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                 OFFICE OF TNE ATIORNEY GENERAL              OF TEXAS
 2
                                       AUSTIN
 II
&“I” srl&raa
rmr*er’ c&lrdL



          Honomble R. A. Jeml~on,        Commlsrloner
          Deprtanent of BRnklDg
          Auetln     14, Texas

          Dear Mr. Jamlaon:




                                               l&ion       into a State
                                                   we am    requested to
                                                       AD herdaabove
                                         0tia ha8'not fua0r0n
                                          there hem bean aaser lflth
                                        lar, lnvolvlng   the aonvor-
                   rlon of 8 StRtls oharterod assoolRtlon      into R
                   Pederalawoalatlon.        we are therefore ln need
                   of advlos as to the app(~lflo requ%Msslts
                   vhlah ehouldbe     lmposedbythlrDspertPMnt8s            -
                   a oonilltlan preaedent to the appFati1 or the
                   propowl nev organlzeticm      under a State abarter.
Honorable 8. A. Jaznlalon,     Pa&e 2


             "Our study of the building and loan law
   .   suggests that   perhaps Saotlon 21-a and Sea-
       tlon 55-a slmg ulth various other sections
       which have to do wlth the Inaorporatlon     OS a
       aavLngs and loan asaoalation    will be Invoked
       In the enumeration of requirements or steps
       that must be folfoved   to bring about the
       conversion of a Federal aaaoolstion    into a
       State chartered aaaoalatlon.
             50 appraalate   the fact that the appro-
       prtate Federal 8genoy will igpoaa certain ra-
       quIremfmta partalnlng   to the tranaaatlon but
       ot thoao we ara not aonaerned, but rather as
       ta requlmrmnts vhIoh M should Impose.
              “A apealflc   problem vhIah oeoura to us
       la  represented    by a question a8 to vhether
       or not thzwugh auoh a conversion the nsult-
       3ng State aaaooIatlon      would acquln     all of the
       right,   title and Anterest in 6x4 to all pro-
       perty of eve= kind and ahanoter, vhttther
       ~1,     personal or rpixed OS the Fedenrl aaaoois-
       tion by opalst1on OS law end vlthout any ooa-
       veyanae or transfer vbatever.         In thla OQnnOO-
       tlon your attention      la dlreoted   to Subaeotlon
       (d) under Seotlon 554,       aaptloned Wonvenlont.
       This, ag oourae, has to do with a State aher-
       tored aaaooiatlan     teing aonverted Into Q Fod-
       era1 aavlnga a& loan aaaooiatlon,         in vhloh
       event lt follow      through Subasotioh (d) that
       the resulting Federal aavInga and loan oaao-
       olatlon aoqulrea all of the right, title         and
       lntenat     In and to assets    of every nature and
       kind by opemtlon of lav and vlthout the detail
       oonveyanoe thatolghtothervlso          be requllwd.
             "In other vorda, we an wondering If this
       right, vbloh la a valuable one In napect to a
       tranaaatlon aaibmaing tha eonversion of a State
       aaaooIatlon   into 8 Fedemsl aaaoeiation,    can be
       oonstrued to vo* ln reverse aI3loo it EappesFa           .
       under SubaeotlonSoS      SeatIon 55-a that it vaa
       the Leglalatlve    intent to provide a rule vhIoh
IIonimAble H. A. Sam%aoa, Page 3


   _ woul$ work both vays insofar as it was vithln
     the jawladi.0tion of the Stito Lagialature to
     leglalrte    on mettera   effeatlng   Me-1   asao-
     aMA.ona.
            1) . . , . a

