Article XII, Section 6 of the Texas Constitution

From Texas Legal Guide
Jump to navigation Jump to search

This section was repealed November 2, 1993.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."

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

Online Resources