W. T. Waggoner Estate v. Electra I. School Dist., 14300.

• Decision Date: 28 November 1941
• Docket Number: No. 14300.,14300.
• Citation: 157 S.W.2d 721
• Parties: W. T. WAGGONER ESTATE v. ELECTRA INDEPENDENT SCHOOL DIST.
• Court: Texas Court of Appeals

Page 721

157 S.W.2d 721

W. T. WAGGONER ESTATE v. ELECTRA INDEPENDENT SCHOOL DIST.

No. 14300.

Court of Civil Appeals of Texas. Fort Worth.

November 28, 1941.

Rehearing Denied January 9, 1942.

Appeal from District Court, Wichita County; Ernest Robertson, Judge.

Suit by the Electra Independent School District against the W. T. Waggoner Estate to foreclose a tax lien. From a judgment for plaintiff, defendant appeals.

Reversed and remanded with instructions.

R. B. Anderson, of Vernon, and Kilgore & Rogers, of Wichita Falls, for appellant.

T. R. Boone, of Wichita Falls, C. P. Engelking, of Electra, and Kearby Peery, of Wichita Falls, for appellee.

McDONALD, Chief Justice.

This suit is brought by Electra Independent School District against the W. T. Waggoner Estate to recover taxes, with penalties and interest, for the years 1933 to 1938, inclusive. Trial before a jury resulted in a judgment in favor of plaintiff for all amounts sued for, from which defendant appeals.

During the years involved, said Estate owned twenty-five or more tracts of land within the school district, several of which were producing oil. Each year the Estate rendered its properties for taxation, and each year tendered payment of the taxes based upon its renditions. The renditions so made listed each of the several tracts the Estate owned, with the value of each, including the value of the minerals under each tract, save and except that for the years 1936, 1937 and 1938, the royalty interest under certain tracts which were under lease to the Texas Company was rendered as a separate item, and was not included in the valuations of the several tracts of land.

During each of the years in question, the taxing authorities of the school district followed substantially the same procedure with respect to the renditions made by the Estate. The tax assessor would furnish to the board of equalization his estimate of the aggregate amount of royalty received daily by the Estate from all of its lands within the district. The board of equalization would reduce the value of each of the tracts to an amount it considered a proper valuation of the surface, as distinguished from the minerals, and would then add to the rendition what might be termed a blanket assessment against all the royalty under all of the lands. The valuation of the royalty would be arrived at by multiplying the daily royalty production by a given figure. The royalty assessment so made by the board of equalization for the various years was as follows: 1933, 143.99 barrels at $900 per barrel, $129,591; 1934, 164.79 barrels at $850 per barrel, $140,071.50; 1935, 144.53 barrels at $1,000 per barrel, $144,530; etc., for the remaining years. Assessments were made against the 7/8 ths working interest in some of the tracts in a similar manner.

The totals of the tax assessments thus arrived at by the board of equalization were greatly in excess of the renditions made by the Estate.

Following the action by the board of equalization, there was entered each year upon the tax rolls an item of 1/8 th royalty, of the aggregate value so ascertained, and, for some of the years, an item of 7/8 ths working interest. Briefly, the taxing authorities undertook to make a blanket assessment against all of the royalty owned by the Estate, and against all the 7/8 ths working interest, as distinguished from an assessment against the mineral interests in each separate tract.

The petition sought to foreclose a lien upon all of the land for the taxes assessed against all of the mineral interests, and the judgment rendered likewise adjudged a lien against all of the tracts for the taxes assessed against all of the mineral interests.

The record shows without dispute that the board of equalization arrived at its valuations of the mineral interests in all other lands in the district in the same manner. It would decide upon a given figure, that is, $850, or $900, or $1,000, for that particular year, and would in each instance multiply this figure by the estimate of daily production furnished it by the tax assessor, to arrive at its valuation for royalty, without regard to any other factor, such as age of the wells, whether sand or lime production, probable life of the wells, etc. Nor did the board undertake to ascertain the amount being received from each tract, where royalty was owned under more than one tract, or from portions of a tract covered by several leases.

In no way can it be determined, from the tax records of the district, what amount of taxes has been assessed against any particular tract of land.

Although plaintiff in its brief undertakes to demonstrate that the tax records are such that the Estate, with its knowledge of its own affairs, could figure the amount of taxes it would have to pay against each tract, yet in its petition the district alleges that it was "unable to accurately allocate respective mineral valuations to each of the respective tracts of land other than as hereto described, but did take the total productivity, or the entire minerals calculated in barrels, which were received by the defendant, and fixed a value thereon for each of the years, both as to the royalty received by the defendant and the working interest received by the defendant, all as more fully set forth in detail in the tabulation, as follows:" The tabulation following shows the amount of tax assessed against the surface, as distinguished from the minerals, and then shows, for each year, the amount of tax against the total royalty interests in all of the lands, and the amount of tax against the total 7/8 ths working interest. The royalty, as well as the working interest, is described only as a certain number of barrels.

In following the above described procedure, the board of equalization each year attached to the rendition a list of names of purported lessees, without identifying the land covered by the leases owned by such lessees. The petition, as well as the judgment, also contains a long list of names of lease owners, without identifying the particular tracts covered by their respective leases.

In answer to the only special issues submitted to it, the jury found: (1) At the time defendant rendered the properties in controversy, it deliberately and purposely failed to show the amount of oil that it was receiving from each and every tract of land. (2) Such conduct on the part of the defendant did not result in the assessments being made as they were made. (3) Defendant deliberately and purposely withheld from the board information concerning the true value of the royalty interest in controversy. (4) Such conduct did not result in the assessments being made as they were made. (5) Royalty from some Estate properties in the district was worth less on a per barrel basis than oil royalties from other properties in such district. (6) The working interest from some Estate properties in the district was worth less on a per barrel basis than the working interest from other oil properties in the district.

The trial court rendered judgment for $18,099.62, being the full amount sued for. It then decreed a lien in favor of plaintiff upon each of the several tracts of land for what is obviously the amount of taxes assessed against the surface. It then decreed as follows: "It is further ordered, adjudged and decreed by the court that the plaintiff is entitled to a lien to secure the taxes on the following described lands and premises situated in the Electra Independent School District during the years of 1933 to 1938, inclusive, covered by the leasehold instruments then held during that period by the following named Lessees, who were then operating portions of said above described sections or surveys, the exact description of the area which said leases covered being more clearly shown by the leases or assignments to the respective lessees hereinafter named, to-wit:"

Following the quoted portion of the judgment is a list of names of 32 persons and firms.

Following this list of names the judgment contains the following recitation:

                "* * * for the year 1933 in
                  the sum of .................... $1,859.63
                for

...