Central Power & Light Co. v. State

• Decision Date: 28 October 1942
• Docket Number: No. 9299.,9299.
• Parties: CENTRAL POWER & LIGHT CO. et al. v. STATE.
• Court: Texas Court of Appeals

165 S.W.2d 920

CENTRAL POWER & LIGHT CO. et al. v. STATE.

No. 9299.

Court of Civil Appeals of Texas. Austin.

October 28, 1942.

Rehearing Denied November 18, 1942.

Appeal from District Court, Fifty-Third District, Travis County; J. Harris Gardner, Judge.

Action by the State against the Central Power & Light Company and others for chain store taxes. From a judgment for plaintiff, defendants appeal.

Affirmed.

Arnold & Arnold, of Texarkana, Ark., Wagstaff, Harwell, Douthit & Alvis, of Abilene, Kemp, Lewright, Dyer, Wilson, & Sorrell, of Corpus Christi, and Looney & Clark, Charles F. Herring, and Everett L. Looney, all of Austin, for appellant.

Gerald C. Mann, Atty. Gen., and Billy Goldberg, Morris Hodges, Fowler Roberts, Cecil D. Redford, and Cecil C. Rotsch, Asst. Attys. Gen., for appellee.

McCLENDON, Chief Justice.

Chain Store Tax Law case (Chap. 400, p. 1589, G.L. 1st C.S. 44 Leg., 1935, Vernon's Ann.P.C. Art. 1111d). The suit was by the State against three operating subsidiary public utility corporations: the CP&L (Central Power and Light Company), the SW (Southwestern Gas and Electric Company), and the WT (West Texas Utilities Company). Each of the defendants had paid the tax for the years 1936-1940 inclusive based upon the number of stores operated by each as separate chains. The suit was for the difference between the amounts paid and the amounts allegedly due based upon the total number of stores operated by the three defendants as a single chain, allocated in proportion to the number of stores operated by each, as in the Safeway case. Safeway Stores, Inc., v. Sheppard, Tex.Civ.App., 158 S.W. 2d 319, error refused. The case was tried upon agreed stipulation and the State recovered the full amount sought. The three defendants have appealed.

Appellants have briefed the case under 9 points, which we will consider in somewhat different order than as presented.

Points 4, 6, 7, 8 and 9 have already been adjudicated adversely to appellants, and it is not the function of this court to reconsider them. See the Humble case. Humble Oil & Refining Co. v. State, 158 S.W.2d 336, error refused. We will merely state these points and refer to the cases in which they were adjudicated.

Point 4 urges that the parent and not the subsidiary corporation is liable for the tax. The Safeway case expressly held that the language of Sec. 6 of the Act "* * * corporation * * * which is controlled or held with others by majority stock ownership," etc. "clearly imposes liability upon the subsidiary."

Points 6 and 7 are to the effect that the Act is unconstitutional because of indefiniteness in not providing: 6) Who shall pay the tax, and 7) how it shall be allocated. These points were expressly adjudicated against appellants in the Butt, Butt Grocery Co. v. Sheppard, 137 S.W.2d 823, error refused, and Safeway cases.

Point 8 urges that the Act is violative of Art. VIII, Sec. 2, of the Texas Constitution, Vernon's Ann.St., providing that "all occupation taxes shall be equal and uniform upon the same class of subjects." This point was expressly adjudicated against the appellants in the Chain Store Tax cases. Hurt v. Cooper and McCraw v. S. H. Kress & Co., 130 Tex. 433, 110 S.W.2d 896.

Point 9 urges that the Act is violative of the due process and equal protection provisions of the Federal Constitution. This point was expressly adjudicated against appellants in the Chain Store Tax and Safeway cases.

Point 1 urges that the suit is not maintainable "because the Act requiring licenses for the operation of stores (Chain Store Tax Law) does not create a debt and give a remedy by civil action."

We overrule this point upon the holding that the State's right to maintain this suit as a civil action is expressly conferred by Arts. 7076, 7076a and 7098a, Vernon's Ann.Civ.St.

Art. 7076 confers upon the Attorney General the power to bring suit in the name of the state to recover "the penalties provided for by this Chapter [Chapter 2 of Title 122]." It also authorizes the State Tax Board to bring suit in the name of the State for the recovery of "any taxes or penalties provided for by this Chapter * * * found at any time to be delinquent." It authorizes the State Tax Commissioner "to request and receive the assistance of the Attorney General" and the heads and employees of all state departments "to aid in the speedy recovery of such money or penalties due the State under the terms of this Chapter." It requires all departments and agencies of the state government "which are now, or may be charged with the administration and collection of State taxes and license fees, to certify to the State Tax Commissioner * * * the fact of such delinquency * * *. The venue and jurisdiction of all suits arising hereunder is hereby conferred upon the courts of Travis County."

