Electra Independent Sch. Dist. v. W. T. Waggoner Estate, 1918-7948.

• Decision Date: 27 January 1943
• Docket Number: No. 1918-7948.,1918-7948.
• Citation: 168 S.W.2d 645
• Parties: ELECTRA INDEPENDENT SCHOOL DIST. v. W. T. WAGGONER ESTATE.
• Court: Texas Supreme Court

168 S.W.2d 645

ELECTRA INDEPENDENT SCHOOL DIST. v. W. T. WAGGONER ESTATE.

No. 1918-7948.

Commission of Appeals of Texas, Section B.

January 27, 1943.

Rehearing Denied March 3, 1943.

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Error to Court of Civil Appeals of Second Supreme Judicial District.

Suit by the Electra Independent School District against the W. T. Waggoner Estate for the foreclosure of liens for taxes, etc. Judgment for plaintiff was reversed and the cause was remanded with instructions by Court of Civil Appeals, 157 S.W. 2d 721, and plaintiff brings error.

Judgment of Court of Civil Appeals affirmed. Judgment of district court reversed and remanded.

T. R. Boone and Kearby Peery, both of Wichita Falls, and C. P. Engelking, of Electra, for plaintiff in error.

R. B. Anderson, of Vernon, and Kilgore & Rogers, of Wichita Falls, for defendant in error.

SLATTON, Commissioner.

The Electra Independent School District recovered a judgment against the Waggoner estate for $18,099.62, together with foreclosure of liens for taxes, penalties, interest and costs. The Court of Civil Appeals at Fort Worth reversed the judgment of the trial court and remanded the cause with instructions which amounted to a rendition of a judgment in favor of the Waggoner estate upon a tender of its taxes based on its rendition and valuations of property situated within the school district. 157 S.W.2d 721.

Waggoner estate rendered some 25 or more separate tracts or parcels of land and town lots, together with certain personal property, to the school district for tax purposes during the years 1933, 4, 5, 6, 7 and 8, inclusive. The tracts or parcels of land were briefly described in accordance with the statute by giving abstract and survey numbers, original grantees, number of acres and value. The town lots were consolidated in city blocks and the value placed on all lots in one block. Oil was being produced on many of these tracts and the estate owned a one-eighth royalty in such production and in some instances the estate owned a seven-eighths working interest in the oil production. In the renditions for the years 1933 and 1934 the minerals were not excepted from the description of the property, neither was the value of the fee or minerals separated. The renditions of the Waggoner estate for the years 1935, 6, 7 and 8, inclusive, were made in practically the same manner as above described, except mineral interests were described as "royalty" and "working interest." The value of the "fee" was stated and the total of the fee value and presumptively the value of the mineral interest were estimated in one total.

The assessor and collector of the district, in connection with the Board of Equalization, attached to the rendition sheets, or noted on said rendition sheets, raises in the value of the surface or fee estate and in some lowered such values and noted the various average daily production of oil on the leases, in which the estate owned working interests and royalty, and placed the value upon the daily production as the fair market value of the royalty and working interest at so much per barrel. The same method was used by the Waggoner estate when the estate specifically described mineral interests in its rendition, except the estate used a smaller value per barrel than was used by the taxing authorities. The assessor and collector, in making up the tax rolls, placed the various tracts or parcels of land the same as described in the renditions with the values of the fee or surface as raised or lowered by the Board of Equalization. The total amount of oil production in barrels at the average price per barrel was placed on the tax rolls in one sum. For example, the one-eighth royalty for 1933 was placed on the tax rolls at $129,590. This included all the royalty belonging to the estate in and under many of the tracts or parcels of land which were covered by a number of different oil and gas leases belonging to various and sundry lessees. Thus the taxes due the school district by the Waggoner estate, as shown by the assessments and the tax rolls for the years involved in this suit, do not appear on said assessment lists and tax rolls as the property was described in the renditions of the Waggoner estate. The taxes due the district by the Waggoner estate on lands which were producing oil are shown with respect to the surface estate as they were described by the Waggoner estate in the renditions but the mineral interests, both working interests and royalties, are aggregated in the one amount and so described on the assessment lists and the tax rolls of the school district.

Article 7146 of Vernon's Annotated Civil Statutes of Taxes, provides: "Real property for the purpose of taxation, shall be construed to include the land itself, whether laid out in town lots or otherwise, and all buildings, structures and improvements, or other fixtures of whatsoever kind thereon, and all the rights and privileges belonging or in any wise appertaining thereto, and all mines, minerals, quarries and fossils in and under the same."

