City of Houston v. Tod

• Decision Date: 14 December 1923
• Citation: 258 S.W. 839
• Parties: CITY OF HOUSTON v. TOD et al.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

258 S.W. 839

CITY OF HOUSTON v. TOD et al.^*

Court of Civil Appeals of Texas. Galveston.

December 14, 1923.

Rehearing Denied January 22, 1924.

Error from District Court, Harris County; J. D. Harvey, Judge.

Suit by Mrs. Osceola E. Tod and others against the City of Houston. From decree for plaintiffs, defendant brings error. Reversed and rendered.

Sewall Myer and W. Ray Scruggs, both of Houston, for plaintiff in error.

Sam R. Merrill, J. S. Bracewell, and H. H. Cooper, all of Houston, for defendant in error Tod.

A. C. Van Velzer, of Houston, for defendants in error Harrisburg Independent School Dist. and Hanner.

PLEASANTS, C. J.

This is a suit by appellees to enjoin the levy and collection of taxes by appellant in its municipal capacity and as an independent school district upon property owned by appellee Tod and described in the petition, on the ground that the property is not within the corporate limits of the city of Houston or the Houston independent school district as the same are legally fixed and constituted. The petition sets out at length the various acts of the city in what is alleged to have been an illegal and unauthorized attempt of appellant to extend its corporate limits so as to include the property involved in the suit. It further alleges the levy and threatened collection of taxes on the property by the appellant. The grounds upon which the extension of the city limits is alleged to be illegal are thus stated in appellees' brief:

"Defendant in error specifically alleged that the city of Houston was an independent school district, operating as a part of the city of Houston, and that the taxes assessed by said city of Houston were apportioned between the government of the city corporation as such, and the government of the school district; and also alleged that the defendant in error's property was situated in common school district No. 20 of the county of Harris, and that bonds had been voted in said school district and defendant in error's property pledged as security for such bonds, and that the city of Houston had no school facilities in any adjacent territory to the property of the defendant in error, while the school facilities of the common school district No. 20 was adjacent to the property, and convenient to it, and that the said plaintiff in error had never paid, nor made any provisions to pay, any part of said indebtedness of said common school district No. 20, so as to relieve the property of this defendant in error, and other property like situated, from the payment of its proportionate share of the aforesaid indebtedness of said common school district No. 20.

"Said school district and said city were each assessing taxes against the property of the defendant in error for school purposes.

"Defendant in error specifically alleged that the action of the city of Houston in extending its boundaries was in violation of section No. 56 of article 3 of the state Constitution, in that it was an attempt by the Legislature to interfere in the internal affairs of said city of Houston, and it constitutes a clear discrimination between the citizens of said city of Houston, in that it denies to such residents that may be located within the limits as so extended, the benefits of the taxation of said city, and that it denied to the defendant in error the benefits of public utilities of said city, and that it was illegal and void, in that it attempts to take the property of defendant in error and other like property, situated within common school district No. 20, and subject the same to the payment of taxes to said city of Houston, without making any provisions to take care of the bonded indebtedness of said common school district No. 20, nor to relieve the property of this plaintiff, and other like property, from the obligation so to do, and that the taxation of defendant in error's property by said plaintiff in error for school and municipal purposes is unconstitutional, and constituted double taxation of defendant in error's property.

"It was also alleged that it made no provisions for giving to the defendant in error, or others like situate, any benefits of the schools or of the municipal utilities."

On March 1, 1919, the defendant city of Houston (plaintiff in error) filed its answer containing a general demurrer and general denial, and denying that it has ever attempted to assess and collect taxes outside its corporate limits. That the property of plaintiff was inside the general corporate limits of the city of Houston by reason of ordinances of 1916 extending its city limits, an ordinance of January 16, 1918, calling an election of the qualified voters to adopt an amendment to the city charter taking into the city all of Houston Heights and fixing the city limits by metes and bounds, which metes and bounds voted upon also included a strip of land embracing a part of old school district No. 20, including the property of plaintiff. That said election carried and said charter was accordingly amended.

