James Beattie et al. v. D. H. Hardy, Secretary of State, 93 Tex. 131

BROWN, Associate Justice. The plaintiffs, James Beattie, A. F. Jones, J. C. Whaley, and L. H. Griffin, presented to the defendant, D. H. Hardy, Secretary of State of the State of Texas, the following charter for record in Ms office: “The State of Texas, County of Cooke. — Know all men, that we, A. F. Jones, James Beattie, J. C. Whaley, and L. H.

Griffin, citizens of the State of Texas, residing in the county of Cooke, do hereby unite and associate for the purpose of forming a corporation under the laws of Texas, the name of which shall be The Ardmore Mill and Elevator Company, and shall exist for the period of fifty years. Said corporation is. formed for the purpose of owning, maintaining, and operating a flouring mill, grain elevator, and cotton gins in the town of Ardmore, Chiclea- . saw Nation, Indian Territory, and for the purpose of buying and selling, and dealing in grain.

The business of said corporation shall be transacted at Gainesville, Cooke County, Texas, and at Ardmore, in said Chickasaw Nation. Said corporation shall have five directors, and such directors appointed for the first year are J. C. A. Whaley, James Beattie, J. C. Whaley, L. H. Griffin, and J. M. Floyd; all of whom are residents of Cooke County, Texas, except the said Floyd, who resides in said town of Ardmore.

The capital stock of said corporation shall be fifty thousand dollars ($50,000), divided into five hundred shares of one hundred dollars each.” The charter was acknowledged, as required by the laws of this State, and the plaintiffs made proof that'50 per cent of the authorized capital had been subscribed and that 10 per cent had been actually paid in. The defendant, refused to file and record the charter, whereupon the plaintiffs filed this suit, praying for a writ of mandamus requiring defendant Hardy to file and record it.

The defendant filed in this court the following answer: “How comes the respondent herein by his attorney, Thomas S. Smith, Attorney-General of the State of Texas, and demurs to the petition of relator's herein for a writ of mandamus, and says that the allegations in the same are insufficient in law to entitle relator to the writ' of mandamus against him. And specially excepting to said petition, he says that the same is insufficient in law because, “First.

It appears from the same and ‘Exhibit A/ attached thereto, that- relators seek to compel respondent to file a charter, under the laws of Texas, for the express purpose of creating a corporation for the transaction of business in a jurisdiction other than that of the State of Texas, to wit, in the town of Ardmore, Chickasaw Nation, Indian Territory, while title 21, Revised Statutes of the State of Texas, only permits the creation of private corporations whose domicile and principal place of business are in the State of Texas, and the purpose of which corporation is the transaction of business in the State of Texas. “Second.

Because the State of Texas has no power to create a corporation the purpose and object of which is the transaction of business beyond the boundaries of the State of Texas in a foreign jurisdiction. “Third. Because it appears from the face of said petition and said exhibit that said pretended corporation is a fraud both upon the State of Texas and the Indian Territory. “Fourth.

Because-it appears from the face of said charter sought to be filed that from the very nature of the business said corporation would be engaged in, that, of necesshy, its principal office and place of business would, as a matter of fact, be in Ardmore, in the Indian Territory, outside of and beyond the State of Texas, while

article 673, Revised Statutes of the State of Texas, requires ‘Each corporation or joint stock company of every description, whether organized and acting under a special charter or general law of the State, shall keep its principal office within this State/ Of which said general demurrer and special exceptions respondent prays judgment of the court and that said petition be dismissed. “And should said demurrer and special exceptions be overruled, respondent, for further answer to said petition, says that as to the allegations of fact set forth in the same, he admits them to be true, and that he refused to file said charter for the reasons set forth in his said s¡>ecial exceptions.

Wherefore, he prays that he be dismissed hence with his costs, and that this court will refuse to issue the writ of mandamus against him as prayed for "by relator.” The defendant insists that the charter seeks to create a corporation to do business wholly outside of the State of Texas; that the law of this State does not authorize the formation of such corporations, and does not empower him to record such paper.

We think the question raised by the answer of the defendant is not involved in this case, and we express no opinion as to whether the State may create a corporation with power to transact its business exclusively beyond the territory of Texas.

The charter complies with the law in form, specifying as purposes for which the corporation is organized, (1) “for the purpose of owning, maintaining, and operating a flouring mill, grain elevator, and cotton gins in the town of Ardmore, Chickasaw Nation, Indian Territory; (2) and for the purpose of buying and selling and dealing in grain.” The places of business for the said corporation are specified as follows: “The business of said corporation shall be transacted at Gainesville, Cooke County, Texas, and Ardmore, in said Chickasaw Nation.” There is a business expressed in the terms of this charter to be done, or which may be conducted at Gainesville, Texas; that is, “the buying and selling and dealing in grain,”" as well as that to be conducted at its principal office in this State.

It can not be said that this corporation has no business to be performed and no home within this State. Defendant insists that under the charter the principal office must be at Ardmore. The law does not require the charter to state the place where the principal office is to be located, but commands the corporation to establish and maintain it within the limits of this State.

We do not agree with the contention of the defendant that the terms of this charter are such as to require its principal office to be beyond the limits of the State in order to carry on the business for which it is organized; on the contrary, the business of buying, selling and dealing in grain, in connection with or independent of the elevator and mill, may be, and, judging from the terms of the charter, will be, conducted both at Gainesville and at Ardmore, in the Indian Territory, and may may be controlled and directed from an office in Texas. In the case of Franco-Texan Land Company v.

Laigle, 59 Texas, 339, the charter provided as follows: “Its principal office for the transaction of business shall be at Weatherford, Parker County, Texas, and that its business might also be transacted at the city of New York and at Paris, France.” Chief Justice Willie said: “A private corporation, whose charter has been granted by one State, can not hold meetings or pass votes or have any legal existence in another State.

It must dwell in the place of its creation and can not migrate to another sovereignty. * * * “This prohibition as to the performance of acts outside of the State where chartered refers to acts of a strictly corporate character such as must be discharged by the corporators themselves, such as the original organization, the election of directors, etc.

The better opinion is that the mere transaction of such business as is usually done by the directors or other agents of the body may be done as well without the State as within it.” There being in the charter sufficient to constitute a corporation to do business within the limits of the State, the fact that authority is also conferred upon it to hold property and transact business in the Indian Territory will not render the charter void as a whole.

The State can confer authority upon a corporation to do business in this State and to hold property and transact its business within the territory of another State by consent of the latter. If authority to transact the business within the limits of the foreign territory should be denied, the charter would not be void and the corporation would not be without a business, for it might yet perform within this State the business of buying, selling, and dealing in grain.

It is therefore ordered that the peremptory writ of mandamus issue to the Secretary of State, commanding him to file and record the charter presented by the plaintiffs, and to issue the certificate required by law. Writ of mandamus granted.