Texas Co. v. Stephens

• Decision Date: 26 June 1907
• Parties: TEXAS CO. v. STEPHENS et al.
• Court: Texas Supreme Court

103 S.W. 481

TEXAS CO. v. STEPHENS et al.

Supreme Court of Texas.

June 26, 1907.

COPYRIGHT MATERIAL OMITTED

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

Action by the Texas Company against J. W. Stephens and others. From a judgment for defendants, plaintiff appealed to the Court of Civil Appeals, and defendants assigned cross-errors, on which the judgment was reformed and affirmed (99 S. W. 160), after which the Texas Company brought error. Reformed and rendered.

Jas. L. Autry and Gregory & Batts, for plaintiff in error. R. V. Davidson, Atty. Gen., and Claude Pollard, for defendants in error.

WILLIAMS, J.

This was an action brought by the plaintiff in error in the district court of Travis county against the defendants, J. W. Stephens, Comptroller of Public Accounts, J. W. Robbins, State Treasurer, R. V. Davidson, Attorney General, and J. W. Brady, county attorney of Travis county; its purpose, generally stated, being to obtain an injunction to restrain the defendants from proceeding to enforce against plaintiff the provisions of chapter 148, p. 358, of the Acts of the Twenty-Ninth Legislature, generally called the "Kennedy bill," by which certain taxes were levied. The complaint was founded upon contentions that the entire act, and more especially sections 9, 11, 12, and 13 thereof, which more immediately affected the plaintiff, are unconstitutional and void, and also that the defendants, upon an erroneous construction of those sections, were about to proceed to require of plaintiff reports and to charge it with liabilities and subject it to prosecutions and suits not warranted by their provisions. The defendants took various exceptions to the petition, involving, among others, the propositions that no cause for an injunction against them was shown, and that the action was in effect one against the state. They, however, affirmatively set up facts upon which they contended that plaintiff was liable to the state under the act referred to for taxes, and prayed for judgment therefor in behalf of the state. In no other way was the state made a party to the proceedings. Upon final hearing the district court held the act valid, and that, upon a proper construction of its provisions, the plaintiff was liable for some of the sums of money, and was not liable for others, which the defendants claimed of it. Judgment was rendered adjudging that the defendants recover of the plaintiff the sums for which plaintiff was held to be liable, and acquitting it of all other liability. No disposition of the preliminary injunction which had been issued appears, except inferentially, to have been made. The plaintiff appealed to the Court of Civil Appeals, assigning as errors the rulings of the trial court against it, and the defendants filed cross-assignments upon the rulings against them. The Court of Civil Appeals reformed the judgment so as to adjudge a recovery by the state of the sums adjudged below to the defendants, and in all things else affirmed the action of the district court. The plaintiff alone has applied for a writ of error, and we are not advised by anything said or done in this court by counsel for defendants whether or not they expect action at our hands upon their cross-assignments presented in the Court of Civil Appeals. We deem it proper to say that as causes must be brought to this court upon petition for writ of error specifying the grounds upon which the writ is sought, and as our consideration must be confined to the grounds so specified, assignments made in the Court of Civil Appeals, but not embraced in some form in a petition for writ of error, lay no basis for a review by this court of the judgment of the Court of Civil Appeals. Such assignments are looked to only for the purpose of ascertaining whether or not the points made in the petition were raised in the Court of Civil Appeals. The case is therefore before us only upon plaintiff's petition, and is so presented as to confine us to the points made therein reviewing the action of the Court of Civil Appeals.

One of the objections is that the Court of Civil Appeals erred in rendering judgment in favor of the state when the state was not a party to the action, and we must hold that it is well taken. Whether or not the Attorney General would have been authorized to make the state a party by cross-action to recover the taxes due we need not decide. He did not assume to do so. The answer is by "the defendants," and they merely pray that the state recover, etc. Nowhere do we find that there was ever an intention on the part of the Attorney General to make the state a party or to sue in its name. The idea of the defendants in pleading as they did doubtless was to obtain a construction of the statute determining and declaring the extent of the plaintiff's liability put in issue by the petition in accordance with their own contention, and probably the judgment of the district court was intended only as an adjudication of these issues. It went too far, however, as was held by the Court of Civil Appeals, in adjudging a recovery by the defendants in the ordinary form of judgments for the recovery of money. The defendants had no such right of action for the taxes as entitled them to such a judgment. We shall return to the question as to the character of judgment to be rendered after other questions shall have been disposed of.

