Henry County v. Standard Oil Co.

• Citation: 71 S.W.2d 683,167 Tenn. 485
• Parties: HENRY COUNTY et al. v. STANDARD OIL CO. et al.
• Decision Date: 31 May 1934
• Court: Supreme Court of Tennessee

71 S.W.2d 683

167 Tenn. 485

HENRY COUNTY et al. v. STANDARD OIL CO. et al.

Supreme Court of Tennessee.

May 31, 1934

Appeal from Chancery Court, Henry County; Tom C. Rye, Chancellor.

Suit by Henry County and others against the Standard Oil Company and others. The Chancellor overruled demurrers to the bill, and granted an appeal.

Decree reversed, and the suit dismissed.

Burch Minor & McKay and Holmes, Canale, Loch & Glankler, all of Memphis, and Bass, Berry & Sims, of Nashville, for appellants.

R. H Rhodes, of Paris, for appellees.

CHAMBLISS Justice.

The county trustee sues to recover from defendant oil companies certain funds alleged to have been collected by them pursuant to section 14, chapter 125, Private Acts 1931, which act required each wholesale dealer doing business in the county to collect "two cents tax on each gallon of gasoline sold in said County" and to report and pay over to the trustee monthly these collections. However, the bill showing that this act of 1931 had been adjudged unconstitutional within thirty days after its passage, demurrers were filed on this and other grounds, which the chancellor overruled and granted this appeal.

The substance of the defenses presented by the demurrers is (1) that the only basis alleged for the right of recovery is a void act, which confers no rights; (2) that the right, if any, to the fund is in those from whom it was collected under this void act, and in no event in complainants. Defendants also invoked the "due process of law" and "law of the land" constitutional provisions.

The demurrers must be sustained. It is well settled that an unconstitutional act is not a law, and imposes no obligations and confers no right of recovery. It is "inoperative as though it had never been passed." Norton v. Shelby County, 118 U.S. 425, 6 S.Ct. 1121, 1125, 30 L.Ed. 186; Lynn v. Polk, 8 Lea, 130; 12 C.J., pages 800-801.

Estoppel is relied on for appellees, the county and its trustee, on the ground that the defendants have collected and hold moneys belonging to the complainants and may not in good faith retain such funds. But, as well said for appellants, in reply, "while estoppel may be urged for the protection of a right, it can never create a right." This view was expressed by this court in McLemore v. Charleston & M Railroad Co., 111 Tenn. 663, 69 S.W. 338.

Neither State v. O'Brien, 94 Tenn. 79, 28 S.W. 311, 26 L. R. A. 252, nor Pointer v. Smith, 7 Heisk. 137, sustain this theory of estoppel on the facts of the instant case. In the O'Brien Case this court properly held that an agent of a foreign corporation prosecuted for embezzlement of its funds in Tennessee could not defend on the ground that the foreign corporation, whose moneys he had collected and appropriated, had not complied with our statutory requirements for doing business in this state. Here the complainants have no constitutionally sound legal basis for a claim to ownership of the funds in question. This applies, also, to the Pointer Case, wherein Smith, as...