Duval County Ranch Co. v. State, 16085

• Decision Date: 11 July 1979
• Docket Number: No. 16085,16085
• Citation: 587 S.W.2d 436
• Parties: DUVAL COUNTY RANCH COMPANY and Clinton Manges, Appellant, v. STATE of Texas et al., Appellees.
• Court: Texas Court of Appeals

Page 436

587 S.W.2d 436

DUVAL COUNTY RANCH COMPANY and Clinton Manges, Appellant, v. STATE of Texas et al., Appellees.

No. 16085.

Court of Civil Appeals of Texas, San Antonio.

July 11, 1979.

Rehearing Denied Sept. 5, 1979.

Jack L. Hart, Midland, for appellant.

G. Rudolph Garza, Jr., Corpus Christi, for appellees.

OPINION

KLINGEMAN, Justice.

This is a delinquent tax suit. ¹ The State of Texas, County of Duval, Duval County Vocational School District, and Duval County Conservation and Reclamation District, as plaintiffs, and Benavides Independent School District, and Freer Independent School District, as intervenors, ² sued Duval County Ranch Company and Clinton Manges, as defendants, for personal judgment for the amount of tax indebtedness alleged to be due and for foreclosure on all the property involved, including surface lands and mineral and royalty interests. ³ Connecticut General Life Insurance Company and Bank of the Southwest, as lienholders, were made parties to the action by other pleadings. Duval County Ranch Company and Clinton Manges answered that the taxes sought to be collected were not legally listed, assessed, or levied, and that at the time of the suit Duval County Ranch Company did not own the minerals under the lands involved in the suit. Trial was to the court without a jury. The trial court held that Duval County Ranch Company was indebted for delinquent property taxes in the amount of $482,684.94, and that Clinton Manges was indebted for delinquent property taxes in the amount of $721,325.39. The trial court ordered a foreclosure of the tax lien on all the properties and a tax sale. The defendants have duly perfected their appeal. For the purpose of brevity three of the taxing agencies (the State of Texas, County of Duval, and Duval County Vocational School District) will at times hereinafter be referred to collectively as "Duval County." Benavides Independent School District and Freer Independent School District will be referred to as "School District," and Duval County Conservation and Reclamation District will be referred to as "Water District." Clinton Manges will be referred to as "Manges," and Duval County Ranch Company will be cited as "Ranch Company."

The trial court made extensive findings of fact and conclusions of law. Such findings accurately set forth much of the pertinent factual background and may be summarized as follows:

(a) The delinquent tax rolls of Duval County were offered and identified by Arnoldo Cuellar, County Tax Assessor-Collector, covering taxes collected by the Duval County taxing authorities. It was stipulated by all the parties that the delinquent tax rolls offered in evidence were properly authenticated and were the official delinquent tax records. Such tax records, the stipulation as to their authenticity, and various exhibits reflecting delinquent tax rolls for several years (commencing in 1971) were received in evidence, including the delinquent tax rolls with respect to the mineral interests;

(b) The Ranch Company introduced into evidence copies of the tax rolls and delinquent tax rolls, both as to the surface and oil and gas interests;

(c) The County Tax Assessor-Collector testified that delinquent taxes as shown upon the delinquent tax lists were unpaid;

(d) By agreement of the parties certified copies of the tax records of the Benavides Independent School District were received in evidence without requirement of further authentication, were identified by the school district's tax assessor-collector and were stipulated to be the "official Delinquent Tax Record of Benavides School District" and official tax rolls reflecting delinquent taxes as to the property involved. The school district tax assessor-collector testified that except for a partial payment which was reflected in intervenor's exhibits on taxes for the years 1973 and 1974, no other payments for taxes assessed against the property of the Ranch Company have been paid.

(e) The defendants introduced into evidence the purported minutes of the Commissioners Court of Duval County, which as offered and received do not reflect any action of the Commissioners Court regarding the levy of ad valorem taxes for the years 1971 through 1975. The minutes reflect that at a meeting on July 31, 1975, there was a motion that "a total rate of $2.20 be approved and adopted for the year 1976 (sic). . . ." The minutes as introduced do not reflect any action of the Commissioners Court to levy ad valorem taxes in 1976. (Except to the extent that the exhibit speaks for itself, the trial court was unable to find as a fact that this exhibit reflects whether there were other meetings and/or actions by the Commissioners Court not shown by these minutes.) Neither party offered the testimony of any member of the Commissioners Court, County Clerk, or any other person with knowledge of the facts in connection with the listing, assessing and levying of the taxes in question.

