Greyhound Lines, Inc. v. Board of Equalization for City of Fort Worth

• Decision Date: 04 October 1967
• Docket Number: No. B-196,B-196
• Citation: 419 S.W.2d 345
• Parties: GREYHOUND LINES, INC., Petitioner, v. BOARD OF EQUALIZATION FOR the CITY OF FORT WORTH et al., Respondents.
• Court: Texas Supreme Court

Page 345

419 S.W.2d 345

GREYHOUND LINES, INC., Petitioner, v. BOARD OF EQUALIZATION FOR the CITY OF FORT WORTH et al., Respondents.

No. B-196.

Supreme Court of Texas.

Oct. 4, 1967.

Stone, Tilley, Parker, Snakard, Law & Brown, Richard Lee Brown, Fort Worth, for petitioner.

S. G. Johndroe, Jr., City Atty., Fort Worth, for respondents.

CALVERT, Chief Justice.

As originally filed, the purpose of this suit by Greyhound Lines, Inc., a California corporation, was to have declared void ad valorem tax assessments made by tax officials of the City of Ft. Worth and Ft. Worth Independent School District on 277 of its buses for the year 1965. Before trial, the taxes levied, $12,900 by the city and $11,775 by the school district, were paid under protest, and by amended petition Greyhound sought recovery of the taxes so paid. The plaintiff filed a motion for summary judgment and the defendants filed a similar joint motion. The trial court granted the defendants' motion and declared the assessments made by officials of the city and the school district valid, thus decreeing, in effect, that Greyhound take nothing by its suit. The court of civil appeals reversed the judgment of the trial court and remanded the cause for trial of what it deemed to be a fact issue. 412 S.W.2d 76. We reverse the judgment of the court of civil appeals and affirm the judgment of the trial court.

On summary judgment proofs establishing uncontroverted facts, including the fact that Greyhound's principal place of business in Texas is in Ft. Worth, the trial court concluded, in effect, that the 277 buses had a situs for taxation in the city and the school district, and that an apportionment formula used by officials of the city and the district for arriving at the value at which the buses were assessed was authorized by law. The formula used by taxing officials for arriving at an assessed value of $750,000 on the buses, involved ascertainment of (1) the present value of buses owned by Greyhound and operated within the State of Texas; (2) the total number of route miles traveled by the buses; (3) the number of route miles traveled by the buses within the State of Texas; (4) the ratio of the route miles traveled by the buses within the State of Texas to the total route miles traveled within and without the State; (5) the present value of the use of the buses in Texas as measured by the ratio of route miles traveled in Texas to total route miles traveled within and without the State; (6) 55% Of the present value of the use of the buses in Texas.

Two points of error were presented by Greyhound in the court of civil appeals. The first asserted that the trial court erred in holding that its buses had a situs for taxation in the city and the school district. The second asserted that the trial court erred in holding that the city and school district had the right to adopt an apportionment formula for taxing the buses in the absence of authorizing legislation. As we understand the opinion, the court of civil appeals held that buses owned by a foreign corporation and operated in interstate commerce in the State of Texas can acquire a tax situs in Texas, and that an ad valorem tax can 'be imposed thereon on basis of equitable apportionment fairly and in good faith calculated in consideration of presence or use within as compared with presence or use both within and without the state'; but the court further held that local taxing units are authorized 'only to impose such character of tax on basis of an equitable apportionment fairly and in good faith calculated in consideration of presence or use within the Subdivision as compared with presence or use both within and without the Subdivision.' ¹ The court also held that the number of buses which can be taxed by a local taxing entity is 'the average number and value of buses' maintained and used In the taxing subdivision. Having thus apparently disagreed with both the method used by the city and school district for ascertaining The number of buses subject to taxation and The formula used for arriving at assessed value, the court of civil appeals reversed the trial court's judgment and remanded the cause to that court to determine the proper amount of taxes due by Greyhound to the city and school district.

Both parties, plaintiff and defendants, applied for writ of error and both applications were granted. Greyhound's application presents essentially the same questions presented in the court of civil appeals. In addition, both Greyhound and the taxing entities attack the method announced by the court of civil appeals for determining the number of buses to be taxed and the formula for arriving at their taxable value.

