Houston Endowment, Inc. v. City of Houston

• Decision Date: 12 May 1971
• Docket Number: No. 438,438
• Citation: 468 S.W.2d 540
• Parties: HOUSTON ENDOWMENT, INC., Appellant, v. CITY OF HOUSTON, Texas et al., Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 540

468 S.W.2d 540

HOUSTON ENDOWMENT, INC., Appellant, v. CITY OF HOUSTON, Texas et al., Appellees.

No. 438.

Court of Civil Appeals of Texas,

Houston (14th Dist.).

May 12, 1971.

Rehearing Denied June 1, 1971.

John C. Nabors, Liddell, Sapp, Zivley & Brown, Houston, for appellant.

W. Lawrence Cook Jr., Sr. Asst. City Atty., Houston, for appellees .

SAM D. JOHNSON, Justice.

On November 29, 1967, Houston Endowment, Inc., brought suit against the City of Houston seeking temporary and permanent injunctive relief against the City's plan to annex and tax a 220-acre tract of unimproved land owned by Houston Endowment. On December 6, 1967, the District Court of Harris County, Texas, temporarily enjoined the City from passing on final reading the ordinance which would annex the Houston Endowment tract of land. The First Court of Civil Appeals reversed the trial court's decision and dissolved the temporary injunction against annexation. City of Houston v. Houston Endowment, Inc., 428 S.W.2d 706 (1968), err. ref., n.r.e. After the Supreme Court found 'no reversible error' in that action the City of Houston completed the procedural steps necessary to annex the Houston Endowment tract. The City of Houston then sought to impose taxes for the year 1970 at the full rate for property within the general city limits. Houston Endowment thereafter challenged the legality of the City of Houston's plan to tax the land owned by the appellant. In May, 1970, the instant case was tried to a jury which answered the three submitted special issues in favor of Houston Endowment. The trial court granted the City of Houston's motion for judgment non obstante veredicto, however, and entered judgment that Houston Endowment take nothing. Houston Endowment has duly perfected appeal to this Court.

Houston Endowment owns approximately 770 acres of land in the Thomas Earle Survey in Harris County which is bounded on the north by the Houston Ship Channel. The approximately 200 acres in question here is a part of Houston Endowment's larger tract and is that part which is immediately adjacent to the Houston Ship Channel. The property is vacant, unimproved and devoted exclusively to agricultural purposes. Its greatest potential, however, is for industrial development.

Houston Endowment's 220-acre tract lies within a 5,000 foot wide strip of land that extended 20 air miles down the Houston Ship Channel which was specially annexed by Houston in 1913, pursuant to Articles 1183--1187, Vernon's Ann.Civ.St. This long strip of land (sometimes herein referred to as 'specially annexed extension') lies on both sides of the ship channel. Pursuant to the cited statute it was annexed for the limited purpose of navigation and wharfage, but was Not within the general city limits. Subsequent to the 1913 special annexation the City of Houston held exclusive jurisdiction of the specially annexed extension and no other city could annex or otherwise deal with any part of the area. City of Balena Park v. City of Houston Tex.Civ.App., 133 S.W.2d 162, writ ref.; Tod v. City of Houston, 276 S.W. 419 (Tex.Com.App.1925).

On August 28, 1967, Article 1187--1, V.A.C.S., became effective. It provides:

'The governing body of any incorporated city which has heretofore annexed or which shall hereafter annex territory under authority of and for the limited purposes described in Articles 1183 through 1187 of the Revised Civil Statutes of Texas, 1925, shall have the right, power, and authority to designate all or any part of such area so annexed and remaining in such limited purpose annexation status as an industrial district, as the term is customarily used, and to treat with such area from time to time as such governing body may deem to be in the best interest of the city. Included in such rights and powers of the governing body of any such city is the permissive right and power to enter into contracts or agreements with the owner or owners of land in such industrial district to guarantee the continuation of the limited purpose annexation status of such district, and its immunity from general purpose annexation by the city for a period of time not to exceed ten years, and upon such other terms and conditions as the parties might deem appropriate. Such contract or agreement shall be evidenced in writing and may be renewed or extended for successive periods not to exceed ten years each by such governing body and the owner or owners of land in such industrial district.'

In the month immediately following the effective date of the above statute, that is, in September, 1967, the Houston City Council declared its intention with respect to the property within the specially annexed extension by setting forth the City's intent to enter into industrial district contracts with property owners who made application prior to October 31, 1967. The City of Houston further declared its intent to generally annex the property of owners who did not apply for industrial district contracts. Guidelines were established for the industrial district contracts which provided that (1) as to land, an owner should annually pay the City a sum equal to that which would be paid in city ad valorem taxes if the city were within the general city limits, and (2) on property other than land, the owner should annually pay at a rate which would begin at a reduced or fractional percentage of the ad valorem tax which would be due if the property were within the general city limits and then increase on a graduated basis for the next five years until it equalled the tax rate on property within the general city limits. The rate would remain at that equal to the tax rate on property within the general city limits for the remainder of the 10-year industrial district contract . The City of Houston agreed that it would not generally annex property covered by industrial district contracts for ten years.

Houston Endowment did not apply for an industrial district contract. Thereafter, on November 8, 1967, Houston's City Council passed on first reading Ordinance 67--2146 purporting to generally annex Houston Endowment's 220-acre tract lying within the specially annexed extension together with a 150-foot wide connecting strip (also lying within the specially annexed extension) to Houston's existing general city limits. Houston Endowment then brought this suit seeking temporary and permanent injunctive relief against the City's plan to annex and tax its property. The District Court of Harris County enjoined the annexation and the First Court of Civil Appeals reversed and dissolved the temporary injunction. City of Houston v. Houston Endowment, Inc., 428 S.W.2d 706, err. ref., n.r.e . Thereafter, on April 2, 1969, Ordinance No. 67--2146 was passed on second and final reading and the procedural steps necessary for annexation of Houston Endowment's tract were completed. It is clear that since the date last referred to Houston Endowment's 220-acre tract has been within the general city limits of the City of Houston . Being within the general city limits the City of Houston sought to impose full city taxes on Houston Endowment's 220-acre tract for the year 1970 and the instant controversy issued.

At the instant trial the jury responded to three special issues. The jury found (1) that the market value of the...