Westwood Independent School Dist. v. Southern Clay Products, Inc.

• Decision Date: 08 August 1980
• Docket Number: No. 1285,1285
• Citation: 604 S.W.2d 511
• Parties: WESTWOOD INDEPENDENT SCHOOL DISTRICT, Appellant, v. SOUTHERN CLAY PRODUCTS, INC., Appellee.
• Court: Texas Court of Appeals

Page 511

604 S.W.2d 511

WESTWOOD INDEPENDENT SCHOOL DISTRICT, Appellant, v. SOUTHERN CLAY PRODUCTS, INC., Appellee.

No. 1285.

Court of Civil Appeals of Texas, Tyler.

Aug. 8, 1980.

Rehearing Denied Sept. 11, 1980.

Alex Beall, Beall & Crow, Tyler, for appellant.

A. D. Henderson, Palestine, for appellee.

SUMMERS, Chief Justice:

This is a suit for the collection of delinquent taxes. The appeal is from a judgment of the trial court which ruled that the Westwood Independent School District's valuations of personal property belonging to Southern Clay Products, Inc., were grossly excessive.

Plaintiff, Westwood Independent School District (Westwood), brought suit against defendant, Southern Clay Products, Inc. (Southern), for the collection of delinquent taxes, penalty, and interest due and owing for the years 1975, 1976, and 1977 on equipment, machinery, inventory, and other personal property of the defendant located at its plant in Palestine, Anderson County, Texas, within the confines of the Westwood Independent School District. Defendant alleged that the valuations placed upon its inventory, machinery, and equipment by Westwood were grossly excessive. Defendant's first amended original answer alleged that the total valuations that should have been used to establish a reasonable fair market value of all its property are as follows: 1975 $162,850.00; 1976 $162,850.00; 1977 $175,965.63.

Trial was had before the court and jury, and at the conclusion of all the evidence Westwood submitted a motion for a directed verdict, which motion was overruled by the court. No issues were submitted to the jury regarding the assessments for inventory since Westwood's expert witness, H. M. Harris, Jr. admitted in his testimony that the assessed value on inventory was grossly excessive for the years 1974, 1975 and 1976 in that for each of such years the value used for inventory should have been $9,400.00, the same as 1977, as contended by Southern. Special issues were submitted to the jury asking whether the reasonable fair market value established by Westwood on machinery and equipment owned by Southern was grossly excessive, and if such reasonable fair market value was grossly excessive, the amount of such excess. The jury answered the special issues finding that the reasonable fair market value was grossly excessive in the following amounts: for 1975 $175,720.00; for 1976 $159,224.00; for 1977 $79,431.00. The trial court entered judgment in accordance with the jury's answers to said special issues.

A motion for new trial was filed by Westwood alleging that there was no evidence to support the answers to the special issues, or that the evidence was insufficient to establish any grossly excessive valuation, and that the jury was guilty of misconduct in their deliberations in that the jurors considered the total market value of all Southern's property (buildings, machinery, equipment, and inventory) in arriving at market value for machinery and equipment. Said motion therefore alleged that the jurors did not respond to the issues submitted by the court asking for the jury to determine whether the reasonable fair market value on machinery and equipment was grossly excessive. The court overruled the motion for new trial and plaintiff has perfected this appeal.

We affirm.

The record reveals that Southern bought the plant in question in Palestine in 1966 for approximately $93,000.00 but did not begin operating it until 1974. This particular plant receives raw clay and processes it into a rough material which it sells to other companies for the production of ceramic tile. During the first year of operation, Southern did not make a rendition for the value of its property with Westwood's tax office. Westwood employed the firm of Pritchard & Abbott to make appraisals of property within the district. H. M. Harris, Jr. (Harris), an Evaluation Engineer for Pritchard & Abbott, made an appraisal of Southern's property for 1974 tax purposes. A 65% assessment ratio was used in 1974 to compute taxable value of property within the school district. Southern paid the assessed taxes on its property for 1974, but made a notation of protest upon the check.

In 1975, Westwood again employed Pritchard & Abbott to make a valuation study of property within the district. However, the 1975 contract with Pritchard & Abbott stated that at least part of their compensation was to be a percentage of any increased valuation that they might find concerning taxable property within the district. As a result of this study, Westwood increased the appraised valuation of Southern's machinery and equipment. An 85% assessment ratio was used to compute taxable value for 1975. Southern did not make a rendition of its property for 1975 and did not pay the assessed taxes for such year, computed to be $4,489.02.

