Mr. Justice Wilson
delivered the opinion of the Court.
This is a suit for refund of contributions paid the Texas [609] Employment Commission under Art. 5221b, V.A.C.S. Because of limitations upon the charter powers of a corporation doing business in Texas, the Rowan Drilling Company was reorganized into Rowan Oil Co. and the Rowan Drilling Company, Inc. There seems to be no dispute that the two new companies will continue substantially the same operations as the old company conducted with the same employees doing the same jobs under the same ownership. The practical effect of the reorganization is to eliminate possible ultra vires acts. The Texas Employment Commission has fixed contribution rates for the new companies greater than the rate of the old Rowan Drilling Company because that body ruled that the new companies are not entitled under the law to the benefit of the experience rating of the old company.
We must first determine whether this proceeding is an appeal from an administrative tribunal in which the trial court’s function is to test the Commission’s ruling by the substantial evidence rule or whether it is an original action to recover an alleged improper levy of taxes in which the trial court should use its ordinary fact-finding procedure.
The two new companies filed a petition in the district court seeking, among other things, a refund of all moneys paid under the new rate.
The trial court treated this case as an appeal from an order of an administrative agency. After hearing evidence it rendered judgment that plaintiffs take nothing because the administrative decision was reasonably supported by substantial evidence. This has been affirmed by the Court of Civil Appeals on this one ground. 253 S.W. 2d 673.
Art. 5221b, Y.A.C.S., contains no provision granting an employing unit an appeal from an adverse ruling of the Employment Commission denying a refund.
Prior to the amendment in 1947 of the unemployment compensation statutes (Art. 5221b) by the Fiftieth Legislature (Acts 50th Leg., Ch. 379, p. 769) an employing unit aggrieved by a contribution rate assessed against it by the Employment Commission was given no right by Art. 5221b to resort to the courts. Because the “contributions” are an excise tax, Friedman v. American Surety Co., 137 Texas 149, 151 S.W. 2d 570; State v. Praetorians, 143 Texas 565, 186 S.W. 2d 973, 158 A.L.R. 596, it had the remedy of paying the disputed contribution under [610] protest and suing to recover under the general statute governing the payment of taxes under protest (Art. 75057b, V.A.C.S). The case of James, State Treasurer, v. Consolidated Steel Corp. Ltd., Tex. Civ. App., Austin, 195 S.W. 2d 955, 960, writ refused, n.r.e., allowed the employing unit to bring an action for recovery even though the request for refund of contributions had not been made to the Commission as required by Art. 5221b, 12(j) as then worded. The court said:
“* * * But the above quoted language of Sub. (j) of Art. 5221b-12 is the only provision we find in said Act relating to any claim which an employing unit might have for recovery of contributions. The method therein prescribed is permissive and not mandatory, and prescribes no procedure for hearing, appeal, or resort to the courts by the aggrieved party who may be dissatisfied with the decision of the Commission. The absence of such provisions is, we think, significant. * * *”
After the James decision, the Fiftieth Legislature amended Art. 5221b-12(j) by inserting subsection j (2) (1) into Section 12.
The general statute governing the payment of taxes under protest is Art. 7057b. It requires, first, that the taxes be paid under protest; and, second, that the suit be filed within ninety days. Thus the 1947 amendment to Art. 5221b made a significant change in the situation of an employing unit in that it was not required to pay the contribution under protest. Instead it had four years (“notwithstanding” the provisions of Art. 7057b) to request a refund and then one year to “commence an action” after the request for refund had been denied.
The 1947 amendment to Art. 5221b did not create a right to an appeal from an order of the administrative agency. It established a procedure by which contributions paid but not legally due could be recovered under Art. 5221b without resort to Art. 7057b. It follows that this suit is an original action permitted by Art. 5221b to recover money paid but not due. As such, it is [611] in no sense an appeal from an administrative tribunal but is similar to an action brought under Art. 7057b to recover taxes paid under protest. The substantial evidence rule has no application in such an action.
The State moved for judgment on the basis that this proceeding was a “review” of an administrative order and that:
“* * * the burden in cases of review of administrative decisions under the substantial evidence rule imposes a burden on the Plaintiffs to go forward and show that the decision of the Commission was illegal, arbitrary or capricious. There has been no evidence offered of that nature by Plaintiffs in this case. There is, on the other hand, substantial evidence in the record on which the Commission’s decision was reasonably based. We, therefore, move for judgment.”
The trial court recited in its judgment that:
“After the plaintiffs had presented their evidence and rested their case, the defendants moved for judgment on the ground that plaintiffs had failed to discharge their burden of showing that the administrative decision of the Texas Employment Commission was illegal, arbitrary or capricious; that is, that said administrative decision was not reasonably supported by substantial evidence introduced in the trial court.”
