City of Dallas v. Texas Prudential Ins. Co.
| Decision Date | 20 June 1956 |
| Docket Number | No. A-5523,A-5523 |
| Citation | 156 Tex. 36,291 S.W.2d 693 |
| Parties | CITY OF DALLAS, Petitioner, v. TEXAS PRUDENTIAL INSURANCE COMPANY, Respondent. |
| Court | Texas Supreme Court |
H. P. Kucera, City Atty., Dallas, R. A. McBean, Ted P. MacMaster, Asst. City Attys., Dallas, for petitioner.
Pinkney Grissom and David M. Kendall, Jr., Thompson, Knight, Wright & Simmons, Dallas, for respondent.
Petitioner, City of Dallas, filed this suit against respondent, Texas Prudential Insurance Company, to recover personal property taxes levied upon the furniture and fixtures kept by respondent in its branch office in the City of Dallas. Respondent is a domestic life insurance company with its principal office and place of business in the City of Galveston, Galveston County, Texas. For convenience the parties will hereafter be designated as the 'City' and the 'Company'.
The City presented five principal contentions in the trial court that (1) the sentence contained in Article 3.15, Insurance Code, Vernon's Annotated Civil Statutes of Texas, which reads, '* * * For the purpose of state, county, and municipal taxation, the situs of all personal property belonging to such companies shall be at the home office of such company' was not applicable to the tangible property involved in this suit, but is only applicable to intangible personal property, and more specifically to securities owned by a domestic life insurance company. The City contends that the Legislature meant intangible property because all of the Article except the quoted sentence dealt with the right of a domestic life insurance company to deposit with the Treasurer of this State, at its option, securities (intangible) in which its capital stock has been invested, etc.; (2) the City took the position that if it should be held that the above quoted provision of Article 3.15, supra, was meant by the Legislature to apply to all personal property, then such provision was unconstitutional as being violative of Sections 1 and 11 of Article 8 and Section 5 of Article 11 of the Constitution of the State of Texas, Vernon's Ann.St.; (3) the City further contended that if Article 3.15 was applicable to all personal property, it was violative of Article 1177, Vernon's Annotated Civil Statutes; and (4) was violative of Chapter XII, Section 181 of the Charter of the City of Dallas; (5) that the Company was estopped to deny that the taxable situs of the property involved in this suit was in Dallas County, and was estopped to deny that the taxes were legally and lawfully assessed and levied as claimed by the City in its petition because the Company for certain years had rendered the property in Dallas, Texas.
The Company assumed the position that under the provisions of Article 4739 of the Revised Civil Statutes of the State of Texas, now Article 3.15 of the Insurance Code of 1951, the taxable situs of the personal property involved was at its home office in Galveston, Galveston County, Texas, and the City was without authority or power to levy and assess taxes on such property. The Company further contends that the Act under consideration is not unconstitutional.
In a trial of this suit before the court without a jury, the court held that the statute did not apply to furniture and fixtures (tangible property) and, in the alternative, if it did apply it was unconstitutional. Judgment, therefore, was rendered for the City and against the Company for the amount of the taxes, plus penalties and interest. The Court of Civil Appeals at Waco held that the statute did apply and that, under prior decisions of this Court, the statute was constitutional. The judgment of the trial court was accordingly reversed and judgment was rendered that the City of Dallas take nothing. 282 S.W.2d 723.
This Court is particularly concerned with these questions: 1. Did the makers of the Constitution by adopting Article 8, Section 11 wherein it is provided that 'All property, whether owned by persons or corporations shall be assessed for taxation, and the taxes paid in the county where situated, * * *' (emphasis added) intend to deprive the Legislature of the power to fix the situs of all personal property at the domicile of its owners? 2. If the Legislature has the power to fix the situs of all personal property at the domicile of its owner, then, by enacting Article 3.15 was it intended to restrict the meaning of the words 'all personal property' to include only intangible personal property? 3. Is the Company estopped to deny that the situs of its furniture and fixtures is in Dallas, Dallas County, Texas, because of the fact that for certain years the property was rendered for taxation in that city and county?
We shall first consider the questions involving the applicability and constitutionality of Article 3.15. We are of the opinion that the Act is constitutional and that the Legislature meant to provide and did provide that the taxable situs of all personal property, tangible and intangible, should be at the home office of the company. On the question of constitutionality of the Act we have concluded that the provision of Section 11, Article 8 of the State Constitution to the effect that all property shall be assessed for taxation in the county 'where situated' was not intended to repeal or modify and does not repeal or modify any of the then existing rules defining where personal property shall be regarded as being situated for the purpose of taxation. The Constitution of Texas does not define the term 'where situated'. The words 'where situated' used in the Constitution have a legal meaning identical with the word 'situs', a legal term having a well-defined and established meaning at the time the Constitution was framed. The constitutional provision simply means that property shall be taxed where it has its situs. It is our opinion that the language 'where situated', as used in the Constitution, does not, by its own force, determine the situs of personal property to be where it is physically located. If the language of the Constitution under consideration does thus determine situs, unaided by legislative effort or the common law, then there would be no authority in any case for disregarding the actual physical presence of personal property within a taxing district. In other words, if we held that the Constitution, by its own force, fixes the situs of the personal property involved in this suit to be in Dallas, Texas, because of its physical presence in that city, notwithstanding the declaration of the Legislature that its taxable situs shall be in the city of the Company's domicile, then there would be no authority for looking to the declarations of the Legislature or the common law in any cause to determine the situs of tangible or intangible personal property. The petitioner argues that the rule announced in the case of Great Southern Life Ins. Co. v. City of Austin, 112 Tex. 1, 243 S.W. 778, 785, does not apply to the case at bar because in that case intangible property only was involved; whereas, tangible personal property is involved in the present case. On the question of the power of the Legislature to fix the taxable situs of intangible property the court, in the Great Southern case, supra, said, in part:
'Having determined that the Constitution did not of itself fix any definite situs for the taxation of intangible property, but left such situs to be determined under the rules of the common law as then understood, and having determined that the Legislature had authority to fix the situs of such property at the domicile of the owner, it necessarily follows that section 38, Chapter 108, General Laws of the 31st Legislature, fixing the taxable situs of the personal property referred to therein at the domicile of the companies named, is constitutional and must be upheld.'
If the Legislature had the authority to fix the taxable...
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