Harris made an on-site inspection of Southern's property for 1976 tax purposes. This inspection revealed that Southern had added several pieces of machinery and equipment, and therefore the valuation of its machinery and equipment was increased. An 85% assessment ratio was used by Westwood to compute the taxable value of property in 1976. Southern did not make a rendition for 1976 tax purposes and did not pay the assessed taxes for such year, computed to be $4,922.15.

Harris made an on-site inspection of Southern's plant for 1977 tax purposes. Southern did make a rendition of its property for 1977 tax purposes. A representative of Southern appeared at the 1977 Board of Equalization meeting. At a later meeting the Board approved a total value of Southern's property which was higher than the value rendered by Southern but which was lower than the value proposed by Harris. An 85% assessment ratio was used by Westwood to compute the taxable value of property for 1977. Southern did not pay the $4,445.72 in taxes which they had been assessed.

Westwood's points of error nos. 2, 3, 6, 7, 10, and 11 contend that there was no evidence (nos. 2, 6, and 10) or insufficient evidence (nos. 3, 7, and 11) to support the jury's findings that the reasonable fair market value established by Westwood on Southern's machinery and equipment for the years 1975, 1976, and 1977 was grossly excessive.

Westwood's points of error nos. 4, 5, 8, 9, 12, and 13 contend that there was no evidence (nos. 4, 8, and 12) and insufficient evidence (nos. 5, 9, and 13) to support the amount of excessive fair market value found by the jury on Southern's machinery and equipment for the years 1975, 1976, and 1977.

In determining these points of error, we are mindful of the rule that in determining a "no evidence" point, which is a question of law, the appellate court will consider only the evidence and inferences which such evidence reasonably permits that will support the challenged findings, disregarding all evidence and inferences to the contrary. Lukus v. Hartford Accident & Indemnity Co., 552 S.W.2d 796, 797 (Tex.1977); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965).

In determining an "insufficient evidence" point, which is a question of fact, we consider and weigh all the evidence in the case to determine whether the evidence is factually insufficient to support a finding of a vital fact or the finding is so against the great weight and preponderance of the evidence as to be manifestly unjust and that the finding should be set aside and a new trial ordered. Garza v. Alviar, supra; In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 662 (1951).

Article VIII, section 1 of the Constitution of Texas, Vernon's Ann.Const., provides that taxation shall be equal and uniform and all property shall be taxed in proportion to its value, which shall be ascertained as may be provided by law. The Legislature has provided for the means to enforce the uniform taxation required by the Constitution. Articles 7148 and 7161, ¹ provide for the rendition for taxation by the taxpayer, of the value of merchandise and personal property in his hands sometime after January 1 of each year. Article 7193 provides that the assessor of taxes shall assess the property for the taxpayer, if he fails to render it. Article 7212 provides for a board of equalization to supervise and equalize the assessment of taxes, and to fix the final valuation. Article 1060a makes the above statutes applicable to municipal corporations and school districts. Thus, to insure the uniformity in taxation the boards of equalization have been established as the final equalizing factor.

In State v. Whittenburg, 153 Tex. 205, 265 S.W.2d 569, 572-573 (1954), the following controlling principles were stated:

"It is now well settled that the assessment of property for tax purposes is a quasi-judicial function of boards of equalization and that no attack on valuations fixed by such boards can or will be sustained in the absence of proof of fraud, want of jurisdiction, illegality, or the adoption of an arbitrary and fundamentally erroneous plan or scheme of valuation. State v. Houser, 138 Tex. 28, 156 S.W.2d 968, 970-971; Druesdow v. Baker, Tex.Com.App., 229 S.W. 493, 495. Moreover, when their official action is attacked it will be presumed that such boards discharged their duties as public agencies according to law and acted in good faith. Zachary v. City of Uvalde, Tex.Com.App., 42 S.W.2d 417; Lubbock Hotel Co. v. Lubbock Ind. School Dist., Tex.Civ.App., 85 S.W.2d 776, no writ; Hinkson v. Lorenzo Ind. School Dist., Tex.Civ.App., 109 S.W.2d 1008, writ dism.

"While it has been held that a grossly excessive valuation may, in law, be sufficient to establish such fraud or illegality as to render a valuation void, Johnson v. Holland, 17 Tex.Civ.App. 210, 43 S.W. 71, writ denied; City of Sweetwater v. Biard Development Co., Tex.Civ.App., 203 S.W. 801, no writ; Simkins v. City of Corsicana, Tex.Civ.App., 86 S.W.2d 792, no writ; Howth v. French Ind. School Dist., Tex.Civ.App., 115 S.W.2d 1036; French Ind. School Dist. v. Howth, 134 Tex. 211, 134 S.W.2d 1036,...