The trial court then based its judgment upon its determination of whether or not the order of the Commission was reasonably supported by substantial evidence. The Court of Civil Appeals based its decision squarely on this same ground. We hold this to be error.
Petitioners tersely stated the reason for the reorganization in a document filed with the Commission and introduced in evidence from which we quote:
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Mr. Justice Wilson
delivered the opinion of the Court.
This is a suit for refund of contributions paid the Texas [609] Employment Commission under Art. 5221b, V.A.C.S. Because of limitations upon the charter powers of a corporation doing business in Texas, the Rowan Drilling Company was reorganized into Rowan Oil Co. and the Rowan Drilling Company, Inc. There seems to be no dispute that the two new companies will continue substantially the same operations as the old company conducted with the same employees doing the same jobs under the same ownership. The practical effect of the reorganization is to eliminate possible ultra vires acts. The Texas Employment Commission has fixed contribution rates for the new companies greater than the rate of the old Rowan Drilling Company because that body ruled that the new companies are not entitled under the law to the benefit of the experience rating of the old company.
We must first determine whether this proceeding is an appeal from an administrative tribunal in which the trial court’s function is to test the Commission’s ruling by the substantial evidence rule or whether it is an original action to recover an alleged improper levy of taxes in which the trial court should use its ordinary fact-finding procedure.
The two new companies filed a petition in the district court seeking, among other things, a refund of all moneys paid under the new rate.
The trial court treated this case as an appeal from an order of an administrative agency. After hearing evidence it rendered judgment that plaintiffs take nothing because the administrative decision was reasonably supported by substantial evidence. This has been affirmed by the Court of Civil Appeals on this one ground. 253 S.W. 2d 673.
Art. 5221b, Y.A.C.S., contains no provision granting an employing unit an appeal from an adverse ruling of the Employment Commission denying a refund.
Prior to the amendment in 1947 of the unemployment compensation statutes (Art. 5221b) by the Fiftieth Legislature (Acts 50th Leg., Ch. 379, p. 769) an employing unit aggrieved by a contribution rate assessed against it by the Employment Commission was given no right by Art. 5221b to resort to the courts. Because the “contributions” are an excise tax, Friedman v. American Surety Co., 137 Texas 149, 151 S.W. 2d 570; State v. Praetorians, 143 Texas 565, 186 S.W. 2d 973, 158 A.L.R. 596, it had the remedy of paying the disputed contribution under [610] protest and suing to recover under the general statute governing the payment of taxes under protest (Art. 75057b, V.A.C.S). The case of James, State Treasurer, v. Consolidated Steel Corp. Ltd., Tex. Civ. App., Austin, 195 S.W. 2d 955, 960, writ refused, n.r.e., allowed the employing unit to bring an action for recovery even though the request for refund of contributions had not been made to the Commission as required by Art. 5221b, 12(j) as then worded. The court said:
“* * * But the above quoted language of Sub. (j) of Art. 5221b-12 is the only provision we find in said Act relating to any claim which an employing unit might have for recovery of contributions. The method therein prescribed is permissive and not mandatory, and prescribes no procedure for hearing, appeal, or resort to the courts by the aggrieved party who may be dissatisfied with the decision of the Commission. The absence of such provisions is, we think, significant. * * *”
After the James decision, the Fiftieth Legislature amended Art. 5221b-12(j) by inserting subsection j (2) (1) into Section 12.
The general statute governing the payment of taxes under protest is Art. 7057b. It requires, first, that the taxes be paid under protest; and, second, that the suit be filed within ninety days. Thus the 1947 amendment to Art. 5221b made a significant change in the situation of an employing unit in that it was not required to pay the contribution under protest. Instead it had four years (“notwithstanding” the provisions of Art. 7057b) to request a refund and then one year to “commence an action” after the request for refund had been denied.
The 1947 amendment to Art. 5221b did not create a right to an appeal from an order of the administrative agency. It established a procedure by which contributions paid but not legally due could be recovered under Art. 5221b without resort to Art. 7057b. It follows that this suit is an original action permitted by Art. 5221b to recover money paid but not due. As such, it is [611] in no sense an appeal from an administrative tribunal but is similar to an action brought under Art. 7057b to recover taxes paid under protest. The substantial evidence rule has no application in such an action.
The State moved for judgment on the basis that this proceeding was a “review” of an administrative order and that:
“* * * the burden in cases of review of administrative decisions under the substantial evidence rule imposes a burden on the Plaintiffs to go forward and show that the decision of the Commission was illegal, arbitrary or capricious. There has been no evidence offered of that nature by Plaintiffs in this case. There is, on the other hand, substantial evidence in the record on which the Commission’s decision was reasonably based. We, therefore, move for judgment.”
The trial court recited in its judgment that:
“After the plaintiffs had presented their evidence and rested their case, the defendants moved for judgment on the ground that plaintiffs had failed to discharge their burden of showing that the administrative decision of the Texas Employment Commission was illegal, arbitrary or capricious; that is, that said administrative decision was not reasonably supported by substantial evidence introduced in the trial court.”
