                  OFFICE   OF THE   ATTORNEY         GENERAL       OF TEXAS
                                        AUSTIN
o-     0. YInrc
--mu
                                                               ,     e4



                                                      PJNA
                                                 $




          Boaor8bla Bert Ford, hdnlnirtrator
          Tar8  Liquor Control Board
          Austin, Tax88
          Dew     Slrl




          requsrtlng our op
          Ity ai th8 LIqu
          in your lrttrr

                                                       @ p@lUit i8 8U8d
                                                       Iolation pi tin
                                                       J ritrr 8 uoh aul-
                                                       d tmdor th8 -8

                                                   Thr a 0r:eretIon
                                     took   .ot $3,000, rhloh wa8 rub-




                     Phillips hCkae8 Store, hWor~at.d,     ha8
           8pp11d to thr Liquor Contml lb8rd   r0r a pInit to
           Opcrrt@ 8 pOk8eO 8tOr8 OXIprWi8@8 OWlI br per61
           Phllllp~. The Bo8rd ir r&ii384 th8t  ?rrnki8 8iUOrly
i8      th8          rlfa of ha8                      8iImrly who, for th8 part 188r,
h8       b8Ua          8ap1Or84                  in    the p8OkQa 8tOr8 iOr shish
Parat Phillip h8ld 8 PeEnit        OallOa18d by thr                                           ti8I-d.
-8    6iiLWlt   WW  tWiO8    ODWiOt8d Of ViOl8tiw                                              th8
Tar88   Liq,uor OentrOl Aat,    tha ilrrt inrtanoa                                            bdna
hbx'la8rt16, 1936, an4 tbr 88OOlldiMt8M8 brlq
hbmM?t   26, 1936. IdO lt81r Wa8 aadar iUhULOtiOS
for liquor riobtlon in 1934, 8ad h88 b88i Op8reting

                            fo      ti8W         Oi      tha ronigoipg hot8 out1lna4 In
four   lettar,                      you         88k      our oplnloa upon th8 r0ii0airrg
qU88tiOIlS              t

                            'Tha'qU88tiOU d8a8                           88 t0 What
          flrribilit~                           Of     18W    8Xi8t8 to      pST8lit      l
          00~ or8tion  to raak and obtdn      a priti-
          1w8  d8Ilid  80 inaitichql.,    8rd Whhst
          fart8 8nd Oir8U8t8tiO88      would jU8tie
              thi8          lb8rd          in        d8n7hg      8   p8mit      8ppliad
          ;~,;a                     a oorporatlon unbar tha                     lxlating

                            "TO what 8XtWt =8t                       th8 8XWOi88
              of       fraud    OF 8Ubtartug8 k                      88tablirhad
              t0       jU8tifr             a rafU881            Of 8 POreit 8Oueht
              br 8 @OrpOl%tiOlY?”

          A8 w8 int8rpret 7 ar elU68tiOn8, that r818t8
to tha snma rubjaot, sad thaf will thrrrrora ba SMWar8d
togathrr.
                            fn       our        opinion, It Canmt be 8814 that 88                          l
mattar of low undrr tbr fSOt8 atatrd, the Taxar Liquor
Control Boar4 WX~& ba jurtISIa4 lo refiring a permit
to tha oorporatlon. &?;(iTrr,tha iclOt Of rhloh tb
BOQ-d            h98        nOtiW               lre       Unply 8UffiOiULt t0 Warrant                th8
Board              in aonduotiq
                        8 had.ri6   to datrrdn8   whathar Or
not    tlm  aorporatIoon IS bdry   wad  a8 I 8ub .rrfa%r  to
ow8r      th8 intandad oprrdion oi 8 liquor bUSiin.88     by
di8poalifid      persona or tha operation ot ruoh bU8in888
in 8D iuje8i iDaMar, ati if th8 Board 8OnOlnb88          that
th8 OOrpm8tlOn I8 bra          80 U88d, it ha8 8uthcrit;lto
ranarr     tha pmnllt.
                                                                      793



BOCbOr8bl8 krt    Ford, pm8           3



            Tb   f8Ct8 8tCtid in JOrU 18tttr 40 not On
their iat8 8hOW th8t        th8 OCZpZ’at iOB 18 di8QMlifi8d     ?r-
h0iabg     thr permit. Earln~      never  rn~a~ad In th8 liquor
buBin.88,    the Oar bnttion, of O~pnr,       ha8 not b88n
&Iiltr    Of 8af TiO P 8tiOtl8  Of the 8Ot, 8od it Wm
thartior, b8 Il80888~r~ icS th8 board to OODdUOt t
hs8rlq IU Order      t0 d8ftrmint     whtthar or nOt f8Ot8
d8t     WhiCh 8&W th8t th8 OOrpOretibII       Wa8 IWt     iOr8d
in ($004 filth, but otr81y t8 8 8Ubt#rfU&8.
             The Doer4 or the A3ainIctrator I8 roquirab
br Artlolt 666-11, Vernon’8 Pant1 Coda, to rsfurr t
par.&    aftrr   8 hterlng in whioh it fin48 enf or the
6FOUlld#   t0 8xi8t *Ioh tr8 lirtad in Uid trtiO18.
In 8pp17Ing thi8 rtututa,     it 18 to be ramsnburrd that
“Th Ttxer Liquor Control Aot 18 intend84 88 an axtr-
0180 of the pcllitrpaatrr of the State to prottat          t&a
health,   wyllfara,  5~808 ard tamparenoa or Ita paoplr;
and all of It8 provI8lom      8rt    to bt oon8trut4 llbtrtll~
t0 tffUttU8tU rush purpo8a8.w Texas Liquor Control
Boer4 V8. &mint      Exohanat 8001tl Clubs 127 9. Vi:‘.   (24)
967. The flnding8 of hot        aurt   be mtdt  by the Board
or the Adaioi8tr#tOr,     rnd when bared UpOKI subrt;zf;l
arldrnc4’,will not be ret trI48 by the court.
Liquor Control Board 18. fO!lt8,       112 9.  B. (24) 2311
;;;;a Liquor Control Board ~8. Lanz8, 129 S. N. (24)
       .
           slnor the Eour4 or tha Mainl8tretor mart
hold the herin        8n4 8808rtein the i8Ot8, It 18 !lOt
vlthln cur prorinor      \io rtata   whet the COUOlU8iOM
of the Boer4 or thr Adainirtretor should br upon any
lrI4aoet whloh nay be heard. Howatrr, it I8 our
opinion that the Eo8x-4ha8 authority to r r fulr a l
pamIt where It tines a8 a iaot that the COr~rrtiOn
he8 btrn tormrd for th8 pUrpO88 Of btfng          U8td   It l
rubtarfugr   to oottr    the   oparetion  of the busint88
by 8 4irq~tllfItd parron or the oporatlm Of th8
bU8&888 in an illegal mnnar.

