Brown v. First Nat. Bank

• Decision Date: 03 April 1915
• Docket Number: (No. 7076.)
• Citation: 175 S.W. 1122
• Parties: BROWN et al. v. FIRST NAT. BANK OF CORSICANA et al.
• Court: Texas Court of Appeals

Page 1122

175 S.W. 1122

BROWN et al. v. FIRST NAT. BANK OF CORSICANA et al.

(No. 7076.)

Court of Civil Appeals of Texas. Dallas.

April 3, 1915.

Rehearing Denied May 1, 1915.

Appeal from District Court, Navarro County; H. B. Daviss, Judge.

Action by the First National Bank of Corsicana and others against W. J. Brown and others. Judgment for plaintiffs, and defendants appeal. Reversed and remanded.

McClellan & Prince, R. S. Neblett, and J. H. Rice, all of Corsicana, for appellants. Richard Mays, of Corsicana, for appellees.

TALBOT, J.

The appellees, First National Bank of Corsicana, and 9 other banks, state and national, located in Navarro county, Tex., and the stockholders in said banks, numbering about 181, brought this suit against the appellants, R. R. Owen, county judge of Navarro county, J. N. Edens, W. L. Mederis, J. R. Slay, and W. B. Payne, county commissioners of Navarro county, constituting the board of equalization of said county, and W. J. Brown, tax collector and tax assessor, respectively, of said county, to have declared illegal certain taxes assessed against them and to restrain the collection of said taxes. Appellees alleged: That the officers of the banks, at the direction of the tax assessor, furnished him with a list of the stockholders, together with the capital, surplus, and profits of said banks, but that no value was placed upon the shares of stock by such officials, that individual plaintiffs did not render their shares of stock for taxes, nor were they called upon to do so, nor were they given notice by the taxing authorities, as to their dealings with said stock, and that they did not authorize the rendition of said shares by the bank officials. That the board of equalization adopted as the market value of said shares of stock the aggregate of the capital, surplus, and profits of said banks, divided by the number of shares of said banks, respectively, and fixed the taxable value of said shares at from 65 per cent. to 83 per cent. of its reasonable cash market value. That the tax assessor made no assessment against the banks, nor against the shareholders, and that, after the board of equalization fixed the tax value at 65 per cent. to 83 per cent. as aforesaid, it gave the shareholder no notice of such action. That all other property in Navarro county was equalized and assessed by the board on the basis of 35 per cent. of its reasonable cash market value. That it had become an established, general, and uniform custom, for a long period of time prior thereto, to assess property at less than its market value in Navarro county, and that, in pursuance thereof, the board assessed property, other than that owned by banks and stockholders therein, at an average of 35 cents on the $100 of valuation; whereas, they assessed bank stock and bank property at from 65 per cent. to 83 per cent. of such value. That said board during the time they were acting upon the property rights of plaintiffs with full knowledge of said existing custom, and in recognition of the same, and with the design and intention of observing it, listed and equalized real estate and personal property, other than that of national and state banks, at the sum of 35 per cent. on the $100 of its reasonable cash market value, and intentionally and pursuant to a definite system, and with the design of imposing an unequal burden of taxation on plaintiffs, said board wrongfully, illegally, and arbitrarily fixed and assessed the value of said bank stock of plaintiffs (appellees), and each of them, at from 65 per cent. to 83 per cent. on the $100 of its book value, and its book value being its reasonable cash market value and not more. That the action of said board in so fixing the value of other property at 35 per cent. of its reasonable cash market value, and fixing the value of the bank stock of plaintiffs at from 65 per cent. to 83 per cent. on the $100 of its reasonable cash market value, done in pursuance of said system and custom, and intentionally followed, as aforesaid, was an illegal and arbitrary discrimination against plaintiffs, constituted a legal fraud upon them, was not in fact an equalization of the taxable value of their property with other property of the county, but was an intentionally illegal, systematic, and arbitrary assessment of plaintiffs' property at about double the proportionate value at which said board fixed the value of other property, as aforesaid, belonging to other persons in said county, and is violative of article 8, section 1, and article 1, section 19, of the Constitution of Texas, and section 1 of the fourteenth amendment to the Constitution of the United States.