Under the statute quoted it has been held that a conveyance of oil and gas in place in the ground is an interest in realty which is subject to taxation in the hands of the grantee. Texas Co. v. Daugherty, 107 Tex. 226, 176 S.W. 717, L.R.A.1917F, 989; Stephens County v. Mid-Kansas Oil & Gas Co., 113 Tex. 160, 254 S.W. 290, 29 A.L.R. 566. It has been held that minerals contained in land when severed from the land by a proper conveyance may be taxed separately from the land itself. State v. Downman, Tex. Civ.App., 134 S.W. 787, writ refused; Downman v. State, 231 U.S. 353, 356, 357, 34 S.Ct. 62, 58 L.Ed. 264. Royalty interests in oil and gas acquired under instruments conveying minerals in place are taxable as realty. Federal Royalty Co. v. State, Tex.Civ.App., 42 S.W.2d 670; Sheffield v. Hogg, 124 Tex. 290, 77 S.W.2d 1021; Id., 124 Tex. 290, 80 S.W.2d 741.

Article 7164 of Vernon's Annotated Civil Statutes of Texas, provides how real estate should be rendered for taxation. "1. The name of the owner, abstract number, number of survey, the number of the certificate, the name of the original grantee, the number of acres, and the true and full value thereof. 2. The number of the lot and block and the true and full value thereof, together with the name of the town or city. 3. When the name of the original grantee, or abstract number, or number of certificate, or number of survey is unknown, say `unknown,' and give such description so that land or lot can be identified and the true and full value thereof can be determined."

It has been decided by this Court that the lien provided by Section 15 of Article 8 of the Constitution of Texas, Vernon's Ann.St., and declaratory statutes enacted pursuant thereto attaches only to each separate tract or parcel of land for the taxes assessed against it. Richey v. Moor, 112 Tex. 493, 249 S.W. 172. It was recognized by this Court at an early date in the case of State v. Baker, 49 Tex. 763, "that either lots or blocks in a town or city, or originally distinct and separate surveys or grants in the country, if listed and assessed by the owner, or with his knowledge and approbation, as a single tract or parcel of land, may not be subject to a lien for the aggregate tax thus assessed; or that two or more originally separate tracts or parcels of land, either in town or country, may not be so used and occupied by the owner as to warrant their assessment as a single tract." Reaffirming that doctrine this Court, in the case of State Mortgage Corporation v. Ludwig, 121 Tex. 268, 48 S.W.2d 950, loc. cit. 954, quotes the following from a statement made by the Dallas Court of Civil Appeals: "It would seem to be more in harmony with justice and sound reason that an assessment made in the manner requested or approved by the taxpayer would be a valid assessment. There might be reasons which would render it more convenient and to the interest of the taxpayer to have it so assessed than to have the assessments made against the various parcels. At any rate, the tax assessor assessed the property in the manner in which the taxpayer presented it to him for assessment, and we do not think that plaintiffs in error should now have the privilege of raising objection to the manner in which the taxes were assessed against the property." (Citing authorities).

Article 7204 of Vernon's Annotated Civil Statutes, in harmony with the above mentioned articles of our statute, require a brief description of realty in order to have a valid assessment for taxes. Ordinarily a description is sufficient when the property sought to be assessed may be identified from the description given. Slaughter v. Dallas, 101 Tex. 315, 107 S. W. 48. Where a property owner has rendered his property for taxation and the assessment is made in accordance with the description furnished in the rendition, the taxpayer cannot complain of an insufficient description. McMahan v. State, Tex.Civ. App., 147 S.W. 714, writ refused.

It is apparent from the facts stated in the present case that the purported assessments by the assessor and collector and the Board of Equalization of the taxes against the minerals under the land owned by the Waggoner estate is invalid for the lack of a sufficient description. We are unable to ascertain from the assessment lists and the tax rolls the tract or tracts of land of which the minerals assessed are a part; and since the owner of the realty duly rendered the property in separate tracts or parcels and not in "solido" the entire assessment of the surface or fee, as distinguished from the minerals, is also invalid.

The school district seeks to sustain the assessments made by the Board of Equalization upon the theory that the property was used and operated in such manner by the owners so as to render it impossible for the Board to make a proper valuation of the mineral interests under each particular se...