Republic Ins. Co. v. H. Park Independent School Dist.

• Decision Date: 07 April 1943
• Docket Number: No. 2455-8020.,2455-8020.
• Citation: 171 S.W.2d 342
• Parties: REPUBLIC INS. CO. v. HIGHLAND PARK INDEPENDENT SCHOOL DIST.
• Court: Texas Supreme Court

171 S.W.2d 342

REPUBLIC INS. CO. v. HIGHLAND PARK INDEPENDENT SCHOOL DIST.

No. 2455-8020.

Commission of Appeals of Texas, Section A.

April 7, 1943.

Rehearing Denied June 2, 1943.

COPYRIGHT MATERIAL OMITTED

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

Suit by the Highland Park Independent School District against the Republic Insurance Company to recover back taxes. From a judgment in favor of the defendant, the plaintiff appealed to the Court of Civil Appeals. To review a judgment of the Court of Civil Appeals, 162 S.W.2d 1056, reversing the trial court's judgment and remanding the cause, the defendant brings error.

Judgment of the Court of Civil Appeals reversed, and trial court's judgment reformed and, as reformed, affirmed.

Shook & Shook, W. H. Shook, and J. L. Shook, all of Dallas, for plaintiff in error.

Claude D. Bell, R. M. Vaughan, and J. W. Hassell, all of Dallas, for defendant in error.

BREWSTER, Commissioner.

This is a tax suit. It is the fourth in a series of lawsuits between Highland Park Independent School District, respondent, and Republic Insurance Company, petitioner. The first suit was for taxes for 1926 and 1927. It was terminated by the opinion of the El Paso Court of Civil Appeals reported in 57 S.W.2d 627 error refused. The second involved taxes alleged to be due for 1933. The opinions on appeal appear in Tex.Civ.App., 80 S.W.2d 1053, and 129 Tex. 55, 102 S.W.2d 184. The third was for 1934 taxes, and the opinions on appeal appear in Tex.Civ.App., 123 S.W. 2d 784, and 133 Tex. 545, 125 S.W.2d 270.

This suit is for designated items and amounts of personal property which respondent alleges petitioner failed and refused to render for taxation during the years 1923 to 1931, both inclusive. Respondent's assessor assessed these items and amounts on January 30, 1934, as a supplement to petitioner's 1934 rendition. His action was approved by respondent's board of equalization. Petitioner declined to pay the taxes, totaling more than $95,000, claimed to be due on basis of this "back" assessment, whereupon respondent filed suit in the District Court of Dallas County to recover them. That court instructed a verdict for petitioner and rendered judgment in its favor, which judgment was reversed and the cause remanded by the Court of Civil Appeals at Dallas, Justice Young dissenting, in part. 162 S.W.2d 1056. That opinion gives an excellent statement of the history of the controversy between the parties and of the facts pertaining to the case now at bar.

Petitioner urges fifteen points of error in the judgment of the Court of Civil Appeals. However, we have condensed them into fewer propositions, which we shall consider in our own order rather than in that used by petitioner. In connection with our discussion of these several propositions, we shall state such of the facts as we consider relevant to each.

It is contended, in three points of error, that the back assessment is void because it was made by respondent's assessor without notice to petitioner and approved by its board of equalization without giving petitioner an opportunity to be heard. Then, as a corollary proposition, it is urged that the Court of Civil Appeals erred in its holding that the district court can validate the assessment. These contentions must be sustained.

It seems undisputed that the assessment in question was made by the assessor without notice and approved by the board of equalization without a hearing. Therefore, we agree with the Court of Civil Appeals that it was void. However, we do not agree with the further conclusion of that court that such hearing can be afforded in a retrial of the case in the district court. The decisions are clearly to the contrary. Assessing and equalizing taxes are not functions of the courts. Electra Independent School District v. W. T. Waggoner Estate, 140 Tex. ___, 168 S.W.2d 645. Therefore, the trial court was correct in rendering judgment for the petitioner. However, we affirm that judgment on the sole ground that the assessment is void, and we reform it to show that it is rendered without prejudice to the right of the respondent again to assess and value the property in accordance with law and to collect such taxes as may be due thereon. French Independent School District v. Howth, 134 Tex. 211, 134 S.W.2d 1036; Bashara v. Saratoga Independent School District, 139 Tex. 532, 163 S.W.2d 631.

