# Untitled Texas Attorney General Opinion > Texas Attorney General Reports · July 2, 1947 URL: https://www.frixlaw.com/law-library/cases/4138586 ## Case - **Court:** Texas Attorney General Reports - **Decided:** July 2, 1947 - **Precedential status:** Published - **Opinion:** Opinion - **Judges:** Price Daniel - **Cited by:** 0 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4138586 ## Opinion text ;.. - R-399 TEXE A&ORN&Y GENERAL OFTEXAS AUSTIN.TEXAS May 5, 1947 Bbn. Paul H. Brown opinion RO, v-185 Secretary of State Austin, Texas Ret Is a oorporatlon or- ganized under Subdirl- 81011 39, Article 1302, R.C.3,, 1925, limited to retall business? You have requested the opinion of this De- partment lo to whethbr w not i oorperatlonorganized under the provisions of Subdivision39, Article 1302, Revised Civil Statutes, 1925, is limited to the con- duct of a retail business only. Subdlvlslons39 and 40 of Article 1302, Re- vised Civil Statutes of Texas, 1925, ape as follows: 'Article 1302. The purposes for which private corporatfonsmay be formed are . * n "39- To )urchLse and sell goods, wares and merchandise, and agrlCultural~andfarm products. "40. To buy and sell goods, wares and merchandise of any description,by wholesale OP wholesale and ret&l, with h capital stock of not less than twenty thousand dollam; provldea. such wholesale and retail business shall not be conduoted apart or ig semrate establishments." (Fimphasls added) Because of the unrestrictedlanguage of sub- division 39, supra, It would appear at first glance that a corporation organlzed under its provisions could en- gage fn either a retafl OP wholesale business or both. However, when construed In parf titeria with the provi- s%ons of subdlvLsion40, and particularly the ~emphasfzed portions thereof, it la apparent that the Intent of the Legislature in enacting subdivision40 was to restrict the terms of subdivision 39. - ._, Hon. Paul B. Brown - Page 2 v-185 It ia a cardinal rule of statutory construc- tion that the Intent of the Legislaturemay be ascer- tained from the legislativehistory of the act in ques- tion. Artlole 566,-R.c.~.,1879, (Artlole 1302, R.C.S., 1925) did not Contain the specific purpose' clauses contained in subdivisions39 and 40, supra, but dla aontain subdivision27, which Is as follows: "For any other purpose lnteuded fop mu- tual profit or benefit not otherwise espe- cially provided for and not inconsistentwith the constitutionand laws of this state." This subdlvl~loawas repealed by,Chapter 61, Acts Nineteenth Legislature, (1885), p. 59, (see Bmpire Mills v. Alston Grocery Co. 15 3. W. 505, 507),and the Twentieth Legislature in 1867 amended Article 566 by enactln$ Subdlvislon24, (Chapter 58, Acts 20th Lugls- lature, p. 41) as follows: "The pwchase and sale of arrrlcultural and farm vpoducts. goods. wares and merchaa- u: Provided further, That the number of persons incorporatingfor such purposes ahall In no instance be less than ten, nor shall any person hold or own more than five hundred dollars of such stock; and any person owning more than five hundred dollars of such stock, shall be liable for all the debts of such corporation." (Emphaslaadded) The emphasized portion of the above quoted subdivision is practically Identicalwith subdivision 39 of the present revised statutes, and would apparent- ly permit the conduct of either retail or wholesale bus- iness, or both, and It Is evidence that the Legislature in 1891 was cognizant of suoh interpretationsince it amended ArtSole 566, R.C.S., 1879, by adding subdivision 25 (Chapter 401, Acts Twenty-secondLegislature,P. 164) which la as follows: "Iporthe purpose of buying and selling goods, wares and merchandise of any descrlp- tlon by m; but the llmlaitatlons upon stock and stockholders in corporationscre- ated under subdivlslon24 of this article shall not apply tb corporation6oreated un- der this subdivision." (Emphasisadded) Hon. Paul H. Brown - Page 3 v-185 In 1895, subdivision24 and 25, Article 566, R.C.S., 1879, were again amended by Chapter 105, Sec- tion 1, Acts Twenty-fourthLegislature, p. 190, to read a8 follows: “24. The purchase and sale of goods, w&es and merchandise and agrloulturaland fam products. “25. For the purpose of buying and selling goods, wares and merchandise of any desarlptlon by wholesale or wholesale ang retail; but the llmitatlonsupon stock and _ stockholdersin corporationsareated under subdivision 24 of this article shall not apply to corporationscreated under this subdivision: Provided, that no oorporatlon created under this subdivision shall be chartered with a capital stook of less than twenty thousand dollarsa And DDrovided.fur- ther, that suah wholesale and retail busi- peas shall not be conduated apart or in SBD- arate bstablfshments." (&phasis added) The amendment of 1895 was carried forward un- changed into the Revised Civil Statutes of 1895, 1911 and 1925, exoept for changes in Art1018 and subdivision numbers. Considering the foregoing legislativehistory of subdivisions39 and 40 as a whole, it is alear that by the amendment of 1891 creating SubdiviSIOn25, supra, now subdivision 40, the Legislature intended that aor- poratlons chartered under subdivision39 were authorized to engage in retail business only, while those chartered under subdivision0 were authorized to engage In whole- sale business only. ROWBVBZ?,in 18%~ th8 Legislature areated an 8XC8ptlOn to subdivision25, now subdivision40, by per- mitting a corporation to engage In both retail and whole- sale business, only When such businesses w8re conducted together in the SBm8 establishment. It is th8 Opinion Of this Department that a corporation chartered under the provisions of subdivlslon 39, Article 1302, Revised Civil Statut8s, 1925, IS res- tricted to the conduot of a retail businees Only. Hon. Paul B. Brown - Page 4 V-185 A oorpowtloa ohartered under~subdivf- si0d 39, Artiole 1302, R.C.S., 1925, ia res- trlctad to the sonduct of a retail business OUJ. Yourm very truly ATTORRZY WIVEFUL OF ZRM BY Ce K. ,Rii\hards Assiataat APPROVID HAY 5, 19%' --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4138586. Public record. Not legal advice.