloe of law rendering him guilty of ooctampt of
the Supreme Court of Idaho althougb he did not sign the pa-
pers e5d pleadings as attorney, and he did not acoept legal
employment sxeept rrom persons who had already enllated hi%
servloes In buslners matters oocneoted with loans.
The Supreme Court of the State of New York in the
case of In re Paoe, 156 14. Y. Sup. 641, held in erieot that
where A aorpora,tioa, known aa the Corporation Coupany of Dols-
ware malntalned~ en offloe In New York City and dlst*rIbuted
alroulars to attorneys at law, Offering either to inoorporete
oompanles under the laws of Delaware or to furnish all ths
neoessary r0m, eta., for the attorneys to do so themeelves,
end thereafter through %uoh oorporatlon Hew York attorneys,
who aated as roswardersto the home ortloe In Delawars, In-
aorporated three oo>panIes. The aorporatlon wus guilty or
e vlolatlon of the Penal Law prohlblting the praotloo or law
by aorporatlons ainoe the praotIoe of law is not lI&tsd to
appearlag In oourt, or advlsI5g and aa%IstI5g In the aonduot
or lItigatIona, but embraaes the preparation of pl%adlngs and
all other papers Inoldent to lotlo5s and. speolal ~~I!OOe%ding%,
oonveyances, the preparation of legal Instruments of all klads,
and the glvlne, or all legal adVIOe to allents, and Potions
taken for them in matters oonneated with the law, lwluding
the preparation of papers requisite for the Incorporation of
the oompany and the Inoldental advise necessarily given In eon'
neotlon therewith.
7% do not rind any Texas Ceoislons construing Section
3 or Article 43Ga quoted ebove. Xe quote from.opInItn ho.
O-647 written hay 5, 1939, by Honorable dames ?. Hart, Assis-
tant Attorney General, wklob oon%truee Seotion 3 of Artlole
43Ga ri9 roiiowt3:
*The ",ue!itIouremains as to Wiet was the
Intention cr the Legislature In providing in
SeatAm 3 that *It shall be unlnwt'ul ror any
corporstion to practloe law cf% defined by this
Honorable Tom L..Beauohakp,Page 10
Adt or to appear as an attorney r0r say par-
son other than itself. . .* It Is our opIn-
ion that the words *other than Itself' were
used 80 a8 to make it plain that a aorporetlon
is not prevented trOm hIring a regular stati
or lawyers to appear and represent it in court.
In a sense, such action by the corporation tight
be construed to+oonstltute the Indireot praatioe
of the law by the oorporation for iteelf, but
suoh action Is not illegal because the oorpora-
tlon by so doing is seaurlng legal representa-
tion for Itself and not for other persons. We
believe that the LsgIslature had in tind certain
cases wherein it has been held thot a oorpora-
tion Is indlreotly prdotiolng law where It, In
eifect, hires E staff of lawyers and furnishes
legel repreeentetlon to other peraonm.- See In
re Uaolub of America, (Mass.) 3 N. EG (2).272,
,105 A. L. R. 1300; Peopla 0. Motorists Asso-
olatlon of Illinois, 354 Ill. 595, 188 N. IC.
827; United 8tates Title Cunranty Oonipany v.
Brown, 217 N.Y. 628, &ll N. E. 826. We think
thet the Legislature intended, by using the
words 'other then itself,' to make it plain
that a corporation can hire a regular legal
atafi to represent It, but that the Legfslatum
did not intend tp confer On oorpOratiOAt3 the
right to be represented e:oept by agent8 or
attorneys who have been duly lioenaed to praa-
tloe law."
We do not .belleve that the C~ T Corporation System or
the proposed corporetlon mentioned in your in@ry under their
ITvzse clauses are authoiized to render the servIoes outlined
.
In view of' the foregoing authorities you ere reepeot-
iully advised that It is the oplnlon of thI8 Department that
your questions should be answered as follows:
(1) No.
(2) Yee.
(3) Yes.
Hanorabie Tom L, Beauahamp, Page 11
(4) No.
Aa we have answerad your fourth question In the nega-
tIve it 18 not neoes8ciry to amwar queetfone NOe. 5 and 6.
Trmting that the foregoing answers your inquiry,
we remain
Your8 very truly
ATTORNXY GEh:ERi'iL
OF TEXAS
-.4S.LiL-
BY A+11 yiIlliams3
A&sletant