*1 legislature by ly fairly express the an intent to re- reveals an intention to re- ( n ) therefore, State; serve all minerals to the one-half of serve the uranium and “presumed it was held that the intent” Friedman, Property. under the Crews’ apply. Acker Reed cases would at 586. 691 S.W.2d 354, Bums, Wojtasczyk v. 744 S.W.2d correctly The trial court denied Crews’ 1988, writ), (Tex.App. Corpus Christi — summary incor- judgment motion for by held that the which the reservation rectly granted Plainsman’s motion for sum- grantor of one-fourth of “all minerals mary judgment. the This so because rights mineral above de- the summary judgment tri- evidence before the uranium, land” is also re- scribed included dispute shows that con- al court there is a upon by The reliance is lied Plainsman. fact, cerning two issues of can which misplaced. The con- Wojtasczyk deed by They a trial merits. be resolved on the just one- tained more than a reservation of 1) mining reason- are: whether solution is a (¼) minerals; specifical- fourth of all it also extracting method of uranium from able the ly provided compensation 2) Property; solu- the Crews’ and whether owner for market surface the reasonable consume, mining deplete or de- tion would reasonably necessary of the land value of stroy the surface the land. minerals, taking reflected which re- judgment of the trial court is parties minerals contemplated that the that cause fur- versed and the is remanded for such as uranium would be extracted proceedings. ther methods destructive the surface. The appeal us in does not so Deed before this
provide. 1)
Accepting the that: the Deed facts 1983; 2) prior that
was executed to June quantities of uranium are found
substantial 3) surface; less than 200 feet
at below “near surface” that such substances are In OF HOUSTON and Houston CITY law; 4) open pit mining is a matter of District, Appel dependent School 5) mining; method a reasonable of Cross-Appellees, lants and surface, destroy method will such a v. remain solution questions as to whether mining mining is a reasonable method CITY, Texas, Appellee FIRST surface of the Crews’ uranium Cross-Appellant, mining will Property and whether such v. damage destroy the sur- substantially or HEARD, GOGGAN, BLAIR are questions the land.2 These face of WILLIAMS, & Cross- grant- preclude of fact question which Appellee. summary Plainsman. ing judgment owner, Crews, will case The surface this No. 01-90-00622-CV. uranium is at proven if it is that the prevail Texas, Appeals Court less), (200 surface” feet or the “near (1st Dist.). Houston extraction will any reasonable method of surface, consume, deplete, destroy March 1992. of trial. including such a as of date method Rehearing 1992. April Denied II, 597 at 747. Reed S.W.2d See cases control Acker and the Reed Accordingly, appeal. disposition not affirmative- hold that Deed does
we
mining
mined
solution
undisputed
case that at
land would
in the Moser
It was
Corp.,
Steel
Moser United States
method. See
affirmance
Eastland Court
time of
(Tex.Civ.App.
to Feb
Appeals
June
as contrasted
— Eastland
(Tex.1984).
deed,
1980),
24, 1949,
aff’d,
S.S.B.B., Houston, City of County, Harris Texas, generally Lyric known as the Centre (the Building “Property”), Office to recover years taxes for the tax interest and due thereon, fees. First (hereafter gen- National Bank of Houston Bank,” erally referred to as “First but sometimes referred to as “New First Bank”), against Prop- which held a lien defendant, erty, joined as a and later against City, filed a counterclaim HISD, Heard, Goggan, and the law firm of (“Heard, Goggan”), Blair & Williams attorneys collecting agent for the and HISD. court,
Following judgment a trial to the *5 part in City was rendered for the HISD, part City and in All for First Bank. parties appealed. have We affirm. (1) The issues to be decided are: whether (Vernon the Tex.Tax 33.07 § Ann. Code 1982) penalty properly assessed (2) against Property; whether the as- penalty sessment of such was barred Reform, the Financial Institutions Recov- 1989; (3) ery and Enforcement Act of whether there was an accord and satisfac- City deposited tion when the and HISD and, so, if Property checks for taxes on the was there a breach of the accord and satis- faction; (4) parties are whether the King, Joyce Langenegger, William E. A. fees. entitled Houston, appellant. Elkins, Rosenbaum, A. Vinson & Glen BACKGROUND Duckers, Radnofsky, A. A.
Barbara Sarah City formerly wholly- First Bank was Houston, appellee. subsidiary City Bankcorpo- owned of First Texas, Inc., corporation a Texas ration of BISSETT, Before COHEN and Bank”). (“Old April City First Effective O’CONNOR, JJ. 1988, City reorga- Bank was Old First assistance of the nized with the financial OPINION Corporation Deposit Federal Insurance BISSETT, Justice.1 (“FDIC”), new, entity reorganized and a created, City Bankcorpora- prop- was called First appeal delinquent This is an from a Texas, Inc., corporation a Delaware City of Hous- tion of erty tax collection suit. (“New Bank”). Independent By virtue Houston (“City”) ton Bank, appellee (“HISD”) reorganization, in filed suit Octo- School District Inc., appeal, is now a cross-appellant in this against Properties, Russo ber subsidiary of New First wholly-owned record owner of Block the then Christi, Bissett, assignment. sitting by Corpus at T. retired Jus- Texas 1. The Honorable Gerald tice, Appeals, District Thirteenth Court reorganization Bank, May acting Bank. The resulted in the entity, Collecting creation of another new Bank, Collecting behalf of foreclosed its Bank, liquidation, a national bank which lien on the Property. $1,753 assumed book billion value of non-
performing and other lesser quality assets PLEADINGS subsidiary of Old First Bank’s banks alleged in their and HISD first (before of approximately related reserves original petition,2 peti- amended their trial million). Collecting agreed Bank $735 also (1) tion: taxes in certain indemnify New First Bank for owing stated amounts were due and arising liabilities of its subsidiaries out of against years pre-reorganization Property their for the tax activities. Collect- ing 1985, 1986, accept deposits 1987; Bank does not or en- that on or about gage general banking April activities. Bank remitted to the tax offices of the HISD checks Bank, acting New First on Collect- $607,750.58 $779,- in the amounts of ing behalf, manage- Bank’s conducts asset payment respectively, “toward the ment and collection activities respect taxes, outstanding pen- of all interests and Bank, Collecting assets on the books of Property; alties” on the including Property. Collecting Bank’s amounts due “include that have purpose, as set forth its Articles of Asso- accrued, law, a matter of the amount ciation, carry is to on the business of a (15%) tax, percent of fifteen penalty of all liquidation bank liquidat- and to serve as July year and interest 1 in each unpaid on ing agent. taxes;” (4) 33.07 for 1985 and 1986 § purpose of the FDIC assistance “penalties are not an attorney’s reorganize transaction was to Old First *6 fee, are subject to a reasonableness (1) City by forming Bank a bank hold- new provisions standard the of Texas ing company, City Bank, (2) New First re- law, previ- and as statutory penalty [sic] books, moving loans from troubled its and waived, ously released, may accrued not be (3) providing financial assistance to New statutory or remitted authority;” without City First Bank. Pursuant to the assist- (5) that the funds application repre- of the transaction, group ance an outside investor by in sented the checks “resulted the pay- significant infusion of private capi- made a taxes, penalties ment of all and interest for City tal Bank ap- into New