Art. 7076 was reenacted with amendments by Chap. 192, p. 581, Gen.Laws 43 Leg.(1933). This chapter also enacted Art. 7076a, the pertinent portions of which read: "It is further specifically provided that all of the provisions of this Act shall apply and be applicable to all delinquent State taxes due and owing to the State of Texas, of every kind and character whatsoever, including all franchise, occupation, gross receipts, gross production, gross premiums tax on insurance companies, inheritance, gasoline, excise and all other State taxes which become delinquent other than State ad valorem taxes on property. It is hereby declared to be one of the purposes hereof to impose upon the State Tax Board the additional duty of collecting and aiding in the collection of all delinquent taxes enumerated and referred to herein, and all laws now applicable to the collection of such delinquent taxes, and all powers and authority now possessed by existing officers and agencies of the State Government are hereby, in addition, conferred upon said State Tax Board, as far as the same may be applicable * * *; provided further, that said State Tax Commissioner shall, after the passage hereof, be the chief administrative officer of this Act."

The caption of this chapter reads in part: "An Act for the purpose of strengthening and providing for a stronger and more efficient administration and enforcement of all inheritance, occupation, gross receipts, gross production taxes, gross premiums taxes on insurance companies, gasoline, excise, sales, and all other State taxes, including intangible, and all character of delinquent State taxes other than ad valorem taxes on property."

The emergency clause of the Act recites: "That by reason of the fact that there is much and unparalleled delinquency and an inadequate enforcement of our present occupation, franchise, gross receipts, gross production, inheritance and other tax laws, and the further fact that it is imperative that said tax laws be strengthened, and that an adequate system of enforcement and collection of delinquent taxes be provided for, together with the fact that the government of the State of Texas is losing millions of dollars annually by reason of such condition, creates an emergency * * *." Section 22.

Art. 7098a reads: "The Comptroller of the State of Texas shall be ex officio Tax Commissioner of the State of Texas. He shall discharge all duties placed upon the Tax Commissioner by any laws now or hereafter in force in this State."

This Article is Sec. 2 of Chap. 12, p. 645, Gen.Laws 46 Leg.(1939), which chapter in effect abolished the office of State Tax Commissioner and amended Art. 7098 by substituting the Attorney General for the State Tax Commissioner as a member of the State Tax Board.

The suit was brought by the State of Texas "acting by and through the Attorney General of the State of Texas, at the instance and request of the Comptroller of Public Accounts of the State of Texas."

Reading the three Articles together (7076, 7076a, and 7098a), we think nothing could be plainer than that this suit was authorized and properly brought.

In Point 2 appellants contend that since all power and authority conferred by the Act was vested in the Comptroller, his action in accepting the lesser payments and issuing licenses to the respective defendants for the years in question is final and not subject to review. It is urged in this connection that his situation is analogous to that of boards of equalization in respect to valuations placed upon property under the ad valorem tax act (Art. 7212), citing State v. Chicago, R. I. & G. R. Co., Tex.Com. App., 263 S.W. 249.

There is no analogy between the two acts in this regard. The Chain Store Tax Law is plain, explicit and definite in fixing the absolute and exact amount of the tax. In this respect no discretion is vested in the Comptroller, and his related acts are purely ministerial. He was without any authority to estop or otherwise bind the State in its right to the full amount of the tax as fixed by the Act, by accepting less amounts and issuing the licenses or by any other act of his. See Grayburg Oil Co. v. State, Tex.Civ.App., 50 S.W.2d 355 error refused and authorities there cited.

Point 3 urges that the WT was not properly included in the chain because a majority of its stock was not held in common ownership with that of CP&L and SW. The pertinent facts are these: The parent corporation (Central and Southwestern Utilities Company, a Delaware holding corporation) owned the majority of the stock in CP&L and SW, and in the APS (American Public Service Company, also a Delaware holding corporation). The latter owned the majority of the stock in the WT. The contention under this point is that ownership by the parent corporation of controlling stock in the APS, which in turn owned the controlling stock in the WT, did not constitute ownership of controlling stock in the WT. We cannot accept this interpretation of the Chain Store Tax Law. Control through majority stock ownership is potentially as effective mediately, through an intervening holding corporation, as immediately through ones...