In its attack upon the validity of the statute, the plaintiff has invoked many provisions of the state and federal Constitutions, and urged many propositions which have so little relevancy that they require no further notice. We shall confine our attention to those which seem to us to present real questions. One of them is that the sections before referred to, which are the ones applying to the businesses in which plaintiff has been engaged, levy an ad valorem tax upon the value of its property in excess of the rate allowed by the Constitution. This contention has been made with reference to a number of like statutes in this state, and has invariably been overruled. State v. Stephens, 4 Tex. 137; Albrecht v. State, 8 Tex. App. 216, 34 Am. Rep. 737; State v. G., H. & S. A. R. R. Co., 97 S. W. 71, 16 Tex. Ct. Rep. 909; 2 Cooley on Taxation, pp. 1094, 1095, 1105-1107, 1109, and authorities cited. In the case of Producers' Oil Co. v. Stephens (Tex. Civ. App.) 99 S. W. 157, in which this court recently refused a writ of error, the point was made that the tax levied by section 13 of the act under consideration upon producers or oil was a tax upon property; but the courts below held otherwise, and this court in refusing the writ of error approved the holding. The taxes in the act are levied because the persons specified are engaged in particular, defined businesses, and are laid upon the carrying on of those businesses. The amounts of the taxes to be paid by those engaged in the businesses are to be ascertained by various standards, depending upon the characters of such businesses, but in no instance is a tax laid upon all or any of the property owned by such persons. Had the statute simply defined the businesses and imposed a tax of a fixed sum upon each, no one would have questioned that it was a tax upon the doing of the businesses; in other words, an occupation tax. The fact that the amount of the tax is to be determined in prescribed methods from the value, or extent, or magnitude of the businesses done, cannot convert it into an ad valorem tax upon the property of the persons conducting them. We could only hold that it does by disregarding not only the nature of the provisions themselves and the language in which they are expressed, but the course of judicial decision here and elsewhere and of former legislation in this state, by which such laws have been treated as imposing occupation taxes.

As especial reliance to sustain this contention is placed upon the language of section 9, we may as well discuss it at this point, and, as other questions arise out of it, we set out its material provisions. It provides that each and every person, association, or corporation "which shall engage * * * in the wholesale business of coal oil, naptha (sic), benzine or any other mineral oils refined from petroleum, and any and all mineral oils, shall pay an annual tax of two per cent. upon their gross receipts from any and all sales in this state of any of said articles * * *, and an annual tax of two per cent. of the cash market value of any and all of said articles that may be received or possessed or handled or disposed of in any manner other than by sale in this state, and it is hereby expressly provided that delivery to or possession by any person, etc., in this state of any of the articles hereinabove mentioned * * * from whatever source the same may have been received, shall for the purpose of this act be held and considered such a sale and such ownership and possession of such articles and property (when no sale is made) as will and shall subject the same to the tax herein provided for." The concluding language quoted is appropriate to the levy of a tax upon the property mentioned, but it is controlled by the leading provision defining the business on the doing of which the tax is imposed. This, when considered in connection with the general scope and purpose of the statute, fixes the character of the tax, and all of the other provisions of section 9 must be viewed as merely dealing with incidents of the business taxed, and as specifying more fully the elements of value to be taken into account in arriving at the amount charged upon the pursuing of the occupation, and as probably intended also to prevent evasions. When the character of the business and of the tax upon it are ascertained, the operation of the incidental provisions, inapt as the language is when applied to such a subject, may be in most cases determined without great difficulty. The persons referred to as receiving, possessing, handling, or disposing of...