American Liberty Pipe Line Co. v. Agey

Decision Date16 December 1942
Docket NumberNo. 9118.,9118.
CourtTexas Court of Appeals

Appeal from 53d Judicial District Court, Travis County; Ralph W. Yarbrough, Judge.

Suit by W. M. Agey, in his own behalf and on behalf of the State, against the American Liberty Pipe Line Company. Judgment for plaintiff, and defendant appeals.

Reversed and remanded with directions.

Verne H. Maxwell, of Dallas, D. D. Mahon, of Lubbock, and Dan Moody, of Austin, for appellant.

John W. Stayton, of Austin, for appellee.

McCLENDON, Chief Justice.

Suit by Agey in his own behalf and on behalf of the State against American (American Liberty Pipe Line Company) as a common purchaser of crude oil under Sec. 8, Art. 6049a, Vernon's Ann.Civ. St. to recover penalties under Sec. 11 of said Article for alleged discrimination against Agey in refusing to purchase oil produced by him in the East Texas Oil Field. American plead in abatement urging that Agey could not lawfully institute and prosecute the suit on behalf of the State. The plea was overruled and upon trial to a jury upon special issues judgment was rendered against American in favor of Agey "on his own behalf and on behalf of the State of Texas" (1/2 on behalf of each) for $5,800, being the minimum penalty of $100 per day for 58 days. American has appealed.

Since we are sustaining American's plea that Agey could not lawfully maintain the suit, it will not be necessary to consider the other assigned errors.

Art. 6049a, Sec. 11, reads: "For the violation of any provision of this Act, or for the violation of any valid rule or regulation promulgated hereunder or any order passed by the Railroad Commission in pursuance of any such provision, rule or regulation, such person, association of persons, or corporation shall be subject to a penalty of not less than One Hundred Dollars ($100.00) nor more than One Thousand Dollars ($1,000.00) for each offense recoverable in the name of the State in any District Court in Travis County, Texas, and each day of such violation shall constitute a separate offense. One half of such penalty may be recovered by and for the use of any person, association of persons or corporation against whom there shall have been an unlawful discrimination as herein defined, such suit to be brought in the name of and for the use of the party or parties aggrieved."

American's contention is predicated upon Art. IV, Sec. 22, and Art. V, Sec. 21, of our State Constitution, Vernon's Ann.St., relating to the powers and duties of the Attorney General and county attorneys. Art. IV, Sec. 22, reads: "The Attorney General shall hold his office for two years and until his successor is duly qualified. He shall represent the State in all suits and pleas in the Supreme Court of the State in which the State may be a party, and shall especially inquire into the charter rights of all private corporations, and, from time to time, in the name of the State, take such action in the courts as may be proper and necessary to prevent any private corporation from exercising any power or demanding or collecting any species of taxes, tolls, freight or wharfage, not authorized by law. He shall, whenever sufficient cause exists, seek a judicial forfeiture of such charters, unless otherwise expressly directed by law, and give legal advice in writing to the Governor and other executive officers, when requested by them, and perform such other duties as may be required by law. He shall reside at the seat of Government during his continuance in office. He shall receive for his services an annual salary of two thousand dollars, and no more, besides such fees as may be prescribed by law; provided, that the fees which he may receive shall not amount to more than two thousand dollars annually."

The pertinent portion of Art. V, Sec. 21, reads: "* * * The county attorneys shall represent the State in all cases in the District and inferior courts in their respective counties; but, if any county shall be included in a district in which there shall be a district attorney, the respective duties of district attorneys and county attorneys shall in such counties be regulated by the Legislature."

The contention (which we sustain) is that Art. 6049a, Sec. 11, provides for an action in the name of the State in the recovery in which the aggrieved party may share to the extent of one-half; that such action must be brought by the Attorney General or county attorney; and that to construe the section as authorizing institution and prosecution of the suit by and in the name of the aggrieved party for his own use and that of the State would render it void, to that extent, as contravening the above constitutional provisions.

