Producers' & Refiners' Corporation of Texas v. Heath

• Decision Date: 13 March 1935
• Docket Number: No. 8085.,8085.
• Parties: PRODUCERS' & REFINERS' CORPORATION OF TEXAS v. HEATH, Secretary of State, et al.
• Court: Texas Court of Appeals

81 S.W.2d 533

PRODUCERS' & REFINERS' CORPORATION OF TEXAS v. HEATH, Secretary of State, et al.

No. 8085.

Court of Civil Appeals of Texas. Austin.

March 13, 1935.

Rehearing Denied April 3, 1935.

Appeal from District Court, Travis County; J. D. Moore, Judge.

Suit by Producers' & Refiners' Corporation of Texas against W. W. Heath, Secretary of State, and others. From an adverse judgment, plaintiff appeals.

Affirmed.

John W. Martin, of Houston, for appellant.

James V. Allred, Atty. Gen., and Sidney Benbow, Asst. Atty. Gen., for appellees.

BLAIR, Justice.

Appellant, Producers' & Refiners' Corporation, a Kansas corporation formerly doing business in Texas under a ten-year permit which expired March 14, 1932, sued appellees, the Secretary of State, the State Treasurer, and the Attorney General of Texas, to recover $744.60, paid the Secretary of State as its franchise tax for the year beginning May 1, 1932, and ending April 30, 1933. Appellant alleged that the suit was instituted under the Suspense Account Statutes; that the tax was paid under written protest as follows: "For the reason, among others, the franchise tax is unjust, discriminatory and unconstitutional"; and that the tax was also paid under the mistaken belief of both the Secretary of State and appellant that the permit expired June 19, 1935, instead of March 14, 1932. Appellant further alleged that the Secretary of State had by mistake paid the tax out of the Suspense Account Fund into the general fund of the State Treasury. The judgment was adverse to appellant, and it brings this appeal upon agreed facts, in substance, as follows:

The mistake as to the expiration date of the permit arose from the fact that the Secretary of State, some eight years prior to the payment of the tax in suit, in making a new ledger for appellant corporation, erroneously stated the date as June 19, 1935, and mailed appellant an official certificate showing such erroneous expiration date; which mistake of fact could have been easily discovered by either party from the records involved if they had examined them at the time the tax was paid.

In January, 1932, the Secretary of State mailed appellant a form for use in the payment of the tax in the event it desired to continue doing business in Texas for the next fiscal year, beginning May 1, 1932. Prior to the date the permit would have expired on March 14, 1932, and while appellant was still doing business in Texas, it filled out the form and returned same with the amount of the franchise tax, together with the written protest that the tax was unjust, discriminatory, and unconstitutional, to the Secretary of State. After such payment of the tax, but prior to May 1, 1932, the date the tax was due, appellant was placed in an involuntary receivership in its home state of Kansas, and it ceased thereafter to do business in Texas, and has not and will not renew its permit.

At the time the franchise tax was paid and the protest filed, there was pending in the Circuit Court of Appeals of the United States, at New Orleans (Southern Realty Corp. v. McCallum, 65 F.(2d) 934), a class suit involving all the issues raised by appellant in its written protest; and appellant would have received the benefits of a judgment in favor of such class. However, the judgment was in favor of the Secretary of State upon the issues raised in the written protest, and appellant was bound thereby.

Appellant concedes that the federal court decision is res adjudicata of all issues raised in its written protest, but contends that this suit is based upon the alleged new ground of mistake as to the expiration date of its permit to do business in Texas, alleging that such new ground was not discovered until after the federal court decision; and further contends that this suit is authorized by the Suspense Account Statutes, that is, of the Acts of 1930, 41st Leg., 5th Called Sess., p. 230, c. 73, and the Acts of 1933, 43d Leg., p. 637, c. 214 (Vernon's Ann. Civ. St. art. 7057b), which was made cumulative of the first act. We do not sustain these contentions.

The original act merely provided that the State Treasury Department keep a "Suspense Cash Book" and a "Suspense Account Fund," in which all money received by the head of each department of the government, the legal status of which was undetermined, be recorded and held until its legal status be determined; and when so determined, the Treasurer was required to pay out said fund as directed by the act. Appellant's tax was paid while this act was in force. It provided for no method of compelling the officers named therein to execute its provisions, and no statutes authorized a suit of this character to recover such fund, until the act of 1933.

Section 1 of the act of 1933 (Vernon's Ann. Civ. St. art. 7057b, § 1) provided for the payment of a franchise tax under protest, "setting out fully and in detail each and every ground or reason why it is contended that such demand is unlawful or unauthorized." Other material portions of the act read as follows:

Section 2 (Vernon's Ann. Civ....