Untitled Texas Attorney General Opinion ( 1958 )

Ausns 11. TExAn
September 22, 1958
Hon. Zollie Steakley Opinion No. WW-503
Secretary of State
Capitol Station Re: The authority of the Secretary
Austin, Texas of State to accept and file
Articles of Incorporationwhich
include, in part, the following
purpose clause: "To establish,
maintain, and carry on a general
currency exchange business and
in connection therewith to issue
checks, travelers'checks, money
orders, and other negotiable in-
struments,but without banking,
discounting,or insurance privi-
Dear Mr. Steakley: leges.
Your request for the opinion of this office is in
part as follows:
"The opinion of your office is respectfully
requested concerning the authority of this office
to accept and file Articles of Incorporation
which include, in part, the following purpose
clause under which it proposed to engage in busi-
ness in this State:
"'To establish, maintain and carry on a gell-
era1 currency excha se b siness and in connection
therewith to issue Ehecki travelers'checks. w
orders, and other negotiable instruments but with-
out banking, discounting or insurance privileges.'
(Emphasisadded)
"Insofar as I have been able to ascertain, it
has been the uniform departmentalconstructionof
this office since'the enactment of the Business
CorporationAct that the sale or issuance of money
orders and travelers'checks constitutedone of the
purposes of banking and the Business Corporation
Act was not applicable to such corporationsunder
the provisionsof Article 2.Olb&)a and 9.14A. It
is further noted that there is no provisionunder
Article 1302, R.C.S. for authorizinga corporation
.. -
Hon. Zollie Steakley, page 2 (WW-503)
to engage in business for the purpose of carry-
ing on a general currency exchange business or
issuing or selling travelers'checks or money
orders.l'
Article 2.Ol.A,Business CorporationAct, provides
that '*(c) Corporationsfor profit may be organized under
this Act for any lawful purpose or pur oses. . . .I' However,
under the provisions of Article 2.01B(f )(a) no corporation
can be organized under the Act if any one or more of its pur-
poses is to operate a bank.
It appears from your request that the uniform de-
partmental constructionof the office of the Secretary of
State has been that the sale or issuance of money orders or
travelers' checks constitutedone of the purposes of banking.
In Opinion No. WW-440 (pp. 6~7 and 9-12) this office
held that under the provisionsof the Business CorporationAct
where articles of incorporationwere submitted containingpur-
pose clauses identical with or similar to purpose clauses au-
thorized under the provisionsof Title 32, Chapters 1 and 2,
Vernon's Civil Statutes, and particularlyArticle 1302, with-
out the qualifyingwords or clauses of limitation contained
therein, such qualifying words or clauses of``limitationwould
have to be added before you would be authorized to grant a
charter or amendment thereto to a domestic corporation,or
issue a certificateof authority to a foreign corporation.
The purpose clause referred to in your letter of request spe-
cifically states that the corporation shall be "without bank-
ing, discounting or insurance privileges,"and therefore it
is not subject to the disqualificationreferred to in Opinion
ww-440.
You further note that there is no provision in Arti-
cle 1302, v.c.S., authorizinga corporation to engage in busi-
ness for the purpose of carrying on a general currency exchange
business or issuing or selling travelers' checks or money or-
ders. While it is true that prior to the enactment of the
Business CorporationAct a corporation could only be formed in
this State for one of the purposes authorized by legislative
enactment, nevertheless it is a matter of common knowledge that
one of the legislative purposes in enacting the Business Corpor-
ation Act was to permit a corporation to be organizedfor any
lawful purpose, or, stated conversely for any purpose not pro-
hibited by law, even though prior to the effective date of the
Business CorporationAct a corporation could not be formed for
such lawful purpose because the Legislaturehad not specifi-
cally authorized or designated such purpose as a lawful purpose
for which a corporation could be created.
_ ,
Hon. Zollie Steakley, page 3 m-w-503)
The establishment,maintenance,and conduct of a
general currency exchange business in connectionwith which
the corporation could issue checks, travelers'checks money
orders, and other negotiable instrumentsis a lawful business.
State v. Currency Services. Inc 218 S.W.2d 600 (Sup.Ct.MO.
1949). Therefore, since the pu$ose clause referred to is a
lawful purpose you would be authorized to accept and file the
proposed articles of incorporationunless the purpose clause
could be construed to be for the purpose of operating a bank,
and therefore prohibitedunder the provisionsof Article
2.01B(4)(a).
We have already noted the qualifyingwords or limit-
ing clause that the corporation shall be "without banking,
discounting . . .'privileges." These words of limitation
should be sufficient to render the proposed corporation sub-
ject.to forfeiture of its charter by appropriatelegal action
in case it violated its corporate purpose by engaging in the
banking business. However, it is well settled law in Texas
that a corporationmay be chartered for the purpose of engag-
ing in certain business activities which are also engaged in
by banks without enga ing in the banking business. Xaliski v.
Gossett, 109 S.W.2d 3 60 34-k iCiv.App.1937 error ref.);
Be&m& ct n Credit Ass n v. Zeiss, 193 Tex. 152, 264
SrW 2d 95 ",; (:;53, For example see sub-divisions48 and
45 'Article 1302 and Article 1303tb), V.C.S., and compare
Article 342-301;'AttorneyGenerals' inions, Bienniel Report
of 1912-1914, p. 342; Attorney Genera
? Is Opinion No. WW-440.
It is the opinion of this office that the proposed
purpose clause contained in your letter of request is.for a
lawful purpose not prohibited by Article 2.01B(4)(a). >
SUMMARY
The Secretary of State has the authority to
accept and file articles of incorporationwhich
include, in part, the following purpose clause:
"To establish, maintain and carry on a gen-
eral currency exchange business and in connection
therewith to issue checks, travelers'checks,
Hon. Zollie Steakley, page 4 (Ww-503)
money orders and other negotiable instruments,
but without {anking, discounting,or insurance
privileges.t'
Yours very truly,
WILL WXLSON
Attorney General of Texas
I
C. K. Richards
CKR:wb Assistant
APPROVED:
OPINION COMMITTEE
Gee. P. Blackburn,Chairman
Wallace P. Finfrock
Howard Mays
Milton Richardson
RBVIEWED FOR THE ATTORNEY GENERAL
BY: W. V. Geppert