Agey asserts that the action created by the section is the well established common law qui tam action in which the prescribed penalty is given in part to the prosecutor and the remainder to the sovereign; which action is maintainable by the prosecutor for his own use and for that of the sovereign; qui tam actions being "well known to the jurisprudence of this State"; citing Bush v. Republic of Texas, 1 Tex. 455; Doss v. State, 6 Tex. 433; Tarde v. Benseman, 31 Tex. 277; State v. Garcia, 38 Tex. 543; Rawlings v. State, 39 Tex. 200.

He contends that Sec. 11 authorized the suit as brought; and that the invoked constitutional provisions were not infringed because the section "properly construed, does not deny the right of the state officers named to take complete charge of any suit filed by an aggrieved party to recover penalties on his own behalf and on behalf of the State of Texas"; citing Van Camp v. Gulf P. Co., 122 Tex. 383, 61 S. W.2d 773, and Maud v. Terrell, 109 Tex. 97, 200 S.W. 375. The record showing in this connection is contained in the following statement of Agey's counsel: "After the suit was filed, I took my file that covered the suit up to Mr. Jim Hart, the Assistant Attorney General, and turned the file over to him, and asked him what he wanted to do about it. He said to leave the file with him, he would let me know later; and they held the file some time, and he finally sent the file back and said he didn't think their Department wanted to take any action in the matter."

The cited cases involving qui tam actions arose under constitutions prior to 1876, which did not contain the invoked provisions, and therefore the question here presented was not there in issue. However, we think some of these cases are to some extent analogous. In State v. Garcia, 38 Tex. 543, 548 (followed in Rawlings v. State, 39 Tex. 200), which related to an act providing for a fine for the unlawful purchase of hides and also providing that "one-half of the fine shall be paid to the informer, and the other half shall be paid into the county treasury," although the act was held to create a criminal offense and was an amendment to the criminal code, nevertheless it was held that an indictment would not lie but the proceeding should be on the relation of the informer. These decisions were by the reconstruction court, and in Gibbs v. State, 39 Tex.Cr.R. 476, 46 S.W. 645, 646, the Court of Criminal Appeals (speaking through Judge Henderson) expressly declined to follow them. We quote from the opinion: "We are of opinion that while proceedings in qui tam actions may have been by the informer, by the commonwealth, or by the state in other jurisdictions, under the provisions of our constitution, it being an offense, the prosecution must run in the name of the state. So far as the disposition of the proceeds of the recovery where a fine is assessed is concerned, that can be distributed by the court trying the case. In such case it would be proper that the indictment or complaint show the name of the informer, and this would be sufficient authority for the court to make a disposition of the fine recovered."

The act before us, while imposing penalties for its violation, does not create a penal offense punishable by fine which could be enforced by imprisonment. It creates a liability enforcible by civil action, although by analogy some of the rules governing penal actions (such for example as that of strict construction) may be held to apply. The action is, however, one which inures to the State, and is maintainable only in the State's name and by its authorized officials, regardless of the fact that one-half of the recovery may inure to the interested party. The decisions which we regard as controlling this question, and which we shall briefly review, stated chronologically are: State v. Paris Ry. Co., 55 Tex. 76; State v. Moore, 57 Tex. 307; State v. I. & G. N., 89 Tex. 562, 35 S.W. 1067; Maud v. Terrell, 109 Tex. 97, 200 S.W. 375; Staples v. State, 112 Tex. 61, 245 S.W. 639; Allen v. Fisher, 118 Tex. 38, 9 S.W.2d 731; State v. Court of Civil Appeals, 123 Tex. 549, 75 S.W.2d 253.

In the Paris Ry. case the Supreme Court held (Judge Gould writing and affirming Judge R. R. Gaines, then District Judge) that the county attorney could not institute and prosecute a suit in the name of the State to enjoin a railroad corporation from constructing its tracks "without any authority of law" along the streets of Paris. The court said: "The power given county attorneys `to represent the state in all cases in the district and inferior courts in their respective counties' (Const., art. V, sec. 21), does not extend to the institution of suits like this, unless it be done with the sanction and in the name of the attorney general." (Emphasis added.)

In the Moore case (Judge Stayton writing) it was held that under the provision in Art. IV, Sec. 22, that the Attorney General shall "perform such other duties as may be required by law" the legislature might make him the adviser of district and county attorneys, and the representative of the State for the recovery of money due the State in counties in which there are no district and county attorneys; but that...

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