Manges v. Freer Independent School Dist.
| Decision Date | 20 April 1983 |
| Docket Number | No. 16776,16776 |
| Citation | 653 S.W.2d 553 |
| Parties | 12 Ed. Law Rep. 599 Clinton MANGES and Duval County Ranch Company, Appellants, v. FREER INDEPENDENT SCHOOL DISTRICT, et al., Appellees. |
| Court | Texas Court of Appeals |
Richard Banks, Austin, Mike Hatchell, Tyler, for appellants.
T. Kellis Dibrell, San Antonio, Homero C. Canales, Alice, J.A. Canales and G. Rudolph Garza, Jr., Corpus Christi, for appellees.
Before CADENA, C.J., and CANTU and REEVES, JJ.
This is an ad valorem tax suit. Appellees, various taxing authorities, sued appellants for delinquent ad valorem taxes allegedly due for tax years 1977, 1978 and 1979. Trial was to the court and judgment was rendered in favor of the taxing authorities for delinquent taxes, penalties, interest and attorney fees.
Appellants have duly perfected their appeal and raise eight points of error which may be conveniently divided into three general groups. The first group challenges the validity of taxes assessed, levied, and sought to be collected by Freer Independent School District. The second group challenges the award of attorney fees and the last group challenges the validity of the foreclosure liens granted by the judgment.
There is no dispute concerning the dollar amount of taxes involved. The issues before us are thus, for the most part, delineated by stipulations between the parties. Other issues are found in the decretal portions of the judgment.
The facts as stipulated and developed at trial governing appellants' challenge to the validity of taxes levied, assessed and sought to be collected by Freer Independent School District reflect the following.
On August 14, 1976, the qualified voters residing within the incorporated limits of the City of Freer, Texas, voted to establish a municipal school district 1 pursuant to Tex.Educ.Code Ann. § 19.161 (Vernon 1972). The proposed municipal school district previously constituted a part of the existing Benavides Independent School District. The ordinance of the Freer City Council, dated August 26, 1976, shows that after receiving a petition signed by 50 qualified voters of the city, 2 and within 20 days of the receipt of the petition, the voters approved the creation of the Freer Municipal School District by a vote of 807 for, and 10 against the proposition.
On December 9, 1976, the Freer City Council passed another ordinance which, pursuant to § 19.161, created the Freer Municipal School District. The Board of Trustees for the new district was named by an ordinance of the city council on that same day. Although the record does not show it, the parties have stipulated that the only bonded indebtedness incurred by the City of Freer if it did, was that pro rata share of indebtedness of the Benavides School District at the time Freer Municipal Independent School District was carved out of the Benavides Independent School District. 3
On December 21, 1976, the Freer City Council, at the request of the new school board, voted to extend the boundaries of the new district for school purposes only. See Tex.Educ.Code Ann. § 19.164 (Vernon 1972). The parties stipulated that a petition signed by the majority of voters in the affected area was submitted to the city council on December 15, 1976. The extension of the boundaries of Freer Independent School District on December 21, 1976, brought defendants Manges' and Duval County Ranch Company's property under the taxing jurisdiction of the Freer Independent School District whereas it had previously been within the taxing jurisdiction of the Benavides Independent School District.
The creation of the new district involved property which constituted only a fractional part of the Benavides Independent School District and did not affect the continuing operation of the Benavides Independent School District. The record does not indicate what effect the creation of the new district had on the existing bonded indebtedness of the Benavides Independent School District. The record does show, however, that the August 1976 election only dealt with the acquisition of exclusive control over the school system, and did not speak to whether the bonded indebtedness of the old district would be assumed by the new district. Nor did the election results speak to any authorization to levy maintenance taxes within the new district. See Tex. Const. art. VII, § 3.
