The STATE of Texas, Petitioner, v. Fred SMITH, d/b/a Aragon Ballroom, et al., Respondents, 434 S.W.2d 342

STEAKLEY, Justice. The opinion of the Court delivered July 24, 1968, is withdrawn and the following is substituted therefor: This case presents for review a number of problems concerning

Article 1.07, as amended in 1961, and

Article 21.04 of Title 122A, Taxation-General, Volume 20A, Vernon’s Annotated Texas Civil Statutes. The Court of Civil Appeals has given exhaustive consideration to the questions presented in this case, 420 S.W.2d 204, and in the related case of State v. Rope, 419 S.W.2d 890. See also Miller v. Calvert, 418 S.W.2d 869, no writ history. The facts here involve the operation of an amusement by Respondent, Fred Smith, under the name of the Aragon Ballroom in Dallas County.

The State sued to collect delinquencies in the payment of the admission taxes imposed by Articles 21.01 et seq., alleged to be for the periods of time of April 1, 1957, through December 31, 1960, and April 1, 1963, through March 31, 1964, in the respective sums of $29,000 and $11,750. Smith was the owner of the real estate properties used in the operation of the amusement, but such properties were subject to a vendor’s lien and deed of trust held by Respondent, C. D. Wyche. The State sought to foreclose a tax lien on such properties.

Notice of the lien had not been filed in the county where the properties were located. Judgment for the State was rendered by the trial court for the full amount of the alleged delinquencies, penalty and interest, and for foreclosure of the tax lien asserted by the State. The trial court also declared the tax lien to be superior to those held by Wyche. The Court of Civil Appeals (

a) reversed the judgment of the trial court in favor of the State for admission taxes incurred in the operation of Aragon Ballroom for the period of time from April 1, 1957, through December 31, 1960, and remanded “that portion of the cause” for further proceedings; and (

b) affirmed the judgment of the trial court in favor of the State for admission taxes incurred during the period of time from April 1, 1963, to March 31, 1964, but reversed and rendered the judgment of the trial court foreclosing the state tax lien for this period. The State and Smith and Wyche filed applications for writ of error and both were granted. The major holding of the Court of Civil Appeals under attack by the State is that the lien to secure the payment of the admission taxes imposed by

Article 21.04(2) is subject to the filing and recording requirement of

Article 1.07, as amended, and such lien becomes effective when the notice required by

Article 1.07 is filed and recorded. The major holdings under attack by Smith and Wyche are (

a) the notice requirement has no application to admission taxes which accrued prior to the effective date of the 1961 amendment; (

b) the admission tax lien covers property interests used in the amusement other than that owned by the operator (see also State v. Rope); and (

c) the title of the 1959 act codifying the tax statutes carried adequate notice of the admissions tax lien under the requirements of

Article 3,

Section 35, of the Texas Constitution, Vernon’s Ann.St. (see also State v. Rope). The State also complains of the holding that there was no support in the evidence for the tax claim for the earlier period of April 1, 1957, to December 31, 1960; whereas, Smith and Wyche complain of the holding that there was supporting evidence for the later period of April 1, 1963, to March 31, 1964. We affirm. We consider first the problem most emphasized in importance by the State.

It is whether, as the State contends, the filing of notice requirement imposed by the 1961 amendment is limited to taxes for which a lien is not otherwise authorized in Title 122A, and hence inapplicable to the specific lien provided by

Article 21.04; or, as Smith and Wyche contend, is also a prerequisite to the effectiveness of the lien securing the payment of admission taxes against real estate used by the owner or operator of a place of amusement. The statutory situation is this. In 1959 the Legislature revised and rearranged the taxation Title 122 of the Revised Civil Statutes of Texas into a new title to be known as Title 122A “Taxation-General.”

