Bank of Texas v. Childs

Decision Date23 January 1981
Docket NumberNo. 20660,20660
PartiesBANK OF TEXAS et al., Appellants, v. John CHILDS et al., Appellees.
CourtTexas Court of Appeals

Peter S. Chantilis, Cecilia S. Hufstedler, Dallas, for appellants.

Earl Luna, Randel B. Gibbs, Dallas, for appellees.

Before GUITTARD, C. J., and AKIN and ROBERTSON, JJ.

GUITTARD, Chief Justice.

ON MOTIONS FOR REHEARING

The principal question in this case is the validity of the tax on bank shares assessed by Dallas County under article 7150.6 and 7166 of the Texas Revised Civil Statutes. 1 The suit was brought by the Bank of Texas, a state banking corporation, and all its shareholders, against the county, its tax assessor-collector, and board of equalization, for mandamus, injunction, and declaratory relief, alleging that the county's tax plan of 1979 is illegal under state law, or if not illegal, unlawfully discriminates against holders of bank shares because no such tax is assessed against other intangible property including other moneyed capital in the hands of individuals. The bank and its shareholders further contend that the assessment is illegal under federal law because it considers the value of obligations of the United States held by the bank in computing the tax, contrary to the federal statute exempting such obligations from taxation.

After a trial without a jury, the trial court upheld the tax and denied the relief sought. We affirm.

State Law

We consider first the contention that the county has no authority to tax shares of bank stock because article 7150.6, which exempts most intangible property from taxation, has the effect of repealing the tax on bank shares imposed by article 7166. Since article 7166 is not expressly repealed, we must examine the two statutes to determine whether the legislature intended to impliedly repeal the tax on bank shares. We conclude that no such repeal was intended by the legislature.

Article 7166 is as follows:

Every banking corporation, State or national, doing business in this State shall, in the city or town in which it is located, render its real estate to the tax assessor at the time and in the manner required of individuals. At the time of making such rendition the president or some other officer of said bank shall file with said assessor a sworn statement showing the number and amount of the shares of said bank, the name and residence of each shareholder, and the number and amount of shares owned by him. Every shareholder of said bank shall, in the city or town where said bank is located, render at their actual value to the tax assessor all shares owned by him in such bank; and in case of his failure so to do, the assessor shall assess such unrendered shares as other unrendered property. Each share in such bank shall be taxed only for the difference between its actual cash value and the proportionate amount per share at which its real estate is assessed. The taxes due upon the shares of banking corporations shall be a lien thereon, and no banking corporation shall pay any dividend to any shareholder who is in default in the payment of taxes due on his shares; nor shall any banking corporation permit the transfer upon its books of any share, the owner of which is in default in the payment of his taxes upon the same. Nothing herein shall be so construed as to tax national or State banks, or the shareholders thereof, at a greater rate than is assessed against other moneyed capital in the hands of individuals. Tex.Rev.Civ.Stat.Ann. art. 7166 (Vernon 1960).

The pertinent provisions of article 7150.6 are as follows:

(a) Except as provided by Subsection (b) of this article, intangible property is exempt from ad valorem taxation.

(b) Intangible property is taxable ad valorem if its taxation is provided for by Article 7105, 7165, 7166, or 7244, Revised Civil Statutes of Texas, 1925, as amended; by Section 11.09, Texas Savings and Loan Act (Article 852a, Vernon's Texas Civil Statutes) .... Tex.Rev.Civ.Stat.Ann. art. 7150.6 (Vernon Supp. 1980).

The bank and its shareholders contend that since article 7166 provides that bank shares may not be taxed at a greater rate than other moneyed capital in the hands of individuals, and article 7150.6 expressly exempts such other moneyed capital from taxation, 7166 no longer imposes a tax on bank shares. They acknowledged in oral argument that this contention means that article 7166 has been repealed by implication.

We do not agree that article 7166 was repealed by article 7150.6. Since repeals by implication are not favored, old and new statutes that are not positively repugnant will each be construed so as to give effect to both, if possible. Standard v. Sadler, 383 S.W.2d 391, 395 (Tex.1964). We have no difficulty in construing these two statutes so as to give effect to both. In fact, article 7166 falls within an express exception to the exemption of intangible property from taxation provided by article 7150.6(a). It would be clearly contrary to the legislative intent to hold that an earlier statute expressly specified in an exception to the later statute is repealed by the later statute.

