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        Honorable G44r 4 H. Sheppard
        cosrkptroller ef p-ublic Accounts
        Austin, Texar                         *inion       we. V-A82

                                              E4,: The applicability of tha
                                                   Taut Stock Treaefer ‘kc
                                                       Law   to transfer    wf stock
                                                       to the .rurvivor    whan    the
                                                       ato& ~44 issued to twe
                                                       permom as tenants in com-
                                                       m6n with ihe r&h% of mar-
                                                       vivorlllrip.

        X344? Sir:
                                                                                            .


                   ln your   letter of April 14, 19d7, ysa rsqwwt the apixdam
        of this deyartmrat    upen the question reorotcrd in a IetMr from Mr.
        R&art b. Hincka,     of the firm of Bur ft rd, Rybwn, tunCkti & Foal.
        Mr. Hfncks’ letter    is as feflewar

                   “Am Att4rney fw a Te~me corporbtioa, 1 have
              frrqueat occreion tfa p8sa 0 various tr~anefers of
              dock, which transfers are made on the b4eks afthe
              Company’s transfer agent in Ekllrs.

                   “Often we l-he a transfer requested to the aur-
              vivor where the rtock has been isswd in tore names,
              as tenants in common with right of eurvivership.
              While ,thim right of survivorship is not log*1 in Tex-
              aa unleis supported by a contract in the lffetime of
              the partia8, it is legal in IIYA~ states and we have
              mtlad ffirt kr such cases the 14w of the residence lp-
              pli4r and we make the tranmfer to the survivor on
              proof of t&e da&h of the ether WI@& in commor~.

                     3 have been unable to fidd 4 ruli4 os ta wheth-
           ‘,’‘er or not the Texas Stock Transfer Tax Law apples
                to the above transactions. The Federal L.aw exempts
               ,them from skdk transfer 64s     as a transfer ariming
                                                                                                ‘..


                by operation of law.

                     “Would you be kind en&&to          render me a find-
              ing    or regulation on the above? *                                                    4
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lion. Goorpt H. Sheppard - Page 2                    Opinion No. V-W
               I

           Article   7047m, V.C.S., provides in part as followr:

            “There ia hereby imposed and levied a tax as
      hereinafter provided on all aales, agreements to
      oell, or memoranda of @alas, and all deliverfas or
      transfers of shares, or certificates of stock, or
      certificatea for rights to stock, or certificatir of
      deposit representing an interest fn or reprt#cntfng
      oertificbtor made taxable uader this Section in any
      domastic or foreign assocfrrtfon, company, or cor-
      poration, or certificates of tatera& in go bueinesc
      conducted by txustee or trueteec mule after the ef-
      factiva date hereof, whether made upo4 or Jowa by
      the books of the association, company, corparatiun,
      or trustee, or by any asrigament in blank or by u~)r
      delivery of any papers or agreement or mamoran-
      dum or other evidaace of rale or transfer or order
      for or agraament to buy, whothor intermediate or
      finrl, and whether  investing tha holder wfth thebena-
      ficial fntarest in or legal title to such shck ar c&hat
      certificate Cuable harelurler, or with the pos~~sior
      or use theraof for any purpeee, or to mecure the fu-
      ture p4yment of ma4ay or the future tra4rfar of Lnp
      ruch stock, ox certificate, on each hundred dollars
      of face value or fraction thereof, lbire4 (3) Centb, . . .*

           After providing for the levy of the tsx upon the 00&i-
tiono net out in the above-quoted portfen of Article ‘IQ47m, them
folIowe certain exceptions, to which the tu does not apply, The
excaption nccarrary for us to ceader     here is ae folbwr:
           *
            * . . if neither the sale, nor tie order for, nor
      agreement to buy, nor the agreement to sell, aor the
      memorandum c&frule, nor the delivery ip ,ynads tn
      tbia St&e 4nd when no act wcdaeary       to &feCt the
      ralc or ixawfer ia done in this State. . . .”

           A constructitm of the foragoing exceptfen oU4 fer a da-
tarmfnation of whether or not-the sale, the order far, the agree-
ment to buy, the agreement to sell, the memorandum of aale, the
delivery, or any act nacessary to effect the s4le or trmsfe,r, is
done in this State.

           A careful research rcva4lr th4t our 4ourU h4va oat
tbul far constrwd Article 7047~ ia conwction with the probhll
pn4oated; hence this opiaion rest4 upon our oap oamatnrotfo4 d
tha Act applfcabla to tha problem prceanted.

           If a certifioate of stack has been issued to two perlolu,
ab tenants in common, with absolute right of ownership vestfng in
t&3 survivor upan the death of one of the tenants in common, and at
.:




     Hon. Gvorge H. Sheppard - Peg8 3                  OpiQiQn Ye. v462



     the time of du8th, under the 18w of the St&e in wMch the tesnn& in
     common reside, the ownership pasws unconditionally to the aurvi-
     ~1: by operation of law, then we are of the opinion that there dws
     net remain any further act necessary te effsct the srle or transfer
     tn this St&e. Indeed if the title passes to the survivor by e~eraW
     of law, we doubt if there he been s arle or transfer vithfr t&i pus-
     view of this et&de.     But if 80, ad if ,*e necee~rrty tct to affect tb4
     srle or twasfer ha8 occurred in another &ate, it $8 not subjbQt to
     tax in thio State. We confine oui answer so&Iy to the Qw*t&r 04 8
     transfer that irmree to the benefit of the survitig    temt in cm
     in l State in which such ownership may arise by operation oi ina,
     and not by virtue of a contrrct ,made in the lifetime of the parties a6     !


     required in Tex&s before the surviving tenant in common may cl&fan
     t&e full +xnseriliip of the stock, Article2580,   V.C.S.; Chandler v.
     ##urJw, 139 6. W. (26) 327 (tiurt of Civfl Appeals).

                                SUMh4ARY

                A wvtWk@e al ntwk owned by two p vr r o ns l8
           knmt@ ia vmnmvai $6 not subject to the stock trans-
           fer tan Provided in Article 7047m, V.&S., If under
           the 16~ of the St&e where such tenurta in cornmon
           reside, &s&ate ownarship vehs in the survivor upon
           the de@.& of ens of the owners by operation of law.
           This ruling insapplicable only to the States in which
           by operation ,of law the survivor acquires complete
           ownership of rtock which he owned with a tenant in
           cemmvn rt the time of the death of such tenant,

                                               Very truly youra,

                                       ATTQRNEYGENERALOP~



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     LPL:mmc

                                       APPROVED     MAY 5. 1947

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                                       ATTORNEY     GidiRJU     OF %‘6L&&?



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