State v. The Praetorians, A-451.

Citation186 S.W.2d 973
Decision Date11 April 1945
Docket NumberNo. A-451.,A-451.
CourtSupreme Court of Texas

This suit was instituted by the State of Texas to recover taxes and penalties claimed to be due by respondent, The Prætorians, under the unemployment compensation law of Texas on account of commissions paid by The Prætorians to its insurance solicitors and agents between April, 1939, and October, 1941. In the trial court judgment was rendered in favor of the State for $11,083.16. The Court of Civil Appeals reversed the trial court's judgment and rendered judgment that the State take nothing, the ground of its holding being that the caption to the amendment of the Act under which liability for the tax was asserted was defective and the tax was therefore not validly imposed by such amendment. 184 S.W.2d 299.

The unemployment compensation law has been the subject of much change by amendment since it was originally enacted. It is not thought that a detailed history of the many amendments need be set down in this opinion, for a brief sketch thereof will reveal how the questions before us for decision arose. This law was first enacted in 1936 at the Third Called Session of the 44th Legislature, being Senate Bill No. 5, ch. 482. It was divided into 25 sections and many subsections, some of which in turn were subdivided. The Act had many subheads and generally there was but one section under each subhead. The subhead under which Section 19 appeared was "Definitions." It was provided in Section 19(g) (9) that:

"In determining employees under this Act and in determining employers under this Act, and in determining wages under this Act, neither term shall include employment of or service by agents of insurance companies who collect their compensation on a commission basis."

The law was amended in 1937 by the 45th Legislature at its regular session, ch. 67, but no change was made in the provision just quoted. In 1939 it was again the subject of many amendments, and one respect in which it was amended was by omitting altogether the provision quoted above regarding insurance agents. That amendment became effective on March 14, 1939, Acts 1939, p. 436, Vernon's Ann.Civ. St. art. 5221b—1 et seq. In 1941, the 47th Legislature at its regular session by H.B. No. 86, ch. 625, enacted many more amendments, Vernon's Ann.Civ.St. art. 5221b—3, 5221b—17, 5221b—24. One of such amendments to Sec. 19, Vernon's Ann.Civ.St. art. 5221b—17, had the effect of restoring the original provision regarding insurance agents and solicitors.

This suit is for the recovery of taxes and penalties claimed to be due by respondent based upon the commissions paid by it to its solicitors and agents during the period between the effective dates of the 1939 and 1941 amendments. It is obvious that, if the amendment of 1939 which omitted the provision with reference to insurance agents and solicitors was invalid as to the respondent, then the exemption provision theretofore existing remained effective and has never been repealed. The Court of Civil Appeals held that, in so far as such amendment applied to respondent it was invalid under Art. 3, Section 35, of the Constitution of Texas, Vernon's Ann.St., which reads in part as follows:

"Sec. 35. No bill, * * * shall contain more than one subject, which shall be expressed in its title. * * *."

We are not in accord with the views of that court, but on the contrary, are of the opinion that the caption meets the requirements of the constitutional provision just quoted. We here quote the entire caption of the amendment of 1939, supplying the italics:

"An Act to amend the subject matter embraced in Section 3, Section 4, Section 7, Section 13, and Section 19 of Chapter 482, Acts of the Forty-fourth Legislature, Third Called Session, as amended by Section 1, Section 2, Section 3, Section 5, and Section 7, respectively, of Chapter 67, Acts of the Forty-fifth Legislature, Regular Session, and Section 5, Section 6, Section 8, Section 9, Section 14, and Section 16 of Chapter 482, Acts of the Forty-fourth Legislature, Third Called Session; imposing a tax on employers of eight or more persons; providing for benefits; fixing benefit eligibility conditions and certain disqualifications for benefits; providing a merit rating for determining the amount of contributions by employers; fixing the duration of coverage; making provisions with reference to the administration of the Unemployment Compensation Fund; and with reference to the administration of the Unemployment Compensation Administration Fund; providing additional means for the enforcement of the collection of contributions; providing for the making of audits by the Commission, and filing of reports by employers; and providing that such reports or audits when made, constitute prima facie evidence of liability for taxes hereby imposed; providing for the granting of injunctions and appointing of receivers as aids in the collection of the tax hereby imposed; adding certain penalty provisions; defining certain additional terms; adding new sections to be known as Section 19-A and Section 19-B, which provide for the effective date of this Act and for the repeal of all laws and parts of laws in conflict herewith; and declaring an emergency."

Since this Court has lately written on the question of the sufficiency of the caption in Gulf Insurance Co. et al. v. James, 185 S.W.2d 966, we shall here discuss the question but briefly. In the cited case both the majority and the minority opinions reaffirmed the settled law that Section 35 of Article III of the Constitution should be given a liberal construction. Both opinions also reaffirmed the rule that, if the caption is deceptive or misleading, it falls within the condemnation of the constitutional provision. The parties hereto agree that both of those rules are well established and should be applied in deciding the question under review. We shall not therefore cite any further authorities in support thereof. But the parties are in sharp disagreement in the application of those rules to the caption before us.

Respondent would eliminate from the caption all verbiage except that which it conceives to be applicable alone to Section 19 and have the caption construed as if it read this way:

"An Act to amend the subject matter embraced in * * * Sec. 19 (by) defining certain additional terms."

If the caption should properly be limited to that narrow scope, there would probably be no ground to question the soundness of respondent's position. A caption like that would have been deceptive if, instead of defining additional terms, the Act had omitted terms, as in this case, because of which a liability for taxes was sought to be imposed. But we cannot agree that the context of the caption is subject to that construction. Clearly, it seems to us, such construction is not required, but is arrived at by a strictness of reasoning not permissible in passing upon the constitutional provision under review. While Section 19 does fall under the heading "Definitions", so likewise does Section 20, and some definitions are found in other sections of the Act. As pointed out by petitioner, definitions were actually added to other sections by the particular amendment of 1939 now under review. We...

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