Article 1.07(1) of

Chapter 1 captioned “General Provisions" provided: “All taxes, fines, penalties and interest due by an individual, firm, association, joint stock company, syndicate, copartnership, corporation, agency, trustee, or receiver to the State of Texas, by virtue of this Title, shall be a preferred lien, first and prior to any and all other existing liens, contract or statutory, legal or equitable, and regardless of the time such liens originated, upon all the property of any individual, firm, association, joint stock company, syndicate, copartnership, corporation, agency, trustee, or receiver.

This lien shall be cumulative, and in addition to the liens for taxes, fines, penalties, and interest now provided by law, and shall attach as of the date such tax or taxes are due and payable.”

Chapter 21 of Title 122A contained the admissions tax.

Article 21.04(2) is the lien provision: “The State of Texas shall have a prior lien for all delinquent taxes and penalties provided for in this

Chapter on all property used by the owner or operator of any place of amusement as designated in this Chapter, and the Attorney General of the State of Texas may file suit for the collection of such tax and penalties in any court of competent jurisdiction in Travis County, Texas, and for the foreclosure of such lien, and may enjoin the operation of any such business until such taxes and penalties are paid.” The additional requirement that notice of the tax lien authorized by

Article 1.07 be filed and recorded was added to Title 122A by legislative amendment in 1961.

The form of the amendment was the inclusion of the following italicized provisions in the body of Art. 1.07(1), together with additional provisions in other sections for the recording and indexing of state tax liens in the office of the county clerk: “All taxes, fines, penalties and interest due by an individual, firm, association, joint stock company, syndicate, copart-nership, corporation, agency, trustee or receiver to the State of Texas, by virtue of this Title, shall be a preferred lien, first and prior to any and all other existing liens, contract or statutory, legal or equitable, and regardless of the time such liens originated, subject, however, to the modification hereinafter contained, upon all the property of any individual, firm, association, joint stock company, syndicate, copartnership, corporation, agency, trustee, or receiver.

This lien shall be cumulative, and in addition to the liens for taxes, fines, penalties, and interest now provided by law, and shall attach as of the date such tax or taxes are due and payable. Provided, however, before the taxes provided for in this laps shall become a lien on real estate, notice thereof must be filed in the county where the real estate is located on which the lien is desired as provided in

Article 1.07A of this Act. Stick lien shall not be valid or effective as against any mortgagee, holder of a deed of trust, purchaser, pledgee, or judgment creditor acquiring title, lien or other right or interest before such notice has been so filed and recorded.” The effect and coverage of

Article 1.07 as a part of

Chapter 1 captioned “General Provisions” of the 1959 codification is entirely clear. The statute did not itself impose a tax but provided for a preferred lien to secure the payment of all taxes due “by virtue of this Title,” i. e., Title 122A, which was “first and prior” to all other liens of any nature regardless of the time of origin. The accrual of the tax obligation — becoming “due and payable”— was the only condition to attachment of the lien, and it was a lien upon all the property of the taxpayer. It was cumulative and in addition to tax liens otherwise provided by law. The 1961 amendment of

Article 1.07 is equally clear. It provides that taxes will not become a lien on real estate until notice thereof is filed in the county where the real estate is located, and that the lien will not be valid or effective against interests in the property acquired before the filing and recordation of the notice. As to the problem at hand, the range of the 1961 amendment as to liens on real estate was the same as the statute it amended. This legislative purpose is reflected in and corroborated by the language of the amendment defining its application to the taxes provided for “in this law” which refers to the coverage of

Article 1.07 which, in turn, is written in terms of “All taxes, fines, penalties and interest due by an individual * * * by virtue of this Title,” i. e., Title 122A, the whole body of the statutory law codified in 1959. The preferred lien for the taxes due by virtue of this title was expressly subjected by the 1961 amendment to the modification hereinafter contained, namely the added requirement for filing of the tax lien notice.

