National Biscuit Co. v. State, 7618.

• Decision Date: 24 January 1940
• Docket Number: No. 7618.,7618.
• Citation: 135 S.W.2d 687
• Parties: NATIONAL BISCUIT CO. v. STATE.
• Court: Texas Supreme Court

Page 687

135 S.W.2d 687

NATIONAL BISCUIT CO. v. STATE.

No. 7618.

Supreme Court of Texas.

January 24, 1940.

Error to Court of Civil Appeals of Third Supreme Judicial District.

Suit by the National Biscuit Company against the State of Texas to recover permit fees paid by the plaintiff to the Secretary of State in 1909 and franchise taxes paid by the plaintiff from 1907 to 1917, on the ground that the laws under which payments were made were unconstitutional. Judgment for the defendant was affirmed by the Court of Civil Appeals, 129 S.W.2d 494, and the plaintiff brings error.

Reversed and rendered.

Levert J. Able, William Ryan, Sidney Benbow, C. R. Wharton, and Baker, Botts, Andrews & Wharton, all of Houston, for plaintiff in error.

Gerald C. Mann, Atty. Gen., and A. S. Rollins and George W. Barcus, Asst. Attys. Gen., for defendant in error.

CRITZ, Justice.

This suit was filed in the District Court of Travis County by National Biscuit Company, a foreign corporation, hereinafter designated the Company, against the State of Texas to recover the sum of $55,040 paid by it in 1909 as a permit fee, and to recover the further sum of $38,367 paid by it as franchise taxes for the years from 1907 to 1917, both inclusive. The suit was authorized by joint resolution passed by the Texas Legislature in May, 1937. Trial in the district court resulted in a judgment for the State. On appeal by the Company the Court of Civil Appeals affirmed the judgment of the district court. 129 S.W. 2d 494. The case is in the Supreme Court on writ of error granted on application of the Company.

As above stated, the suit was authorized by joint resolution passed by the Texas Legislature. Gen.Acts 1937, p. 1549. The resolution is as follows:

"Senate Concurrent Resolution No. 63

"By Stone.

"Whereas, National Biscuit Company is a foreign corporation with permit to do business in Texas, and has been doing business continuously in Texas since 1907; and

"Whereas, The said National Biscuit Company has paid filing fees and franchise taxes to the State of Texas continuously from 1907 to 1917, under the then existing franchise tax and filing fee laws, which have been declared unconstitutional by the Supreme Court of the United States, said decision holding that the taxes and filing fees so paid were illegally and unlawfully exacted from National Biscuit Company by the State of Texas; and

"Whereas, There is no provision of law, nor has there been any provision of law whereby this money unlawfully exacted could be returned or recovered except through a direct appropriation by the Legislature; and

"Whereas, There is no machinery set up by the laws of the State of Texas to accurately and definitely determine just what amount of taxes should be returned, if any; and

"Whereas, In order to definitely and accurately determine the same, it is the policy of this Legislature to let a court of competent jurisdiction pass upon the same; and

"Whereas, The Legislature of the State of Texas has from time to time permitted other corporations, such as National Biscuit Company, to recover these taxes, and has made appropriations to pay the same; now, therefore, be it "Resolved, By the Texas Senate, with the House of Representatives concurring, that National Biscuit Company be, and the same is hereby granted permission to bring suit against the State of Texas in any court of competent jurisdiction in Travis County, Texas, to determine definitely and accurately what amount of taxes and filing fees may have been heretofore illegally exacted of National Biscuit Company by the State of Texas and paid to the State of Texas, if any, as filing fees and franchise taxes under any such unconstitutional law as hereinabove mentioned, and there is hereby appropriated out of the Treasury such funds as may be necessary not heretofore appropriated to pay any final judgment which may be obtained by reason of the permission to sue the State of Texas herein granted, and service of citation for the purposes herein granted may be served upon the State of Texas by serving the Attorney General, Secretary of State and the Comptroller of Public Accounts."

In 1889 the Texas Legislature enacted a law fixing permit fees to be paid by foreign corporations. Gen.Acts 1889, c. 78, p. 87. Under Section 5 of the 1889 Act, permit fees for foreign corporations were fixed as follows:

Corporations with a capital stock of $100,000, or less, paid $25. Corporations with a capital stock of more than $100,000, and less than $500,000, paid $50. Corporations with a capital stock of $500,000, and less than $1,000,000, paid $100. Corporations with a capital stock exceeding $1,000,000 paid $200. These fees were payable annually.

