                          January    24,   1961


Honorable   Robert S. Calvert                Opinion   No.   w’d-988
Comptroller     of Public Accounts
Capitol   Station                            Re:   Necessity    of obtaining
Austin,   Texas                                    inheritance    tax waivers
                                                   on transfers    of shares
                                                   of corporate     stock in
                                                   the name of a deceased
                                                   shareholder    to his
Dear Hr.    Calvert:                               executor.

       You have requested   that we advise you on the above
captioned   matter.   The pertinent  statutory    provisions   are
Articles   14.22 and 14.23,   Ch. 14, Title    122A, Taxation-General,
V.A.T.S.   Article  14.22 reads as follows:

              "No notes,    bonds,   certificates,      mortgages,
           stocks,   securities     or other evidences       of
           indebtedness     due the estate       of deceased
           persons and subject       to taxation,      hereunder,
           shall be transferred        or delivered     to any
           legatee   or heir until      the Comptroller       issues
           a notice   to the executor,        administrator
           or trustee    of such estate,        or to their
           bondsmen, stating       that all the inheritance
           taxes due this State have been paid.               Such
           notice   shall be authority        for any adminis-
           trator,   executor    or trustee      to deliver     such
           property    to the proper legatee         or heirs."

      Article     14.23   reads     as follows:

              "Should any domestic        corporation      or
           association      transfer   to any legatee       or heir,
           or should an administrator,           executor     or
           trustee    deliver    to any legatee      or heir,    the
           stocks or bonds of any domestic            corporation
           or association,       or deliver    any other property,
           before    the inheritance      tax thereon      due this
           state is paid,       the corporation      or association,
           or the administrator,         executor,     trustee   and
           their bondsmen, shall be liable            for said tax
           and penalty      and all cost of collection."
Honorable       Robert     S. Calvert,   Page 2         Opinion       No. W-988



       You   will note that the prohibited      transfers   enumerated
in Article      14.22 are transfers   or deliveries     “to any legatee
or heir.     . .‘I The notice    of payment of inheritance      taxes
required     by this article   is notice  to any administrator,
executor     or trustee  and constitutes    the authority    for the
delivery     of property   in their hands to the proper legatee
or heir.

      The penalties          imposed by Article 14.23 are incurred   only
when ;he prohibited           transfers are made “to any legatee   or heir
. . .

       We are of the opinion         that the lan guage of these controlling
statutory     provisions     is plain and unambiguous and precludes                the
necessity     of obtaining      a written    consent     from the Comptroller
prior    to transfers      of corporate     shares of stock in the name of
a deceased      shareholder     to the executor       of his estate.        This
concl    sion is fortified       by the fact that Articles            14.16 and
14.19 Y , Chapter 14, Title        122A, 20A, Taxation-General,             V.A. T. S.,
expressly     provide    that a lien shall        exist    on all property      subject
to taxation      under the inheritance         tax statutes      and that “said
tax shall     be a lien ;Eon such property            from the death of the
decedent     until   paid.       Stated differently,         only payment can
extinguish      the lien for inheritance          taxes.     Op. Atty. Gen.
No. v-769 (1949).          Thus the transfer       of shares from the name
of the decedent       to the executor       in no wise affects         the state’s
security     for the inheritance        taxes.     The lien therefor        continues
as a matter of law, and it is only upon transfer                    tc t,he legatee
or heirs     that notice     of payment of all inheritance             t.axes due
this State must first          be received     as auf,‘nority    fcr such transfers.



1/   Article       14.19    reads   as follows:

                “A lien shall exist         on all proper%y
             subject    to taxation      under this law t,o
             secure the payment of all taxes,             penalties
             and costs     provided     for in this Chapter.
             All persons      acquiring     any portion    of said
             property     shall be charged with notice           of
             the existence      of all such unpaid taxes,
             penalties     and costs,      and of the lien
             securing     their   payment, which may be
             enforced     in any suit brought for the
             collection      of said taxes,     penalties
             and costs .”

      Article      14.16.
Honorable    Robert    S. Calvert,     Page 3          Opinion    No. w-988



      In Cooper                                               267 S.W.2d   848
(Tex.Civ.App.,      1954, error ref.,    n.r .e. ), the court held that
where a will bequeathed        corporate   stock to a trustee      and
provided    that the stock should be turned over to the trustee
by the executor      as promptly as practicable        after the death
of the testator,       and the executor    had endorsed     stock certifi-
cates    and delivered     them to the corporation      with a request     for
transfer    to the trustee     and issuance    of new certificates      to
the trustee,     the executor     was not entitled     to vote the stock
pending administration        even though the corporation        had refused
to record     the transfer    on its corporate     books.

        It was contended    in this case that Articles    7136 and 7137,
R.C.S.,     (presently  recodified   in identical  terms in Articles
14.22 and 14.23) necessitated        a different  result.   The court
summarized the two articles        and concluded  that they had no
application      to the decision   of the case at bar.    At page 854,
the court said:

               “The Bank’s action       in endorsing     the stock
            to the Trustee Cooper,         or a transfer    of same
            on the books of The Cooper Company could not
            violate   the cited     statutes.     They provide
            that stocks     shall not be transferred        to an
            heir or legatee.        The statutes’    purpose is
            to protect    the State in its collection         of
            inheritance     taxes.     Cooper is a Trustee under
            the will,    with only the power to vote the
            stock and pay the dividends          to Mrs. Brassell
            and Mrs. Denton, who are the legatees.              Endorse-
            ment or transfer       of the stock to the Trustee
            Cooper by the Executor         or the corporation      is
            not a transfer      to a legatee     or heir.

               “The statutes     prohibit     a Trustee    as well
            as an Executor     from transTerring        stock to
            a legatee   or heir prior        to the time the
            Comptroller    certifies      that taxes have been
            paid.    The State has the same protection             after
            the transfer     to the Trustee      as it had prior
            thereto .‘I

        Thus the reasoning       of the court in the Cooper case is in
 accord   with the reasons       which have led to our answer to your
 instant   request.

                             S U MM A R Y

                 An inheritance   tax waiver need not
            be obtained  in order to transfer   shares
Honorable     Robert   S. Calvert,        Page 4           Opinion     No, w-988



            of corporate    stock in the name of a
            deceased   shareholder  to his executor.

                                     Yours    very     truly,

                                     WILL WILSON
                                     Attorney General           of   Texas



                                     BY

                                           Assistant

MMP:cm

APPROVED:

OPINION COMMITTEE:
W. V. Geppert, Chairman

Jerry H. Roberts
Linward Shivers
W. 0. Shultz
W. E. Allen

REVIEWEDFOR THE ATTORNEYGENERAL

By:   Morgan Nesbitt
