Stephens v. Texas & P. Ry. Co.

• Decision Date: 07 November 1906
• Parties: STEPHENS, State Comptroller, et al. v. TEXAS & P. RY. CO.
• Court: Texas Supreme Court

Page 309

97 S.W. 309

STEPHENS, State Comptroller, et al. v. TEXAS & P. RY. CO.

Supreme Court of Texas.

November 7, 1906.

Error from Court of Civil Appeals of the Third Supreme Judicial District.

Action by the Texas & Pacific Railway Company against John W. Stephens, as State Comptroller, and others, to enjoin defendants from performing their duties under Gen. Laws 1905, p. 336, c. 141, levying an occupation tax on corporations. A judgment of the Court of Civil Appeals (93 S. W. 436) reversed a judgment in favor of defendants, and they bring error. Reversed.

R. V. Davidson, Atty. Gen., and W. E. Hawkins, Asst. Atty. Gen., for plaintiffs in error. T. J. Freeman and N. A. Stedman, for defendant in error.

BROWN, J.

The Texas & Pacific Railway Company instituted this suit in the district court of Travis county against John W. Stephens, Comptroller, Robert Vance Davidson, Attorney General, and John W. Robbins, Treasurer, of the state of Texas. The object of the suit was to procure the issuance of a writ of injunction against the defendants, restraining them from performing their several duties under an act of the Twenty-Ninth Legislature, which is attached as an exhibit to the petition. It is sufficient for the decision of this case to state that the law in question levied upon every corporation, etc., operating any line of railroad in this state an occupation tax equal to 1 per cent. of its gross receipts, and, for the purpose of determining the amount of the tax, the officers of the railroad companies named therein were required to report to the Comptroller of the State on the 1st day of October, 1905, and annually thereafter, the gross receipts of the line of railroad from all sources whatsoever for the year ending on the 30th day of June preceding the date of the report. The comptroller is required, upon such return, to estimate the tax required by the statute and to assess and enforce its collection. The only way by which the Comptroller could enforce the collection is to request the Attorney General to bring suit for the tax and penalties in case the railroad company shall fail to pay them on the 1st day of October, and the Attorney General is authorized and required by law to institute the suits upon the request of the Comptroller. The Treasurer has no duty to perform in connection with the collection of the money, but is only required and authorized to receive it when paid by the taxpayer. It is alleged in the petition that, unless restrained from so doing, the officers made defendants therein would proceed to perform their several duties, and that a suit will be instituted against the railroad company for the recovery of the tax and the penalties. The petition sets out in detail the facts relied upon to show that the law under which the taxes are to be levied and collected is in conflict with the state and federal Constitutions in several particulars.

It is also alleged that the corporation was created by an act of Congress of the United States and that its line of railroad extends into Louisiana and Arkansas. There are many allegations in the petition which we do not deem it necessary to mention here, but to show the grounds upon which the petition relied for the issuance of an injunction we make the following extract from the opinion of the Court of Civil Appeals rendered in this case: "Said petition further showed as grounds for relief by injunction that John W. Robbins, Treasurer of the state of Texas, was personally unable to respond in damages for the injury which was about to be inflicted, and did not have property subject to execution exceeding $5,000 in value, and that the tax purported to be levied by said gross receipts tax bill would aggregate more than $650,000, and that there was no authority granted by statute in the state of Texas, or otherwise, whereby suit could be maintained against the state to recover the taxes so paid, and no provision for the payment of any judgment that might be obtained therefor. Said petition also showed that, by reason of the provisions of said bill which required the Comptroller to enforce the collection of the tax and penalties for the nonpayment thereof, there would result a multiplicity of suits from such attempted enforcement, the cost and expense of which would amount to large sums of money, and the bringing to trial of the same would entail further injuries upon the parties claimed to be subject to such tax. It also showed that such tax and any judgment rendered therefor would be a lien upon the property of the railway company against whom the same was claimed, and would be a cloud upon the title of such property, and would lessen the market value of the same. Said petition also showed that by reason of said act being unconstitutional and void petitioner was entitled to the relief demanded, and that such relief required the restraint of the act of the Comptroller in attempting to estimate, assess, and enforce the collection of said tax, and the restraint of the Attorney General and Treasurer in assisting him in doing the same, because such acts would be prejudicial to the petitioner. By all of which allegations it was shown that there was no adequate remedy at law." Upon hearing in the trial court, general demurrer and special exceptions were sustained to the petition, and, the plaintiff therein having declined to amend the petition, the case was dismissed, from which the railroad company took an appeal to the Court of Civil Appeals, and that court reversed the judgment of the district court and rendered judgment enjoining said officers from proceeding to enforce that law.

The plaintiffs in error claim that the injunction should not have been granted by the Court of Civil Appeals because (1) no sufficient ground is shown to justify the court in the exercise of that power; (2) that for all wrongs or injuries which the railroad company was liable to, under the facts of this case, it had an adequate remedy at law; (3) because this is a suit against the state, and, as the state has not given its consent to be sued, the courts had no jurisdiction to entertain the action. There is no conflict in the authorities upon the proposition that the unconstitutionality of a statute will not of itself authorize the issuing of an injunction to stay proceedings under it for the collection of taxes. There must be a state of facts showing that the enforcement of the law by the officers will result in some injury which cannot be avoided in the ordinary course of legal procedure. Shelton v. Platt, 139 U. S. 591, 11 Sup. Ct. 646, 35 L. Ed. 273; Ark. Bldg. Ass'n v. Madden, 175 U. S. 269, 20 Sup. Ct. 119, 44 L. Ed. 159.

The first question for our consideration is, Do the allegations of the petition for injunction show...