Gulf Ins. Co. v. James
| Decision Date | 31 January 1945 |
| Docket Number | No. A-139.,A-139. |
| Parties | GULF INS. CO. et al. v. JAMES, State Treasurer, et al. |
| Court | Texas Supreme Court |
Wood & Wood and A. E. Wood, all of Austin, for plaintiff in error Gulf Ins. Co.
Shook & Shook, all of Dallas, for plaintiff in error Repub. Ins. Co.
Thompson, Knight, Harris, Wright & Weisberg, Will C. Thompson and William Thompson, all of Dallas, for plaintiffs in error Aetna Ins. Co. and Hartford A. & I. Co.
Grover Sellers, Atty. Gen., Gerald C. Mann, former Atty. Gen., of Dallas, R. W. Fairchild, Former Asst. Atty. Gen., of Houston, and Gaynor Kendall, Asst. Atty. Gen., Fagan Dickson and Ocie Speer, Assts. Atty. Gen., of Austin, for defendants in error.
Coleman Gay, of Austin, amicus curiæ.
The Legislature of this State by Acts of 1943, 48th Leg., ch. 313, p. 469, Vernon's Ann.Civ.St. arts. 4385a, 6687b, § 15, provided for the transfer of portions of certain funds which had been collected for special purposes to the General Revenue Fund for use for general purposes. The Gulf Insurance Company and others engaged in writing fire, tornado, and motor vehicle insurance in this State brought this suit for themselves and all others similarly situated against the Honorable Jesse James, State Treasurer, and others to enjoin the transfer of portions of the Fire Insurance Division Fund and the Motor Vehicle Insurance Fund to the General Revenue Fund, as provided for in said Act. It is plaintiffs' contention that the 1943 Act is unconstitutional.
The trial court rendered judgment for plaintiffs, holding that said Act was unconstitutional, and enjoining the transfer of said funds. The Court of Civil Appeals reversed the judgment of the trial court, and rendered judgment for the defendants. 179 S.W.2d 397.
Revised Statutes, Article 4902, as amended in 1931, Vernon's Ann.Civ.St. Art. 4902, authorizes the collection of certain special taxes from certain classes of insurance companies for the purpose of paying the expenses of the Insurance Commission in the supervision of the business done by these insurance companies in Texas. Said Article reads as follows: "Article 4902: The State of Texas shall assess and collect an additional one and one-fourth per cent of the gross fire and/or lightning and/or tornado and/or windstorm and/or hail insurance premiums of all companies doing the business of fire or lightning or tornado or windstorm or hail insurance in this State according to the reports made to the Commissioner as required by Law; and said taxes when collected shall be placed in a separate fund with the State Treasurer to be expended during the current year, or so much thereof as may be necessary in carrying out the provisions of this Chapter, and should there be an unexpended balance at the end of any year, the State Insurance Commission shall reduce the assessment for the succeeding year so that the amount produced and paid into the State Treasury, together with said unexpended balance in the Treasury, will not exceed the amount appropriated for the current year, to pay all necessary expenses of maintaining the Commission, which funds shall be paid out upon requisition made out and filed by a majority of the Commission, when the Comptroller shall issue warrants therefor." (Acts 1920, 3rd C.S., p. 105; Acts 1931 42nd Leg., p. 306, ch. 180, § 2.)
In the course of years the special fund above provided for increased so that on September 1, 1943, there was an unexpended balance therein of $243,143.42.
By the provisions of Article 4682b, Sec. 11-a () insurance companies writing motor vehicle insurance are required to pay a similar tax "to be used for the sole purpose of administering this Act." Said statute further provides that should there be any unexpended balance in said fund at the end of the year, the assessment to be levied for the succeeding year shall be reduced so that the amount produced and paid into the fund, together with the unexpended balance, will not exceed the amount necessary for the current year to pay the expenses of maintaining the Department. On September 1, 1943, there was an unexpended balance in this fund of $125,102.21.
The plaintiffs are now, and for many years have been, engaged in writing fire, tornado, and motor vehicle insurance and other insurance in this State, and for many years have paid taxes into the above-mentioned special funds.
The Act of 1943, the validity of which is here involved, reads as follows:
Acts 1943, 48th Leg., R.S., ch. 313, p. 469.
It will be noted that Articles 4902 and 4682b, Sec. 11-a, contemplate that the taxes collected under these statutes shall be kept in separate funds for use only in the administration of those particular Acts; that only so much of the taxes therein authorized shall be collected as shall be necessary to carry out the purposes of the Acts; and that any unexpended balance in said funds at the end of any year shall be taken into consideration in reducing the tax to be levied for the succeeding year; whereas, under the Act of 1943, here involved, all of the money to the credit of each of these special funds is to be transferred to the General Revenue Fund for use for general purposes, except an amount equivalent to the receipts deposited to the credit of such special fund during the preceding fiscal year. There is therefore a direct conflict between the 1943 Act and the prior Acts, and it becomes necessary for us to determine which of these is the prevailing law.
The plaintiffs contend that the Act of 1943 is unconstitutional because it violates the provisions of Article III, Section 35, of the Constitution, Vernon's Ann.St., in that the subject of the Act is not so expressed in the title thereof as to reasonably apprise the Legislature and the affected public as to the contents of the Act.
It will be noted that the general language, "An Act providing for placing portions of certain special funds in the General Revenue Fund," as used in the title of the Act, is followed immediately by the more restrictive language, "and especially transferring a portion of the surplus from the Operator's and Chauffeur's License Fund to the General Revenue Fund." There is a rule of statutory construction, which is sometimes applied, to the effect that where words of general import are followed...
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