City of Abilene v. State, 1731.

• Decision Date: 17 December 1937
• Docket Number: No. 1731.,1731.
• Citation: 113 S.W.2d 631
• Parties: CITY OF ABILENE v. STATE.
• Court: Texas Court of Appeals

113 S.W.2d 631

CITY OF ABILENE v. STATE.

No. 1731.

Court of Civil Appeals of Texas. Eastland.

December 17, 1937.

Rehearing Denied February 11, 1938.

Appeal from District Court, Jones County; B. W. Patterson, Judge.

Suit by the State of Texas against the City of Abilene to recover state, county, and school taxes levied on realty, which had been purchased by the City of Abilene for the purpose of a reservoir, and to foreclose tax liens on the realty. From a judgment in favor of the plaintiff, the defendant appeals.

Judgment reversed and judgment rendered for defendant.

Wiley L. Caffey and Edmund C. Yates, both of Abilene, for appellant.

E. G. Aycock, of Fort Worth, and Omar T. Burleson and Gilbert C. Smith, both of Anson, for appellee.

FUNDERBURK, Justice.

On January 1, 1928, and at various other dates, up to and including December 12, 1930, the City of Abilene, a municipal corporation, acquired by purchase about 34 tracts of land situated in Jones county for the purpose of a reservoir site for impounding water for the use of said city and its inhabitants. This suit was brought in the name of the State of Texas to recover state, county (of Jones), and school taxes, levied, assessed, and delinquent upon said land for years, included within the time of such ownership; and to foreclose the tax liens upon the several tracts. A nonjury trial resulted in a judgment for the plaintiff awarding recovery of taxes in the aggregate sum of $7,767.28, with interest, penalty, and costs, and decreeing a foreclosure of the tax liens as prayed. The City of Abilene has appealed.

The judgment was warranted and proper, unless by constitutional provisions or valid statutes, said property was not subject to, or was exempt from, taxation.

The honorable trial judge in response to proper request filed findings of fact and conclusions of law. From such it appears that said city had procured from the proper authority the necessary appropriation of water; that bonds in the sum of $350,000 had been authorized for "the purpose of extending and improving the water works system of" said city and "for purchasing the lands involved in this suit for the purpose of building a lake to supply the inhabitants of the City of Abilene an additional water supply"; that engineering work at a cost of $4,000 had been done; that the lands are necessary "to the accomplishment of extending and improving the water works system of the city of Abilene"; that "on account of insufficient funds" said city "has been unable to acquire all the land necessary to the completion of the project * * * or to erect the necessary dam for the reservoir on such land"; that "defendant has not abandoned its intention to accomplish the purpose for which said lands were acquired and it has been its intention continuously since voting of the bonds" on October 5, 1928, "to ultimately acquire such lands to complete such reservoir and to accomplish additional water supply to its inhabitants"; that the defendant had not constructed the necessary dam or reservoir for the storage water on the land, "nor is such land or any part thereof being actually used for such purpose."

Other significant findings were to the effect that since acquisition of the lands by said city, it had "been leasing same for agricultural purposes for an approximate aggregate annual rental of $2,500 and that during the past five years cash rentals have been paid therefor and that prior to that time receipts from said property in cash were based upon annual production of agricultural products under the normal 1/3 and 1/4 rentals. That said property is at this time leased and that said lands are being prepared for the production of agricultural commodities for the current year"; that the leases "have in all of said years been made expressly subject to the rights of the city of Abilene to build the dam and reservoir on said property at any time."

The conclusion of law was that the property was not exempt from taxation.

The question of the exemption of said property from taxation involves the proper interpretation of constitutional and statutory provisions, the material portions of which, are as follows:

Const. art. 8, § 1: "All property in this State, whether owned by natural persons or corporations, other than municipal, shall be taxed in proportion to its value. * * * Provided, that two hundred and fifty dollars worth of household and kitchen furniture, belonging to each family in this State shall be exempt from taxation."

Const. art. 11, § 9: "The property of counties, cities and towns, owned and held only for public purposes, * * * and all other property devoted exclusively to the use and benefit of the public shall be exempt from * * * taxation."

Const. art. 8, § 2: "The Legislature may, by general laws, exempt from taxation public property used for public purposes; actual places of religious worship; places of burial not held for private or corporate profit; all buildings used exclusively and owned by persons or associations of persons for school purposes and the necessary furniture of all schools, [also the endowment funds of such institutions of learning and lands] and institutions of purely public charity; and all laws exempting property from taxation other than the property above mentioned shall be null and void." (Italics ours.)

Revised Statutes 1925, art. 7150:

"The following property shall be exempt from taxation, to-wit: * * *

"All property, whether real or personal, belonging exclusively to this State, or any political subdivision thereof."

The question presented for our decision appears to be one of first impression. The question may be stated thus: When a city becomes the owner of land acquired for a public purpose and there is delay in the actual use of it for such purpose, will the temporary renting of the land and the use thereof by tenants for agricultural purposes, in the absence of an abandonment of such public purpose, place such property beyond the power of the Legislature to provide for its exemption from taxation until such time as the property be actually used for such public purpose? Counties, cities, and towns are municipal corporations. Const. art. 11. They are political subdivisions of the state. Id. Corporation of San Felipe De Austin v. State of Texas, 111 Tex. 108, 229 S.W. 845. Property owned and held by counties, cities, and towns is public property, subject to taxation or exemption, according to the conditions or circumstances prescribed by the Constitution and laws of the state. That the property in question is public property was determined in City of Dallas v. State, Tex.Civ.App., 28 S.W.2d 937. The Legislature by general law has provided that "All property, whether real or personal, belonging exclusively to this State, or any political subdivision thereof" shall be exempt from taxation. (Italics ours.) R.S.1925, art. 7150. The terms of this statutory exemption undoubtedly include the property in question. If, therefore, the entire validity of said statute could be assumed, its plain provisions would control the determination of the question at issue in favor of the claimed exemption.

But the statute cannot be accepted as conclusive. The power of the Legislature to make valid provisions for exemptions from taxation is hedged by constitutional provisions of at least two distinct kinds. One kind of such provisions operates to prohibit the Legislature from taxing certain property. Examples of these provisions are "two hundred and fifty dollars worth of household and kitchen furniture, belonging to each family in this state" as provided in Constitution, art. 8, § 1;...