(f) Minutes of a meeting of the Directors of the Water District for the period prior to July 10, 1972, had "disappeared." The defendants introduced the subsequent minutes of meetings of the Water District. The minutes do not reflect any action of the Board of Directors as to the levy of ad valorem taxes for the years 1971, 1972, 1973 and 1974. A motion was made at a meeting on July 29, 1976, according to these minutes, to set the ad valorem tax rate for the Water District. (Except to the extent that this exhibit speaks for itself, and aside from the statutory presumption and prima facie case created by introduction into evidence of the delinquent tax records, the trial court was unable to find as a fact whether the Directors of the Water District did or did not act during the years in question to levy the taxes.)

(g) There was testimony that all minutes of the meetings of the Board of Trustees of the Benavides Independent School District were "missing" for all times prior to January 7, 1974. Subsequent minutes of the school district were introduced by defendants. The minutes offered by defendant do not reflect any action to levy ad valorem taxes for the year 1974. There was a "motion" to levy ad valorem taxes for the year 1975 in the minutes dated August 14, 1975. No further evidence was offered by any party as to other minutes or to other action that may have been taken by the Board of Trustees of the school district in connection with the listing, assessing and levying taxes, except that the tax assessor-collector for the school district testified that tax rates were set for each year and in general testified as to action of the Board of Trustees levying taxes. (These exhibits were received with no assurance by any party that they constituted all of the minutes for the school district meetings for the period purported to be covered, and therefore, aside from the statutory presumption and prima facie case created by introduction into evidence of the delinquent tax records, the trial court was unable to find as a fact whether the Board of Trustees of the school district did or did not levy the taxes for the years in question.)

(h) Over objection, the intervenors introduced into evidence the budgets of the Benavides Independent School District as submitted to the Texas Education Agency (regarding) levies and tax rates. Some evidence as to a Board of Equalization hearing in 1975 was also offered.

(i) Secondary evidence tending to indicate tax levies by the plaintiffs for the several years were received over objection, namely, the stipulated testimony of the County Auditor, as to tax rates being set for the years in question and County budgets as filed with the State Comptroller, alluding to the several tax rates.

(j) The defendants offered into evidence a tax certificate from the Benavides Independent School District reflecting payment of all taxes through the year 1974, but withdrew such exhibits after evidence was offered that such certificate was fraudulent; that the Ranch Company had paid less than twenty-five per cent of the taxes owing; and that a false tax certificate has been issued by Tax Assessor-Collector Rodolfo Couling on the orders of George Parr. ⁴

Other findings of fact made by the trial court are restated, as follows:

(1) The Delinquent Tax Rolls of Duval County received in evidence under a stipulation of all parties that they were the official Delinquent Tax Rolls for such County are sufficient to and do constitute the list of lands and lots and/or property on which taxes . . . are delinquent within the purview of Article 7336 V.A.C.S. and Article 7326 V.A.C.S. Such Delinquent Tax Rolls also substantially comply with the requirements of Article 7321 V.A.C.S.

(2) Defendant (Duval County) Ranch (Company's) Exhibits 9 through 12 were the Delinquent Tax Records submitted by Duval County to the State Comptroller in accordance with Article 7321 V.A.C.S.

(3) The Delinquent Tax Records of the Benavides Independent School District received in evidence under a stipulation of all parties that they were the official tax records of such School District are sufficient and do constitute the records constituting the prima facie evidence under Article 7336 V.A.C.S., 7326 V.A.C.S. (by virtue of Article 7343 V.A.C.S.).

(4) The Delinquent Tax Lists of the Duval County Conservation & Reclamation District received under the stipulation of the parties as to their authenticity, were sufficient to and did constitute the records constituting prima facie evidence under Article 7326 & 7336 V.A.C.S.

(5) Except for the partial payment of approximately $30,000.00 by the Duval County Ranch Co., Inc., on February 12, 1975, to the Benavides Independent School District in connection with the issuance of the false Tax Certificate and the credits reflected on the Delinquent Tax Lists of the Plaintiff, none of the taxes in question, penalty, or interest have been paid.

(6) The defensive evidence offered by Defendants was insufficient to...