Summary
finding that a statute which permitted a school board of trustees to appoint individuals to a board of equalization did not overcome self-appointment prohibition and therefore the trustees could not appoint themselves
Summary of this case from Opinion No. GA-0377Opinion
No. 3862.
July 17, 1930.
Appeal from District Court, Morris County; R. T. Wilkinson, Judge.
Suit by the Naples Independent School District against the St. Louis Southwestern Railway Company of Texas. Judgment for plaintiff, and the defendant appeals.
Reversed and remanded, with instructions.
The suit was by the Naples independent school district for delinquent taxes claimed to be owing and unpaid by the railway company for the year 1928. From a judgment in favor of the plaintiff, the railway company has appealed, claiming illegality (1) in the order authorizing the tax levy; and (2) in the tax assessment made by the trustees of the school district acting as a board of equalization.
In 1902 the Naples independent school district was organized under the general laws of the state of Texas authorizing the creation of such districts. In 1928 the board of trustees met and duly elected its president and secretary and appointed a treasurer and an assessor and collector of taxes for the school district. The St. Louis Southwestern Railway Company of Texas had 3.66 miles of main line trackage situated within the school district subject to taxation for the year 1928. On April 24, 1928, the railway company by its authorized tax agent duly rendered said property for assessment of taxes for the year 1928 at the total sum of $43,920. A factual outline of the undisputed evidence shows the controversy between the parties. On May 4, 1928, at the time required by law, the trustees of the school district, duly elected and organized as a board, met for the purpose of levying the ad valorem tax to be levied and collected in the district for the year 1928. Such tax levy, as found by the court, was made "by resolution adopted by the board of trustees." The resolution was entered and recorded in the minutes of the board of trustees as the action of the board. The minutes of the board of trustees, which were offered in evidence, read:
"May 4, 1928. We, the Board of Trustees of the Naples Independent School District, hereby levy or set the tax rate on $100.00 valuation for this district at $1.00 to be assessed and collected by the duly elected Assessor and Collector for the purpose of maintenance and payment of bonds, 60% to be used for maintenance, 40% to be used for payment of bonds.
"The above order was unanimously passed by the Board of Trustees, Naples Independent School District, this date.
"Dr. C. D. Hibbitts, President.
"B. J. Floyd, Secretary."
The above resolution was the only action taken by the board of trustees for the levy of the tax for the school district for the year 1928. Later in 1928, and at a date not definitely given, the board of trustees passed and had entered and recorded in the minutes as the action of such board the following:
"The school board met in regular session, with the following members present (Here follows the names of the seven trustees), and the motion was made by B. J. Floyd and seconded by T. F. Matthews that the school board sit as a board of equalization in 1928, and the motion carried."
Thereafter the seven trustees of the school district, in pursuance of that order, met as an equalization board and passed on all the assessment lists for 1928 of all the property within the school district. During the session, the trustees, acting as the equalization board, raised the rendition of $43,920 made by the appellant railway company to $50,000. The tax due on the $50,000 is the tax in suit, and the tax raise above $43,920 is contested.
The trial court made findings of fact, namely:
"I find that the said Board of Trustees sitting as a Board of Equalization raised the value of the property of the St. Louis Southwestern Railway Company situated within the limits of said District to $50,000.00 at said meeting and adjourned to a day not less than ten nor more than 15 days from the date said value was raised and directed the Secretary of the Independent School District to notify the defendant of such raise which notice was given to the defendant, St. Louis Southwestern Railway Company of Texas, requiring it to appear on the date fixed and to show causes why the value of its property should not be raised to $50,000.00.
"I find that W. A. Conaway, the Tax Agent of the defendant, St. Louis Southwestern Railway Company of Texas, appeared before said Board and contested the right of the said Board of Trustees to raise the said property.
"I find that said W. A. Conaway, the Tax Agent of the defendant, did not make any objection to the right of the Board of Trustees to act as a Board of Equalizations, but acquiesced in same.
"I find that the Board of Equalization after hearing the contest of the defendant's agent adjudged that the property should be raised to the sum of $50,000.00 and that the books and assessment rolls of the Tax Assessor, including the defendant's property and the raise in its value, were duly approved by said Board of Equalization and Board of Trustees.
"I find that the defendant refused to pay the tax after such raise and tender the Tax Collector the amount of taxes due to the Independent School District under its original rendition and refused to pay the difference.
"I find that the Board of Equalization in raising the property of the defendant to $50,000.00 acted in good faith and with no intention of discriminating against the defendant.
"I find that as a fact the Board of Equalization did not discriminate against the defendant in the raise of defendant's property valuation to $50,000.00, and I find further there was not any testimony to support any such allegation.
"Conclusions of Law."From the above and foregoing findings I conclude that while the levy of the tax was made by resolution and not by ordinance, that the acts of the 29th Legislature validated such assessment, if in fact it was illegal.
"I conclude that while the law requires the Board of Trustees to select three persons as a Board of Equalization, and that while it is contemplated that the three persons should not be members of the Board of Trustees, I conclude that the act of the Board of Trustees sitting as a Board of Equalization was valid by reason of the fact that they were de facto officers.
