Whelan v. State, 6738

• Court: Texas Civil Court of Appeals
• Writing for the Court: HALL
• Citation: Whelan v. State, 271 S.W.2d 108 (Tex. Ct. App. 1954)
• Decision Date: 01 July 1954
• Docket Number: No. 6738,6738
• Parties: D. E. WHELAN et al., Appellants, v. The STATE of Texas et al., Appellees.

Page 108

271 S.W.2d 108

D. E. WHELAN et al., Appellants, v. The STATE of Texas et al., Appellees.

No. 6738.

Court of Civil Appeals of Texas, Texarkana.

July 1, 1954.

Rehearing Denied Sept. 9, 1954.

Dibrell, Gardner, Dotson & Graham, Sam J. Dotson, San Antonio, John E. Taylor, Marshall, Morton Taylor, Sinton, for appellants.

Shirley W. Peters, Dallas, C. M. Turlington, Marshall, for appellees.

HALL, Chief Justice.

This is a tax suit instituted by the State of Texas and Harrison County, for itself and the Harleton Common School District No. 18, against appellants for the collection of certain taxes assessed against their gas property for the years 1950, 1951 and 1952, and to foreclose tax lien against same. As stated in appellants' brief: 'Defendants (appellants) answered with general denial, that the assessments were in violation of the Constitutions of the State of Texas and of the United States in that they were discriminatory and based upon fundamentally wrong methods of taxation.'

The case was tried to a jury upon seventy-two special issues with the directive by the trial court that if the jury answered special issues one, two and three 'no' they need not answer any other issue. The jury answered special issues one, two, and three 'no.' Upon these answers judgment was rendered for appellees for the taxes alleged to be due, together with penalty and interest and a foreclosure of tax lien on their property.

Appellants' first point is: 'The trial court erred in overruling defendants' motion for judgment notwithstanding the verdict of the jury for the reason that it was established as a matter of law that the boards of equalization for each of the years 1950, 1951 and 1952, designedly, systematically and arbitrarily adopted and used a fixed and systematic policy of assessing for taxing purposes non-producing oil and gas leases of at least 200,000 acres at a flat value of $1.00 per acre, whereas said property had a fair value of from $5.00 to $200.00 per acre; and in assessing all cattle, 35,000 head in 1950, 40,000 head in 1951 and 50,000 head in 1952, at a flat value of $15.00 per head regardless of the true market or real value of said property, thereby depriving Harrison County and the State of Texas and other taxing units, plaintiffs in this case, of a substantial amount of taxes and substantially increasing the tax burden on the defendants and their property in violation of Section 1, Article 8 of the Constitution of Texas and Section 1 of the Fourteenth Amendment to the Constitution of the United States.' By point two appellants assert that the method of assessing non-producing oil and gas lands at $1 per acre and assessing all cattle at the flat rate of $15 per head employed by the equalization board of Harrison County, hereinafter referred to as the board, as set out in point one, is contrary to Section 1, Article 8 of the Texas Constitution, Vernon's Ann.St. and of Section 1 of the Fourteenth Amendment of the Federal Constitution. By their point two-a, appellants assert that such arbitrary assessment by the board of cattle and non-producing oil and gas leases at a flat rate, regardless of their actual cash value, while appellants' property was assessed at thirty per cent of its value renders the assessment against appellants' property null and void. And by points three and four appellants assert (a) there was no evidence to support the jury's negative answer to special issue No. 1 and (b) that the jury's answer to said special issue was against the overwhelming preponderance of the evidence. These points will be considered and discussed together.

In our opinion these points raise the principal issues on this appeal.

