Corrigan Properties, Inc. v. City of West University Place

• Decision Date: 02 July 1968
• Docket Number: No. 15304,15304
• Citation: 430 S.W.2d 917
• Court: Texas Court of Appeals
• Parties: CORRIGAN PROPERTIES, INC., Appellant, v. CITY OF WEST UNIVERSITY PLACE et al., Appellees. . Houston (1st Dist.)

Page 917

430 S.W.2d 917

CORRIGAN PROPERTIES, INC., Appellant, v. CITY OF WEST UNIVERSITY PLACE et al., Appellees.

No. 15304.

Court of Civil Appeals of Texas Houston (1st Dist.).

July 2, 1968.

Rehearing Denied Sept. 5, 1968.

Sears & Burns, Robert L. Burns, Houston, for appellant.

Reynolds, White, Allen & Cook, Stanley B. Binion, Houston, for appellees.

COLEMAN, Justice.

Four suits were filed by appellant to enjoin the City and certain of its officials from collecting the property tax for the years 1963, 1964, 1965 and 1966 on a shopping center located within the City. Appellees duly filed answers to these suits and cross-actions for the tax levied and assessed and for a foreclosure of the tax liens. The suits were consolidated for trial and trial to a jury. At the conclusion of the evidence the trial court withdrew the case from the jury and rendered judgment against appellant for the tax and for foreclosure of the tax liens.

Appellant asserts that the value at which the property was assessed for city taxes was grossly excessive. The question as to whether an assessed valuation is grossly excessive, as distinguished from being the result of a mere difference in opinion or error in judgment, is one of law. Whelan v. State, 155 Tex. 14, 282 S.W.2d 378 (1935). Since the case was withdrawn from the jury, the evidence must be considered in the light most favorable to the appellant. Jones v. Nafco Oil & Gas, Inc., 380 S.W.2d 570 (Tex.1964). The testimony as to the market value of the property in question produced by the witness for appellant must be taken as if found by the jury. The question then is whether property having a market value of.$660,000.00 in 1963 and 1965, $645,000.00 in 1966, and $625,000.00 in 1964, and assessed for taxes at a value of $304,157.00 for each of said years, was assessed at a grossly excessive valuation considering the fact that the policy of the City was to assess all property at 32% Of market value. Had the property been assessed at 32% Of the market values the assessed values would have been $211,200.00 for 1963 and 1965, $200,000.00 for 1964, and $206,400.00 for 1966.

The following table shows the savings in taxes and the percentages of savings which would have resulted if appellant's property had been assessed on the basis of the market value as established by the testimony:

                          Tax Based on  Tax Based on
                          Actual        Market Value  Reduction  Percentage
                Tax Year  Assessment    Assessment    in Taxes   of Saving
                --------  ------------  ------------  ---------  ----------
                  1963     $5,414.00     $3,759.36    $1,654.74     .305
                  1964      5,414.00      3,560.00     1,853.99     .342
                  1965      5,414.00      3,759.36     1,654.74     .305
                  1966      5,414.00      3,673.92     1,740.07     .321
                

A simple calculation shows that for the year 1963 the assessed value of the property was 30.6% More that it would have been had the established value been used as the basis for assessment. The figures for the years 1964, 1965, and 1966 would be 34.2%, 30.6%, and 32.1%, respectively.

In Whelan v. State, 155 Tex. 14, 282 S.W.2d 378 (1955), the court said:

'If the answers of the jury show that the assessed valuation of petitioners' properties is grossly excessive, or if the answers to the other issues satisfy the court that petitioners have suffered substantial injury by reason of the other actions of the taxing authorities complained of, the assessments of petitioners' properties for the years 1950, 1951 and 1952 should be cancelled without prejudice to the right of taxing authorities to accept petitioners' taxes on the basis of the valuations at which petitioners rendered their properties or to proceed under the provisions of Article 7346, V.A.C.S. If an issue on excessive valuation of petitioners' properties--as distinguished from an unequal valuation thereof--is submitted, cancellation of the assessments should not follow unless the finding shows the assessed valuations to be grossly excessive, Johnson v. Holland, 17 Tex.Civ.App. 210, 43 S.W. 71, writ denied; State v. Houser, 138 Tex. 28, 156 S.W.2d 968, as distinguished from a mere difference in opinion or error in judgment, State v. Houser, supra; Simkins v. City of Corsicana, Tex.Civ.App., 86 S.W.2d 792, no writ history. If other findings show only some measure of insubstantial discrimination, the assessments should not be cancelled.'

