H. Rouw Co. v. Texas Citrus Commission

• Decision Date: 30 January 1952
• Docket Number: No. A-3248,A-3248
• Citation: 151 Tex. 182,247 S.W.2d 231
• Parties: H. ROUW CO. v. TEXAS CITRUS COMMISSION.
• Court: Texas Supreme Court

Page 231

247 S.W.2d 231

151 Tex. 182

H. ROUW CO. v. TEXAS CITRUS COMMISSION.

No. A-3248.

Supreme Court of Texas.

Jan. 30, 1952.

Rehearing Denied April 9, 1952.

Sid L. Hardin, Edinburg, Archer & Archer and L. Hamilton Lowe, all of Austin, for appellant.

Price Daniel, Atty. Gen. and Clinton Foshee and Dean J. Capp, Asst. Attys. Gen., for appellee.

GRIFFIN, Justice.

This is a direct appeal from the 92nd District Court of Hidalgo County, Texas, under the provisions of Article 1738a, Vernon's Texas Civil Statutes, and Rule 499a, Texas Rules of Civil Procedure. Appellee, as plaintiff below, instituted this suit against appellant, an Arkansas corporation, having a permit to do business in Texas. Parties will be styled as they were in the court below. It was alleged, among other things, that defendant had failed to give the bond required by certain provisions of House Bill 29, Chap. 93, Acts, Reg.Sess., 51st Leg., 1949, and found as Article 118d of Vernon's Texas Civil Statutes, in order that defendant might conduct his business in dealing in citrus fruits. The plaintiff also sought an injunction to prohibit defendant carrying on his business in citrus fruits, until a bond was given. defendant answered attacking the constitutionalty of the above Act upon the grounds hereinafter noted, and its requirement that defendant execute the bond. The cause was heard in the trial court upon stipulated facts as shown in the transcript before us, and after hearing, the trial court granted the temporary injunction as prayed for by the plaintiff. Defendant has duly perfected his appeal to this court.

Article 118d, in general terms, creates the Texas Citrus Commission, and prescribes the qualifications, appointment, powers and duties thereof, and authorizes the Commission to levy a tax upon the persons, firms, associations and corporations therein provided of not exceeding 3cents per standard box, or bag of 1 3/5 bushels, upon all citrus fruit grown in the State of Texas and packed or placed in containers and marketed, or processed and sold between September first of each year and August 31st of the following year; and provided that if any citrus fruit is placed in containers or packed or processed between the above dates in any years, but not sold until after the next September first, is shall be taxed upon such sale at the rate fixed by the Commission on or before the September first preceding the sale and authorizes the levy of an appropriate tax on other qualities of citrus fruit.

The Act provides that the tax money collected should be deposited in three named funds: (1) Texas Citrus Commission Fund, (2) Agricultural and Mechanical College of Texas-Weslaco Experiment Station No. 15 Citrus Fund, and (3) Texas College of Arts and Industries Citrus Fund, and further that 'the proceeds of such taxes in said funds shall be appropriated by the Legislature of the State of Texas for the purposes herein named and for no other purpose. * * * to be used by said respective institutions in education and research for the purpose of increasing knowledge with respect to Texas citrus fruits and by-products, and protecting Texas citrus fruits from pests and diseases and of finding new uses for Texas citrus fruits and by-products and of improving the quality and yield of such fruit and by-products.'

