Lively v. Missouri, K. & T. Ry. Co. of Texas

• Court: Texas Supreme Court
• Writing for the Court: Brown
• Citation: Lively v. Missouri, K. & T. Ry. Co. of Texas, 120 S.W. 852 (Tex. 1909)
• Decision Date: 25 June 1909
• Parties: LIVELY et al. v. MISSOURI, K. & T. RY. CO. OF TEXAS.

120 S.W. 852

LIVELY et al. v. MISSOURI, K. & T. RY. CO. OF TEXAS.

Supreme Court of Texas.

June 25, 1909.

Certified Questions from Court of Civil Appeals of Fifth Supreme Judicial District.

Suit by the Missouri, Kansas & Texas Railway Company of Texas against Hiram F. Lively and others. Decree for complainant, and defendants appealed. On certified questions from the Court of Civil Appeals.

R. V. Davidson, Atty. Gen., Jas. D. Walthall and Claude Pollard, Asst. Attys. Gen., D. L. Lewelling, Co. Atty., and J. L. Goggans, for appellants. Coke, Miller & Coke, A. H. McKnight, and Thomas & Rhea, for appellee.

BROWN, J.

Certified questions from Court of Civil Appeals of the Fifth Supreme Judicial District, as follows:

"This is a suit brought by the Missouri, Kansas & Texas Railway Company of Texas, appellee, against Hiram F. Lively, county judge of Dallas county, Texas, R. W. Eaton, H. H. Bennett, C. D. Smith, and W. H. Pippin, county commissioners of Dallas county, Texas, constituting the board of equalization of said Dallas county and Henry W. Jones, tax collector of Dallas county, each in his official capacity, to set aside alleged acts of the board of equalization of said county, and to enjoin the said tax collector from collecting or attempting to collect a portion of the tax upon the intangible assets of appellee.

"Appellee alleged in its petition, in substance that the state tax board, acting under an act of the Thirtieth Legislature, being chapter 17, p. 469, of the General Laws of the First Called Session of 1907, fixed, determined, and declared the value of its intangible assets at the full and fair market value thereof, and more than the full and fair market value of the same, and so apportioned to said county said assets, and that the tax assessor of said county has placed, set down, and listed said intangible assets upon the tax rolls of said county at the value fixed, determined, declared, and certified by the state tax board, and that the commissioners' court of said county, sitting as a board of equalization, approved the roll of the tax assessor which contained the intangible assets of appellee as apportioned to said county at the full and fair market value thereof, etc.; that the property of taxpayers generally throughout the county for the year 1907, and for several years prior thereto, had been assessed, equalized, and placed on the tax rolls for taxing purposes at not exceeding 50 per cent. of its value; that said undervaluation of property generally was by virtue of a fixed and established custom, usage, design, and intention; that the act of the board of equalization in so equalizing, or purporting to equalize, the property to said county and in approving the lists of the tax assessor containing the intangible assets at full value was intentional, arbitrary and fraudulent, and plaintiff was by said act unjustly, arbitrarily, and illegally discriminated against. The petition does not allege that the plaintiff sought before the board of equalization of Dallas county to have the value of its intangible assets reduced or to have advanced the valuation of all other property in the county to its true value in money. Nor does said petition show any excuse for plaintiff's failure to do so.

