Article XII, Section 6 of the Texas Constitution

This section was repealed November 2, 1993.

Editor Comments

The former section was adopted in 1876 and never amended.

It read: "No corporation shall issue stock or bonds except for money paid, labor done or property actually received, and all fictitious increase of stock or indebtedness shall be void."

—Attorney Steve Smith

Recent Decisions

None.

Historic Decisions

Washer v. Smyer, 211 S.W. 985, 990 (Tex. 1919) ("The constitutional provision was not intended as a shield . . . . It was aimed against his acquiring stock except upon lawful payment. It was designed for the protection of the corporation and its creditors. It emphasizes the stockholder's obligation to make full and lawful payment in accord with its mandate, rather than furnishes him a defense when he has failed in that obligation. Its purpose is to give integrity to the corporation's capital. It is to prevent false pretense at its hands, and avoid imposition upon the public. None of these objects would be promoted by declaring a note given by a subscriber for stock uncollectible in the hands of a bona fide holder.")

Library Resources

Vernon's Annotated Constitution of the State of Texas (this multi-volume and up-to-date resource is available at all law libraries and many municipal libraries)

The Texas State Constitution: A Reference Guide (this one-volume resource is available at most law libraries and some municipal libraries)

The Constitution of the State of Texas: An Annotated and Comparative Analysis (this two-volume resource is available at most law libraries and some municipal libraries)

Online Resources

Constitution of the State of Texas (1876) (this resource is published and maintained by the University of Texas School of Law)

Amendments to the Texas Constitution Since 1876 (this resource is published and regularly updated by the Legislative Council)

Reports Analyzing Proposed Amendments (this resource is published and regularly updated by the Legislative Reference Library)