              ~paolr~0~ii~      rrfarring   to th8 ca88 *Ioh I8
 thg   rubjret ai pur      18 ttar,    wa balir~a thr tollo*l~
 ooml4aretIont     8r8   partinrntr
                                                                    . 7!j:

Eonorebla Bert Tore, pa?8 4



            (1)   Srction     2 o? Artiola    666-11,   Vernon’8
hn81    COda, prOvid88 t&t       the ptmit    My     b8 Ft.'wad
I? the lppliCUlt   &l8 TiOl8t8d  8Ill prOTi8iOn O? thi8
lot or rnr rub or r!gu.btlon of tb beard during the
prarlout rrmlt period. Saot loa 9 of thi8 lrtlala
8180 pro 4 da8 that the word l  epplicant~ rhall InOluda
“t&t owea   or owmr8        o? the majority    of   th8 oorpbrata
rtook of t oorp0retlon.n on tht h8t8 8tittrd, it 4088
not lppaar tlabt P8roy phIllIp l8 tb  owner o? t&
aajorlttO? the corporeta rtotk, but the iaotr alght
ahow upon 8 htsrlnd t&t ha, in feot,prld for all of
the 8tOok or ?UrOi8h#d th8 montt to th8 Other prtit8
to buy tha ttook end that ha, In raalltf, 18 the owoar
of all or o? 8 mejorltf of the ttook, If the herd
00mludrr that three an the feot8, we baliora   thet
the parnlt me7 be rrl'urrd,
          (2)  Dnbtr stotlon   6 of Article 666-11,
V4rnont8 Panel Coda, the Boerd 18 authorized to ra-
fU8t 8 permit where the   ?iadiq ia a.94athet,thr tp-
~11. ant will con4uct the bu8ina88 rt II plnot or in
ouch a mao6r   that, nbeaa4 on the gaaarel walfsra,
health, praoa, aomla, ati aefaty ct the paopla and
on tba public 8anoa o? daosncy ?mrantc I r zfuurel
of t perm: tvm 10 pe88ill8UPM this i8SUt, tht     B0Fal.d
~3~14 be authorized to consider ell of tha tact8 with
raitrenct to the monasr In r:hlob the bUsina88 la to
be conducted, lncl::UIn~ the  plaot where the butlnrsr
18 to be operated,   the faot it 18 the came place
when the buei8e88 ~88 operated for which the permit
he8 barn cencala4, tk8 fact thet the oem8 of the Qor-
poratlon would lead to the belle? that it la to ba
operated by Percy Phillipr, end tha general ohsreatar
8nd repltatlm   of 811 o? the rtockholdrr8 end ortloerr
o? the corporation. In other worda, the mere ?OLXM-
tlon ot the oorporetlon will not prtolodt the Boer4
from inqalrlw into all ot the feota relating to tLm
place and minn~r in which tha buiintrs ir tc be oon-
ductad, including tiU part r4COrd end r4pUt4tiOn Of
the parro-r who form the o~rporatlon and who will
rM th bWufo888.
          (3)     s&Ion   5 o? Article 666-11 prorldar
thet the &874     8htil rafUa0 t0 i88Ut 4 permit t0 an
Bon:r ablr   krt   lord,   pam   5


appllaant who 10 n:;t or uood moral oharrotrr or
who har a bad reputatloa,        as a praorablr law-eb+Ilna -   '
oltizen la the comaunlt~ where ha rerlbil. In
oonneotlon with thr prorlaiona         of rratlon 9 Of t416.
artlcb, we bellete that the Board zBT lnqulra into
the qtmrtlon aeta whether of not any Of the oftlOer8
o? thr oorporetlon,       or tb uwn6ra of a ssjorltl      or
thr oorporrtr      atook,   arm pereonq who have a bed
rrputetlon     or who era or bad moral oharactar.       If
the Board 00mlude8        that any or the Orflcors,    or thr
rtockholdars     ounlw a mjorltl       of the stock, ma not
of PC& mnral charaotsr or have bad rpputo tiona aa
law-ahldlW,     citizen8    in ths comuzltr,   we bsl.iavr
the Board    wculd    be suthorlzed   to rsfum   the perait.
                                     Your0 rsrp   truly
                                 ATWRNETC:NZRAL Q? TEXAS




             f.pgOVEZSEP 16, 1940

             -f-w-
             ATTORNEY
                    GENERAL
                          OF TEXAS