In Johnson v. Holland, cited above, the court said:

'The supreme court of Illinois, in Railroad Co. v. Cole, 75 Ill. (591,) 594, in passing upon a case where the valuation placed upon the property of the railway company by the board of equalization was arbitrary and excessive to an unreasonable extent, say: 'Because the law has devolved on the board of equalization, and not on the courts, the duty of making such valuations, we hold it is not the duty of the courts to exercise any supervisory care over its valuations, so long as it acts within the scope of the powers with which it is invested, and in obedience to what may reasonably be presumed to be an honest judgment, however much we may disagree with it. But whenever the board undertakes to go beyond its jurisdiction, or to fix valuations, through prejudice or a reckless disregard of duty, in opposition to what must necessarily be the judgment of all persons of reflection, it is the duty of the courts to interfere and protect taxpayers against the consequences of its acts. Where its jurisdiction is conceded, no mere difference of opinion as to the reasonableness of its valuations will justify equitable interference; but its valuation must be the result of honest judgment, and not of mere will.' This case, upon the facts, seems to be very much in point here. In Hotel Co. v. Lieb, the same court said: 'Where, however, the valuation is so grossly out of the way as to show that the assessor could not have been honest in his valuation-- must reasonably have known that it was excessive,--it is accepted as evidence of a fraud upon his part against the taxpayer, and the court will interpose.' 83 Ill. 609. See, also, Cooley, Tax'n (2d Ed.) p. 784; 25 Am. & Eng. Enc. Law (1st Ed.) pp. 261, 262, and authorities there cited; Tainter v. Lucas, 29 Wis. 375; 2 Desty Tax'n, pp. 656, 681, 1433. If, however, the board errs in honest judgment, under our statute, there is no appeal from its decision.'

In Simkins v. City of Corsicana, 86 S.W.2d 792 (Tex.Civ.App., Waco 1935), the court assumed that the real value of the property in question was $20,000.00, and that the assessment was made on the basis of a value of $29,130.00. The court then said:

'It is well settled that the decisions of tax boards in matters of valuation are quasi judicial in their nature, and therefore they are not subject to collateral attack, in the absence of fraud or other obvious violations of law. No mere discrepancy between the true value of the property and the amount at which it is assessed will warrant a court in setting aside a valuation fixed by the board where such valuation is the result of the honest judgment of the board in the application of lawful principles. * * *

'In the case at bar, the evidence was sufficient to have justified the jury in concluding that the valuation as fixed by the board was grossly excessive. There are some authorities in this state which hold that the mere fact that the assessment is grossly excessive is sufficient to authorize a jury to infer that the board acted arbitrarily. Johnson v. Holland, 17 Tex.Civ.App. 210, 43 S.W. 71 (writ denied); City of Sweetwater v. Biard Development Co. (Tex.Civ.App.) 203 S.W. 801. * * *'

In State v. Houser, 138 Tex. 28, 156 S.W.2d 968 (1941), the Supreme Court said:

'Our courts have repeatedly held that the decisions of taxing boards in the matter of valuations are quasi-judicial in nature; and, therefore, in the absence of fraud or other obvious violation of the law, such decisions are not subject to collateral attack. It has also been held that such valuations will not be set aside merely upon a showing that the same are in fact excessive. If a board fairly and honestly endeavors to fix a just valuation for taxing purposes, a mistake on its part under such circumstances is not subject to review by the courts. State et al. v. Mallet Land & Cattle Co. Inc., 126 Tex. 392, 88 S.W.2d 471; Texas & Pacific Ry. Co . v. City of El Paso, 126 Tex. 86, 85 S.W.2d 245; Rowland v. City of Tyler, Tex.Com.App., 5 S.W.2d 756; Druesdow v. Baker, Tex.Com.App., 229 S.W. 493; Duck v. Peeler, 74 Tex. 268, 11 S.W. 1111; State v. Chicago, R. I. & G. Ry. Co., Tex.Com.App., 263 S.W. 249; Sunday Lake Iron Co. v. Wakefield, 247 U.S. 350, 38 S.Ct. 495, 62 L.Ed. 1154; Simkins v. City of Corsicana, Tex.Civ.App., 86 S.W.2d 792. Of course, if a board adopts a method that is illegal, arbitrary, or fundamentally wrong, or if its valuation is grossly excessive, the decision of such board may be attacked and set aside. Texas & Pacific Ry. Co. v. City of El Paso, supra; Rowland v. City of Tyler, supra; Druesdow v. Baker, supra; Simkins v. City of Corsicana, supra .

'* * * Certainly a tax assessment cannot be set aside as being null and void merely because a court or jury differs with an equalization board as to valuation. On the contrary, it must be shown either that the board's valuation was arrived at by an arbitrary or unlawful method, or that the valuation fixed was itself unreasonable, fraudulent, or discriminatory. * * *'

In State v. Whittenburg, 153 Tex. 205, 265 S.W.2d 569 (1954), the court said:

'While it has been held that a grossly excessive valuation may, in law, be sufficient to establish such fraud or illegality as to render a valuation void, Johnson v. Holland, 17 Tex.Civ.App. 210, 43 S.W. 71, writ denied; City of Sweetwater v. Biard Development Co., Tex.Civ.App., 203 S.W. 801, no writ; Simkins v. City of Corsicana, Tex.Civ.App., 86 S.W.2d 792, no writ; Howth v. French Ind. School Dist., Tex.Civ.App., 115 S.W.2d...