Greyhound's contention that its buses do not have a tax situs in Ft. Worth, Texas, is based upon the common law rule that as personal property its buses are constructively situated at its corporate domicile in California (Mobilia sequuntur personam--movables follow the person); and that the rolling stock of a motor bus company traveling and used in Texas as a part of its interstate operations does not come within any of the exceptions recognized in Texas to rule of Mobilia. It emphasizes that the only judicially declared exceptions to the Mobilia rule are set out in State v. Crown Central Petroleum Corp., 242 S.W.2d 457 (Tex.Civ.App.--San Antonio 1951, writ ref'd), and are as follows: '(1) there is a statute to the contrary, or (2) the property is tangible and has acquired an actual situs of its own in a state or place other than where owner is domiciled or (3) in case of intangible property, it has acquired a business situs in a state other than the one where the owner is domiciled.' It then argues that inasmuch as its rolling stock is not intangible property, there is no statute fixing a tax situs therefor, and there is no proof that any of its buses had through permanency of location in Ft. Worth acquired a tax situs of their own in the city and school district, the defendants were without power to impose the taxes in question. It should be noted at this point that Greyhound does not contend that imposition of the taxes violates the constitutional inhibition against unduly burdening interstate commerce or the constitutional guaranty of due process, except, as to the latter, in so far as its denial of tax situs may raise a question of due process. See Braniff Airways v. Nebraska State Board, 347 U.S. 590, 74 S.Ct. 757, 98 L.Ed. 967 (1954).

Greyhound is correct, of course, in asserting that its buses do not come within the exception to Mobilia relating to intangibles. It is also correct in asserting that there is no Texas constitutional or statutory provision expressly fixing a tax situs for rolling stock of foreign motor bus corporations which travels and is used in Texas in interstate operations, as there is for rolling stock of railroads. See Tex.Const. Art. VIII, Sec. 8 and Art. 7169. ² The question thus narrows to whether the buses have acquired an actual tax situs of their own in this State and in the city and school district. We consider first whether the buses have acquired a tax situs in the State; for, if they have not, they cannot have acquired a tax situs in the city and school district.

The constitutional provisions relevant to the power of the State to impose taxes on the property of corporations are Art. VIII, Secs. 1, 3, 4 and 11. The pertinent provisions will be quoted. Sec. 1: 'Taxation shall be equal and uniform. All property in this State, whether owned by natural persons or corporations, other than municipal, shall be taxed in proportion to its value, which shall be ascertained as may be provided by law. * * *' Sec. 3: 'Taxes shall be levied and collected by general laws and for public purposes only.' Sec. 4: 'The power to tax corporations and corporate property shall not be surrendered or suspended by act of the Legislature, by any contract or grant to which the State shall be a party.' Sec. 11: 'All property, whether owned by persons or corporations shall be assessed for taxation, and the taxes paid in the county where situated * * *.'

The relevant statutory provisions will be quoted. Art. 7145: 'All property, real, personal or mixed, except as may be hereinafter expressly exempted, is subject to taxation, and the same shall be rendered and listed as herein prescribed.' Art. 7147: 'Personal property, for the purposes of taxation shall be construed to include * * * all personal estate of moneyed corporations, whether the owners thereof reside in or out of this State * * *.' Art. 7153: 'All property, real and personal, except such as is required to be listed and assessed otherwise, shall be listed and assessed in the county where it is situated * * *.'

Neither the Constitution nor the statutes provide for exemption of personal property of foreign corporations in this State from taxation by this State and its political subdivisions. Indeed, the express language of Sec. 4, Art. VIII of the Constitution denies to the Legislature the power to grant such an exemption; and yet, to hold that the rolling stock of a foreign motor bus corporation, constantly traveling upon the highways of this State and enjoying the protection and benefits provided by this State, has no taxable situs in the State would be to grant it tax exemption. Moreover, such a holding would result in discrimination against motor bus corporations chartered in this State, similarly using its highways, in violation of the 'equal and uniform' mandate of Sec. 1, Art. VIII of the Constitution. A result so incompatible with the clearly expressed intention of the framers of the Constitution and of the Legislature in its statutory enactments, should not be reached unless compelled by some immutable law or some overriding public policy consideration. We hold that it is not compelled by either.

Texas has adopted the Mobilia rule as the basic rule for locating the tax situs of tangible personal property at the...