Ex parte State ex rel. Lawson

• Decision Date: 29 May 1941
• Docket Number: 1 Div. 134.
• Citation: 241 Ala. 304,2 So.2d 765
• Parties: Ex parte STATE ex rel. LAWSON, Atty. Gen.
• Court: Alabama Supreme Court

2 So.2d 765

241 Ala. 304

Ex parte STATE ex rel. LAWSON, Atty. Gen.

1 Div. 134.

Supreme Court of Alabama

May 29, 1941

Thos S. Lawson, Atty. Gen., and John W. Lapsley and J. Edw Thornton, Asst. Attys. Gen., for petitioner.

McQueen & McQueen, of Tuscaloosa, Benners Burr, McKamy & Forman, of Birmingham, and McCorvey McLeod, Turner & Rogers, of Mobile, for respondent.

LIVINGSTON Justice.

This is an original action in this Court to restrain by

writ of prohibition the Hon. J. Blocker Thornton, as Judge of the Circuit Court of Mobile County, in Equity, from taking further action in an appeal pending before him from a final assessment made by the State Department of Revenue under the provisions of the Alabama Use Tax. Act (General Acts 1939, page 96, Code 1940, Tit. 51, §§ 787-811) against the Southern Kraft Corporation, a foreign corporation duly qualified to do business in this State, and having its principal place of business in Mobile County Alabama; or, in the alternative, seeking a peremptory writ of mandamus directing the Hon. J. Blocker Thornton to grant the State's motion to dismiss the appeal.

The record and proceedings show that the Southern Kraft Corporation is a corporation organized and existing under the laws of the state of Delaware, and is duly qualified to do business in the State of Alabama, with its principal place of business in Mobile County. That on the 7th day of October 1940, the State Department of Revenue made final an assessment against the Southern Kraft Corporation under and by virtue of the provisions of the Alabama Use Tax Act, approved February 28, 1939. General Acts 1939, page 96. That on October 30, 1940, the Southern Kraft Corporation, after paying the assessment under protest, took an appeal in conformity with the provisions of section 103, Article 4 of the General Acts of 1935, page 256, 307, as amended by the Act approved April 21, 1936 (General Acts, Special Session 1936, page 172, Code 1940, Tit. 51, § 140) to the Circuit Court of Mobile County, in Equity.

The motion of the State to dismiss the appeal pending in the Circuit Court of Mobile County, in Equity, was denied by the Hon. J. Blocker Thornton, presiding judge, on January 16, 1941. Hence this proceeding.

The State insists (first) that the provisions of section 103, General Acts 1935, page 256, as amended by General Acts, Special Session, 1936, page 172, are not available to Southern Kraft Corporation, a foreign corporation, in view of the provisions of section XXIV of the General Acts of 1939, page 96, Code 1940, Tit. 51, § 810. In other words, that the remedy provided for in section XXIV, supra, is exclusive in final assessments made by the State Department of Revenue under the provisions of the Alabama Use Tax Act. (Second) That the Southern Kraft Corporation, a foreign corporation does not and cannot have a permanent residence within the State of Alabama within the meaning of section 103, supra.

With reference to the first question, the pertinent part of section XXIV, supra, is as follows: "No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against this State or against any officer thereof to prevent or enjoin under this act the collections of any tax or any amount of tax herein required to be collected; but after payment of any such tax or any such amount of tax herein required to be collected under protest, duly verified and setting forth the grounds of objection to the legality thereof, the retailer or person making the payment may bring an action against the Commissioner of Revenue in the Circuit Court of Montgomery County, Alabama in equity, praying a declaratory judgment determining his tax liability for the amount so paid or his rights to a refund thereof. From the decree of the Circuit Court either the Commissioner or the person making the payment may appeal direct to the Supreme Court within thirty days and such appeal shall be a preferred case."

The courts of the several states have made numerous statements as to the purpose of declaratory judgments acts. It has been said that their primary purpose is to relieve litigants of the common law rule that no declaration of rights may be judicially adjudged unless a right has been violated for the violation of which relief may be granted. And further, that they render practical help in ending controversies which have not reached the stage where other legal relief is immediately available. Such statutes enable parties between whom an actual controversy exists or between whom litigation is inevitable to have the issues speedily determined where their determination would be delayed to the possible injury of the one or the other if they are compelled to await the courts of ordinary judicial proceedings. They are designed to supply the need of a form of action that will set controversies at rest before they lead to repudiation of obligations, invasion of rights, and the commission of wrongs. For other expressions as to the purpose of declaratory judgments acts, see 16 Amer. Jur. section 7, page 280; 6 R.C.L. (P.S.) section 7, page 3956; 50 A.L.R. page 43, Anno.; 68 A.L.R. page 110, Anno.; 87 A.L.R. 1211, Anno.; 101 A.L.R. 690.

No case is cited, nor has our search revealed one in which it has been held that the right of action for a declaratory judgment is a substitute for an appeal. The nature, history and purpose of the action indicate that the remedy provided is not a substitute for an appeal, and is cumulative rather than exclusive. There is nothing in the Act here involved to indicate a legislative intent that the remedy provided for therein is exclusive. We hold, therefore, that it is merely cumulative.

As previously stated, this proceeding is directed at an appeal to the Circuit Court of Mobile County, in Equity, from a final assessment made by the State Department of Revenue against the Southern Kraft Corporation under and by virtue of the Use Tax Act. General Acts 1939, page 96. The appeal was taken in conformity with section 103 of the Act of 1935, page 307, as amended by Acts 1936, special session, page 172. The pertinent provisions of section 103, supra, are as follows:

"If any taxpayer against whom an assessment is made by the State Tax Commission under any assessment required by law to be made by the State Tax Commission, is dissatisfied with the final assessment as fixed by the said State Tax Commission, he may appeal from said final assessment to the Circuit Court of Montgomery County sitting in Equity, or, in cases other than public utilities, to the Circuit Court of the County in which the taxpayer resides if the taxpayer has within the State a permanent residence."

The material inquiry then is whether the Southern Kraft Corporation had, or could have a permanent residence in Alabama within the purview of said section 103, supra, since it is a foreign corporation, and whether or not the legislature intended to include foreign corporations in granting to the taxpayer the right to appeal to the circuit court of the county of his or its residence if he or it has within the State a permanent residence. It appears to be conceded that if a foreign corporation can have a permanent residence in Alabama within the contemplation of section 103, supra, Southern Kraft Corporation has such a residence.

The federal courts have more often defined the legal residence of a foreign corporation, since usually it is connected with a federal question, and our statutes using a term defined by the federal courts will ordinarily be considered as having adopted the meaning given to it by the federal courts, if consistent with our conception of its true meaning.

In aid of a solution of the questions here presented, a review of some of the authorities touching the taxation of the intangibles of a foreign corporation is helpful. By a fiction they follow the owner wherever he shall reside. In the...