First the with all accounts for for taxes assessed proval the FDIC. 1986;” (6) and that the amount was insuffi- in $970 The FDIC contributed million 1987; pay cient to taxes for the total there- reorganization, notes to the in FDIC and fore, plaintiffs applied remaining “the return, million A received in Series $970 accounts,” prorata thereby amount to all preferred Bank, Collecting stock from resulting deficiency the City a total due to Collecting which is subordinated Bank’s $64,670.09 $80,240.73, and due HISD of obligations City to New indemnity First 31, 1989; (7) City as of that the December preferred A Bank. The stock owned Series and HISD are entitled to reasonable attor- by the FDIC is senior other stock of ney’s prosecution fees of this “for ac- Although Collecting Bank. are there own- year tion for and these attor- Collecting ers classes of Bank of other costs;” ney’s fees as should be taxed and stock, purposes, liquidation these other (8) prior that the 1987 taxes due to only owners receive distributions after $490,- payment by City Bank was First percent repaid 100 has been FDIC 485.60, attorney’s and “reasonable are preferred A of Series stock. million $970 amount, $73,572.75.” of this or 15% part April On as of the FDIC- City Bank, in its second amended reorganization, City Bank assisted answer, original pleading to lien addition its note and interest with transferred denial, general pleaded as affirmative Property Collecting to Bank. de- respect to the January 1990. 2. Filed on (1) transmitting pleaded
fenses: that in the letters by way of affirmative defenses: HISD, the cheeks to the and counsel that First gov- Bank’s claims involved specifically for First Bank set forth functions, ernmental “as to which the Tex- payments applied only were to be legislature expressly preserved has ab- tax, interest, penalties pursuant sovereign immunity, by solute virtue of (Vernon 1982), 33.01 § Tex.Tax Code Ann. § Tex.Civ.PraC. & Rem.Code Ann. applied any penalties, and were not to be (Vernon 1986);” (2) that the funds received costs, pursuant or fees to Tex.Tax Code tendered, conditionally them were not (Vernon 1982), 33.07 or 33.48 §§ Ann. accompanying and the communications that the tax offices of the and HISD checks, law, as a matter of constituted misapplied by applying the funds them to position purpose, a statement of taxes, penalties, all and interest under sec- express right “were not conditions to the 33.48; (2) misappli- tions 33.07 and that this recipient draft;” negotiate represented by cation of the funds (3) that there meeting was not a being checks resulted some of the taxes necessary accomplish minds the contrac- delinquent, left which constituted a breach tual defense of accord and satisfaction. contract; by depositing checks, accepted HISD FACTS tendered, they conditions under which were acceptance undisputed except thereof constituted “an facts are satisfaction;” (4) relating accord and virtue those to claims for fees. satisfaction, taxes, accord and “all receiving proceed After authorization to prior foreclosure, and interest due to 1988 on 28, 1988, April with on issue, excluding penalties the accounts at Bank, acting Collecting behalf 33.48, paid under sections 33.07 and are Bank, remitted checks to the longer case;” full and are no at issue in this payment HISD tax offices of all out- (5) that the breach of the accord and satis- taxes, interest, standing penalties pur- faction and HISD that resulted 33.01(a) respect suant to section properly apply when refused to the Property years prior for all conditional tender of funds has caused $608,- amount remitted to the Bank to incur fees and 422.58, remitted to and the amount HISD *7 $20,000.00; expenses in excess of and $779,071.81. was penalties the asserted for the tax checks, transmitting In the letters 1985, 1986, years preempted and 1987 are City specifically Bank set counsel for First banking City prayed federal laws. First applied payments forth that the were to be City required and to HISD be tax, interest, penalties pursuant only to and reapply proceeds pursu- of the checks 33.01(a) ap- and not to be to section were satisfaction, ant to the accord and and for costs, plied any penalties, pursu- or fees to attorney’s recovery of fees of not less than In ant to sections 33.07 and/or 33.48. addi- $20,000.00. tion, City and attached to the cheeks to City First Bank also filed a counterclaim containing the tax offices were stubs HISD HISD, against City, firm of law following statement: Heard, Goggan. alleged therein virtual- It TAXES/RUSSO COLLATERAL ly the same facts as those set out its taxes, prior to penalties All and interest original and sum- second amended answer excluding pen- 1988 on Block S.S.B.B. prayed The relief for is marized above. 33.07 and alties/costs/fees under Sec. substantially requested the same as that 33.48. answer, original amended ex- the second prayed for fees of
cept that it stipulated that City and HISD $5,000.00. not less than transmittal terms of the understood the letters, on the together the instruction HISD, with City in their answer to and checks, which en- counterclaim, a condition under gen- to be City Bank’s denied expected to made, of the checks was allegations and dorsement erally therein By City By Year 1985 HISD taxes, penalty, of all execute release 3,783.23 0.00 $ $ under section 33.01 for the tax interest 48,798.77 65,975.72 1986, 1987, 1985, years and that First 0.00 0.00 taxing not intend that City Bank did either $52,582.00 $65,975.72 proceeds of the apply unit Heard, Goggan had contracts with the penalties pur- checks to City and HISD for the collection of delin- suant to sections 33.07 and 33.48. provided, quent taxes. These contracts 4, 1988, May Lloyd dated Mr. By letters among provisions, other for a fee of 15 manager tax office for Waguespack, the taxes, percent penalties, of all HISD, informed City counsel for paid. and interest collected to be City that the checks to Bank tendered had in a City applied and HISD been THE JUDGMENT than in First different manner described trial, Upon the conclusion of the bench City Specifically, Bank’s letters. let- both judgment signed was on March applied stated the checks were as fol- ters Findings of fact and conclusions law lows: part, judgment, were filed. The in relevant taxes, applied This amount was all to decreed: penalties interest and un- April 28, On Defendant First 33.48 of the der 33.07 and Tax Code. City payments made to Plaintiff being This resulted three accounts left $608,422,58and to Plain- the amount of delinquent. $779,071.81 tiff HISD in the amount of respect Property. By with virtue 6, 1988, May dated letters satisfaction, of an such remit- accord and Waguespack’s responded May Bank to tances Defendant First constitut- letters, 1988, letters. In those counsel payment ed in full to Plaintiffs stated that April Bank its penal- interest and HISD all base tax applied remittances were not outstanding pursuant ties to Section penalties imposed pursuant to sections Property Tax the Texas Code 33.48, 33.07 and/or informed further (“Code”) respect Property him that First Bank considered the years the tax 1986 and 1987. No application pay- and HISD’s part applicable payments such ments to be an unlawful conversion costs, penalties, applied or will be at- breach of contract. First then Bank torney’s pursuant fees or otherwise formally demanded that the tax office for of the Code. Sections 33.07 or 33.48 reapply and HISD either $4,400.00 Plaintiff is awarded payments previously instructed in the costs, attorney’s fees and oth- penalties, 28, 1988, April part so letters of that no pursuant 33.07 and erwise Sections *8 payment penalties constituted thereof of Code, begin- interest 33.48 of with imposed pursuant to sections and 33.