        OFFICE OF THE A'ITORNEY GENERAL OF'TEXAS
                              AUSTIN




~OnoxablQusi.J. Lawson
secretaryof stQte
Aumtin,TooaS
Dear Mrr                   Attention; Ihank D. Keex,
                                      8eourlSiesCaumissioner
                           0plnienBO. 0-3097
                           Rea Does the *GoopercltiveMvanoe-
                               meat XmorporateP have authority
                               to isruemeieb~rrhlg aad fnvert
                               it8 funflsin the manner eet out
                               in its Gonatitution, and related
                               queetions4
          Your ltiti3rof August al, 194l, requeetingan opln-
ion of tbia departsat upon the quertlonsrtatodbereinbar
beon reoeitad.
           il6quote from four htter    ae folltmsr
         Ym Jtme 50 194l the CooperativeA&QMS-
    aent Innaorpoxate~
                     ffled a charterdth the ofiioe
    of the Secretaryof State which containedthe
    rollowinqpurposeClQUSW
        w’The gurpoaefor whioh SQfd aapwation is
     fommdis to organloelaborers,worklnmea wage
    earners,and farners,cdl busineespeople co
    protectncd edvencetheaselvemin theirrerioue
    glrault
          8.*
         *You will note that the capitalatock of
    this aorporationoanaist8of bSOO.00divided
    into 100 rrbaraoof $5.00 eaah,
         “1 am enolosi~ for your ez.amineSlonand Oon-
    ai&erationof the c&ecrtion8hsxsinafter asked a
    copr of the ohwter of 8ueh Eerporatioil.
                    "The osrpnation has tidoptada ocmrtitu-
    .a:       tion and a plan r0r eelline:memberships as
              distinotfirm the oapltalrtoek, the aost of
              suoh me~lborrbipsb&x$ $la&O per par,     Of
              the W&O0 aollseted,$6.00 shall be depollted
              in a trtxstfuud for the purposeof puroha&iag
              owmon stoak in differantindustries.
              mlaing  $6.00 of the first year’s duer sre to
              be oaredfor expenses, praaotionsand mainten-
              aaoe o? the or&an.nisntionr
                  The swond year Pa&G of the #l&O0 Qus
              shall be usad for expsnrrer, and the other
              &10&O depositedIn mash fun&
                     "$1.00sf the tblrd tsar shsll Ea us.4 isr
              expu~sss  and OU.00  shall be depod.~e~ ia sash


                     wAttaohed hem80       is & 80     of a propwe
              pzespeotus     and ooastltutlba    whPT eh the oerpow-
              tiolr PkIS     t0 iB8Uh      The oorpontion    has ap-
              pUedtottialMpak~e~tfor                    krulingaa        b
              wmthsr or not suoh mambershlpmeonst,ltuts
              a saourity within the pro~irlsnsof tks !lWas
              securitiesAot and beforeidYfsl4 them aa to
              the podtloa        ef this   B     artmeat     with rs8proO
              therstows vmld kppreos ate heving'thebene-
              ;;t$: your opi.nloa
                                a# to the folltning y-

                  ~1.) tr swh oorpmtion ruthorissats
              i8sw mambemhips on the plaa 8Uggestid”l
                  "8.) Are sush ammb6nhipr                   sesuritiu
              within the meanla~ of ths Ten8                 Eeewitlss Aot?
                     V5.) May stmh aorporatisnlegallybarest
              its   fund8   in   the   IoBfUNr   6et   Out   ilI   8U@h Ph&?’