The facts reveal that appellants own and operate certain gas wells in northwest Harrison County in what is known as the Whelan Gas Field. Their gas wells are capable of producing gas and distillate from both the Travis Peak and Rodessa formations. Appellants introduced testimony to the effect that the board assessed all non-productive oil and gas leases without regard to their location at a flat rate of $1 per acre for the years 1950, 1951 and 1952, the years covered by this suit, and assessed all cattle in the county at $15 per head. The facts show further that there were about 200,000 acres of non-productive oil and gas leases rendered in Harrison County during the years covered by this suit, the major portion of which was assessed at $1 per acre. Some of this acreage was assessed at less than $1 during some of the years in controversy and some at a larger figure. The same holds true with respect to the assessed value of the cattle. The facts also show that Harrison County during those years employed the engineering firm of King, Latham and Stults to aid and assist the board in fixing the valuation of the numerous gas and oil wells in the county for taxing purposes. Mr. Stults of that firm seems to have done most of the work in this regard, and he personally aided the board in fixing the value of the several producing wells in the different fields. His qualification as a petroleum engineer was admitted. This witness testified that the valuation he placed on appellants' producing gas wells was fair and equitable and was on the same basis as that recommended for the Stanolind and Hollands-worth producing wells in the Woodlawn Field, also in Harrison County, several miles to the east of the Whelan Field. There is substantial evidence that all producing oil and gas properties in Harrison County were assessed by the board at thirty to thirty-three per cent of its cash market value. In 1950 the total assessed value on the tax rolls of the 180,519 acres of non-producing oil and gas leases was $199,255.00; in 1951 the total assessed value of 210,100 acres of non-producing oil and gas leases was $215,678.00; and in 1952 the total assessed value of the 292,138 acres of non-producing oil and gas leases was $233,641.00.

The assessed value of appellants' property filed by them with the assessor-collector, together with the assessed value of said property fixed by the equalization board for the three years in controversy, is set out below. The property is listed on each of said inventories of the appellants and on each of said tax rolls. Following each item of property is the value placed on same by the appellants and followed by the values assessed against said property by the board:

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                                           1950                 1951                  1952
                                                    ------------------  ---------------------  -------------------
                                                      Whelan   County     Whelan     County      Whelan    County
                Lot or Block               Acres      (1)       (2)        (3)         (4)        (5)        (6)
                --------------------------------------------------------------------------------------------------
                A. H. Peal et al
                  Producing Gas Well .....   96.5   $22,000-  $ 98,490  $16,500.00    $37,790  $11,000.00  $67,030
                                                         .00
                J. L. Ledbetter et al
                  Unit Producing
                  Gas Well ...............  704     30,000.-   170,370   22,500.00     96,430   15,000.00   94,730
                                                          00
                Dee & E. K. Knox Unit
                  Producing Gas Well .....  319.31  25,000.-    96,160   18,500.00     88,130   12,000.00   78,930
                                                          00
                Della Hughes et al
                  Producing Gas Well .....  352.42  20,000.-    81,390   15,000.00     68,840   10,000.00   61,010
                                                          00
                Crocket et al Unit
                  Producing Gas Well .....  548.57  10,000.-    26,550    7,500.00     32,870    5,000.00   28,020
                                                          00
                Newman et al Unit
                  Producing Gas Well .....  703.58  10,000.-    30,040    7,500.00     38,840    5,000.00   44,370
                                                          00
                Warehouse ................    8       750.00                600.00                 500.00      530
                Meterhouse ...............    2       100.00                100.00                 100.00      100
                100 Acres Fee Land
                  Producing in Ledbetter
                  Unit ...................  100       750.00     2,400      917.00      1,750      610.00    1,520
                Mineral Interest
                  Producing under Knox
                  Unit ...................   10       100.00       500
                Fractional interest--3/8
                  of 46.55 acres
                  Producing under
                  Placid Oil Co. Dee & E
                  K. Nox Unit ............   17.46   Royalty                175.00        300      115.00      230
                                                       Acres
                Mineral Interest
                  Producing Under Peal
                  Well ...................   36       360.00       530
                Mineral Interest in Dunn
                  Unit No. 2 ........................ 260.00       520
                Fractional Interest--3/8
                  of 119.5 acres
                  Producing under
                  Placid Oil
                  Co.--British-American
                  No. 1 Peal .............   44.81   Royalty                448.00      1,570      300.00    1,440
                                                       Acres
                A. H. Peal et al Fee
                  Lands Fractional
                  Interest--3/8 of 40
                  acres Producing under
                  Placid Oil Co.--Dee
                  Knox Unit ..............   15      Royalty                150.00        980      100.00      700
                                                       Acres
                A. H. Peal et al Fee
                  Lands Fractional
                  Interest--3/8 of 96.5
                  acres Producing under
                  D. E. & R. J. Whelan
                  No. 1 Peal .............  36.19    Royalty                362.00      2,030      240.00    3,160
                                                       Acres
                D. Little Fee Lands
                  Fractional
                  Interest--1/4 of 103
                  acres
                  Producing under Placid
                  Oil Co.--Dunn No. 2 ....   25.75   Royalty                257.00        530      170.00      500
                                                       Acres
                A. H. Peal et al Fee
                  Lands Fractional
                  interest--3/8 of

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