Rodar Leasing Corp. of Colo v. Wholesome Dairy Inc.

• Decision Date: 14 May 1969
• Docket Number: No. 6015,6015
• Parties: RODAR LEASING CORPORATION OF COLORADO, INC., Appellant, v. WHOLESOME DAIRY INC., a corporation, Appellee. . El Paso
• Court: Texas Court of Appeals

Page 467

442 S.W.2d 467

RODAR LEASING CORPORATION OF COLORADO, INC., Appellant, v. WHOLESOME DAIRY INC., a corporation, Appellee.

No. 6015.

Court of Civil Appeals of Texas.

El Paso.

May 14, 1969.

Peticolas, Luscombe & Stephens, Wayne Windle, Jr., El Paso, for appellant.

Studdard & Melby, John C. Melby, El Paso, for appellee.

FRASER, Chief Justice.

On April 9, 1969 this court rendered an opinion reversing the holdings of the lower court in the above entitled and numbered cause . On April 24, 1969 the appellee filed a motion for rehearing. We have considered this motion and have determined that it has merit. Therefore the aforesaid motion for rehearing is granted, our original opinion withdrawn, and the following opinion substituted in its place.

OPINION

As stated in appellant's brief, on December 10, 1965, appellant, as plaintiff, filed its petition in the District Court of El Paso County, Texas, against the defendant-appellee. Said petition prayed for a total sum of $4,410.12 due and owing to appellant as the result of a breach of a lease agreement involving a large number of milk dispenser cans. Subsequently, appellee's motion for summary judgment was granted, denying appellant any recovery on its action.

The facts are as follows: On or about June or August of 1962, the parties entered into an oral contract in regard to the leasing of milk cans. The parties are in disagreement as to whether or not appellee would be liable for any loss of said milk cans and lids. Appellant is seeking recovery for cans lost between June 23, 1963 and December, 1963, and filed its original petition on December 10, 1965. In July of 1964, he owner and president of appellant company sold the assets of the organization to Rodar of Kansas. The claims which are being made in this lawsuit were specifically excluded from the sale of the assets of the corporation, so that they were retained by Rodar Leasing Corporation of Colorado, Inc. on July 5, 1965 the right of appellant to do business in Texas was forfeited for non-payment of franchise tax, which forfeiture was prior to the institution of this suit. On March 3, 1967 default judgment was entered in the 126th District Court of Travis County, Texas, ordering that the Certificate of Authorization issued by the State of Texas to appellant be forfeited and made null and void.

Appellant brings up two points of error, as follows:

'POINT OF ERROR NO. 1

THE TRIAL COURT ERRED IN GRANTING THE MOTION FOR SUMMARY JUDGMENT AGAINST APPELLANT BECAUSE THE APPELLANT'S CAUSE OF ACTION AGAINST THE APPELLEE ACCRUED AT A TIME WHEN ALL FRANCHISE TAXES WERE TIMELY PAID AND BEFORE SUBSEQUENT OWNERS OF THE CORPORATION PERMITTED ITS RIGHT TO DO BUSINESS IN TEXAS TO BE FORFEITED FOR NON-PAYMENT OF FRANCHISE TAXES.

'POINT OF ERROR NO. 2

'THE TRIAL COURT ERRED IN GRANTING THE MOTION FOR SUMMARY JUDGMENT AGAINST APPELLANT BECAUSE APPELLANT CORPORATION BY VIRTUE OF THE INTERSTATE NATURE OF ITS BUSINESS IN TEXAS WAS NOT REQUIRED BY TEXAS LAW TO OBTAIN A PERMIT TO DO BUSINESS IN TEXAS AND WAS NOT OBLIGATED TO PAY FRANCHISE TAXES IN TEXAS.'

We believe that appellant's first point must be overruled on the basis of the reasoning set forth in Federal Crude Oil Co. v. Yount-Lee Oil Co., 122 Tex. 21, 52 S.W.2d 56 at page 60. The court there states:

'After a careful consideration of all the provisions of this statute, we cannot escape the conclusion that it is susceptible of but one construction, and that is that the inhibition against a corporation suing or defending in the courts, when its franchise tax is delinquent, applies even though the cause of action upon which it sues arose before its right to do business was forfeited, 'and any corporation whose right to do business shall be thus forfeited shall be denied the right to sue or defend in any of the courts of this State,' is sufficiently broad and comprehensive to include causes of action arising prior to the forfeiture of the corporation's right to do business. That it was intended to cover all causes of action, regardless of the time in which they arose, is plainly revealed when we consider the exception inserted by the Legislature in the act of 1907, and carried into the act of 1913. This exception permitted the corporation to defend a suit brought by the state for the forfeiture of its charter. It was designed to mark definitely the limits of that which should be excluded from the operation of the statute. It is a familiar rule of statutory interpretation that an ...