- 33.07 ning from the date of days to accrue 30 48, payments refund the to it. The Judgment. this refused to ei- comply and HISD with $5,600.00 in Plaintiff is awarded HISD ther demand. costs, fees and oth- penalties, attorney’s taxes, of delinquent The total amount pursuant 33.07 and erwise to Sections 28, interest, penalties April due as and begin- Code, interest 33.48 of with 1986, 1988, 1985, years the tax for the date ning days from to accrue 30 1987, were: Judgment. this To To the HISD of Plain- Tax Assessor-Collector $779,071.813 $608,422.583 tiff Tax Assessor-Collector to correct are ordered pursuant to of Plaintiff HISD section 1985, (i) to: tax rolls and 1987 as follows: their were assessed April by City Bank on 1988. 3. The exact amount remitted payments by reallocate the tax made De- ber months the tax has been delin- April quent. fendant First on 1988 to payment constitute in full for all base (c) delinquent A tax accrues interest at penalties pursuant tax and interest and percent a rate one for each month or respect to Section 33.01 of the Code with portion of a month the tax remains Property years for the tax unpaid. para- 1986 and in accordance Penalty Section 33.07. Additional for above; (ii) graph the total show amount Collection Costs. presently owing to Plaintiffs (a) taxing appraisal A unit or district respect Property HISD with may provide, required in the manner 1985,1986 (includ- years the tax and 1987 body, law for official action costs, ing penalties, attorney’s fees and delinquent that taxes that remain pursuant otherwise Sections 33.07 July year 1 of the in which be- Code) $4,400 33.48 of the delinquent come incur an additional $5,600 (with City and for HISD interest penalty collection, defray costs of if beginning to accrue on such amounts the unit or district or another unit that thirty days Judg- from the date of this collects taxes for the unit has contract- ment). attorney pursuant ed with an to Sec- costs, Upon payment penalties, tion 6.30 of this Code. The amount of attorney’s penalty may fees otherwise awarded to not percent exceed 15 taxes, pursuant penalty, Plaintiffs and HISD of the amount of paragraphs (including any 3 and above interest due. may beginning thirty
interest that accrue days Judgment), from the date of this (c) penalty imposed pursuant If a Plaintiffs and HISD shall show all section, taxing may this unit tax, interest, penalties, assessments of recover fees a suit to costs, fees, attorney’s collection fees delinquent subject to the collect taxes against Property for the otherwise penalty. years 1986 and 1987 to have (d) taxing appraisal If a unit or district paid in full and been shall release provides penalty for a under this sec- remove the 1986 and 1987 ad valo- tion, the collector shall deliver a notice Property. rem tax liens from the delinquency penalty and of the against All court costs are assessed property owner at least 30 and not party that incurred them. days July more than before expressly granted by All relief not Recovery of Section 33.48. Costs Judgment is denied. Expenses. (a) In to other costs autho- addition APPLICABLE TAX CODE SECTIONS law, taxing unit is entitled to rized following costs and ex- 33.01, 33.48, recover the 33.07 and Code sections delinquent collect a penses a suit to part, provide: relevant tax: 33.01. Penalties and Interest Section
(a) penalty A tax incurs a ap- reasonable percent the amount of the tax
of six *9 exceeding and not proved by the court it delin- for the first calendar month is of tax- percent of the total amount percent one for each addi- quent plus es, adjudged penalties, interest portion month or of a month tional unit. due the unpaid prior July to of tax remains it delin- year which becomes HISD THE CITY AND THE APPEAL OF However, a tax on quent. present four and HISD penalty of July 1 incurs a total twelve first They in their points error. contend amount of the delin- of percent of the holding the trial court erred point num- that quent regard tax without to the authority penalty” that “it had to those forth in lower terms set said letters and by “pursuant assessed them to 33.07 of the cheeks. They
Code.” further in their third contend To the extent that Defendant/Cross- point holding that the trial court erred in City’s April pay- Plaintiff First writing on the face of the checks penalties, ments are allocated to costs or by pursuant tendered Bank “constitutes a to Sections 33.07 or 33.48 Code, ordering payments such conditional endorsement and that are involun- tary payments and the accounts reallocated.” therefore must be Since points intertwined, they pay- refunded or reallocated to constitute are will be con tax, interest, in full of all ment base together. sidered and discussed pursuant to penalties Section 33.01 of the court, among findings The trial other of Code. fact, found: penal- The trial court did not “lower the Plaintiffs, City of Houston and the ty” by assessed It HISD. District, Independent Houston School simply enforced the conditions which through their Tax both Assessor/Collec- the checks were tendered and cashed. As through attorneys, tors and their under- judgment, payments in the such stated con- stood the terms of the Rosenbaum let- satisfaction,” and, stituted “an accord and 28, 1988, April together ters of with the part payments applicable “no of such checks, instructions on the to be a condi- costs, applied penalties, to or will be to the tion under which endorsement of the pursuant fees or otherwise expected checks was to execute release sections 33.07 or 33.48 of the Code.” taxes, of all penalty and interest under by The reliance and HISD on Property Section of the Texas Tax Williams, Jones v. 121 Tex. (the “Code”) years Code for the tax (1931), misplaced. holding is respect 1986 and 1987 with proper- consider, inapplicable and is Jones does not ty subject that is the of this type penalty authorized section proceeds no amount of the of such 33.07. That section was added to the Code applied penal- checks were to be [sic] 14, 1981, August Leg., Act of 67th ties, costs, attorney’s fees or otherwise C.S., 1st ch. sec. 1981 Tex.Gen. under Sections 33.07 and/or 33.48 of the 117, 168, January Laws effective Code. purpose penalty The stated of section 33.07 defray is to the costs collection. At the Through 28,1988 remittances, April its decision, analogous time of the Jones Defendant/Cross-Plaintiff First did statutory provisions recovery of collec- costs, pay fees, not intend penal- tion costs was not denominated as a under Section 33.07 or Section 33.48 of ty- the Code to the of Houston or to the argue that the doc- HISD Independent Houston School District trine of accord and satisfaction does not this matter. apply to tax collection cases because the court, among The trial other conclusions prevent party doctrine intended to a law, concluded: if acting from a contract exists and then City’s denying Defendant/Cross-Plaintiff First later existence. In such in- its payments April 28, stances, protect party 1988 delivered to who has relied conduct, implied Plaintiff/Cross-Defendants such the courts have contract; however, Independent implication Houston Houston such an School District with the let- does not exist in the tax collection context. Rosenbaum improperly They argue taxpayers “if are ters were allocated Plain- also tiff/Cross-Defendants, attempt ‘slip’ in that endorse- conditioned en- allowed negotiation through governmental tax ment and of the checks con- dorsements local *10 offices, likely an accord and The result is that devious stituted satisfaction. the by avoiding taxpayers terms of the accord and satisfaction are will be rewarded 472
payment
1957,
full
liability.”
