Walter Butler Bldg. Co. v. Soto

• Decision Date: 03 July 1957
• Docket Number: No. CC834,CC834
• Court: West Virginia Supreme Court
• Parties: WALTER BUTLER BUILDING COMPANY, a Corporation, v. Joseph S. SOTO, Individually and as State Tax Commissioner of West Virginia.

Page 275

97 S.E.2d 275

142 W.Va. 616

WALTER BUTLER BUILDING COMPANY, a Corporation, v. Joseph S. SOTO, Individually and as State Tax Commissioner

of West Virginia.

No. CC834.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 15, 1957.

Decided April 2, 1957.

Rehearing Denied July 3, 1957.

Syllabus by the Court

1. When a statute is susceptible of two constructions, one of which is, and the other of which is not, violative of a constitutional provision, the statute will be given that construction which sustains its constitutionality unless it is plain that the other construction is required.

2. Any doubt as to the constitutionality of an act of the Legislature will always be resolved in favor of the validity of the statute.

3. The provision of Section 8, Article 13, Chapter 165, Acts of the Legislature, 1955, Regular Session, relating to an appeal to the circuit court by a taxpayer from the decision of the State Tax Commissioner denying his petition for reassessment of a tax assessed against the taxpayer, that the court shall 'determine anew all questions submitted to it on the appeal from the determination of the tax commissioner' does not vest in the judicial department of the government a nonjudicial function, is not violative of Section 1, Article V, of the Constitution of this State, and is constitutional and valid.

4. The provision of Section 8, Article 13, Chapter 165, Acts of the Legislature, 1955, Regular Session, that the appeal authorized by that section shall be 'docketed as other cases with the taxpayer as plaintiff and the tax commissioner as defendant' does not permit or require the taxpayer to sue the State of West Virginia and does not contravene Section 35, Article VI, of the Constitution of this State.

5. By the appeal authorized by Section 8 of the statute, the taxpayer, though designed as the plaintiff, can not obtain a recovery of money or property of the State, control the discretion of an official of the State, compel the State or any of its officials to make or perform a contract in its behalf, or obtain relief that will supplant, restrict or adversely affect any established proprietary right or interest of the State; and the prosecution of such appeal by the taxpayer is not a suit against the State which is prohibited by Section 35, Article VI, of the Constitution of West Virginia.

6. Statutory provisions which confer jurisdiction, require reasonable notice to the parties affected, and afford a fair and reasonable opportunity to each party to be heard before any right of any party is passed upon or determined, satisfy the requirement of due process of law and are constitutional and valid.

7. When the title to an act amending a particular article and chapter of the Code of 1931 expressly refers to the amended article and chapter, specifies the several sections repealed or amended and reenacted, and designates four additional new sections, all of which are germane and conform to the subject of the amended statute, the title to the amendatory statute is sufficient, does not violate Section 30, Article VI, of the Constitution of this State, and is constitutional and valid.

Koontz & Koontz, Harry B. Lambert, Charleston, for plaintiff.

John G. Fox, Atty. Gen., Ronald Kyger, Frank M. Ellison, Asst. Attys. Gen., for defendant.

HAYMOND, Judge.

In this suit in equity, instituted in the Circuit Court of Kanawha County in May 1956, the plaintiff Walter Butler Building Company, a corporation, seeks to enjoin the defendant Joseph S. Soto, individually and as State Tax Commissioner of West Virginia, from enforcing an assessment of a business and occupation tax by the State Tax Commissioner against the plaintiff in the amount of $22,507.49.

The plaintiff attacks the assessment as invalid and unenforceable on the ground that Chapter 165, Acts of the Legislature, 1955, Regular Session, upon which the assessment is based, and particularly Sections 7b and 8 of that statute, are unconstitutional and void.

The statute, passed March 12, 1955, and effective ninety days from passage, amended Article 13, Chapter 11, Code, 1931, as amended, by repealing two sections, by amending and reenacting other sections of that article, and by adding four new sections to it.

The defendant insists that the assessment is authorized by Section 2e, Article 13, Chapter 11, Code, 1931, as amended, and by Section 2, Article 13, Chapter 165, Acts of the Legislature, 1955, Regular Session, and is valid and enforceable.