When the Freer City Council, by ordinance, extended the boundaries of Freer Municipal School District, it provided that the annexed area bear its pro rata share of any school taxes and of "... any obligation owed by Freer Independent School District...." There is no evidence, one way or the other, that the voters of Benavides authorized a levy of taxes pursuant to Article VII, § 3 of the Constitution. However, appellants do not challenge Benavides' taxing authority. The parties also stipulated that while Benavides Independent School District voted to incur bonded indebtedness, the Freer Independent School District has never submitted to the voters of its district, either as originally constituted or as expanded, the question of authorization to assess, levy and collect taxes for the maintenance of the new district or for retiring any bonded indebtedness.
Appellants Manges and the Duval County Ranch Company filed a first amended answer alleging a legal defense to the foreclosure of the Freer Independent School District's tax liens. The defense was that "... Freer Independent School District has no legal authority to levy or collect ad valorem taxes from these defendants as there has not been any election held since the plaintiff was originally and initially organizaed [sic] as a school district in which the voters within the school district voted to authorize the plaintiff to tax property for any purposes." The argument advanced by appellants is that Tex. Const. art. VII, § 3 makes an election authorizing a school district maintenance tax mandatory and that without such an election, any attempt to levy, assess, or collect such taxes is impermissible.
At the trial on the merits appellees offered the tax rolls into evidence, properly predicated by testimony from the tax assessors and the consultants who keep records of mineral interests for taxing purposes. Having established a prima facie case, and after offering some testimony as to attorney fees, appellees rested.
The only evidence offered by the appellants was the testimony of Jack Shires, the president of the board of trustees of Freer Independent School District. Shires predicated the answers to appellants' request for written interrogatories which were admitted, over objection, for the purpose of showing the mechanics in the creation of the new district.
The appellants have never challenged the validity of the intervenors' tax, nor do they dispute the assessment values of any of the taxing entities. Their sole contention, as set out in their first amended answer, argued at trial, and on appeal, is that Freer Independent School District had no power to tax because there was no election authorizing the assessment, levying and collection of the maintenance tax.
The trial court rejected the defendants' theory of the case and entered judgment in favor of all the taxing authorities. The judgment recites that appellees recover from Clinton Manges personally, the amount of $148,530.86 and from the Duval County Ranch Company the sum of $346,555.57 as delinquent taxes. The judgment further establishes a bulk lien in solido for the combined amounts and orders a foreclosure in bulk and in solido for that amount.
A motion for new trial complaining of most of the errors presented on appeal was apparently overruled by operation of law as no order appears in the record. A request for findings of fact and conclusions of law was filed, but no findings appear in the record.
Appellants' first three points of error attack the authority of Freer Independent School District to tax at all, since the record indicates that the qualified voters of the district never voted approval of the tax. According to appellant, such an election is required under Tex. Const. art. VII, § 3. 4
Article VII, § 3 is a "... rather patched and overly cobbled enactment" giving local school districts the authority to levy ad valorem taxes. Shepherd v. San Jacinto Junior College District, 363 S.W.2d 742 (Tex.1963). The section in question requires the legislature to provide revenue for the benefit of public free schools. Such revenues are to be provided from the state occupation taxes, poll tax, and if those funds are insufficient, "... there shall be levied and collected an annual ad valorem state tax not to exceed thirty-five cents ($.35) on the one hundred dollars ($100.00) valuation." If this amount is not sufficient, the section continues, the legislature is authorized to either appropriate money from the general fund, or "... the legislature may authorize additional ad valorem tax ... provided that the majority of the qualified property taxpaying voters of the district voting at an election to be held for that purpose, shall vote such a tax...."
The construction appellants suggest that we adopt would be that Freer Independent School District, which validly split off from Benavides Independent School District, holding an election which authorized them to create the new district, but silent as to the authority to levy taxes to support and maintain the new district, results in an Independent School District which has no power to assess, levy and collect taxes. The judgment granting the foreclosure of a lien in favor of Freer Independent School District, is therefore erroneous, appellants argue, because the district has no authority to tax under the constitution.
Subject to the following discussion of appellees' counterpoints, we feel that the...
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