The trial court then based its judgment upon its determination of whether or not the order of the Commission was reasonably supported by substantial evidence. The Court of Civil Appeals based its decision squarely on this same ground. We hold this to be error.
Petitioners tersely stated the reason for the reorganization in a document filed with the Commission and introduced in evidence from which we quote:
“Rowan Drilling Company (the Delaware corporation) transacted business in Texas and other states from 1934 until October 1, 1948. During this 14 year period, the company provided employment security to Texas citizens in furtherance of the declared public policy of this State, annually contributed to the Unemployment Compensation Fund, and systematically accumulated an account balance and experience rating. During this period, and as an incident to its charter purpose of drilling oil and gas wells on a contract basis, the company acquired oil and gas leases and properties. The operation of an oil company in[612] volves one charter purpose. The drilling of wells on a contract Basis involves a different charter purpose. Since our Texas statutes limit corporations to the exercise of a single charter purpose as enumerated in Article 1302, and since there are certain prohibitions against corporate ownership of real estate (Article 1359), Rowan Drilling Company was engaging in ultra vires corporate activity; and the management of the company therefore deemed it a requirement of law that the company be reorganized. Under Article 1302, Rowan could operate either a drilling business or an oil business. It could not do both.”
The particular language as then worded of Art. 5221b-5 (c) (7) with which we are concerned is:
“* * * (i) immediately after such change the employing enterprises of the predecessor employing unit or units are continued solely through a single employing unit as successor thereto ;***”.
In State v. Dallas Liquor Warehouse, 147 Texas 495, 217 S.W. 2d 654, we held that the formation of two corporations out of one old employing unit prevented the carrying forward of the old rate under 5221b-5 (c) (7), V.A.C.S. as then worded. It is obvious that if the law requires one corporation to operate a drilling company and another and separate one to operate an oil producing company and if it is an ultra vires act for either to perform the function of the other, then the two new corporations cannot be a single employing unit under the Dallas Liquor Warehouse case without again falling into the very ultra vires operation the reorganization was designed to prevent.
In 1949 the Legislature considered this problem. Art. 5221b was amended in such a way that if the new corporation “acquires a part of the organization, trade or business” of its predecessor “subsequent to the 30th day of June, 1949”, the test becomes:
“* * * and (ii) immediately after such acquisition the successor employing unit continued operation of substantially the same organization, trade or business or part thereof acquired;
This language differs from the language it replaced in that the operation of a reorganized business need no longer be through a “single employing unit” in order to retain its earned experience rate. Under the wording of the amendment the old operation could be split into two or more separate operations and both be entitled to the old rate if each successor continued [613] to operate a part of the old business. Apparently the Legislature had in mind the very situation presented at bar. Therefore, we must determine whether either of the new companies acquired a part of the old business after June 30, 1949. If they did, they are entitled to a transfer of the old experience rate.
The uncontroverted proof in this case establishes that the transfer of certain New Mexico oil leases did not become final until approved by the U. S. Department of Interior in December 1949. As between the parties, this might be regarded as a transfer upon condition subsequent happening after June 30, 1949. But it did not become a transfer of title until finally approved by the U. S. Department of Interior. In view of the fact that one purpose of Art. 5221b is to prevent unemployment and that the whole structure of the act tends to stabilize employment by rewarding the employer who provides stable employment, we construe the word “acquired” so as to carry out the announced policy of the act. Clearly this policy should give this employer the benefit of its earned rate and by so doing encourage it to provide stable employment. Accordingly we hold that the oil company in acquiring the business of its predecessor acquired a part of it subsequent to June 30, 1949, and is therefore within the amendment and entitled to its refund. There is evidence in the record which would support a finding that the transfer to the drilling company had been completed prior to June 30, 1949. However, there is also testimony that the entire reorganization was contingent upon the federal approval of the assignment of the New Mexico leases. Upon this record we hold that the question of whether the drilling company acquired a part of the predecessor business subsequent to June 30, 1949 is one of fact.
We make no comment upon the recently enacted Senate Bill No. 34 except to say that because of Article III, Section 55, Texas Constitution, the Act cannot release any contributions which accrued (i.e. became a fixed liability) before its passage and neither does one session of the Legislature have the power to construe the Acts or declare the intent of a past session. Section 1, Article II, Texas Constitution. Snyder v. Compton, 87 Texas 374, 28 S. W. 1061; Plunknett, A Concise History of the Common Law, p. 292-304.
We cannot determine from this record the status of the refund nor how much should be allocated to the oil company. The judgments of the trial court and of the Court of Civil Appeals are reversed and the case is remanded for a full development of the facts.
[614] Associate Justices Griffin and Calvert dissenting.
Opinion delivered June 17, 1953.