The permit fee Act of 1889, supra, was carried into the codification of 1895 as Article 2439. In other words, under Article 2439, supra, the annual permit fees charged foreign corporations were the same as were charged under the Act of 1889, supra.

In 1905 the Legislature amended Article 2439, R.C.S.1895, supra, so as to charge foreign corporations permit fees as follows: Corporations with a capital stock of $10,000, or less, were charged $25. Corporations with capital stock exceeding $10,000 were charged $25 for the first $10,000, and $5 for each additional $10,000, or fractional part thereof. Gen.Acts 1905, c. 91, p. 135.

In 1907 the Legislature again amended Article 2439, R.C.S.1895, supra, as amended, so as to charge foreign corporations as follows: Corporations with capital stock of $10,000, or less, were charged $50. Corporations with capital stock exceeding $10,000 were charged $50 for the first $10,000, and $10 for each additional $10,000, or fractional part thereof. Gen.Acts 1907, 1st Called Sess. c. 22, p. 500.

In 1909 the Legislature again amended Article 2439, R.C.S.1895, as amended in 1905 and 1907, so as to charge foreign corporations the following permit fees: Corporations with capital stock of $10,000, or less, were charged $50. Corporations with capital stock exceeding $10,000 were charged $50 for the first $10,000, and $10 for each additional $10,000, or fractional part thereof. Gen.Acts 1909, 1st Called Sess., c. 4, p. 266.

The Act of 1909, supra, so far as applicable here, was codified as Article 3837, R.C.S.1911. In such Article permit fees charged foreign corporations were the same as provided by the Act of 1909, supra.

The permit fee statutes above mentioned have been amended since the codification of 1911, but we are not interested in such amendments in this suit.

In 1899 National Biscuit Company, hereinafter called the Company, obtained a permit to do business in Texas, and, we presume, paid the permit fee then required by statute, $200. Article 2439, R.C.S. 1895, supra.

In 1909 the Company renewed its permit to do business in this State. In order to effect such renewal the Company was required to pay the permit fees provided by Article 2439, R.C.S. 1895, as amended in 1909, supra, being the same fees required by Article 3837, R.C.S.1911. Under such statute the Company was required to pay the sum of $55,040.

In 1893 the Legislature passed an Act levying an annual franchise tax on foreign corporations, such as this, of $10. Gen. Acts 1893, c. 102, p. 158, sec. 5.

The Act of 1893, supra, was carried into the codification of 1895 as Article 5243i. Under such Article the franchise tax charged a foreign corporation, such as this, was $10, regardless of capital stock.

In 1897 the Legislature amended Article 5243i, supra, along with Articles 5243e, 5243j, and 5243k, R.C.S.1895. The Act of 1897 levied franchise taxes on foreign corporations, such as this, as follows: "And each and every foreign corporation having an authorized capital stock of one hundred thousand dollars or less which has heretofore received a permit to do business in this State, under the laws of this State, shall pay to the Secretary of State an annual franchise tax as follows: Each and every foreign corporation having a capital stock of $25,000 or less, an annual franchise tax of $25.00; each and every foreign corporation having a capital stock of more than $25,000.00, and not exceeding $100,000.00, an annual franchise tax of $100.00 to be paid on or before the first day of May of each year; and every such corporation which shall hereafter receive such permit shall also pay to the Secretary of State an annual franchise tax of fifty dollars, the tax for the first year to be paid at the time such permit is issued, and the Secretary of State shall not be required or permitted to issue said permit until said tax is paid, and each succeeding tax shall be paid on or before the first day of May of each year thereafter. And any such corporation having an authorized capital stock of more than one hundred thousand dollars shall in addition to the franchise tax of fifty dollars, as above provided, also pay a franchise tax of one dollar for every ten thousand dollars of their capital stock over and above one hundred thousand dollars." Gen. Acts 1897, c. 104, p. 141.

Article 5243i, as amended, was again amended in 1897. The Act just mentioned levied franchise taxes on foreign corporations, such as this, as follows: "Each and every foreign corporation heretofore authorized to do business in this State under the laws of this State shall, on or before the first day of May of each year, and each and every such corporation which shall hereafter be so authorized to do business in this State, shall, at the time so authorized, and on or before the first day of May of each year thereafter, pay to the Secretary of State the following franchise tax: Every such corporation having an authorized capital stock of twenty-five thousand dollars or less, an annual franchise tax of twenty-five dollars; every such corporation having an authorized capital stock of more than twenty-five thousand dollars and not exceeding one hundred thousand dollars, an annual franchise tax of one hundred dollars; every such...