                    Vader the CosstitutianSt the abws nntiomd   ODE-
          pemtion, the run48 OS u&id o~2wrstiss ara to bs~iave+d
          as aet out in your let8rr md the swmberrbip'fe8s arcal*b
          to bs used as msntionedtheFeln. Bsr ths third y6ar sf the
          SQEUIsmnberehip @l&O shall be plaoed in t&S ti8arv6 aa-
I         oouat,Qnd 61,Oii in ths Operatingaoaowt, as Stated by youa
                                         year thersaftsp.
       an4 i,nthe em14 ratio a8 ths t.hlrd
                 Artisle~l90E, Vernon~8 JinnotatedCivil Statute8,
       reta   forth the
                      4uxv0888 for whfoh private ooiQ?Mations  may
       ba Somad., and aeotlcn83 thsrsoS,.aB  anendsdby House Bill
       No. 16, kStS~Of ths 47th &?&83.@tUCe, 1941, lWld8 118 fOl-
:~..   1-r
., i
                   'To orgaaia~~$ .laboriwanorkingmen wage
              tKMleT8,aad fRd&S 'tto    p&'O#tWti
                                                th4lWSlY;,in
       1,     theirvariow purruit8; pmia04, however,no aharc
              ter shall OS issuedhereafterto labswrr, work-
              ing men, or 'wagesarnars~,  or Qiendmsntgraatsd
              to a cbarter of a sorpomtioa prutiouslyors-
              ats4 to or(panitslaborers,~uorkisg   msn
              oarnars, or that ‘iusy be hm&!6gftarc&~h~t!
              under    to ~~g~ite~laborers, work1 ma, or
              -8s     eammrs,  by the %ao~~ttwy of "fs
                                                     tat, to say
              pernon, askwdutlon or 60 oratitm,for ooeh
              pnrpos~s rithout aa Iaver38 ation   filw haYl?q
              boon mde by tbr Cdsrlonrr       oi Iabw  Stat;Lr
              tie8 ao~smlc~ meh appllaa*tioai     and a Taror-
              lbls rsamumemlstion  made thereor)by sa$,dC&a-
              mlmsioasrto tha0eoretarjr   of &ate. 3t 3.8
              apreeely. prwldsd that'aoimert&*cion @r
              reoomnndatfonby th6 Oolpmicrrioaar of,Laboe
              Sta~ti8tiesshall be.rsqulm4   or made o? appl%-
 :-           oatfonmfrom faxmin ior a abar8errR
                  In OOMiaering your fix8t questiona8 8tatsd above,
       we axa f,irst aonoernsdwith the prspasitfonrhsth& or not
       the aboos ntmtiimedoorporationhe8 ths~powsrmvler it8
       chsrt6ron4 the law8 Of thi8 mat. to iSWM me&ershlps      en
       the plan hurotofore9asntionsd~&umWall~ apss]rSx&&    tbs
       powers or the corporation  are thooe osppnssl Oonfsrrsdupon
       it by its ehartsror the atntutssaSd thoes LpUed imm
       the %Xpxae8 powiars or inoideatsl.to the eqtStesOsOf thS
       corporQtion.The oo~pomtion     ha8 no powsr to 40 an aot
       where it la not uithln the express,is&31104  ST issi4Snta1
       ~snorsresultingrroz the charter,or where it ir pfohiblt-
       ed by the ohaster ar 8oiue sp+miel8tStute,  or WbmJ it $S
       prohibitedby a Banera 8tatateapplioable $s bcbthmtttpal,
       an4 artifioialper6ozus.Thiweioxo, In detedaiag *rtretbW
       a oopporaticnha8 the power to 40 an a~$, it,%8 Bstissarg
      first tc irefer    to ?iheoharterto m.61)
                                              whatbarthe power~ls
      .acnrsrredexpressly or by lzplioo~lon,thm ta sxa~iimthe
      ohwter aAa the statutestblaclng to acrpomtlons twsee
      it the a& ie pro+ibitrd,and then in some oared to~~ooaeult
      the r;enerurl
                  lrtatutsr   to eeb ii the aNi is illegaleven in
      QC:X3 Of AAt-        ~0~001111~

