Republic Ins. Co. v. Highland Park I. School Dist., 2766.

• Decision Date: 26 January 1933
• Docket Number: No. 2766.,2766.
• Citation: 57 S.W.2d 627
• Parties: REPUBLIC INS. CO. v. HIGHLAND PARK INDEPENDENT SCHOOL DIST. OF DALLAS COUNTY.
• Court: Texas Court of Appeals

57 S.W.2d 627

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

No. 2766.

Court of Civil Appeals of Texas. El Paso.

January 26, 1933.

Rehearing Denied March 9, 1933.

Appeal from District Court, Dallas County; W. M. Taylor, Judge.

Action by the Highland Park Independent School District of Dallas County, Tex., against the Republic Insurance Company. Judgment for plaintiff, and defendant appeals.

Reversed and rendered.

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

J. Harold Goode and Bell & Clark, all of Dallas, for appellee.

James V. Allred, Atty. Gen., and Sidney Benbow, Asst. Atty. Gen., amicus curiæ for the state.

Worsham, Rollins, Burford, Ryburn & Hincks and Allen Charlton, all of Dallas, amicus curiæ for Gulf Ins. Co.

HIGGINS, Justice.

This is a suit by the Highland Park Independent School District of Dallas County, Texas, against the Republic Insurance Company, a Texas fire insurance corporation, domiciled in Dallas county, to recover balances alleged to be due by said company for taxes levied against it for the years 1926 and 1927.

The parties will be designated as they were in the court below.

It was alleged the tax for 1926 amounted to $18,978, and a payment thereon of $10,523.20 was made January 31, 1927, leaving a balance of $8,454.80, due and unpaid.

For the year 1927 it was alleged the tax amounted to $12,237, upon which a payment of $4,887.90 was made January 31, 1928, leaving a balance of $7,349.10 due and unpaid.

The suit is to recover the said balances with statutory penalty, costs, and interest.

Judgment was rendered in plaintiff's favor for $10,984.23, taxes, etc., for the year 1926, and $8,675.15, taxes, etc., for the year 1927.

It was alleged plaintiff's board of trustees for the years in question levied a tax of $1 per hundred valuation against all property in the district for the benefit of the public schools within the district, and "thereafter the tax assessor of Dallas county, as the duly and legally selected and designated assessor of said District, after the defendant had failed and refused to do so, duly and legally listed, inventoried and assessed said property along with other property in said district, in the manner and at the valuation shown in said exhibits, and included same in his regular tax rolls for said years."

While it is alleged by plaintiff in its original petition that defendant failed and refused to list, inventory, and assess its property, it nevertheless appears from the evidence that defendant prepared and tendered upon the official forms a list, inventory, and assessment of its property to the tax assessor of Dallas county for each of the years in question, with certain deductions noted thereon, which it claimed it had the right to deduct from its assets as nontaxable.

With reference to the alleged failure of defendant to render its property for taxation, plaintiff, in a supplemental petition, alleged: "Plaintiff specially denies that any valid assessment at any time was tendered or offered to the assessor by the Defendant for either of said years 1926 and 1927, or that any assessment whatever was accepted from Defendant by the Assessor for either of said years or that any assessment was at any time made or equalized except the assessment herein sued on, and the Plaintiff specially alleges that after Defendant failed and refused to make a correct and legal assessment for said years, the same was made by the tax assessor, that the Defendant and its agents and representatives had full knowledge of the amount of said assessments, the items it contained, and the separate amounts of such items and knew that the tax assessor would not and did not accept, approve or execute any other assessments suggested or offered by it and that after the making and execution of said assessment by the tax assessor, it was finally and judicially approved by the duly existing Board of Equalization."

The only two issues submitted read:

"Special Issue No. 1.

"Do you find from a preponderance of the evidence that the Tax Assessor of Dallas County prior to October 2nd, 1926, rejected as the rendition of the Defendant's property for taxation for the year 1926, the proposed rendition tendered to him for that year by the Defendant? Answer `Yes' or `No.' "Special Issue No. 2.

"Do you find from a preponderance of the evidence that the Tax Assessor of Dallas County prior to October 4th, 1927, rejected as the rendition of the Defendant's property for taxation for the year 1927, the proposed rendition tendered to him for that year by the Defendant? Answer `Yes' or `No.'"

Both of these issues were answered in the affirmative.

It will be noted both of these issues assume a rendition was tendered by defendant for both years.