The circuit court overruled the demurrer of the defendant to the bill of complaint of the plaintiff to the extent that the demurrer asserts the constitutionality of Section 8, Chapter 165, Acts of the Legislature, 1955, Regular Session, and sustained the demurrer to the extent that it asserts that all the other sections of the statute are constitutional; and by its ruling on the demurrer held Section 8 unconstitutional and invalid but upheld the constitutionality and validity of all the other sections of the statute.

In its bill of complaint the plaintiff, a corporation organized and existing under the laws of the State of Delaware, alleges in substance that during the years 1953 and 1954, under a written contract between the plaintiff and the Sisters of the Holy Ghost of West Virginia, a charitable and nonprofit corporation organized and existing under the laws of this State, by which the plaintiff agreed to act and acted solely as the agent and construction manager of that corporation, the plaintiff engaged in certain business activities in this State in connection with the construction of a hospital known as the Kings Daughters Hospital in the City of Martinsburg, Berkeley County, West Virginia; that on July 1, 1955, after negotiations between the plaintiff and the defendant and a preliminary investigation by the defendant of the activities of the plaintiff in connection with the construction of the hospital and with respect to the liability of the plaintiff to a business and occupation tax under Section 2e, Article 13, Chapter 11, Code, 1931, as amended, the defendant assessed a tax, including penalties of $4,263.33, against the plaintiff in the amount of $22,507.49; that the plaintiff protested the assessment of the tax and, under the provisions of Section 7b of Chapter 165, Acts of the Legislature, 1955, Regular Session, which amended Article 13, Chapter 11, Code, 1931, as amended, petitioned the defendant for reassessment of the tax; that upon consideration of the petition and the evidence presented at a hearing by the defendant on the petition the defendant ruled that the plaintiff was subject to the tax set forth in the assessment; that after receiving notice of the action of the defendant in connection with the assessment the plaintiff filed an appeal from the decision of the defendant in the Circuit Court of Kanawha County under the provisions of Section 8, of Chapter 165, and attacked the validity of the assessment of the tax, and the ruling of the defendant upon the petition for reassessment, as erroneous, contrary to law and violative of the true intent and meaning of the statutes of this State; that during the proceedings upon the appeal in the Circuit Court of Kanawha County the Judge of that Court indicated to counsel representing the plaintiff and the defendant that he entertained some doubt as to the constitutionality of Section 8 of the statute; that for that reason the appeal filed by the plaintiff, though still pending, has not been actively prosecuted and has not been finally determined; that instead of proceeding further in the appeal the plaintiff instituted this suit for injunctive relief against the enforcement and collection of the tax assessed by the defendant; that in making the assessment against the plaintiff and in denying its petition for reassessment the defendant acted under and by virtue of the authority conferred upon him by Chapter 165, Acts of the Legislature of West Virginia, 1955, Regular Session; that Chapter 165, and particularly Sections 7b and 8 of that statute, are violative of the Constitution of West Virginia and of the Constitution of the United States; that Section 8 of the statute imposes upon the circuit court a ministerial or administrative duty, and attempts to authorize a taxpayer to maintain a suit against the State; that the title to the act is fatally defective; that in these particulars the statute contravenes Section 1, Article V, Sections 1, 3, and 12, Article VIII, and Sections 35 and 30, Article VI of the Constitution of this State; and that the assessment of the tax by the defendant, the decision of the defendant denying the petition of the plaintiff for reassessment of the tax, and all the acts of the defendant in attempting to enforce the collection of the tax, being based upon an unconstitutional statute, are null and void and of no force and effect.

The prayer of the bill of complaint is that the defendant be enjoined from collecting the tax assessed against the plaintiff; that Chapter 165, Acts of the Legislature, 1955, Regular Session, be declared to be unconstitutional and void; and that the plaintiff be granted general relief.

Section 2, Article 13, Chapter 165, Acts of the Legislature, 1955, Regular Session, which imposes the tax assessed against the plaintiff contains, among other provisions, this provision: 'There is hereby levied and shall be collected annual privilege taxes against the persons, on account of the business and other activities, and in the amounts to be determined by the application of rates against values or gross income as set forth in sections two-a to two-j inclusive, of this article.'

Section 2e, Article 13, Chapter 11, Code, 1931, as amended, which was not amended by Chapter 165, provides: 'Upon every person engaging or continuing within this State in the business of contracting, the tax shall be equal to two per cent of the gross income of the business.'

Section 7b, Article 13,...