Defendant further alleges that plaintiff by its action made a collateral attack upon the corporate limits of the city, and that a direct action is required in order to attack the validity of the annexation of territory or the extension of the city limits.

The Harrisburg school district and W. C. Hanner filed petitions in intervention in which, after alleging the creation, on June 18, 1884, by the commissioners' court of Harris county, of common school district No. 20, and the fixing by said court of the boundaries of said district on August 14, 1911, so as to include the property involved in this suit, it is alleged in substance:

"That thereafter, on August 16, 1911, said common school district No. 20 issued certain bonds in amount $15,000 due in 40 years. That other bonds were subsequently issued. That on April 27, 1914, the commissioners' court changed the boundaries of said district No. 20 by adding additional territory. That defendant city of Houston, by ordinance passed January 24, 1916, undertook to change the boundaries of the city of Houston and Houston independent school district by taking therein property which was a part of said common school district No. 20. That since the passage of said ordinance the city of Houston, which constitutes the Houston independent school district, has collected taxes on all of said property described in said ordinance which is within said district No. 20. That said ordinance is void, and that the city had no authority to take the property out of said common school district No. 20 and add it to the boundaries of the said city of Houston. That by said ordinance the defendant has taken away the securities of the bonds which were issued by said common school district No. 20, which said bonds are still outstanding and prevents said district, and prevents its successor, the Harrisburg independent school district, from levying a tax on said property located in said school district, and which was taken by defendant into its boundary limits, which tax was by said common school district and is by Harrisburg independent school district, its successor, to provide funds to pay the interest on said bonds and to create a sinking fund for their payment. That the value of the property left in said district by said ordinance is insufficient at the rate of tax allowed by law to be levied to pay the interest on said bonds and to create a sinking fund for their payment, and that the vested rights of the bondholders, including intervener, W. C. Hanner, have thus been taken away and the security on said bonds greatly impaired. That the defendant city of Houston has collected taxes on said property which is a part of the Harrisburg independent school district, and has never paid or offered to pay the common school district No. 20, nor its successor, Harrisburg independent school district, any part of said bonded indebtedness nor any interest on the same, nor has it over recognized any liability therefor.

"That the Legislature of Texas, by special act of 1919 (Sp. Laws 1919, c. 72), incorporated the Harrisburg independent school district and fixed the boundaries thereof the same as common school district No. 20, and that the Legislature took no account of said ordinance of defendant city of Houston. That if the ordinance extending the city limits be upheld that the vested rights of the owners of the bonds would be taken away, that the security of the bonds would be impaired, and that the bondholders would be required to accept different securities for their bonds than existed when issued. That Harrisburg independent school district is successor to common school district No. 20 and entitled to all of the rights and privileges of the said common school district No. 20. Intervener, W. C. Hanner, alleges that he is the owner and holder of some of said bonds."

The trial in the court below without a jury resulted in a judgment in favor of the plaintiff and interveners, granting "a perpetual injunction from forever collecting, receiving, or attempting to collect or receive taxes for the years 1917 and 1918, upon the lots in controversy, and enjoining them from collecting or receiving taxes on the land and premises described, and declaring null and void any assessments or levies of taxes thereon."

Upon the trial in the court below the parties presented an agreed statement of facts, from which the following facts are taken:

Plaintiff owns the lots claimed and described in her petition as lots 15 to 24, inclusive, of the town of Harrisburg. These lots are situated about 6 miles in an easterly direction from the courthouse of Harris county, which is near the center of the city of Houston, and are within 2,500 feet of the thread of the Houston Ship Channel. These lots were, on April 18, 1913, and have been at all times subsequent thereto, situated in common school district No. 20 of Harris county as such district was laid out and defined by the commissioner's court of ...