In view of the possibility of further litigation in this prolonged controversy, it is our duty to consider other questions raised by this appeal.

Petitioner claims it is absolved from any liability for taxes for the years 1923 to 1928, inclusive, because of a certificate issued on October 31, 1940, by the tax collector of Dallas County, covering (besides described real estate) "all the personal property owned by the Republic Insurance Company in the years 1919 to 1940, both inclusive," in which it is certified "that there are no taxes due or unpaid thereon, and that all taxes, interest, penalty and costs on all the above described property have been paid by the Republic Insurance Company for the years 1919 to 1940, both inclusive and for each all (sic) the intervening years; and for the years 1919 to 1928 both inclusive * * * this certificate covers the taxes * * *, during said years the taxes for said district were assessed, equalized and collected by the proper officials of Dallas County."

This certificate was issued under Art. 7258a, Vernon's Tex.Civ.Stat., Acts 41st Leg. (1929), 2nd C.S., Chap. 77, p. 153, providing that in any county with a population of 210,000 or more the tax collector "shall, upon request, issue a certificate showing the amount of taxes," etc., due on the property described therein, and further providing that "when any certificate so issued shows all taxes, interest, penalty and costs on the property therein described to be paid in full to and including the year therein stated, the said certificate shall be conclusive evidence of the full payment of all taxes, interest, penalty and costs due on the property described in said certificate for all years to and including the year stated therein. * * * And the introduction of the same [in evidence] shall be conclusive proof of the payment in full of all taxes, interest, penalty and costs covered by the same." Dallas County at all times involved had a population of more than 210,000, and the above described certificate was introduced in evidence in the trial court. We do not believe that its introduction had the effect to prove, under the facts of this case, that the taxes sued for had been paid.

Aside from the proposition now under discussion and that raised in its 10th point of error, next considered, petitioner makes no claim that it had actually paid the taxes in suit, its defense being that the items involved here were properly deductible from its renditions made for the several years in question. In view of the extended litigation between the parties, as indicated in the first paragraph of this opinion, we think it may be safely assumed that everybody connected with this lawsuit knew as a matter of fact that the taxes sued for had not been paid and that the recitations of the certificate were, to that extent, pure fiction. Moreover, the record shows that this suit was filed on May 6, 1937. The first amended original petition was filed October 21, 1940. The first amended original answer was filed October 11, 1939; the second on October 31, 1940. An examination of these pleadings shows that the real issue between the parties was whether the items in dispute were properly deductible from petitioner's several renditions. It certainly could not have been the intention of the legislature to make a tax collector's certificate, issued on October 31, 1940, determine that issue. If so, the statute would have the effect to constitute the collector not only an assessor of taxes but a board of equalization and a court of review as well; it would invest him with the power to determine the very questions we are now called upon to decide. No statute can effect any such result and that no such result was intended or attempted by the act under consideration is clearly shown by the very first words of its emergency clause, as follows: "The fact that owners of property have no way of definitely ascertaining that all taxes have theretofore been paid." (Italics ours.) It is clear, then, that the statute has no reference to "definitely ascertaining" what items of property may lawfully be assessed for taxes—the very gist of this suit as well as of the other three that have gone before. We overrule the point.

Likewise we overrule the proposition that the yearly renditions made by petitioner, when accepted by the assessors and approved by the boards of equalization and the taxes paid by petitioner, concluded its liability for all taxes for the years included. During those years petitioner was claiming, as it is here, that the items now sought to be taxed were deductible from its renditions, and they were deducted. If they were not so deductible, it was beyond the power of the taxing officials thus to permit them to escape taxation. If they were illegally deducted, regardless of the manner or reason therefor, the result was exactly the same as if they had never been rendered at all. Republic Insurance Co. v. Highland Park Independent School District, 129 Tex. 55, 102 S.W.2d 184; 26 R.C.L., p. 351, sec. 308. And they thereby fell into the category of "personal property which has not been assessed or rendered for taxation every year," and became subject to "back" assessment under Art. 1047, R.S.1925. Otherwise, the purpose and effect of that statute could and might be utterly defeated.

In State v. Chicago, R. I. & G. R. Co., Tex.Com.App., 263 S.W. 249, 253, cited by petitioner, it was held that when the duly constituted officers have performed all acts necessary to determine the amount of taxes to be paid by a...