Highland Park Independent Sch. Dist. v. Republic Ins. Co., 11791.

• Citation: 80 S.W.2d 1053
• Decision Date: 15 December 1934
• Docket Number: No. 11791.,11791.
• Parties: HIGHLAND PARK INDEPENDENT SCHOOL DIST. OF DALLAS COUNTY et al. v. REPUBLIC INS. CO.
• Court: Court of Appeals of Texas

80 S.W.2d 1053

HIGHLAND PARK INDEPENDENT SCHOOL DIST. OF DALLAS COUNTY et al. v. REPUBLIC INS. CO.

No. 11791.

Court of Civil Appeals of Texas. Dallas.

December 15, 1934.

On Rehearing February 16, 1935.

On Second Motion for Rehearing March 15, 1935.

Appeal from District Court, Dallas County; Claude M. McCallum, Judge.

Suit by the Republic Insurance Company against the Highland Park Independent School District of Dallas County and others. Judgment for plaintiff, and defendants appeal.

Reversed and rendered, injunction dissolved, and order for mandamus vacated.

Bell & Clark and Vaughan, Purl & Lewis, all of Dallas, for appellants.

Smithdeal, Shook, Spence & Bowyer, of Dallas, for appellee.

J. W. Gormley, of Dallas, amicus curiæ, on second motion for rehearing by appellee.

JONES, Chief Justice.

Appellee, Republic Insurance Company, incorporated under the laws of the state of Texas, with its principal office in the town of Highland Park, Dallas county, Tex., instituted this suit against appellants Highland Park Independent School District and its board of trustees, and on final trial obtained a perpetual injunction against appellants, restraining them from disregarding what it termed a final judgment of appellant's board of equalization, valuing appellee's personal property for tax purposes, and a mandamus to compel appellants to accept the amount of taxes due under said valuation. When the petition was presented, a temporary restraining order was issued, then, at a later hearing, a temporary injunction was granted, and upon a final trial of the case, the permanent relief prayed for was given. From this judgment, appellants have perfected this appeal. The term "appellant" will refer to the Highland Park Independent School District. The following are the necessary facts:

The Highland Park Independent School District is a regularly organized municipal district for school purposes, with a board of trustees and its own tax assessor and collector. The Republic Insurance Company was chartered under the laws of the state of Texas, and its business may be briefly described as that of writing fire and casualty insurance. Its domicile is within said school district and, under the laws of this state, all of its personal property subject to taxation is taxable for school purposes by said district.

On March 28, 1933, appellee prepared a rendition of what is claimed to be its taxable personal property, verified same by proper oath, and duly delivered same, through the medium of the United States mail, to C. H. Hickcox, appellant's tax assessor. This rendition was made on the blank form prescribed by the comptroller of the state for the listing, inventorying, and assessing of property, and attached thereto was what purported to be a complete itemized list of all its taxable personal property, and the values of the respective items. There was also listed what appellee claimed to be insurance reserves, and the amount of the value of the claimed reserves exceed the value of the taxable personal property by approximately $1,000. The rendition, therefore, showed that appellee had no personal property subject to taxation, under its method of calculating taxable assets.

When this assessment was received by the tax assessor, appellant was not satisfied therewith, claiming that certain personal property was rendered too low; that certain other personal property owned by appellee was not rendered; and that certain items listed in appellee's rendition as reserves was not legally exempt from taxation. The claim was also made that appellee, on December 28, 1932, used $402,671.87 in the purchase of United States tax free bonds, not for the purpose of making a bona fide investment of said bonds, but for the fraudulent purpose of evading taxation on that amount of money, and that said bonds were converted into cash on January 31, 1933; that this action was in fraud of appellant's right of taxation; and that said sum of money should have been rendered as cash.

