Producers' Oil Co. v. Stephens

EIDSOR, Associate Justice. This is a case in which were con *332 solidated the suits of the Producers Oil Companj', the Moonshine Company and the Little Jap Oil Company, against appellees for injunction to restrain them from taking any action looking to the enforcement against appellants of the provisions of chapter 148, Acts of the Twenty-ninth Legislature of the State of Texas, known as the Kennedy Bill. Appellants’ petitions assail said Act as being obnoxious to various provisions of the Constitution of this State and that of the United States. Appellees’ answer, insofar as necessary to be stated, contained an exception in limine, to the effect that the suits were against the State of Texas, and for that reason, could not legally be maintained; and a cross bill praying for judgment against appellants for the taxes- and penalties imposed upon them by said Act of the Legislature. Appellants excepted to appellees’ cross action. The court overruled appellees’ exception in limine, and sustained appellants’ exception to appellees’ cross action insofar as it related to penalties, but overruled same as to taxes. The court gave judgment in favor of appellees for the taxes claimed, but refused to render judgment for any penalties. While according to the holding of the Supreme Court in Stephens v. Texas & Pac. Ry Co., 16 Texas Ct. Rep., 918, this suit by appellants was a suit against the State and could not be maintained without its consent, and therefore the action o“f the court below in overruling appellees’ exception m limine was error, such action becomes immaterial, in view of the refusal of the court below to grant any relief to appellants under their petition for injunction. The taxes recovered in this suit were only such as are imposed by section 13 of said Act, which is as follows: “Sec. 13. Every individual, joint stock company, co-partnership or corporation, whether incorporated under the laws of this State, or any State or Territory of the United States or of any foreign country, which owns, controls, manages or leases any oil well within this State, shall, on or before the first day of April of each and every year, and quarterly thereafter, through its superintendent, president, secretary or other authorized agent, or in person or by agent (if said well belongs to or is managed or controlled by any individual) file with the Comptroller a report under oath, showing the total amount of oil produced by each of said parties, during said next preceding quarter, and also- its market value. Said oil well companies or individuals owning, controlling or managing oil wells, at the time of filing the required report, shall pay to the Treasurer of the State of Texas one percent on the gross products, as shown by said reports, said amount in money to be fixed at the average market value of said product during the preceding quarter. The receipt of the Treasurer of tire State shall be evidence of the payment of such taxes. Should any person, association of persons, the officers or agents of any such persons, association of persons or corporations herein named, fail to make the report provided for in this chapter, for more- than thirty days after the termination of any quarter of the year, then he shall be deemed guilty of a misdemeanor, and upon conviction shall be fined in any sum not less than fifty dollars, nor more than one hundred dollars. Each day after said thirty days have expired shall be deemed a separate offense. And in addition thereto, in the event of the failure of the *333 officers or agents of any such company or corporation to make such report and pay said tax for thirty days after the termination of any quarter of the year, each and every such company or corporation so failing, shall forfeit and pay to the State of Texas twenty-five dollars for each day said report and payment are delayed, which forfeiture shall be sued for by the Attorney General in the name of the State. For the purpose of suits and prosecutions provided for herein, venue and jurisdiction are hereby conferred upon the courts of Travis County, and service may be had upon any officer or agent of such company or corporation within this State, and such service shall, in all respects, be held legal and valid. The tax provided for in this article shall be in addition to all .other taxes levied.” Appellants contend that said section violates the State Constitution as to rate of taxation, equality and uniformity of the tax, assessment of property in the county where situated, and as to equalization of values. This contention is based upon the idea that the tax imposed is an ad valorem tax. In our opinion the tax isl not upon the gross products of the oil wells, but upon the occupation of owning, controlling or managing oil wells producing oil; and the amount of the tax is measured by a percentage of the market value of the gross products. (State v. Galveston, H. & S. A. Ry. Co., 16 Texas Ct. Rep., 909.) Nor does said section violate any provision of the United States Constitution, as the Legislature has the authority to single out and make classifications for the purpose of levying occupation taxes; and all that is required in reference to equality and uniformity is that the taxes imposed be equal and uniform upon tile same class of subjects, and the section complained of complies with this requirement, as it.operates on all oil producers alike. (State v. Galveston. H. & S. A. Ry. Co., supra.) And although this law imposes an occupation tax upon the oil producers who pay an ad valorem tax upon the real estate producing oil, it does- not constitute double taxation, not permitted by the law, as it is within the authority of the Legislature to impose an ad valorem tax on the oil producing property of appellants, and an occupation tax for the use of this property in the production of oil. (State v. Galveston, H. & S. A. Ry. Co., supra.) The Act of the Legislature embracing the section under consideration became effective April 17, 1905, and the court below properly gave it effect from that time. (State v Railway Company, supra.) The court below did not err in not rendering judgment in favor of the State for the penalties sued for, as the amount of the penalties is sufficiently disproportionate to the amount of the taxes to render the penalties excessive within the meaning of the constitutional provision prohibiting the imposition of excessive fines, which includes penalties. (State v. Railway Company, supra.) We notice that the judgment in this case is in favor of the defendants who are the Comptroller, Attorney General and Treasurer of the State of Texas and the county attorney of Travis County. The pleadings ask for judgment in favor of the State of Texas, and the law makes the tax a State tax; hence the judgment should be in favor of the State of Texas. The judgment, of the court below will, therefore, be corrected and reformed, so as to recite a recovery by the State of Texas of the amounts *334 therein stated, instead of a recovery by the defendants of said amounts, and thus corrected and reformed, the judgment will be affirmed. Judgment reformed and affirmed. Writ of error refused.