(Tex.Civ.App.
of their
No
writ
ref’d
— Houston
authority
support
argu-
n.r.e.).
is cited in
of such
They
argue
ments.
further
that there was
acceptance
of the checks resulted in
no accord and satisfaction because there
acceptance of the conditions associated
par-
was “no mutual assent between the
checks; namely,
pay-
with the
the
apply
ties,”
legend
on the checks and the ment in full satisfaction of all amounts due
say
attached cover letters do not
that the
costs,
except
disputed penalties,
and/or
negotiation of the checks is conditioned on fees under sections 33.07 and/or 33.48.
instruction,
merely
its allocation but is
an
context,
Viewed
accord and satisfac-
ignore.
which the
and HISD chose to
apply.
tion must
and HISD ac-
Finally,
argument
is made that
cepted
containing
cashed the
checks
payment
conditions under which
was ten-
stipulated they
terms that it is
understood.
illegal
“City
dered are
in that
violate
explicitly
payment
These terms
withheld
44-16.”
Ordinance Section
category
liability
from a
that was direct-
ly
dispute.
It is well established in the law that all
The fact that the
contracts,
arising
express
sought
keep
ig-
claims
out of
or HISD
the monies and
implied, may
subject
be the
payments
matter of an nore the conditions under which
satisfaction, provided
accord and
undisput-
such con- were made does not eliminate the
Poe,
illegal.
Ry.
governing
tracts are not
Tex. R.
v.
ed
appli-
&
evidence that a contract
337,
591,
(1938).
131 Tex.
115 S.W.2d
592
cation of the remittances was made.
appeal
A case
to this
present
similar
principle
It is a fundamental
of con
ed in
Constructors v.
Warrior
Small
tract law that when a check is tendered to
Co.,
Business Investment
473 representatives meaning in light understood the of must be viewed most favorable to letters; Morgan the statements on the and Bank. Morgan, checks v. 657 (5) 484, (Tex.App. and deposited and HISD the S.W.2d [1st —Houston 1983, w.o.j.). writ dism’d The applied proceeds checks and of the evi Dist.] fully supports dence the above-noted find checks in a manner different from the ings of fact and conclusions of law of the terms of the checks and letters. trial court. finding by Inherent in the the trial court points The first and third of error are that the and HISD understood that overruled. Bank’s tender of the to checks be application conditioned on the pro- of the contend in and HISD their sec- taxes, only penalties, ceeds to interest and point ond of error that “the trial court finding section 33.01 is a that there holding attorney’s erred fees was mutual to the appli- assent demanded pursuant due to section 33.48 of the Texas Accordingly, cation. the trial court con- penalty pursuant Tax Code and the due to cluded, law, applica- as a matter of section 33.07 of the Texas Tax Code consti- proceeds tion of the of the checks tute an unreasonable and unconscionable part payment and HISD in of costs (1) legal They argue: fee for services.” attorney’s pursuant provi- and fees customary fee to be collected as attor- sions of the sections 33.07 and 33.48 was a ney’s fees under a contract for collection of breach of acceptance contract and the of delinquent percent taxes is 15 of the base the checks constituted an accord and satis- tax, penalty, owing; interest due and faction. this amount can be collected on delinquent taxes for which section 33.07 Although express there was no claimed; (3) penalty is not if the conditions language contracting set forth on First penalty of section 33.07 have not been sat- remittances, Bank’s the facts and cir particular year, taxing isfied for a tax entirety inescapably cumstances their unit is entitled to recover section 33.48 lead to the conclusion that there was an fees; (4) attorney’s portion since a implied implied contract. An contract 1, paid prior July 1987 taxes were that, arises when circumstances disclose payments the extent these were according ordinary dealing course of made for which a section penalty men, understanding the common sought, they separate are entitled to a there was a mutual intent to contract. Ste attorney’s determination of fees on these phens County, v. Mills 113 S.W.2d year 1987; (5) accounts writ). (Tex.Civ.App. —Austin through established the testimony of their Express language is not essential to a expert attorney’s equal witness that promise; may equally convey conduct an taxes, percent penalty, objective Ry. assent. v. Texas & N.O. interest, customary is usual and New, (Tex.Civ.App.— 95 S.W.2d them; (6) should be awarded determin- Here, w.o.j.). Austin writ dism’d ing what constitutes reasonable parties conduct of the reflects that assent. matter, any given fees in the courts have express con difference between often looked to the standard of the usual implied tracts and contracts is the charac customary particular type fee for a proof required to ter and manner of estab claim; (7) only parties standing assent, mutual and whether mutual lish object to the reasonableness of question fact to assent existed is a HISD; fees were the facts, trial determined the finder of present any Bank did not evidence to judge this case. Haws & Garrett Gen. presumption rebut the that section 33.48 Contractors, Bros. Weld Inc. Gorbett attorney’s fees were unreasonable. (Tex.1972). Co., ing reviewing determine and HISD also contend that the record to law, they, a matter of are entitled findings court’s of fact whether the trial evidence, 33.07 additional collection the evidence recover section supported are *12 474
costs,
argue
percent
which
is 15
judgment
of all The
of the trial court was af-
tax, penalty,
unpaid
July
and interest
on
1 firmed
the
appeals.
court of
year
in each
years
for the tax
1985 and
case,
In the instant
the
1986,4 which
statutory
is a
penalty and HISD had contracted with an attorney for
does
attorney’s
not include
They
fees.
fur-
the collection
delinquent
pursuant
taxes
they,
ther contend
jointly,
are also
However,
to section 6.30.
there
nothing
entitled to
percent
recover 15
of all delin-
in the record that shows that either the
taxes,
quent
penalty, and interest for the City or
any
HISD took
official action to
year
tax
19875
attorney’s
as reasonable
adopt
penalty
section 33.07
or that either of
pursuant
section 33.48. The
timely
Inc.,
Properties,
them
notified Russo
and HISD state in their brief:
property,
the owner of the
of the tax delin
the
undisputed
instant
it is
[I]n
quency and the section
penalty
33.07
for
years
(i)
for tax
taxing
1985 and 1986 the
the
years.
1985 and 1986 tax
(a)
unit had
contracted
attorney
with an
Furthermore, the section
pen-
33.01 base
taxes, (b)
to collect its
taken official ac- alties for
delinquent
taxes for the tax
adopt
(c)
tion
Penalty
the Section 33.07
year
28, 1988,
paid April
1987 were
notified the property
timely
owner in a
accepted by
and HISD to the ex-
of the delinquency
basis
and the penalty
clusion of the section
penalty
33.07
and the
(ii)
as to the
the 1985 and 1986 section
attorney’s
fees.
taxes
delinquent
July
were
as of
Contrary to the contentions of the
1, 1987,
July
respectively, and as to
HISD,
City and
sections 33.07 and 33.48 are
HISD the 1986
delinquent
taxes were
as
completely
not
statutory provi
unrelated
July
1990.