Appellant employed attorneys to contest appellee's claim that it owned no personal property subject to taxation. These attorneys, in consultation with the tax assessor for appellant school district, prepared for execution by the tax assessor an amended and corrected statement of appellee's personal property, which increased the value of certain items of property over the value listed by appellee in its rendition, and listed items of property that were not in appellee's rendition, and also listed for taxation all of the items of reserve, consisting of the reserve of unearned premiums, reserve for unpaid losses, reserve for taxes, and reserve for reinsurance balances. This corrected rendition was signed officially by said tax assessor and attached to appellee's rendition, in an attempted compliance with the statute authorizing such correction by a tax assessor. In the listing made by appellee, the sum total of the items of these reserves amounts to $8,834,273.37. The sum total of the items listed by appellee in its rendition, and admitted to be subject to taxation, amounts to $8,833,273.67, which is less by $999.70 than the amount of claimed exemptions, and, under appellee's claim of the statutory method of determining the value of the personal property of such an insurance company, subject to taxation, no taxable personal property is shown.

In the listing prepared by the attorneys for appellant, signed by the tax assessor and attached to appellee's rendition, as a proper assessment of appellee's taxable property, after the increase in values of the items listed by appellee, and after the addition of unrendered items of personal property, in which the reserves deducted by appellee in its rendition were not deducted, but were listed and assessed as taxable property, there is shown to be subject to taxation, on the customary 60 per cent. basis, property of the value of $2,300,673.63. If the total amount of the reserves, deducted by appellee in its rendition, should be deducted from the total amount of taxable property, as shown in the listing signed by the tax assessor, and 60 per cent. of this difference be taken, as the customary value of rendition of property in the school district, there would be subject to taxation a balance of $600,109.61.

In addition to the written correction attached to appellee's rendition, there was prepared by appellant's attorneys, in consultation with the tax assessor and signed officially by him, a separate rendition of appellee's personal property, which contains the same figures as to values shown in the attached correction of appellee's rendition, and the same result as to the personal property owned by appellee, subject to taxation. This rendition was made under the statute authorizing the tax assessor to assess unrendered property. This was done, on the theory that, as appellee's rendition did not show any property subject to taxation, there had been in law no rendition made. This was placed with the other renditions. Appellee was duly notified of the action of the tax assessor, in amending and correcting the rendition made, and of the independent rendition made under the unrendered property statute.

Appellant's board of trustees duly appointed H. H. Cleaver, G. V. Straugn, and P. B. Garrett, as a board of equalization of property in the school district for the year 1933. This board organized early in August, 1933, by electing Mr. Cleaver president, and Miss Hawes, deputy in appellant's tax assessor's office, secretary, and sent out a great many notices to taxpayers to appear on certain named dates to show cause why their rendition should not be raised. Such notice was sent to appellee. August 28th was named as the date on which, as appellee understood, there would be a mere informal consultation between its representative and the board of equalization. Neither appellant or its attorneys were notified of this meeting, but became cognizant of such hearing, and duly made their appearances.

The board of equalization—with Mr. Cleaver and Mr. Straugn present, and Mr. Garrett absent, being out of the city—met at the appointed place at 4:15 p. m. August 28, 1933, for the equalizing of the assessment of two property owners, and for an informal conference with appellee; the work of the board as to the other two property owners was finished in a very short time, and then that of appellee was taken up. The attorney for appellee announced that he understood this meeting was merely for an informal conference in reference to the assessment shown in appellee's rendition, and that he had not come prepared for an open hearing of such matter. The attorneys for appellant stated that they understood that it was to be an open hearing, had come prepared and were ready to present evidence on the claim of the school district in reference to such assessment, and also to present authorities to the board in reference to their contention, but that if it was to be an informal hearing with appellee, they would withdraw until such time as the board would set the matter for an open hearing.

This session became a stormy one from the beginning. The board of equalization took the position that the appearance of appellant's attorneys and the president of the school board at such meeting was an affront to the board of equalization; that if they desired to hear from the attorneys or members of the board of trustees, they would call for them; that they considered the matter one between the board of equalization and the taxpayer, and one in which the school district had no interest; and stated that such parties would be excused. However, the meeting continued with all parties present, when Mr. Straugn called for appellee's assessment, which was handed to him, and he discovered for the first time that there was attached to the assessment the document heretofore described; when he was informed what this was, he had the tax assessor of the district sworn, and asked him if he...