Magnolia Petroleum Co. v. State

• Decision Date: 07 November 1945
• Docket Number: No. 9518.,9518.
• Citation: 190 S.W.2d 581
• Parties: MAGNOLIA PETROLEUM CO. v. STATE.
• Court: Texas Court of Appeals

Page 581

190 S.W.2d 581

MAGNOLIA PETROLEUM CO. v. STATE.

No. 9518.

Court of Civil Appeals of Texas. Austin.

November 7, 1945.

Rehearing Denied November 28, 1945.

Appeal from District Court, 126th District, Travis County; Roy C. Archer, Judge.

Action by the State against the Magnolia Petroleum Company for chain store taxes due on defendant's filling stations. From an interlocutory order overruling defendant's plea of privilege, defendant appeals.

Affirmed.

Dan Moody, of Austin, and Walace Hawkins, Earl A. Brown, and Charles B. Wallace, all of Dallas (Charles L. Black, of Austin, of counsel), for appellant.

Grover Sellers, Atty. Gen., and W. V. Geppert and C. K. Richards, Asst. Attys. Gen., for appellee.

Cecil C. Rotsch, of Houston, in support of appellant's second and third points.

McCLENDON, Chief Justice.

Appeal from an interlocutory order overruling a plea of privilege seeking to change the venue from Travis to Dallas County, where defendant (appellant) resided. The suit was brought on behalf of the State by the Attorney General "at the instance and request of the Comptroller of Public Accounts" against Magnolia (Magnolia Petroleum Company) to recover taxes for the years 1936-1941, inclusive, alledgedly due and owing under the Chain Store Tax Law, H.B. 18, p. 1589, Chap. 400, 1st C.S. 44th Leg., 1935, codified as Art. 1111d, Vernon's Ann.P.C., upon filling stations alleged to be stores "opened, operated, established and maintained" by Magnolia.

The State predicated its right to hold venue of the suit in Travis County upon Arts. 7076 and 7076a, Vernon's Ann.Civ. St., which provide for the collection of all state taxes except and valorem, and lay the venue of such suits in Travis County; which articles are copied in full in a footnote,¹ for ready reference.

The Magnolia contends that:

1. The following are essential venue facts under these articles, which the State must, but did not, establish:

(a) That the tax was delinquent;

(b) That it was due and owing;

(c) That Magnolia operated, maintained, opened, established or controlled the filling stations;

(d) That non-petroleum products were sold thereat;

(e) That the suit was brought "at the instance and request of the State Tax Board to recover taxes found by that Board to be delinquent." (Contention (e) appears to be urged for the first time in a supplemental argument filed by one of Magnolia's counsel.)

2. Said articles attempt to vest jurisdiction and venue inseparably and exclusively in the district courts of Travis County, and thereby to divest other district courts of jurisdiction conferred upon them by Art. 5, Sec. 8, Texas Constitution, Vernon's Ann.St.

3. "Such statutes attempt to divest the constitutional powers of district and county attorneys (Art. 5, Sec. 21) and vest them in the Attorney General (Art. 4, Sec. 22) and the State Tax Board."

Art. 7076 was amended and Art. 7076a enacted in 1933 as S.B. 412, Chap. 192, p. 581, Gen.Laws Reg.Ses. 43rd Leg. The articles were analyzed, construed, and their purpose and effect stated in the recent case of Central P. & L. Co. v. State, Tex. Civ.App., 165 S.W.2d 920, error refused, appeal dismissed, "for want of a substantial federal question" by United States Supreme Court, 319 U.S. 727, 63 S.Ct. 1033, 87 L.Ed. 1691. It was there stated :

"The suit was brought by the State of Texas `acting by and through the Attorney General of the State of Texas, at the instance and request of the Comptroller of Public Accounts of the State of Texas.' (The identical language of the petition in the instant case.)

"Reading the three Articles together (7076, 7676a and 7098a), we think nothing could be plainer than that this suit was authorized and properly brought."