Additionally, the caption of the 1961 amendment recites it to be “An Act amending Title 122A, Taxation-General, * * * providing for recording of lien of all taxes provided for in this Act due the State of Texas before the taxes shall be a lien on real estate * * *.” The purpose of the amendment is further described in the emergency clause as being “The need for a method of determining the status and ownership of real property and real property liens.” We regard as inescapable the conclusion that the Legislature intended the filing of notice requirement of the 1961 amendment to apply to the tax liens on real estate specifically authorized in

Article 21.04(2) of Title 122A. The language of the amendment is all inclusive and is devoid of any indication that its provisions are inapplicable to the admissions tax lien. The State argues the difference in the coverage of the two statutes in support of its position, i. e.,

Article 1.07, written in terms of “all the property” of any taxpayer, whether or not used in the taxable activity, in contrast to

Article 21.04(2), written in terms of “property used by the owner or operator of any place of amusement,” whether or not owned by him. So, says the State, the thrust of the lien provisions in the two statutes is different, with each serving a separate and unrelated purpose in accordance with its internal provisions. In support of its position, the State cites certain other specific lien articles in Title 122A which it asserts are for the same reasons immune from the filing requirements contained in the 1961 amendment to

Article 1.07. We express no opinion as to these other lien statutes, particularly those governing the lien securing the inheritance tax, Articles 14.01 et seq. But we are unable for the reasons we have stated to sustain the position of the State that the Legislature intended that the lien on real estate authorized in

Article 21.04(2) would not be subject to the requirements of

Article 1.07 as amended. Respondents further urge that the 1961 amendment imposing the lien filing requirement has an invalidating retroactive effect on amusement tax liens which had attached prior to the effective date of the amendment and which were not filed and recorded. They argue as a matter of statutory construction that such a retroactive purpose is suggested by the provision that the amendment should have no application to litigation pending in any court of competent jurisdiction. However,

Article 1.07 expressly provided before the 1961 amendment that the state tax lien attached as of the date the tax became due and payable, and would be “a preferred lien, first and prior to any and all other existing liens, contract or statutory, legal or equitable, and regardless of the time such liens originated.” The lien securing the payment of amusement taxes becoming due and payable prior to the effective date of the 1961 amendment was therefore complete and subsisting at such time. The amendment of

Article 1.07 does not purport to extinguish prior liens which had thus attached, and the additional requirements of filing and recordation were not made applicable to them. The State indicates some uncertainty as to the holding of the Court of Civil Appeals in another retrospective sense, i. e., whether the effect of the amendment of

Article 1.07 is that once filed and recorded the amusement tax lien relates back and becomes superior to contractual liens or other pre-existing interests arising subsequent to the effective date of the amendment but prior to the filing and recordation of the state lien. We construe the holding of the Court of Civil Appeals to be that the lien of the state arises at the time of the filing and recordation of notice, with the question of priorities determinable as of then. We agree with this construction of the statute.

The amendment expressly provides that the state lien shall not be valid or effective as to the enumerated pre-existing interests before the lien notice has been filed and recorded. We also agree with the intermediate court here, and in State v. Rope, that the phrase “property used,” appearing in

Article 21.04(2), is unambiguous and quite clearly includes property employed by the owner or operator in the operation of the amusement in which he holds less than full ownership. Cf. State v.

Wynne, 134 Tex. 455, 133 S.W.2d 951, at pages 957, 959, holding that property used in a business may be subjected to a lien for an excise or occupation tax on the business carried on, although it is not owned by the person carrying on the business; that a legislative declaration that the tax lien of the State would be superior to contractual liens ac-curing prior to the passage of the statute is a valid exercise of the power delegated by the Constitution to the Legislature to levy taxes; and that the power of amendment, if such is needed, rests exclusively with the Legislature.

Cf. also International Harvester Credit Corp. v. Goodrich, 350 U.S. 537, 76 S.Ct. 621, 100 L.Ed. 681. Here the Legislature evidently expanded the property subject to the lien to secure payment of the state amusement tax because of the nature of the taxed activity of which one holding a lien or other interest would have notice.