"The material facts are as follows: The plaintiff is a railway corporation, and owns and operates a line of railway, beginning at the Texas state line about five miles north of the city of Denison, Grayson county, Texas, and extending into and through Dallas county in said state. The defendants hold and have held for more than one year prior to January 27, 1908, their respective offices of county judge, county commissioners, and tax collector of Dallas county, Texas. Plaintiff's line of railway extending into and through said Dallas county, including the right of way, roadbed, superstructure, depots, and grounds upon which the said depots are situate, and all shops and fixtures of every kind used in operating said line of road, was duly rendered and assessed for taxation in said county of Dallas for the year 1907, and was duly placed on the tax rolls of said county, and approved by the board of equalization for said county at a valuation of $482,890. The rolling stock of plaintiff was duly assessed for taxes for that year in Dallas county, Texas, at a valuation of $795,568, and $35,700 of the amount was duly apportioned by the Comptroller of Public Accounts to the said Dallas county. The state tax board of this state, claiming to act under and by virtue of an act of the Twenty-Ninth Legislature of said state (Laws 1905, p. 351, c. 146), as amended by the Thirtieth Legislature of Texas (Laws 1907, p. 469, c. 17), finally determined and fixed the value of plaintiff's intangible assets at the sum of $22,420, and apportioned of said amount the sum of $1,169,300 to Dallas county, which sum so fixed and apportioned constitutes and represents the full and fair market value of said intangible assets in said Dallas county. The commissioners' court of said Dallas county, Texas, as required by law, met as a board of equalization on the 10th day of June, 1907, and after having inspected, corrected, and equalized the tax lists and books of the tax assessor of said county, approved the same, and the property of plaintiff as so equalized, and the assessment thereof approved by the board of equalization, was thereafter by the assessor placed on the tax rolls of said county at the following valuation: Plaintiff's tangible property at the sum of $518,590; its intangible property at the sum of $1,169,300.

"The manner, custom, and habit of assessing property for taxation in Dallas county, Texas, has been as follows: For the year 1907 all property situate in said county, excepting money and the intangible assets of railway companies, was assessed, equalized, and placed on the tax rolls for taxation at an average valuation of 57 per cent. of its fair market value. The assessor of Dallas county in assessing the property other than money and intangible assets in said county, intended and undertook to assess and place the same on the tax rolls for taxation purposes at 66 2/3 per cent. of its fair market value, and the board of equalization of said county approved said valuation, and when the assessor was assessing said property, and when the board of equalization was approving same, the said assessor and board of equalization understood that the said property was being assessed at 66 2/3 per cent. of its fair market value, and if it was not so assessed, it was a mistake or error in the judgment of said assessor and said board. A like custom and habit had been in vogue and effect in Dallas county with reference to the assessing and equalization of property for taxation for several years prior to the year 1907, and said manner and method had been carried on, and was for the year 1907 followed, by virtue of a fixed and established custom and usage. The bank stock in Dallas county was for the year 1907, and has been for a long number of years thereto, assessed at 66 2/3 per cent. of its fair market value, arrived at upon the basis of accepting the face value of the stock, together with the surplus of the bank, as representing the fair market value of its stock. In a few isolated cases real estate was in Dallas county for the year 1907 assessed at its fair market value. There were special reasons for so doing in these cases, however, the general effort being to tax land at the valuation above stated. In a few instances land was, in Dallas county, assessed for the year 1907, and for many years prior thereto, at not exceeding 25 or 30 per cent. of its fair market value. In Dallas county for the year 1907, and for many years prior thereto, money was taxed at its full face value, and for the year 1907 there was taxed in Dallas county money amounting to $846,250, which said sum represented but a small proportion of the money in said county subject to taxation as shown by bank reports. The custom herein referred to with reference to taxing property at 66 2/3 per cent. of its fair market value is not the result of any agreement or understanding between the tax assessor of Dallas county and the board of equalization of same, or between the tax assessor and the said board, or either of them, with any other officer of the state or county.

"The custom above referred to with reference to the taxation of the property in general in Dallas county does not apply to the intangible assets of railway companies, but for the year 1907 the tax assessor of said Dallas county did place, set down, and list the intangible assets of plaintiff and other railway companies in said Dallas county at the full and fair market value thereof, as fixed, determined and declared, apportioned, and certified by the said state tax board, and said board of equalization approved the assessment lists, and books of the said tax assessor, showing the value of same at the amount fixed, determined, apportioned, and certified to the tax assessor by the state tax board, and said board of equalization at the time said books and lists were approved, as aforesaid, understood that the said intangible assets had been fixed and declared by the said state tax board as their full and fair market value. The plaintiff appeared before the board of equalization of Dallas county a time or two in connection with the assessment of its property in response to notice from the board to appear and show cause why its rendition should not be raised, but the plaintiff did not appear before the said board of equalization and make demand that the value on its intangible assets be reduced, and the plaintiff did not so appear because it understood that if its said application had been made it would have been refused, and further, that said application would have been refused if made, by reason of the provisions of sections 16 and 17, c. 17, pp. 475, 476, of the General Laws of the First Called Session of...