sions;
they complement each other and
The court in Salvaggio v. Houston Inde-
equivalence
purpose
there is an
between
pendent
District,
School
In County Appraisal Uvalde District v. lection costs and fees are not the Parker, (Tex.App.— “collection costs” that section 33.07 was n.r.e.), San Antonio ref’d defray, writ intended to since it was not intend legislature delinquent trial the district court held that ed for a tax penalty permitted by payer pay entitled to the section collection costs for the cost Cave, comply collecting Findlay 33.07 because of its failure to costs. (Tex.1981). requirements the notice of section 33.07. S.W.2d $52,282.00 $65,- $73,572.75 Alleged Alleged 4. to be for the to be for both 975.72 for HISD. HISD. We hold that neither the nor HISD document denominated ORDER,” rep PRE-TRIAL penal- is entitled to recover a section 33.07 “JOINT it was parties ty resented to the trial court that “the their suit collection *13 expert testimony by will submit witness penalties 33.01 and inter- taxes and section deposition attorney’s as to fees issues and years. est for the 1985 and 1986 tax therefore, testimony no further shall be There and HISD is evidence required parties at trial.” Counsel both recover, sought to in addition to the delin- signed Depositions the document. quent due and taxes section “expert” concerning witnesses the reason interest, money a sum of of at least attorney’s litigant fees for each ableness of sum, $181,930.56. however, This included the trial court. Neither were furnished ($118,557.72), penalty a section 33.07 which testimony the such party objected to of limited to the tax costs are 1985 1986 ground witnesses on the that the witness years. They do not seek section 33.48 at- expert was not an on the issue of attor torney’s years. They fees for those do ney’s or that the fees witness was attorney’s seek section 33.48 fees for the qualified testify concerning the reason 1987, year seek but do not a section 33.07 amount, any, the if ableness of to be penalty year. for that The issue of attor- awarded. therefore, fees, ney’s is limited to reason- According testimony presented by ableness of such fees for the collection of HISD, Heard, attorney, the their 1987 taxes. Goggan, keep any did not record of the Any permits statute which a recov preparation hours devoted to its for trial of ery attorney’s penal of fees is nature by expert, the case. It was stated their a strictly and is to be enforced. New Am lawyer partner in the firm law of Indus., Casualty sterdam v. Co. Texas Heard, Goggan, generally, filing Inc., 914, (Tex.1967). 414 S.W.2d 915 of tax suits to recover taxes is fairly computerized. automatic and Their recompense sought When is present any expert objective did not evi- provides imposition a statute that for the fees, by performed dence of the work their attor- attorney’s attorney’s the amount of case; ney particular in this he admitted fees to subject be awarded is to the dic any particular that he did not have knowl- legal profession’s tates of the ethical rules edge of the facts this and that the power and the of the trial to limit the court percent “customary” sought by 15 fee amount Carrington award. Hart, 814, attorney’s fees rea- and HISD (Tex.App. 703 S.W.2d 817 —Aus 1986, writ); Stone, sonable in the context of overall collec- tin no Fowler v. 600 351, tion contracts statewide. (Tex.Civ.App. S.W.2d —Houston 1980, writ). [14th Dist.] legal City and services furnished the HISD, investigatory in addition to routine rule, general As a an award work, entry of an and clerical were: pursuant to a statute where filing appearance bankruptcy in the contested, discre award is within the support of First court of statement Ahmad, tion of the trial court. Rocha v. Property City Bank’s motion to release the (Tex.App. Anto 676 S.W.2d —San court; bankruptcy from the w.o.j.); nio writ dism’d Reintsma v. preparation filing petitions three Maintenance, Apartment Greater Austin 28, 1988, pre- prior April the trial court (Tex.Civ.App. —Austin part computerized pared for the most from w.o.j.). writ dism’d The award taxing units. information furnished pursuant attorney’s fees to a statute must expert presented Bank as their particular reasonable under the circum be who, witness, years lawyer some 10 be- stances shown the record. Common trial, Thomas, with First Lloyd’s 678 fore was associated wealth Ins. Co. v. There is evi- (Tex.App. counsel in this case. S.W.2d Worth Bank’s —Fort litigator, n.r.e.). a commercial ref’d dence that he was writ who was familiar with property litiga- The attack general, tion and the facts of this case HISD on expert Bank’s witness specifically, with no interest in the outcome concerning attorney’s fees is an attack on of this case. He testified that a reasonable weight given testimony rather attorney’s fee in this compensation case as than the admissibility; therefore, point attorneys for the for the and HISD of inappropriate error is appellate re $15,000.00 would be and that an fact, view. It is for the trier of in this case $192,000.00 fee of seemed to be unreason- court, judge the trial credibility able, time, because it “is excessive for witnesses, assign and to weight expertise effort and required accomplish given testimony. to their It is incum *14 the work described therein.” He further upon appellate bent court not to substi novel, testified that the case was not com- judgment tute its for that of the trier of plex, time-consuming, require did not un- fact. Hixson v. Pride Texas Distribut skills, Heard, usual Goggan Co., “under- ing 173, 683 (Tex.App.— S.W.2d 179 monetary took no filing risk” in suit to 1985, writ). Fort Worth no delinquent collect the taxes. The City and state HISD that First The City rely and HISD also on the City presented Bank “no evidence as to the presumption under Tex.Civ.Prac. & Rem. attorney’s reasonableness” of the fees (Vernon 1986) 38.003 that § Ann. Code sought. City did, however, First Bank customary usual and attorney’s fees are present evidence of the unreasonableness reasonable. However section 38.003 sought, of the fees as well as evidence of provides presumption this for claims of the the amount that would constitute a reason type described in Tex.Civ.Prac. & Rem.Code Moreover, able fee. City and HISD (Vernon 1986). They have § Ann. had proving the burden of that their attor presented not any evidence that their claim ney’s fees were City reasonable. First merits requirement. See Smith v. Bank did not proving have the burden of Smith, 422, (Tex.App.— 757 S.W.2d 425 they were unreasonable. A claim of “no denied). Dallas writ That section is, therefore, evidence” inappropriate. does not apply to the case at bar. The Meyerland Royal Co. v. Palais Hous presumption conclusive, is not but is rebut- ton, Inc., (Tex.Civ. 557 S.W.2d 535 apply, table. Even if it did it was rebutted 1977, writ). App. [1st Dist.] —Houston analysis under the 12 factor set forth in v. Georgia Highway Express, Johnson City and HISD also state that Inc., (5th Cir.1974). 488 F.2d 717-19 First standing Bank did not have to Here, the issue is not the reasonableness of object attorney’s they sought to fees that customary usual and attorney’s fees with to from collect Bank. We dis Heard, respect Goggan’s to contracts for agree. standing Bank does have taxes, the collection of but challenge to of the at reasonableness issue is the reasonableness of torney’s fees that the and HISD seek sought fees that and HISD to to recover from it. from