The appellees further alleged that appellees rendered their property for taxation by furnishing lists of the stockholders to the tax assessor, together with the capital, surplus, and undivided profits of said banks, and that the tax assessor transmitted such rendition to the board of equalization; that the board of equalization raised them, and that this raising was without notice to the stockholders, and that in this respect the board of equalization acted illegally, arbitrarily, and contrary to law. Appellees admitted that they owed certain taxes, aggregating $2,326.52, and offered to pay the same. It is also claimed that certain of the stockholders of the banks (appellees) appeared before the board of equalization and protested against the action of the tax assessor and the board of equalization, and that the action of the said board was taken over and against the protest of said banks (appellees). In this connection it is alleged that all of the banks (appellees) had notice of the action of the board of equalization, but that appellees stockholders did not have notice. The prayer of plaintiffs' petition is, in substance, that an injunction be issued restraining the collection of the illegal tax; that appellants be restrained from making levy upon their property, from adding penalties to the amount of said tax, and from instituting suits to enforce the collection of said taxes, and from in any way attempting to collect said illegal taxes; that citation issue, and that the injunction on final hearing be made perpetual, and that the assessment by the tax assessor and the board of equalization be set aside and canceled, and that the tax collector be perpetually enjoined from collecting said taxes.

The defendants answered by general and special demurrers and plea of not guilty or general denial, and further answered that the commissioners' court of Navarro county, sitting as a board of equalization, acted in accordance with law, after hearing evidence, fixed the valuation of appellees' property, and entered an order to that effect, which remains final, and, further, that said commissioners' court, acting as a board of equalization, with the sole purpose, desire and intent to make the appellees' property bear its equal proportion of taxation, and without intention to discriminate, used its best judgment, and acted upon the best information it could obtain, to make the value of appellees' property equal and uniform with all other property in Navarro county subject to state and county taxes, and with no desire, intent, or purpose to place a greater burden upon it than upon other property. They prayed, also, that the temporary injunction be dissolved, and that they be permitted to proceed with the collection of said taxes.

The trial was had before a jury and submitted on special issues. It resulted in a verdict and judgment declaring the assessment illegal as against appellees stockholders and appellees banks, and finding that the banks owed an amount less than admitted by them to be just and correct, and perpetually enjoining appellants from the collection of said taxes, and from making levies, or threatened levies, and from adding penalties, from instituting suits, or in any way attempting to collect the taxes claimed to be illegal. Their motion for a new trial being overruled, the appellants excepted, and perfected an appeal to this court.

The first assignment of error complains of the overruling of appellants' general demurrer to appellees' petition. It is contended that this action of the court was error: (1) Because it appears from the petition that the county of Navarro owns the larger portion of the taxes involved, from the collection of which appellants are perpetually enjoined, and said county is not made a party to the suit; (2) because it appears from said petition that a large portion of said taxes belongs to the state of Texas, and said state is not made a party to the suit. Appellees, in reply to this assignment, assert that the nonjoinder of Navarro county and the state of Texas as defendants herein could not be raised by a general demurrer. This assertion is correct, except, probably, in cases where the want of proper or necessary parties is apparent on the face of the petition, and if the state of Texas and county of Navarro were necessary parties to this suit, for the reason that a part of the taxes sought to be enjoined belonged to each, then the fact was apparent from the allegations of the petition and the law applicable thereto, and the nonjoinder could, it would seem, be taken advantage of by general demurrer. Williams v. Bradbury, 9 Tex. 487; Shelby v. Burtis, 18 Tex. 645; Railroad Co. v. Le Gierse, 51 Tex. 189. However this may be, we think that neither the county of Navarro nor the state of Texas was a necessary part to this action.

The rule announced by the Constitution and laws of this state for the taxation of property is "equality and uniformity, and in order to secure uniform and equal taxation the property of all persons and corporations must be taxed in proportion to its value." The facts alleged in appellees' petition show that the assessment and equalization of their property and that of other property owners in Navarro county was not made according to the same rule or standard of value,...