             The gtitofyour     Wulry   2s otidenoudby    the follov-
I.128 statement in your letter,   to vitr   "We are therefore in
med of advloe as to the apeolfio      requlrmenta    vhiah should
be lmpoaed by this Departsmat as a oandition preoedent to
the approval of the proposed new organ.imtion under a State
oharter."
             Your question la 0017 ~~eral,     %ndeod, it neoeaaar-
lly must be st this time, elnae there la no of3norete quea-
tian before you.      Our anewor, thel*fon,    muat of neoeaalty
be Ukevlaegeneml,         llthoughve  thlnka~hgeneralmaver
vIllauffiaeyourpreaentaeeda.
           Sewtlon 54-A of the Build-   and Ian Aaaoalatlona
Aat (Vernon@a CodlSloatlon  of the Olvll Statutes) Artlole
8814,  Bubdiviaion 2. la a8 follovaa
           "AnyFoderrrlaav%aga andlanaaaooia0lau
     aharteredand    operating utvlt3roBoderalrot,
     atherviae eligible    to beam   a atate bullding
     andlocmaaaoolation,~y        oanveti Into*    St.&e
     aaaocirtlan  in acoordaaoe with    Federal lava aad
     aubjeat to exsMnatlon     end appmml by the Bank-
     ing Canmiaaloner of the State of Texas.”
            Private  ahikrtera are the grants of rovereignty
orestlng artlflolal     persona -- leg81 sntltiea    -- vlth the
powers and duties therein oonferred and Imposed.         Ho aovereIgn
state may grant a aImrter authorlslng       its oovpanrte entity to
eixgage in its oorporate bualneaa la another aovenlgn state
vlthout the consent of the latter.        Thla, of oour50, la aub-
jeot to the explanation      tht a Bedmel ohrter to a private
oorporetlon may authorize       it to aamy on its osrporate b+ul-
neaa in any state of the Union, reg8mUera of the vlahea of
auoh state; but thla la not In oonfl%ot with the dootriue of
~olualveneas     of lndlvldtml    sovereignswith referwoe    to the
twanaaotlon of burlnera vlthln its bordwa bJ prlvstely-
ohartered oorporatlona.       Racsh state of the. Union la a part
Honorable H. A. JarleOn,    PaSo 4


and parOe   of the United   States   as a aovenlgn.
          From this fundamental aanalderatlon       of aavereIgnty
and aorpomte povers It rollova that no state aharter pay
be Laaued in this State to a bullding and loan aaaooiatIon
exaept In oomplIanOo +th the Texas statute govemIng the
or@uUatIon    of auoh oorparatlons.     It llkevlao   follow
that no Federally  lncorporeted   awInga and 10an aaaooIatIon
may be arganlted or dlaorgaeited    save ln aoosldance with
the lava of the United States.
            The word *convert. ” in the last-above   quotation
iron Artlale 8&a-54-A la used In its popular sense and
not In any teobnloal or legal sense. In other words, It
oontamplatea the abang0 of a Saticinal or Federal awInga
ywt;n     aaao4siation into a state bulldhg     8nd 10an aaao-
            ThIa In legal 00ntarplatIon   0an be aoocepllahed
only by-the disaolutl0n     0s the one InoorpcwatIon, &ad the
Ineorpwatlon    of another as its au0oeaaor In p~wera, rQht8
snd duties aoaslatent    with the lava governlag the new in-
o~ep~c.8t&lo and aoaeptable    of OOurae, to those SovemlnS
             .
             The govemlng statute vlth reapeat to the ar-
tlalea 0s aaaooIatlon    for building and loan aaaoeIatlons
In thla State la ArtIole 88l.a-29 of VernOnwe Civil Statutes.
Any aaaoolatlon    being organbed for the purpose of canver-
alon of a Federal afwlnga and 10en aaaoolatlon,        must of
neoeaalty oappQ vlth the xwqulmenta of thla~ statute be-
r0m It aan reaelve a olrartea or have a oorpomte exIatenae.
Perforce 0s the express statute      ri2-d quoted the Bmklng
Ccmmlaaloner upon being tatIafled,      la authorlred   to laaue
~~~oertlflaate     of the fIlIng of the artiolea     0s InOorpors-
      .
            In this oonneotlon, however, you will bear in
mind (as your letter    lndloatea   you have in mind) thst there
la no statute In this State, and Indeed there could not b0,
provldlq    that upon the conversion of a Federal aavlnga and
loan aaaooiatlon    Into a State-ohartered     bulldIng and losn
aaaodatlon,     the propertlea, rights and the like 0s the
Federal should be veat*d in the State aaaoolatlon~         so &t,
before approvln~ the artloles      of aaa~iatlon     of your or@+nit-
lng State build&g and loan aaaool8tIon,         It would be neoea-
aby for a proper tnmsfer of the property 8nd rIShts therein
Honorable H. A. Jmlaon,    Page   5


0s the federal aaaooIatlon   to the State eaaoolatlcm.
At leaat, 8uah tmnaior    ahould follov forthwith the aor-
porate organIa8tlcm 0s the State aa~ooIatlon.
          We aannot advise further In dotall,   nor la it
n6oeaaary to attempt to do so at this time, but we ohall
be glad to advise  further vhen tha neaeaaltIea  therefor
may orlao.
           Pourproblmala    Iadeedanev    one in the jurla-
prudemae of thla State and your anxiety to prooeod vlth
proper offleIal  dlaoretlon  and legality  In all reespeota'la
moat oaamundable.


                                        Very tmly your8
                                  ATTORRRY GRRRMLOF TIKAS


                                  mrr




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