"I conclude that all the proceedings with reference to the levy, equalization, assessment and notices were all valid as against the defendant in this case, and I therefore render judgment for the plaintiff for the amount of tax sued for."
C. E. Bryson and King, Mahaffey Wheeler, all of Texarkana, for appellant.
Henderson Bolin, of Daingerfield, and C. R. Newland, of Linden, for appellee.
The appellant presents the point that the tax levy of May 4, 1928, appearing in the minutes of the board of trustees, in no event could be considered an "ordinance" within the meaning and contemplation of the statutes. The statutes require the board of trustees of an independent school district to levy the annual ad valorem tax "by ordinance." Articles 2758, 1027, R.S.; Gerhardt v. School Dist. (Tex.Civ.App.) 252 S.W. 197; Vance v. Town of Pleasanton (Tex.Civ.App.) 261 S.W. 457; Id. (Tex.Com.App.) 277 S.W. 89. The kind of "ordinance" contemplated has been sufficiently defined in American Construction Co. v. Seelig, 104 Tex. 16, 133 S.W. 429, and in Vance v. Town of Pleasanton (Tex.Civ.App.) 261 S.W. 457, 458, namely:
"To be an 'ordinance,' within the meaning of the statute, the procedure must be more than a mere verbal motion made, adopted, and entered on the minutes, more than a mere resolution subsequently reduced to writing by the secretary. It must be reduced to writing before being acted on by the council. It must be invested, not necessarily literally, but substantially, with the formalities, solemnities and characteristics of an ordinance, as distinguished from motions and simple resolutions."
As found by the trial court, the tax rate in the present case was authorized "by resolution adopted by the board of trustees."' There is no further proof in respect to such resolution than what the minutes of the board of trustees show. Looking to the minutes of such board, there is reflected the record of a literal copy, not of a mere motion or resolution, but presumably of a formal writing drawn up and duly presented to the board of trustees and by them adopted. The notation, which in effect is a certificate, appearing at the foot of the recorded resolution is an indication that the "above order" was in written form at the time it was passed or acted on by the board of trustees. The notation reads:
"The above order was unanimously passed by the board of trustees of Naples Independent School District this date.
"Dr. C. D. Hibbitts, President,
"B. J. Floyd, Secretary."
And it is believed that the formal resolution should be construed to be an ordinance, as it is such in substance and intention. Quoting from 43 C.J. § 798, p. 519: "While it has been said that in substance there is no difference between a resolution and an informal motion made and carried, nevertheless a resolution passed with all the formalities required for passing ordinances may operate as an ordinance, regardless of the name by which it is called."
The same essentials which are required of an ordinance, viz. the amount of the tax and the purposes for which it was levied and the percentages to be applied, were distinctly stated. It is immaterial whether the resolution was read three times or less before final passage, as there is no requirement of statute in that respect applicable to ordinances of a school board. Had this been an ordinance of a municipal corporation, as a city or town, then the enacting clause expressly required by article 1012, R.S., would have been necessary. Harvey v. City of Seymour (Tex.Civ.App.) 14 S.W.2d 901. But the statute does not make the words "be it ordained," as prescribed for the ordinance of a city or town, applicable to school boards, nor does it declare the action or ordinance of a school board void unless the particular prescribed form be followed. The words appearing, "We, the board of trustees of the Naples Independent School District, hereby levy," are a form of expression which suits such body and sufficiently shows the source of the power by which the ordinance is passed and the will of the board that the ordinance should exist. The words so used are at least the equivalent of the words "be it ordained"; and therefore the ordinance should be treated as in sufficient form as well as content for an ordinance. The levy being under a valid ordinance it is unnecessary to allude to the validating act passed by the Forty-First Legislature.
The appellant presents the further point that the trustees of the school board were not empowered to act as a board of equalization of assessments and increase the assessments. As held in Miller v. Vance, 107 Tex. 485, 180 S.W. 739, "an independent school district whose taxes are collected by county officials need not have a district board of equalization." It was later provided by the Acts of 1923, now article 2791, R.S. 1925, as follows:
"It shall be within the discretion of the board of trustees of any independent school district to name an assessor of taxes who shall assess the taxable property within the limits of the independent school district within the time and in the manner provided by existing laws, in so far as they are applicable, and when said assessment has been equalized by a board of equalization appointed by the board of trustees for that purpose, shall prepare the tax rolls of said district and shall duly sign and certify same to the county tax collector as provided for in the succeeding article."
In the present case the board of trustees exercised their "discretion" to have the taxes of their district assessed by the assessor specially appointed for the purpose. As a consequence of such action, the duty then devolved upon "the board of trustees" to appoint "a board of equalization" for the school district. The statutory direction that taxes shall be equalized by an official board of equalization became imperative and not discretionary. 37 Cyc. § 2, p. 1074. "The right, if conferred by the law, to have an assessment reviewed," as laid down in 1 Cooley on Taxation (3d Ed.) p. 771, "is one of which an owner should not be denied." Quoting, as applicable, from the case of Miller v. Vance, supra: "Independent school districts which do not have their taxes assessed by the county assessor are clearly obliged to provide a board of equalization before which the citizen is entitled to appear and be heard upon any assessment of his property."