We perceive no basis for construing the phrase “all property used by the owner or operator of any place of amusement” as if the Legislature had added the words “and owned by him” and pretermit further discussion in view of the adequate consideration given the question by the Court of Civil Appeals in State v. Rope, supra, and reaffirmed here. Respondents also attack the adequacy of the caption of the 1959 codification under the constitutional requirement that the subject of a legislative bill be expressed in its title.

This problem was considered at length and the sufficiency of the caption upheld by the intermediate court in State v. Rope and reaffirmed here. We approve these holdings. See Ex Parte Jimenez, 159 Tex. 183, 317 S.W.2d 189, 194. Additionally, Respondents in their application for writ of error urge a deficiency in the title to the amendatory act of the Legislature in 1953 originally authorizing the lien on property used by the owner or operator of a place of amusement which, in turn, was carried forward in

Article 21.04(2) of the 1959 codification. The asserted captional deficiency in the 1953 amendment is the absence of express notice that the admissions tax lien would act upon property used in the amusement and hence in some circumstances upon property interests other than of the owner or operator, which deficiency vitiates the caption to the 1959 act. The contention is novel, and we are not cited to any decision in point to the problem.

We are of the view, however, that resolution of caption sufficiency and germaneness should not be fragmented between the owner and operator of the amusement business and those holding interests in the property employed in the taxed activity. And, further, that the sufficiency of the caption of the act codifying the tax statutes in Title 122A as to the admission tax lien is determinable by its own terms and is not to be measured by that of the predecessor statutes.

It would be anomalous to say that the caption of an amendatory act meeting the requirements of the Constitution, and hence carrying notice to those affected thereby, would nonetheless be invalidated because of possible infirmities in past legislative enactments. Finally, and for the reasons stated, we agree with the holding of the intermediate court that the judgment for the state tax claim against Respondent Smith for the period April 1, 1957, to December 31, 1960, is insupportable under the evidence offered by the State. No attempt was made as to these taxes to utilize the

Article 1.08 prima facie evidence procedure of a claim certified by the Comptroller, and the claim was not otherwise established by competent evidence.

Article 1.08 of Title 122A provides: “Art. 1.08 Certified Claim as Evidence “If any person, firm, corporation, or association of persons engaging in or pursuing any occupation on which, under the laws of this State, an occupation tax is imposed, who fails or refuses to pay such tax, and it becomes necessary to intervene in any manner for the establishment or collection of said tax claims or penalties, a claim showing the amount of tax due the State, certified to by the Comptroller of Public Accounts or his chief clerk, shall be admissible in evidence in such proceedings and shall be prima facie evidence of the contents thereof; provided, however, that the incorrectness of said claim may be shown.” The judgment for the tax claim for the later period of April 1, 1963, to March 31, 1964, is supported by the certificate of the Comptroller, and Respondents made no attempt to show the claim to be otherwise than correct.

We disagree with the contention of Respondents that the certified claim procedure authorized by

Article 1.08 is unavailable in an original suit instituted by the State to collect de-liquent tax claims and penalties, notwithstanding its availability when the State sues in the form of an intervention in a pending proceeding for the identical purpose. We have no difficulty in holding that the filing of suit to collect deliquent taxes is a situation where it has become necessary for the State to intervene within every reasonable intendment of the statute and accordingly •agree with the Court of Civil Appeals in its more extended consideration of the question.

The motion for rehearing of Respondents, Fred Smith and C. D. Wyche, is sustained in part and overruled in part. The judgment entered herein on July 24, 1968, is set aside, and the judgment of the Court of Civil Appeals is affirmed. SMITH, J., dissenting. REAVLEY, J., not sitting. . Acts 1959, 56th Leg. 3rd C.S., p. 187, ch. 1. . Acts 1961, 57th Leg., p. 201, ch. 104. . See e. g. Articles 3.08, 4.07, 7.15, 8.09, 9.08,10.17,14.19 and 18.03, of Title 122A. . Acts 1953, 53rd Leg., p. 62, ch. 49.