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This section was repealed November 2, 1993.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."
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 (multi-volume and up-to-date resource available at all law and many municipal libraries)
- The Texas State Constitution: A Reference Guide (one-volume resource available at most law and some municipal libraries)
- The Constitution of the State of Texas: An Annotated and Comparative Analysis (two-volume resource available at most law and some municipal libraries)
Online Resources
- Constitution of the State of Texas (1876) (resource published online and maintained by the University of Texas School of Law)
- Amendments to the Texas Constitution Since 1876 (resource published online and regularly updated by the Legislative Council)
- Reports Analyzing Proposed Amendments (resource published online and regularly updated by the Legislative Reference Library)