In requiring the board of equalization to be "appointed by the board of trustees," it cannot be supposed that the law contemplated the following action of the board of trustees: "The school board met in regular session, with the following members present (Here follow the names of the seven trustees): and a motion was made that the school board sit as a board of equalization in 1928, and the motion was carried."
The statute plainly evidences the will of the Legislature to grant the power to the board of trustees to select and appoint an official board of equalization of assessments to be composed, not of themselves, but of other qualified and suitable persons. The words of the grant of authority, which alone can justify the action of the board of trustees, cannot be extended by implication or inference to include the authority to choose and appoint themselves to be the board of equalization. In this view of the statute the board of trustees were without any authority, and it was an absolutely void act, as must be legally regarded, to appoint themselves as the board of equalization of assessments. The principle is set out in 46 C.J. § 43, p. 940, Lamely: "It is contrary to the policy of the law for an officer to use his official appointing power to place himself in office, so that, even in the absence of statutory inhibition, all officers who have the appointing power are disqualified for appointment to the offices to which they may appoint."
As determined in the case of Ehlinger v. Clark, 117 Tex. 547, 8 S.W.2d 666, 674: "We think the employment of the county judge as an attorney by the commissioners' court, over which he presided, comes clearly within the rule that the appointing power, in this instance the commissioners' court, cannot appoint as its attorney, * * * to wit, the county judge, as was done in this case."
The appellee insists that the assessments made by the trustees acting as a board of equalization were nevertheless valid because they were the acts of de facto officers. Numerous and often difficult questions have arisen upon exercise of the powers of an office by one who is only de facto an officer. The doctrine of "de facto officer" became a fixed rule of the common law as a matter of policy and necessity. 22 R.C.L. § 207, p. 589. Many cases have defined a "de facto officer," including Franco-Texan Land Co. v. Laigle, 59 Tex. 344, and Cox v. Ry. Co., 68 Tex. 266, 4 S.W. 455. The general proposition is laid down, as stated in the Laigle Case above, that: The fundamental principle is, "a de facto authority cannot arise when there has been absolutely no election or appointment, or, what is equivalent, one that is absolutely null and void, and not merely irregular or informal."
This proposition is approved in Brumby v. Boyd, 28 Tex. Civ. App. 164, 66 S.W. 874; Oates v. State, 50 Tex.Cr.R. 571, 121 S.W. 370, 371. This principle is applied in Odem v. Ind. School Dist. (Tex.Com.App.) 234 S.W. 1090; Jenkins v. Autry (Tex.Civ.App.) 256 S.W. 672. Further, as forming no basis for the application of the rule as to de facto officers, as laid down in 46 C.J. p. 1058: "The general rule applicable to individual officers irregularly appointed applies also to members of a board. But, since it is against public policy for an official board, without express authority, to appoint one of their own body to office, such an appointment is without color of right and void, and the appointee is not a de facto officer."
In the same general principle is the case of Felker v. City of Monroe, 22 Ga. App. 301, 95 S.E. 1023. And, too, in Gaw v. Ashley, 195 Mass. 173, 80 N.E. 790, 122 Am.St.Rep. 229, the rule that the appointment was inconsistent with and contrary to public policy was applied to prevent a board from appointing one of its own members to an office which was subordinate to such board. Therefore in the present case it is believed that no basis exists for the application of the rule as to de facto officers, and the board of trustees sitting as a board of equalization cannot be legally regarded as having the status of officials de facto.
The cases cited by the appellee of Blewett v. Ind. School Dist. (Tex.Com.App.) 240 S.W. 529, and Martin v. Ind. School Dist. (Tex.Civ.App.) 266 S.W. 607, involved acts of an assessor holding his election or appointment under color of right. Those cases present a state of facts quite dissimilar to the facts of the present case; and the same rule followed in the present appeal would not be strictly applicable to the facts of those cases. The trial court, it appears, felt constrained to hold those cases applicable and to uphold the action of the board as de facto officers solely upon the official ruling of department officers. Otherwise the court's ruling would have been as here now determined.
It is believed that the appellant was legally authorized to plead the invalidity of the assessment made by the board of trustees changing the individual assessment made by it to the assessor, and that it cannot be held to have been estopped, by acquiescence or otherwise, from claiming illegality of their acts as a board of equalization. A taxpayer cannot be held to have waived objections to such acts of an equalization board illegally created. The contentions so made are therefore overruled.
It appears from the findings of the trial court that the appellant "tendered the tax collector the amount of the taxes due to the independent school district under its original rendition and refused to pay the difference." In view of this fact, the school district would be legally entitled to recover of the railway company only the tax on the original rendition of $43,920 at the rate of $1 on the $100 valuation. The railway company, in virtue of the tender to the collector of the proper amount of tax, could not be regarded as having caused the delinquency, and therefore would not be liable for the penalty, interest, and costs sued for in this case.
The judgment is accordingly reversed, and the cause remanded, with instructions to enter a judgment in accordance with this opinion. The costs of this appeal will be paid by the appellee.