Upon the inventory sheet for the year 1926, tendered by defendant to the assessor, it listed "Assets $4,844,596." and then deducted the following items:

                Premium Reserve................$1,364,364.00
                Conflagration Fund ............   500,000.00
                Losses ........................   116,537.00
                Reinsurance balances due.......    46,344.00
                

Other deductions were claimed, the correctness of which is not questioned by plaintiff.

The inventory tendered by defendant was kept by the assessor, and from the data therein given, and other sources, the assessor made up a new inventory and assessment. Upon this he omitted the deductions listed above, thereby increasing the value of the taxable assets of defendant in the amount of such deductions.

For 1927 the procedure was the same as in 1926, except that in the inventory made up by the assessor in 1927 he deducted the premium reserve.

Prior to and subsequent to the action of the assessor in making such inventories and assessments, defendant's agent attempted to secure from the assessor the acceptance of the inventories and assessments tendered by it, with the deductions claimed, and was unsuccessful in its efforts so to do.

The inventories and assessments made by the assessor were by him submitted to the commissioners' court, sitting as a board of equalization, and by it approved.

Opinion.

An assessment, as provided by law, is an indispensable prerequisite to the validity of a tax against an individual. Cooley on Taxation (4th Ed.) 596; 37 Cyc. 987; Clegg v. State, 42 Tex. 605; Sullivan v. Bitter, 51 Tex. Civ. App. 604, 113 S. W. 193; Richardson v. State (Tex. Civ. App.) 53 S.W.(2d) 508; Cook v. Ry. Co., 5 Tex. Civ. App. 644, 24 S. W. 544.

In Federal Royalty Co. v. State (Tex. Civ. App.) 42 S.W.(2d) 670, 674, Justice Walthall, speaking for this court, said: "It is the law that all tax assessments, to be valid, must be made as provided by the statute."

And in Vance v. Town of Pleasanton (Tex. Civ. App.) 261 S. W. 457, 459, Justice Smith, in referring to what is now article 7329, Rev. St. 1925, said: "Nor can the injured property owner be cut off by statute from showing, in such suit, that the taxable value of his property has not been ascertained by the authority or in the manner provided by law, because this right also is vouchsafed to him in the Constitution, in section 1 of article 8, which provides that the taxable value of property `shall be ascertained as may be provided by law.' It was in obedience to this provision that the Legislature provided the present method, embraced in title 22, of the Revised Statutes, for ascertaining the taxable values of property, and the constitutional guaranty follows the method thus prescribed. It is the duty of the constituted authorities to pursue that method in ascertaining the taxable value of property, and the owner may invoke these statutory provisions to defeat a suit to force him to pay taxes not ascertained as thus provided, notwithstanding a subsequent statute which would deny him such defense. We have stated rules which we think are obvious and elemental."

In the same case (277 S. W. 89, 90), Judge Bishop, of the Commission of Appeal, said: "Our Constitution also provides that `taxation shall be equal and uniform,' and that `all property in this state * * * shall be taxed in proportion to its value, which shall be ascertained as may be provided by law.' Article 8, § 1. In a suit to recover taxes the owner of the property assessed has the right under this provision to show in defense of the action that the taxes assessed were not `equal and uniform'; that the value of his property was not ascertained as provided by law; and that the value assessed is in excess of its real value."

An assessment involves, first, the preparation of a list of the property subject to the tax; and, second, the valuation of such property in the manner prescribed by law, and by the constituted authority. 26 R. C. L. Title Taxation, § 311; 37 Cyc. 987, and footnote 84.

The defendant questions the validity of the assessment against it made by the tax assessor in the manner stated above. It contends the assessor had no right to reject the inventory and valuation tendered by it and substitute therefor his own inventory and appraisement.

There was no issue between the defendant and the assessor as to the gross value of the former's assets. For both years they estimate the gross values at the same amounts. The controversy arose over the claim of the defendant that it had the right to deduct from the value of its gross assets the items indicated above and the refusal of the assessor to allow such deductions.

The law requires the taxpayer to render his property for taxation by listing the same, making oath thereto, and delivering the same to the assessor, whose duty it is to "enter the said property on his tax rolls." Articles 7185-7189, R. S.

Article 7192 provides that if the taxpayer refuses or neglects to list his property when called upon so to do by the assessor, such assessor shall enter the name of such person in a book. Subdivision 6 of article 7206 requires the assessor to furnish the names of such persons to the board of equalization, ...