collect Bank. point The second of error is overruled. provides only Section 33.48 and HISD their fourth and approved by “reasonable point that “the trial final of error assert exceeding per the court and not 15 granting appellants court erred in not provide It does cent....” right on the liens secured foreclose taxing percent. unit 15 must receive Since agree. property.” do not We provides the section attor reasonable fees, ney’s reasonableness is a fact that At the trial of this neither the taxing presented must units. nor evidence to the be established HISD Corporate v. of foreclosure of the tax Funding, Inc. Hous court the issue trial, ton, (Tex.App. Following the conclusion of the liens. —Texar n.r.e.). findings request any of fact or they kana writ ref’d did not right concerning conclusions of law their to ferred stock and 781 *15 property penalties against assessed 19, 1998, any April At time after it. In addition to the “BACKGROUND” require City FDIC can that New First above, facts stated there are additional repurchase Bank and the Subsidiaries at upon City facts which Bank’s bear enough preferred least Series A stock at appeal. per equal share to 100 million dol- $10.00 9,1987, September On A. Robert Abboud lars. (“Abboud”) consulting entered into a Among things, other the trial court con- agreement with Old First Bank. Un- cluded: agreement, der the terms of the Abboud Reform, The Financial Institutions Re- and his advisers were “to facilitate and covery and Enforcement Act of 1989 implement reorganization Old [of (hereinafter “FIRREA”) applicable is not 19, 1988, April On Abboud Bank].” penalties to bar tax assessed when the and other acquired investors the stock of acting neither FDIC was as a receiver Bank, New First purchased which party nor was a to the suit. assets and assumed the liabilities of Old Bank. signed August FIRREA was into law on 9,1989. Reform, part
As a Financial Institutions Re- reorganization, of the covery, and Act of paid approxi- FDIC New First Enforcement Bank 101-73, (codified mately Pub.L. No. 103 183 purchase 43 million dollars to non- Stat. (1989)). Among at 12 voting preferred shares, U.S.C. 1811 other convertible Series § Congress purposes enacting D in listed in stock New First Bank. The law, specifically it Collecting in was stated that the Act common stock Bank was is- designed: sued to shareholders of Old First subsidiary Bank. The banks of New First (1) put deposit the federal insurance (“Subsidiaries”) City Bank were issued 97 footing; funds on a sound financial nonvoting preferred million shares of class provide public pri- funds from Collecting A stock. directors of Bank expeditiously vate sources to deal with voting 30 B were issued shares of class depository failed institutions. (“Directors’ stock”). preferred stock FIERRA, 101(5), (8), 103 Stat. § pre- Subsidiaries transferred the class A (1989). exchange ferred stock to the in FDIC Section 219 of FIRREA amended section promissory notes in the amount of 970 mil- Act Deposit 15 of the Federal Insurance Notes”). (“FDIC lion dollars The Subsid- (the “FDIA”) to read as follows: loans, loans, iaries transferred interests estate, (b) real stock and other assets to act- Col- OTHER EXEMPTIONS.—When receiver, lecting pre- following provi- A exchange ing Bank for Series as a apply respect sions shall ing company stock that owns real Deposit Corporation. estate, language [Federal would have in- Insurance] been part comprehensive cluded as of the Corporation shall not be lia- pack- any ble age. In the amounts in the nature instant FDIC ac- fines, or including those quired an asset from the Subsidiaries as a any per- arising part reorganization and rehabilita- from failure pay any son to property, person- real City. tion of New First The asset was 970 property, probate al or recording tax preferred million dollars Series A stock. any or recording filing or when City attempted If HISD or the to assess a due. personal property preferred tax on the stock, a defense could be raised 1825(b)(3)(1989) (emphasis U.S.C. add- § FDIC that it ed). cannot be taxed on the value preferred exempt stock because it is 1825(b)(3) The amended applies section personal property from taxes under FIR- capacity both when the FDIC acts in its as REA. bank, a receiver of a failed and when the operates corporate capacity. FDIC its protections Even if the FIRREA regard, In this FIRREA added U.S.C. Collecting extend to First Bank and 1823(d)(3)(A), provides which that “with § Bank, Bank’s debt to the respect acquired liability asset prior adop and HISD were incurred section, pursuant assumed to this the Cor- tion of FIRREA. Laws of the United poration rights, powers, privi- shall all have presumed apply prospectively States are leges, Corporation and authorities of the United States v. retroactively. and not receiver sections 1821 and Bank, Security Indus. 459 U.S. *16 1825(b).” 1823(d)(3)(A)(1989). 12 U.S.C. § (1982). S.Ct. L.Ed.2d 235 party appeal, The is not a FDIC this in Federal De post-FIRREA opinion acted, appointed, nor has it ever been or Jenkins, posit Corp. Insurance 888 F.2d a Collecting receiver First Bank or (11th Cir.1989), deals with whether a Bank. The FDIC this case is a lender may judicially expand court FDIC defens only. legal relationship Collecting Its with case, In es. that the FDIC became the sole Bank is It as a shareholder. has received claims, actions, judgments owner of all preferred Collecting stock from Bank and assumption of an a failed bank after Subsidiaries, including its Bank. purchase agreement. sought It a declara equity Collecting It is not the of owner claims, tory judgment that all shareholders’ Bank, Property. nor is it the owner of the law, except those based on securities were Collecting separately Bank ais chartered thus, general derivative actions and as a entity, private whose directors are citizens assignee any creditor of the bank and voting and are elected shareholders action, priority causes of the FDIC had Collecting Bank. The FDIC holds ar over shareholders’ claims. The FDIC nonvoting shares. gued necessary pur that a element of a receivership of a national bank is a assumption an chase and transaction is ab specific legal by 12 status and is controlled priority against third solute for it suits (1989). These sections U.S.C. §§ parties priority in that such would best aid provide by the office of for a determination replenishing permanent the FDIC Currency Comptroller fund. The court held that al insurance appointment of a receiver the failed though “the FDIC should take all feasible bank, However, may which be the FDIC. recovery to maximize measures that was not done in the case at bar. fund”, “approve it could not court] [the judicial expansion express powers comprehen- a FIRREA was enacted as rights granted to the FDIC Con package may sive of reforms. It be as- Id. Because the Federal gress.” Congress that had intended immuni- at sumed no indica Deposit Insurance Act contained ty liability from for taxes extend intention to create an absolute in which the FDIC owns nonvot- tion of an situations FDIC, priority chasing purchase only rule in favor of the bank need those highest banking assets which are of the reversed the district Eleventh Circuit Court quality. finding policy court’s was based
consideration.
purchase
of New First
Bank
transaction,
“overnight”
hardly
an
argues
Bank further
eight
elapsed
since over
months
from
prohibits an as
that federal common law
signing
consulting agreement
Ab-
of a
It
penalty.
sessment of a section 33.07
closing
In that
of the sale.
boud
Collecting
asserts that
Bank is a successor
time, careful evaluation of the risks could
a
FDIC,
in interest to the
that the FDIC has
be made.
operations of
continuing
interest in the
Bank,
that, therefore,
Collecting
correctly
The trial court
concluded that
Col
applicable
penal-
lecting Bank and it inherit the defenses FIRREA is not
bar
not a receiver of
support
ties. The FDIC was
available to the FDIC.
receiver,
bank,
assertion,
acting as a
was not
dealing
was not
it relies on several cases
owner, legal
equitable
proper-
D’Oench,
with the doctrine established
to the suit. First
ty,
party
and was not a
FDIC,
447, 62
Duhme & Co. v.
