Untitled Texas Attorney General Opinion ( 1951 )

December 13, 1951
Hon. Bill TiDDen Oninion No. V-1375
County Attorney
Taylor County Re: Constitutionality of subsec-
Abilene. Texas tion (c) of Sec. 5a, Art. 7047k,
V.C.S., as amended, requir-
ing seller and purchaser to
make a joint affidavit of the
true consideration and rcquir-
ing the tax assessor-collector
to refuse mot& vehicle reg-
istration applications from
any seller who owes ‘affidavit
Dear Mr. Tippen: error fees.”
You submit for the opinion of this office the question
of the constitutionality of Subsection 4 of Section VII (Motor Ve-
hicle Sales Tax) of House Bill 285, Acts 52nd Leg., R,S. 1951, ch.
402, p, 695. Subsection 4 of this act amends Section 5a of Article
7047k, V.C.S., to read in part as follows:
“Section 4a, The purchaser and seller shall
make a joint affidavit setting forth the then value in
dollars of the total consideration, whether in money
or other things of value, received or to be received
by the seller or his nominee in a retail sale, . . .
..
. . .
“(b) Where the joint affidavit incorrectly states
the amount of the consideration actually received by
the seller so that the tax actually paid is less than
that which was actually due, the seller shall pay an
affidavit error fee as follows:
“(i) Twenty-five Dollars ($25) if the actual
consideration received by the seller was from five
per cent (5%) through 10 per cent (10%) greater than
the consideration upon which the tax was paid, and
“(ii) One Hundred Dollars ($100) if the actual
consideration received by the seller was in excess of
ten per cent (10%) greater than the consideration up-
on which the tax was paid.
.
Hon. Bill Tippen, Page 2 (V-1375)
“(c) The seller shall pay the affidavit error
fee to the Tax Collector and Assessor. One half of
the affidavit error fee shall be retained by the coun-
ty as a fee of office or paid into the officers salary
fund of the county, as is provided by general law.
The remainder of the affidavit error fee shall be
paid over to the State. The Tax Collector and As-
sessor shall refuse to accept an application for reg-
istration or for transfer of title of any motor vehicle
from any seller who owes the Tax Collector and As-
sessor an affidavit error fee.”
You specifically ask the following three questions:
” 1. Is this method of exacting a fine or penalty
constitutional, since it does not afford any type of
hearing or right of appeal to any administrative tri-
bunal or to the courts? Does it afford due process
of law?
“2. Does the Tax Assessor and Collector have
the authority to accept an applicdtion for registration
or for transfer of title which is presented to him by
the purchaser of an automobile from a dealer who
owes an affidavit error fee? (Section C of the Act
herein referred to, clearly states that the Tax Asses-
sor and Collector shall not accebt an application
from a seller who owes an affidavit error fee.)
“3. Is the refusal to accept applications consti-
tutional as a method of enforcing a penal provision
or of collecting a deficiency? ‘*
Your first question calls for ‘a consideration of that
portion of the statute which requires the seller and purchaser to
make a joint affidavit disclosing the true consideration upon
which the tax of 1.1% is assessed by Section l(a) and (b) of the
act. The statute provides in explicit terms for payment by the
seller of an “affidavit error fee” in the event the joint affidavit
incorrectly states the consideration paid.
You ask specifically if this portion of the statute ac-
cords due process. We think it does. That this is a part of a
revenue statute is apparent, and has for its purpose,the preven-
tion of fraud and evasion of a valid revenue measure and is in
our opinion an appropriate and proper provision upon the subject
of revenue ~ We think the portion of the statute here considered
does nothing more than subject a dealer who fails or refuses to
comply with the statute to a right of action in favor of the State
.
Hon. Bill Tippen, Page 3 (V-1375)
for the ‘affidavit error fees” prescribed by the statute. The
fact that it will subject dealers to litigatiqn by the State to en-
force the collection of the fees thus incurred is not sufficient
to condemn this part of thk statute as a denial of due process.
It is but giving a right of action in favor ,of the State for the en-
forcement of the statutory lien provided by Article 7083a, V.
C.S., against a dealer who fails to comply with its provisions.
The fact that the State must bring suit in a court of Isw guaran-
tees to the dealer a hearing and a r’ight of appeal. *his action
preserves to the dealer a’ll of the fundamental rights character-
ized as due .process. Hagar v. $ecla&$ion District No. 108,,
111 U.S. 701 (1894); Ivfexis IndePendent Schbol Dist. v. City of
Mexia, 134 Tex. 95,133 S.W.2d 118 (1939).
This portion of the statute does not by its terms de-
prive a dealer of any right. Itsdoes not impose an arbitrary or
oppressive burden. It simply require6 that the true considcra-
tion be stated. It is within the lagi6lative power to inake rersoa-
able provisions to in6ure the pe,rformance bf *ties 60 closely
interwoven with th6 public welfare in collection of tax66 legrlly~
imposed and to render~dealere 6ubject to rer6b&abls penalties
incurred by reason of their ne.gli&ncc or refuosl t$ comply with
the statute. United Slz+tei v. Stowcll, 133 U.S. 1 (1890); Ipterst@a
Forwarding Co. v. Vinyard, 121 Tex. 289, 49 S.W.Zd 403-0;
%‘lrst Nat. Bdnk v. Hughes, 6 Fed. 737 (cx.N.D. Ohio, 1881).