$;        f      Xtwillbs noted thr'bthe langwi~soonbaSne6in
      the tamose elatme ret forth 2A fha ohac~-erof iha above
Pi men?,oAed oor,noration  ir rabskntially the 8ame a~,the
!
j(    lmguagb In the firat alatuieaf Bsotion83 of Artiole1302,
      uurra. It was statedin. tha oas6 of Ehnith7; Worth,
.;:-’ 157 fJ* w* 740:
;....
&’
                  The crtatutory rapuisaaeatt&fitthe pur-
&:          para ai the so~psnbton shall ba statad in the
            ohartsr ww Lntindodtcr the pretebtionof
k;          the Looorpxatoru and etoakh~labn,   awl the
            publ.10, in ordar that they,‘w b* adTl,eed a#
il          to tha obaraot0rof Itr o@#p#r~~:aot~vitler,
            and to enablethe f&ate;t.qM~@~%ta propor
!~.         orfll?ers, to ooubot ri1iAfj:t*m and frarjblr8
%           tare&,and to lupervlm zu#Ieontrol~theAm
I           an& punlehthe adn-areof it8~tm~obioe~"
;~.,
I:                 It Is atat* in *q     JhrZaprudonoo,,
                                                     -Vol. lo, Q.
    8848
                 "Xn oonrmotion dth'the 8tatrmamli
                                                 of tha
            purposes of the oqrgoratlen,t&a prinois&l
             proporltion    is #at t&u3MOQO of thb purpoaar
            enumeratedfn the statute taunt       bo'eweti-
                                       to
                                           nbt
            atI.      it Ia oonsldsrwl    bs   the poliop
            of th; hia8 law to lhdt the rf@i6 of inooc-
            pporationto tha spaolflaptuporaaauthorize?
            by atatuta. Obneml ruler of rtatutcryoon~
            atructionare followadIn asterarinlng
                                               the
            ~oc;peof the variouspurpomrrem&mated in
            the atatuta."
                Ho doctrina of the lar of corpooratioA8tramsoend8
      in iZI~O~tPId.thatwhlah ~A~OUAOO~that the kiAQof tr:8M-
      aUtionain which the cOTi.OZWtiOA arayema56 ard 14B5all.yltiit-
      et%)nor is any policymore flrm.Ijsstabllilhed by the Conati-
      tution,eratutesand judiolaldeo;taions   of the State. The
      conceptthat,:aoorpc?mtianWM lnvaatbd with only llmltad
      legal powers 1s not a doatrho of the 064180~ law. (Moosr'r.
                                                                453



BpnorablsWm. J. Unman, Fegb 6


                                   a, w. 179; Texas ;hlrlmrudbnco,

            With       to the 00~8tr~uofion of obartrr power8
                   rdsrenoa
it Ia atataetn !&x&s JuFiuprUtlbnoe,
                                   Volt LO, p. 8781
            "The pri~9ipQl rt+b that has bebn to~w-
    latea for the lntorpretetloa  oi oharterpowers
    is ,thatonly uueh powan are glre~ as am
    clearly eabraoad  la the word6 of tbo sot or
    oberteror derived therefromby neoeoaarylm-
    plioatlbniA ~ibW oi the ,objeet,oithe ptrnt.
    Anoah% cardleelrule apgLying
    chartersunder rhioh speetrlprIlsst-rly
                                     rilb$erera to
    clb.lmed$8 tOst  any 8mblguity oc doubt must
    be resolved      in,iiwor oi ths   pub110as agdnut
    the!grantees      ef tho chart&r.'
        with retbna?r to inalU6Wl powerr, it is dated In
'Abram
     &rl8prudenos,Vol. 10, p* 879;
         "In e+ary gnat of corgonte         pasts, there
    Is impllod a powor to do wbatrrer       ir   neabssary
    or maaelurbly a?proppriato to the exwol~s of
    tho authorlt$ lxp~w8lp oonferrbd. This state-
    ment of thu prin*lQltJasstamo8that tha pwer
    6xbruised~l8irio%dentaf.~to an ezprmsed pwbr;
    tnasaotionr dlfrer~    la kiad from those whioh
    the oorp?ratlon  Is binpowrsdto sntnr into
    oannotbe regardedas iAO%dSAt&
         “A 6btbPmlningfootOPin dsoldindwhat&W
    thu asser6idparer 1s pewees@d by the 8aQpora-
    tioa a8 inoldqntal to Its srpr*SS@kdputpoSb8I@
    wbatherthe trandaotlon18 tU\tpLin the 8 era-
    tion of a bueinese of that kind, grmat we Peht
    being given to the dominantptrrpO80 of thb
    aorporation.,rA the laLgUag5 Of 5 hadit% at+
    thority,
          -'If ths mmmu be such 88 am u8ually
       resortedto and a din-sotlesthodofacooa-
       puehlng the puqo8b of the incarparation,
       they are within it8 panore~if they be Un-
       umal an6 tea6 in an indiraot axmnur 0el.y
       to promotofta iAtbreB%8,they are held
       to hb ultraTlrbs.'*
                     It 1s well establishetl
                                           that a oorporation    may
          *it    or restriotthe aaope of it6 parersanilautheslty
          ocnferred by ths statutesas a generallaw,,b~I;p~gog.le
j~'
  ,,      n~nrlalcnrIn the artlolesat laoomoration.                  e