315 U.S.
point
first
of error is over-
City Bank’s
(1942).6
the successor in to the ultimate interest Among things, other the trial court con- holder of the stock. In the instant cluded that fees are not recover- Collecting Bank is the successor in interest against person acting attorney as an able Bank virtue of the transfer party party for the where the breached a by it of its interest in the Russo Loan. contract, although a breach accord progeny inap Duhme and its are D’Oench had occurred as a matter and satisfaction *17 plicable to this case. City of law for which First Bank was enti- $40,000.00 fee, Heard, in tled to Further, holdings the in the D’Oench Goggan not for such fees. was liable underly- Duhme line of cases have as their ing policy protection the consideration undisputed that First Bank It is the FDIC and its successors interest $40,000.00in expended in excess of attor- dangers speedy from the inherent in the ney’s force the and HISD to fees to purchase transfer of assets under most comply with the terms of the accord and assumption agreements. stated in As undisputed It is also that satisfaction. Hutcheson, F.2d 865 Gunter v. 674 Heard, Goggan and United Governmental (11th Cir.1982): America, Inc. and United Gov- Services Services, Inc., com- purchase assumption must be ernmental its affiliated
[A] great speed, usually pany, collected taxes for the consummated with overnight preserve going City and HISD under a valid contract be- order to Heard, taxing Goggan, units of the failed bank and concern value tween banking accept but the decision to the checks ten- interruption avoid an services. pro- by apply Bank and the time constraints often dered First Because Properties, to the Russo purchasing fully proceeds bank from evalu- thereof hibit a risks, in a manner property make a Inc. tax accounts ating its as well as to instructed, thereby that purchase assumption an attractive different from satisfaction, deal, was purchase assump- breaching the accord and business solely by and HISD. agreement provides pur- made tion 1823(e) (1989). codified at 12 U.S.C. § 6. Now
480 payable
checks were
ignore
the order of the
concerning
the instructions
taxing
Heard,
units and
to the
application
order of
proceeds
thereof. The
Goggan.
given
advice
the tax officials
gov
of those
agencies
Heard,
ernmental
by
Goggan,
activity by
Tax
city
collections
or
attorneys
collecting
their
agents,
governmental
a school district is a
function
cases,
Baker,
not unlawful. The
Black v.
and not a proprietary function. Black v.
706;
111 S.W.2d at
Garland v.
Baker,
454, 458,
130 Tex.
111 S.W.2d
White,
12 (Tex.Civ.App.
(1938).
—East
708
n.r.e.);
land
writ ref’d
Archer v.
long
It has
been the
established rule
Cisco, 211 S.W.2d
(Tex.Civ.App.—
agent
Texas that where an
on
acts
behalf
1948, writ),
Eastland
by
cited
here,
principal,
of a disclosed
as in the case
Heard,
Bank
proposition
Gog-
for the
scope
and within the
of the authority con-
gan
liability
is not immune from
for the
him,
ferred on
it will not ordinarily be
consequences of its actions because it is an
personally
party
liable
the other
contractor,
independent
bearing
have no
contract, in
agreement
the absence of an
appeal.
Black,
mayor
contrary
or other circumstances show-
Hereford,
city
authority
without formal
has,
ing
expressly
impli-
that he
either
council,
city
took action to collect
edly,
liability.
assumed such
3 TEX.JuR.3d
taxes;
personally
he was held to be
liable
(1980).
Agency
legitimate
“In a
§
for such action. In
both Archer and
transaction,
agent
ordinarily
an
is
liable
Garland, policemen, who
un
committed
his principal.”
Sinclair Houston
acts,
lawful
personally
were held to be
Hendricks,
Federal Credit Union v.
resulting damages.
liable for the
Because
(Tex.Civ.App.
S.W.2d
—Galveston
distinguish
facts
the cited cases are
n.r.e.).
writ ref’d
The above rule is
able from those in the case before this
(1)
subject
following exceptions:
Court, they
authority
holding
are not
name;
agent
where
contracts in his own
Heard, Goggan
liable for
fees.
undisclosed; (3)
principal
where the
is
agent
where the
is authorized to act as the
argues
Bank further
property;
owner of the
where
governmental
that a
function
becomes
agent
subject
has an interest in the
matter
proprietary
performed
function if
Agency
of the contract.
3 TEX.JuR.2d
party.
may
contract
another
That
(1980).
exceptions
None of the
§
cases,
true in some
is not in this case.
but
applicable to this case.
function,
governmental
Tax collection is a
and the mere fact that the tax collection
states, “Heard,
Goggan
Bank
assigned
private
function has been
to a
law
accept
made the decision to
the checks ten-
firm
change
does not
the nature of the
City.”
agree.
dered
We do not
*18
governmental
proprietary.
function from
by personnel
The decision was made
of the
Heard,
taxing
Goggan,
units’ tax offices.
City
In the case of
Round Rock v.
advising
accept
taxing
the
units to
the Smith,
(Tex.1985), relied
was
judicially
if
notice
I believe that even we
the
and HISD.
on behalf of
ordinance,
the
neither the
nor HISD is
The ordinance does
judgment.
entitled to
33.41,
governmental
section
the
Under
Thus,
apply to HISD.
whatever the
not
entity must utilize the courts in order to
effect, HISD cannot benefit
ordinance’s
rights
unpaid
its
to collect
delin-
enforce
City,
from it. As for the
the ordinance
governmental
A
enti-
quent tax accounts.
protect
it
the record
should not
because
by and
ty
appear
can
in the courts
option
had an
other than
shows the
attorney.
It
through an
Tex.R.Civ.P. 7.
following
ordinance. It could have re-
the
attorney
is a
does not matter whether
turned
check.
unit,
governmental
payroll employee of the
APPLY
ORDINANCE 44-16 DOES NOT
agents
private attorney. Both are
or a
TO HISD
governmental unit.
representing the
Since
purpose
the intended
of section
44-16,
Houston Ordinance
set out in the
taxing unit
immunity
to insure
was
dissenting opinion, applies only to the tax
performing
governmental
func-
while
City.”
“of the
The
assessor-collector
revenue,
collecting
imposing person-
tion of
presumably
of Houston
would have
liability upon
agent
performing
al
its
while
governing
an ordinance
power to enact
governmental
this
con-
function would be
practices
separate
tax collection
of a
trary
public policy.
government entity,
any
such HISD.
event,
has not done so in ordinance
correctly
The trial court
concluded that
44-16.
fees incurred
the First
44-16
NOT PRO-
ORDINANCE
SHOULD
Bank and HISD are not
recoverable
THE CITY
TECT
Heard,
against
Goggan,
attorneys
delinquent collecting agent
taxing
apply
it
contends
could not
point
units. First
Bank’s second
City’s
as directed in First
transmittal
funds
error is overruled.
manner,
except
or in
other
that
letter
provided by
ordinance.
If the
judgment of the
af-
trial court is
accept
the conditions that accom-
could
firmed.
tender,
panied the
it should have returned
checks,
prior practice.
as was its
COHEN, J., concurs.
they
stipulated
and HISD
that
O’CONNOR, J., dissents.
understood the instructions on the checks
that,
Despite
letters.
and transmittal
COHEN, Justice, concurring.