It seems equally plain to us that the purpose and express intent of the Legislature was to lay the venue of all suits for taxes of the character stated in the first sentence of Art. 7076a (of which this, an occupation tax, is concededly one) in Travis County. It is true the sentence relates to "delinquent State taxes due and owing to the State." But manifestly, we think, these words have no application to the issue of venue. A suit for taxes cannot properly be maintained unless the taxes are delinquent, due and owing. These are matters, however, that go either to the merits of the suit or to the issue of whether it is prematurely brought. The State clearly has a right to litigate a claim which it asserts to a tax liability. And we think it was clearly the intention of these articles to lay the venue of suits asserting such tax liability in Travis County. The only venue question involved was whether the suit was of the character described in Art. 7076a; and "where the particular character of the suit constitutes a factor (here the only factor) in determining the question of venue, the character of the suit becomes a law question, arising on the pleadings." Jones v. Hickman, 121 Tex. 405, 48 S.W.2d 982, 983. This rule was applied in Yates v. State, Tex.Civ.App., 3 S.W.2d 114, in a suit brought under Art. 5420, in which venue was maintained in Travis County, the issue being raised by exception to the plea of privilege without controverting plea. That decision was rendered February 8, 1928, and on April 25, 1928, the Supreme Court in an adopted Commission opinion announced the same rule in these words: "There are some situations, one of which is stated in article 5420, where the character of action is such that no issue of venue can arise under the plea of privilege statute." Duffy v. Cole, 117 Tex. 387, 5 S.W.2d 495, 498. The Yates case was cited with manifest approval in Stockyards Nat. Bank v. Maples, 127 Tex. 633, 95 S.W.2d 1300, 1302, under the holding that: "Proof that the suit is of such nature is supplied by the plaintiff's petition, for it, as so often has been said, is `the best and all-sufficient evidence of the nature of the action.'" The Yates case has been cited with approval of the above holding in a number of Civil Appeals decisions, and so far as we have been able to discover, the holding has never been questioned.

It was suggested in the oral argument that this case is distinguishable from the Yates cases in that there the suit was for land, and since all land titles emanate from the State, the mere assertion in a petition of such title would make a prima facie case in the State's favor. Complete answer to this view lies in the holding of our Supreme Court that venue facts are triable as any other facts essential to the merits of a case and are not concluded by a mere prima facie showing. See Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91. We are unable to conclude that it was the intention of the Legislature to require the State, in answer to a plea of privilege in a suit of a character embraced in Art. 7076a, to establish liability on the part of the defendant.

The above holding in the Yates case is the same as that uniformly applied to other situations where the character of the suit is an element, among others, in fixing venue; as for example in suits to recover land, the venue of which is laid in the county where the land or a part thereof is situated. Art. 1995, Sub. 14. There, the only venue fact is whether the land or a part thereof is situated in the county where the suit is brought; for, as was said in Thomason v. Ham, Tex.Civ. App., 210 S.W. 561, 563, error ref.:

"Whether or not the suit as instituted by the plaintiffs was one coming within the provisions of that subdivision of the statute was a legal question, and not a question of fact, and the defendant's allegation that it was not such a suit was a mere conclusion of law, and not an allegation of fact."

See also in this connection the recent case of Hays v. McKemie, Tex.Civ.App., 185 S.W.2d 484.

Quite a number of cases have been brought by the State in Travis County under these articles, since their adoption twelve years ago, in only three of which has the question of venue been raised, Lally v. State, Tex.Civ.App., 138 S.W.2d 1111; Barrett v. State, Tex.Civ.App., 138 S.W.2d 1114; Washington Oil Corporation v. State, Tex.Civ.App., 159 S.W.2d 517, error ref. W. M.; and in these three (it may be significant to note) it was conceded that venue was properly laid in Travis County, if the recoveries sought were taxes.

We do not think it necessary to burden this opinion with analysis of the many decisions cited by appellant holding in line with Compton v. Elliott, above, that where venue depends upon the commission of some act of a certain character in the county where the suit is brought, the character of the act as well as its commission in the county of suit are venue facts, which must be established by the plaintiff. Those cases have been distinguished from that at bar by the Supreme Court as well as by Courts of Civil Appeals.

Nor do we think it necessary to state or discuss the issues raised by Magnolia as to whether, under the agreed stipulation, the Magnolia was the tax payer within the meaning of the act. These and all other issues raised by Magnolia under its first contention above relate to liability or whether the suit was properly or prematurely brought. Under our above holding as to the proper construction of the articles, these issues do not involve venue facts and are therefore not material in the present appeal.

In connection with contention 1(e) above the point is made in the supplemental argument referred to that the character of suit described in Arts. 7076 and 7076a is one brought at the instance and request of the State Tax Board for taxes found by that Board to be delinquent. Referring to that portion of Art. 7076 under which the Board "shall be authorized to bring suit for the recovery of same in the name of the State," the argument says:

"In view of the settled construction that has been applied to similar statutes, this provision must be construed as meaning that the Board should find what taxes were delinquent and request the...