The Commission is given the 'power to investigate or cause to be investigated, and to otherwise inform itself from time to time as to economic and market conditions affecting citrus fruit, including the present and prospective supply, demand and price for the various varieties, grades and sizes and other pertinent factors affecting the marketing thereof', and to hold hearings and take testimony as to all of the above factors. Among the powers given to the Commission is the power to conduct publicity and sales campaigns designed to increase the consumption of Texas citrus fruits and by-products, and to expend not more than one-half of the revenues of the Commission in any one year for such purpose; to carry on research to increase knowledge of Texas citrus fruits and by-products and of improving the quality and yield of such fruits and by-products and the protection of such fruits from pests and disease. Also it is directed that 'the Commission may by rule and regulation prescribe safeguards to prevent citrus fruit packed or placed in containers from entering commercial fresh fruit channels of trade contrary to the provisions of the rules and regulations of the Commission.' The Commission is made a public municipal corporation of Texas with power to sue and be sued, contract and be contracted with and possesses such other powers as may be necessary to carry out its duties imposed on it by law. Power is given to all persons aggrieved by any order, etc. to have a hearing before the Commission, and then appeal to the appropriate court. The Commission is given power by rules and regulations to establish minimum grades or sizes (limited, however, by another provision that no restrictions shall be placed upon packing or placing in containers of citrus fruit grading equal to or better than 'Texas Select' grade, as now or hereafter officially adopted in Texas, and providing the sizes of such 'Texas Select', or better, conform to the requirements of the Commission in effect at the time such citrus fruit is packed or placed in containers), or both, and the several varieties and kinds thereof, which may be packed or placed in containers during any specified period or periods, for transportation and sale as fresh fruit. The powers of the Commission 'shall be exercised in such a manner as to stabilize the market and insure as near as may be, orderly marketing of fresh citrus fruit at prices which will represent a fair return to the producers thereof. If it should be determined that there is a conflict of this Section and the anti-trust laws of Texas, then in such event the anti-trust laws will prevail.'

An exemption is provided to 'any natural person as to citrus fruit grown in Texas on land owned by such person and packed and sold by such person as fresh fruit or as to such fruit so grown on such land and processed and sold by such person.' The Act further provides that 'each person, firm and corporation (including co-operatives organized under the co-operative marketing laws of Texas) who is or may be engaged in buying or selling or processing or packing or placing in containers or otherwise dealing in any fresh citrus fruit or citrus fruit by-products upon which any tax authorized by this Act is or may become due, shall before engaging in any such activity, give bond to the Texas Citrus Commission in the sum of at least Two Thousand Dollars ($2,000) conditioned upon the prompt payment of all taxes and interest due or to become due under the terms and provisions hereof, at the time and place and in the manner prescribed by law and by rules and regulations which may be from time to time promulgated by said Commission.' The Act contains the usual severability clause. The legislative purpose in enacting the Act is set out as follows: 'This Act is passed for the purpose of preventing economic waste of food and loss of property and natural resources of this State and to encourage and foster the development of a major industry, the Texas citrus industry by fostering research as to new uses; by preventing destruction thereof by pests and diseases and by improving the quality of and stimulating demand for, such Texas citrus fruit and by-products produced therefrom. Lack of such fostering care for such industry has in the past and will in the future (unless prevented) result in unnecessary and avoidable waste of an important resource of this State. Such loss and waste will imperil the ability of producers of Texas citrus fruit to contribute in appropriate amounts to the support of ordinary governmental and educational functions, and increase the tax burdens of other citizens for the same purposes. Hence this Act is passed to further the public welfare and general prosperity of the State of Texas.'

The emergency clause recites that the public necessity and welfare of Texas require the protection of the Texas citrus industry from great waste and loss. In general terms, the above are the main provisions of the Act affecting this cause.

The defendant below, and by assignments here, claims the Act is unconstitutional because it violates the following constitutional requirements and prohibitions: (1) the tax levied is not levied for a public purpose as is required by Section 3, Article I; Section 48, Article III; Section 3, Article VIII; Section 6, Article XVI of the Texas Constitution, Vernon's Ann.St. and Section 1, Article XIV of the United States Constitution; (2) the tax levied is not equal and uniform as required by Sections 1 and 2 of Article VIII of the Texas Constitution, and Section 2, Article IV and Section 1, Article XIV of the United States Constitution; (3) the Act is an attempt to delegate the taxing power, vested exclusively in the Legislature, to the Commission in violation of Section 1, Article III of the...