In answer to your first q&&ion, we hold that this
part of the statute deep not v,iotate due‘process under either the
Federal or State Con6titutioa, or rny ot$ar provision of the Coa-
stitutidn, but is a valid exercise of comtitutional legislative pow-
6r in the enforcement of the revenue laws of this State.
We ~466 next to the coasideration of your eecond
question which calls for an opinion 66 to the constitutionality of
the following provisioh of the statutb:
“The Tax Collector snd A66es6or shall refuse
to accept an application for redistration or for tranr-
f6r of tiile of any motor vehicle from any seller who
owe6 the Tax Collector and h66666Or an affidavit er-
ror fQe.”
There is nothing inherently unlawful in the sale of
automobiles. The right to engage in:&y lawful business without
4x1~ unreasonab,le rtstraiut and tegulotioa ib inherent in our demo-
cratic system of governrrient. Whether (L statute erhanates from
tke police powar or the taxing power of the State, it,is clear that
the State cannet prohibit thl ordinary buaitiess of buying or sell-
ing rrew or used motor vehicles by vestin& absolute or arbitrary
Hon. Bill Tippen, Page 4 (V-1375)
power in the tax assessor-collector to refuse to register cars
sold by dealers delinquent in the payment of *affidavit error
fees.” The seller must be given an appvopriate hearing and an
opportunity to exonerate himself before the denial of such a val-
uable right as the pursuit of a lawful busineea. We think this
portlon of the statute ia a denial of due procesr and subjects
such a dealer to arbitrary restraint, freedom from wkich ia
guaranteed by the Constitution of the United States and the Bill
of Rights embodied in the Constitution of this State.
I,f this statute conferred discretionary power upon
the tax assessor-collector safeguarded by reasonable rules or
regulations for his guidance in the performance of his duties
thereunder, and provided a method of appeal, this provision of
the statute might be susthined, but this it does not do, Instead
it vests in the tax assessor-collector unqualified end unrastraia-
ed power to refuse the registration of motor .vehiclea purchased
from a delinquent dealer, The cQoduct of a lawful business and
the right to earn a fkelihood therefrom may not be thus stifled.
ge Corporation v, SamuelI, 130
Tex. 107, 1 thesu preme c ou*t In coastru-
ing Article 6g54,N.C.S.. readi a8 followl?
*If the property back by the defendnat
tendered
has beam injured or &ma-d
while in hi,s posaess~on
under 8och bond, tke lberiff or conmtable to whom the
same is tendered aball not receive the same, unless
the defendant lZ kke *ime t&me bnderr the reasonsbte
amount d suph iqjury m damage, ta be judged of by
8och ofitcbr. (Emphamla add e d .)
said:
“Tht part of ertHe 68% eatboriatag the sher-
iff 01 coamtable to &termlue tke amount of damages
te the property repCsvled baa tiea nullified, because
it undertake@ to confer upoo #ucch offlcer judicial
power, aad it has been bell timt such power cannot
be conferred upon rerb aa efficer. Morgan v. Cole-
man (Tex. ($1~. App,) 281 SW. 670~ Dupree v. State,
102 Tex. 455, 119 S.W. 301.”
The Legislature in the exercise of the sovereign
power of taxatton haa the iacldeatal rllht to make reasrolrble
provisions fot the collection of taxes and the enforcement of
payment thereof, and what we kave said above LB O& to be con-
rtcued to tke comtrmtp. We hmid. km mml~lcc to Ilrt l*64 q-n-
tia, that the mstbod here a&ptedd. for the rubsem we have
p&it& oat above, is uncoaatitutisul.
. ,
Hon. Bill Tippen, Page 5 (V-1375)
We may hold that part of the statute first considered
constitutional and hold that part which we have considered in con-
nection with your second question unconstitutional, as they may
be separated and are not so dependent upon each other as to pre-
clude-the application of this ruie. City if Taylor v. Taylor B‘ed-
dKng Mfg. Co., 215 S.W.Zd 215 (Tex. Citi. App. 194g, arrds ref.j.
Olu answer to your eecoad qkstioa necessarily an-
swers your third question.
Subsection 4 of Section VII (M&r Vehicle Sales
Tax) of Home@ Bill 285, Acts S2nd Leg., eh. 402, p. 695
(Sec. 5a, Art. 7047k, V.C.S.) requiring the seller and
purchaser of m&e@ vehlclee to eicecuto 8 hint affidavit
gibing the true conrideratien w w#ch the metor ve-
hicle aales, tax is aaaessed, prawiding for payment by
the dealer of an “affidavit err’or fee,” ia a valid provi-
aiee of a t&ng ,statute and does not violate the due
process clause of the 14th Amendment of the Constiti-
tibn of the United States or the 3rd and 19th Sections
of Article I of the Constitution ef this State.
That portion of Article 7047k. bowever, wh6eh
vests arbitrary pewer in the taco asaeoeor-collector tt#
refuse to register mstcpr vehic,lee purchased from de-
linquent dealsra is uncenrtitptieaal aad void beeauaa
it denies d&e pocera under the 14th Amendment Ot
the Federal Constitutim aud Settionr 3 and 19 of Ar-
ticle I od the Coa#titrtlw of the State of Texas and
vista judicial pawer in aa &miai&trativc OJiice, of the
State in violation of w&ton 1, Article II Ot w Cmnmti-
tutioa of the State of Texar.
Your8 very truly,
P-E ,ANIEL
APPROVED: Attsraey General
W. V. Geppert
Taxation Diviaioa
Charles D. Mathews
First Assistant
LPL/mwb