The only provision of article 7166 that is arguably repealed by article 7150.6 is the last sentence of article 7166, which provides:

Nothing herein shall be so construed as to tax national or State banks, or the shareholders thereof, at a greater rate than is assessed against all other moneyed capital in the hands of individuals.

If the intent of article 7150.6 is to repeal all taxes on "other moneyed capital in the hands of individuals" but to retain the tax on bank shares, as the reference to article 7166 in subsection (b) of article 7150.6 indicates, then the last sentence of article 7166 above quoted may no longer be effective. This interpretation is preferable to ascribing to the legislature the intent to repeal article 7166 in its entirety because of the express exclusion of the bank shares tax in article 7150.6(b). Moreover, repeal of only the last sentence would be supported by the rule that when two statutes have conflicting provisions, the earlier statute will be held to be repealed only to the extent of the conflict, and otherwise will be construed as remaining in effect. Whittenberg v. Craven, 258 S.W. 152, 153 (Tex.Com.App. 1924, judgmt adopted); Texas State Board of Pharmacy v. Kittman, 550 S.W.2d 104, 107 (Tex.Civ.App. Tyler 1977, no writ); Parker v. State, 208 S.W.2d 380, 383-84 (Tex.Civ.App.), aff'd 147 Tex. 57, 212 S.W.2d 132 (1948). Consequently, rather than construe article 7150.6 as repealing article 7166 in its entirety, we would be required to construe it as repealing only the last sentence. 2

However, it may not be necessary to go so far as to hold that the last sentence of article 7166 has been repealed by article 7150.6. Subdivision (b) of article 7150.6 enumerates several statutes in addition to article 7166 that are excluded from the exemption of intangible property from taxation. We need not determine whether any of these other statutes impose a tax on "moneyed capital in the hands of individuals." There is no contention here that any of them does impose such a tax, but if any of them do, the last sentence of article 7166 may still be effective to forbid the taxation of bank shares at a greater rate than the tax imposed by any of those statutes. If none of them imposes such a tax, then the last sentence may have no effect until and unless legislation is enacted imposing such a tax.

Furthermore, we note that there is no evidence in the present record that there is, in Dallas County or elsewhere, any "other moneyed capital in the hands of individuals" that is exempt from taxation under article 7150.6. Consequently, there is no evidence the tax plan of Dallas County is illegal on the ground that the bank shares in question are taxed at a greater rate than "other moneyed capital in the hands of individuals."

For the reasons stated, we hold that when article 7150.6 and article 7166 are read together, and effect is given to both to the extent possible, a tax is still imposed on bank shares. Our holding in this respect is not contrary to Childs v. Reunion Bank, 587 S.W.2d 466, 470 (Tex.Civ.App. Dallas 1979, writ ref'd n. r. e.). That case concerned taxes assessed before the exemption provided by article 7150.6 became effective, and this court held that since the record showed that numerous classes of taxable property, including other moneyed capital in the hands of individuals, were subject to taxation, but were not included in the tax rolls, the assessment on bank shares was in violation of article 7166. That holding cannot control this case because of the provisions of article 7150.6, which, as already explained, by its express reference to article 7166, excludes bank shares from the exemption of intangible property, and, consequently, would have the effect of repealing only the last sentence of article 7166, if that sentence would otherwise extend the exemption to bank shares.

Inequality of Taxation

The bank and its stockholders contend further that if a tax is imposed on bank shares by articles 7150.6 and 7166, these statutes are unconstitutional because they deliberately omit taxation of shares of non-banking corporations and most intangible personal property, contrary to article VIII, section 1, of the Texas Constitution, which provides, "Taxation shall be equal and uniform" The county responds that under article VIII, section 1, as amended effective January 1, 1979, taxation of intangible property is permitted, but not required. We agree with the county's interpretation. Formerly, this section provided, "All property in this State ... shall be taxed in proportion to its value ...." As amended, it provides, "All real property and tangible personal property in this State ... shall be taxed in proportion to its value ...." The amendment adds further that the legislature "may provide for the taxation of...

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