                     It lm further stated in the abweimentionedVol. 8,
 &
 hi,' ad&her        Cyolopm%a Uorgbratlona on pq 1968:
                     *A power 18 'impliedwhen *reasormbly
                neo~ersasy!to enable the aorporatian to ao-
                ooqllsh the objietrOS ft. oxsatlon.*
                    It is rwther stated
       ,., ticno rolums                       by   tlatfhsr in the abbots~men-
       ,A.’
        :               on 0. 1990:
       :’
                       “A ROWBS WhitOh the hW  till. SttgaF6 *S
                crxietlng by l~:gUcmtion met    be ona in a
                nenae nboerrasy,    - thet is, aoedful, rultmble,
                and propsrto acoonplishthe objeat oi the
                gent, - kanti
                            oae that is direotlyand ime-
                       amroprirte
                diatrlx7          to the areoution of the
                npaolfiopower@ and not ene that ham but a
                8Ught     indin&      or smote     relatfoa to th8
                rpeoido purpose of the       oolrperetion.

                       V,n Term the rule is r ta ta dls tollowa:
                'Y& 8host    if tha maann be such a? 8z% umnlly
                rii#brtad  do, and a 4lrwt   mthod oi aoeompliah-
                ina;. the gumone of the ihefarporatloa,  they are
                Qithin itO PC!WO?lBe If they   ae ummaml, an4
                tend in an indiraat   maanw only to promoto ita
 .,’
  !
                intemmt8, they ass helA to be ultra     r%rw.'

                        *A lmdla~   tsxtbooltwritsr lay8 down
                the rule:eafollcmm: Wmteter        bo a oomg+$r
                lsgitisataibusfnss8,the ampan my tostsr
                it by all t&s usual means; but f t nmy not go
                b.goriQthi8; It may not UpdsZ'th6 prOtens
                cf fostering,oHm@e     Itsallin proewdlng8
                Mth whioh it has ne lsra;it$.aato~oon,Omm.  In
                the next place, the emalltrhaoo        h-et,
                deGesmlnod   that &ah   mnann n&d       be   dlrwt,
Bo!.wnbleTQa.JI I+Llbon,Page 7


          With r.-terema to the above nantloned rules ard
       set out by Fletcher In his work on acrporationa,It
ot.parcs
1s etated on p. 1776, Vol. 2:
              *The rules laid down abov4 84 to inrplled
      powers are qell osttlad end are, st the prs-
      sent Qay, not c~en ~usstlcnedby oourts or
      wdters. The dlificulty oomea in apglylng
      the ruleah It le efasyto say that a powor
      is lmplled if it 1s ‘reasonably n60essarjc
      to the exercise of express pfzwer8,but there
      is no teat to 4aeiar whether a pertiaular
      aat, done by a ~rtfoular  corboration umisr
      particularalroumetanow, la kaot&y
      1140ollaary.'OS couma, many aota are olearly,
      on ona side OS tfimline OP the other. But
      there are lllan~
                     01054 to thu dlylding lfne,
      which oaea8loalr
                     mar0 ox 1088 aontuaion in
      thm dmalaiona.  The result la the mls that
      *futhsr 4.naot ovmea with&a the bapliod
      pvwpa    or.4    oorporatlon   Qmst   be deter-
      nine4 in eaoh earn frcm all ita        faotm 6nd
      4lrotlDM)tnn048.'*
          ft ia clear tbitttha pumoae o&m44 aa stated la
the obartar of the aboy leentionsdeorporatlon and the ,atrt-
utb tmlar whloh it ma lnuorpratad do40 not vxprerrly eon-
far upon the oorporati#+the power to ierur mezubarahi~aaa
aboy mmticned. ~tYado cot thl& that'thr iaa~ing of tha
mmbsrrhipa herrtofom mentioned.fs a dimat mst;llaa ol
aooomplfahingthr purpose of the inoorpcrationof aeld OOQI
py    or eq     +eam     ~subh a8 .are urwlly   resorted   to,   but
that aua%msthod8 and reet?m~
                           are -~~a1    and tend in ~1 fir-
dirmt man&r only to prC!nOte the intrrWta Of th4 001pOm-
tion. 'fherefora, It la our opinion $hat thr Coo am:::
Adwmo4zsent fnooraorated ha8 no loss1 4uthorltY PO
the abora mentlc&h mkbarships on-the plan he%sinrbovo
stated.
         As we have answered your first yueetic@in tha
negative,pour seoond snd third puostlona raqulrr no dis-
aus.d.onr
              Trusting that
Inquiry,   we are
