Federal Crude Oil Co. v. State

• Decision Date: 17 February 1943
• Docket Number: No. 9294.,9294.
• Citation: 169 S.W.2d 283
• Parties: FEDERAL CRUDE OIL CO. v. STATE.
• Court: Texas Court of Appeals

Page 283

169 S.W.2d 283

FEDERAL CRUDE OIL CO. v. STATE.

No. 9294.

Court of Civil Appeals of Texas. Austin.

February 17, 1943.

Rehearing Denied March 10, 1943.

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

Suit by Federal Crude Oil Company against the State of Texas to recover $6,986.26, alleged to have been paid under protest to Secretary of State in excess of the franchise taxes, penalties, and interest due from plaintiff. From a judgment for defendant, the plaintiff appeals.

Affirmed.

E. E. Easterling, W. D. Gordon, and Geo. E. Holland, all of Beaumont, for appellant.

Gerald C. Mann, Atty. Gen., and Cecil C. Cammack, George W. Barcus, and Ocie Speer, Asst. Attys. Gen., for appellee.

BLAIR, Justice.

Appellant, Federal Crude Oil Company, sued appellee, the State of Texas, to recover $6,986.26, alleged to have been demanded by and paid to the Secretary of State on June 5, 1928, in excess of the franchise taxes, penalties, and interest then due by it, but paid under protest in order to secure the revival of its right to do business and to bring suit for properties belonging to it. The trial below resulted in judgment for appellee; which we affirm.

The pertinent facts are as follows:

Appellant is a Texas corporation chartered on April 1, 1901, for a period of fifty years, for the purpose of owning leases and mining for oil and other minerals. It paid the franchise taxes due under Art. 5243i, R.S.1895, yearly until 1905; and on July 1, 1905, the Secretary of State forfeited its right to do business for failure to pay its franchise taxes as provided by said statute. Other than to hold title to whatever property it owned appellant did not thereafter actively engage in business until about June 5, 1928, when it applied for and secured a certificate of revival of its right to do business, which revived its right to sue or defend in the courts. A judgment of the District Court of Jefferson County attempted to dissolve appellant corporation in 1907, and to dispose of its property. Such judgment was void because the corporation was not dissolved as provided by law, and it has been continuously so considered by appellant. In 1928 appellant desired to prosecute a suit for recovery of its property attempted to be disposed of by said void judgment, and accordingly applied for the certificate of revival of its right to do business and to sue in the courts in the manner provided by Art. 7092, R.S.1925. For such revival certificate the Secretary of State demanded and required appellant to pay the sum of $10,530 as the amount of delinquent franchise taxes, penalties, and interest due on June 5, 1928. Of said sum appellant paid $6,986.26, under protest as being in excess of the amount due, claiming that it ceased to do business from 1906 until June 5, 1928, when its right to do business and to sue in the courts was revived. The receipt of the Secretary of State recited that appellant paid $6,986.25, under protest, "the same being the annual franchise tax and 10% and 25% penalties for the years 1907 to 1929, contending that it is only required to pay franchise tax for the year 1906 and the penalties of 10% and 25%, respectively, for said years, plus the amount of the revival fee of 5% per month for the entire period from 1906 to this date," June 5, 1928. Appellant thereafter paid its franchise taxes yearly until 1937, when it again defaulted; and on July 2, 1937, its right to do business and to sue in the courts was legally forfeited by the Secretary of State under the provisions of Arts. 7089, 7091, R.S.1925 (See same Articles, Vernon's Ann.Civ.St.); and since which time appellant has paid no franchise taxes, and such forfeiture is still outstanding against it.

By a concurrent resolution adopted by the Texas Legislature in May, 1941, appellant was authorized to institute suit to recover the $6,986.26 alleged to have been paid in excess of the amount due on June 5, 1928, or "to determine definitely and accurately what amount of taxes, penalties, and interest thereon, if any, had been theretofore illegally exacted of the Federal Crude Oil Company by the State of Texas and paid to the State of Texas as franchise taxes, penalties, and interest thereon." The resolution expressly stated that all facts recited therein must be proved in the trial of the matter in the court.

Two questions are presented for determination under the facts:

1. Was the Secretary of State authorized to exact and collect as a condition for revival of the Federal Crude Oil Company's right to do business and to sue in the courts of this State the annual franchise taxes and penalties for the years 1907 to 1929, in which it transacted no business other than as above stated after its right to do business had been forfeited for nonpayment of its franchise taxes in 1905?

2. Did appellant under the concurrent resolution have the right to institute this suit, because at the time the resolution was adopted and at the time appellant filed and prosecuted its suit its right to do business in Texas and its right to sue in the courts had been forfeited for failure to pay its franchise taxes for 1937, as above stated?

The first question is settled against appellant by the Supreme Court in the case of Ross Amigos Oil Co. v. State, 134 Tex. 626, 138 S.W.2d 798, 801, wherein the Court says:

"The law undoubtedly levies a franchise tax against corporations such as this, regardless of whether or not they do business. This...