There
kept
money.
was evidence
upon
like this cause one to reflect
Cases
City’s
opposite
normal
why
pro-
have courts. Courts exist to
we
practice.
testified about the
Gordon Welch
precious
people
tect
from abuse. Our most
upon receiving conditional
City’s practices
rights
principle
rest on
constitutional
payments.
this dis-
tenders of tax
When
potential
greatest
abuser is the
arose,
employed
legal
as a
pute
Welch was
through
government. Whether
accord
firm
City’s
assistant at First
law
and he
doctrine, courts
satisfaction or some other
participated in this transaction. Before
*19
open
should be
to cure abuses like the one
that,
supervisor
employed
he
as a
interest,
public
in
and that
this case.
Heard, Goggan,
research for
Blair &
govern-
if
taxpayers,
of all
will be served
Williams,
represented the
the law firm that
accordingly.
and act
ments know that
and that
City and
in this transaction
HISD
that,
dissenting opinion,
In her
Justice O’Con-
Before
Welch
received the checks.
judicial
legal
should take
assistant for the
nor concludes that we
worked as a
experience,
tes-
44-16.
From his
Welch
notice of Houston
Ordinance
Houston.
taxpayer
partial
made a
Thus,
judgment for the
that
if a
she
render
tified
would
requested
specific
a
allocation
payment
no
they had
City and for HISD because
make,
O’CONNOR, Justice,
City normally
the
could not
the
dissenting.
taxpayer’s
would return the
He
check.
disagree
I
majority’s
with the
resolution
knew of several
instances
such
where
point
point
of error
In
three.
of error
returned,
checks were
and he knew of no
three,
City argues
writing
the
on
instances where such checks were not re-
the
did not
face
checks
constitute a
testimony,
turned. Based on Welch’s
the
endorsement,
conditional
and the trial court
trial court could
have concluded that
should not have ordered that the amounts
City should have returned the checks. This
agree.
reallocated.
I
majority
support
finding
would
of accord and
point
overruled that
of error on two
satisfaction.
grounds: (1)
City’s
we cannot consider the
UNCONSTITUTIONALITY OF ORDI- ordinance, which mandates how the tax
NANCE 44-16 AS APPLIED
apply partial payment,
assessor must
a
be-
contends
ordinance is un-
trial;
cause it was not introduced at
because,
applied by
constitutional
City accepted
when
the checks with the
City, it violates article
section 13 of the
endorsement,
conditional
the doctrine of ac-
Constitution,
open
provi-
Texas
courts
required
cord and satisfaction
face,
sion. On its
the ordinance does not
apply the funds as directed.
City’s right
affect First
to redress. How-
First,
disagree
I
majority’s
with the
re-
ever,
applying
contends that
fusal to consider the effect of
Ordi-
payments as stated in the ordinance would
ap-
nance
44-16
City’s
Section
as to the
challenge
penalty
moot
statutes
peal.
majority says
we cannot consid-
paid
because the
would then be
in
trial,
er it because it was not introduced at
full and not refundable.
pre-date
adop-
and cites two cases that
City says
options:
it had three
tion of
Texas Rules of Civil Evidence.
condition,
Pay
1.
as it did.
Rule 204 states
Pay nothing
2.
and risk foreclosure.
A
upon
may,
court
its own motion
full,
Pay
though
even
courts will
shall,
upon
party
motion of
take
“voluntary”
not order
refunds of
judicial notice of the ordinances of munic-
payments.
Salvaggio
See
v. Hous
ipalities
Any
and counties in Texas ...
Dist,
Indep.
ton
School
requesting
judicial
party
notice be
(Tex.App.
[14th
—Houston
taken of such matter shall furnish the
dism’d, w.o.j.)
writ
Dist.]
court sufficient
it
information
enable
City argues
options
2 and 3 are
properly
comply
request
with the
all,
options
get
at
and if it cannot
relief
notice,
give
parties
any,
shall
if
all
such
suit,
as it did
this
then the courts are
may
necessary,
as the court
deem
This
closed to its claim.
is no frivolous
parties fairly
prepare
all
enable
contention.
request.
meet
Courts should avoid constitutional deci-
VI,
Sungrowth
State v.
California
if
sions
a case can be decided on nonconsti-
Ltd.,
(Tex.App.—
178 n. 2
S.W.2d
Moreover,
grounds.
courts should
tutional
n.r.e.),
Austin
writ ref’d
the court
unconstitutional, if
not hold an ordinance
it
said:
can be construed
a constitutional man-
By affirming
judgment,
up-
ner.
this
we
Although
provision
of the Austin
City’s
to the courts.
hold First
access
We
Zoning Ordinance was not
introduced
preserve
public
judicial
interest
also
trial,
may
into evidence at
we
neverthe-
government
deserving
conduct
review
judicial
provisions.
less take
notice of its
Consequently,
scrutiny.
we need not
close
(Supp.1986)
Under Tex.R.Evid.Ann. 204
issue.
on the constitutional
rule
(eff.
1, 1984),
may
Nov.
a trial court
now
judicial
municipal
take
ordi-'
notice
reasons, in
these
addition to those
For
appellate
may
judi-
An
nance.
court
take
opinion, I
Bissett’s
concur.
stated
Justice
*20
may
proper-
cial notice of facts which
be
O’CONNOR, J., dissenting.
ly
thought
by
noticed
a trial court even
ignore
request-
and HISD chose to
formally
not
the trial court was
checks and in the letter
formally an-
instructions on the
and did not
ed to do so
application of the funds.
regarding
that it had done so.
nounce
refusing
to con-
majority is in error
The
played no role in
Accord and satisfaction
ordinance.
sider the
rests
dispute.
Accord and satisfaction
contract,
express
implied,
or
upon a new
of Ordinances
44-16 of
Code
Section
agree
discharge
parties
which
Houston,
it will
states that
for the
obligation by
payment
lesser
ten-
existing
a
partial payment to the oldest delin-
apply a
accepted.
Henry
v.
C.
dered and
Jenkins
amount
quent year first in full. When the
(Tex.1970);
Co.,
Beck
449 S.W.2d
pay
a delin-
tendered is not sufficient
University
Federal Sav.
Christian
full,
year in
quent tax
the remainder
Ass’n,
(Tex.App.—
tax,
outstanding
penalty, and
applied to
writ).
no
Houston [1st Dist.]
44-16
pro
interest on a
rata basis. Section
agreement that the
must show an
evidence
City ordinance states:
of the
payment fully satisfied the entire
debtor’s
city is
The tax assessor-collector of the
Christian,
holding that the doctrine of accord apply the required the
satisfaction majority states that directed. The
funds as City’s through lawyers, concurring govern- was well aware opinion its states City. First in this in this case abused First was an abuse ment ordinance. If there largest ably represented law argument, one of the it is more and I do not make and, well-known, has it is City, firms in this by the likely was received that the abuse represented of Houston in much often litigation. City. imposed City, point of this is that First milliondollars notes foreclose, presented Notes”). and this (“Subsidiary Collecting issue was not Bank is in their motion for trial. new As a result acquired to sell all of the assets it from the objection failed to raise an at the trial Subsidiaries. court level and this issue is waived for Collecting Bank is a national bank. The 52(a); Tex.R.App.P. purposes appeal. directors are elected the shareholders Products, Fariss, Inc. PGP Gas voting who own stock. The board of di- (Tex.1981). S.W.2d The fourth authority ap- rectors has the exclusive point of error is overruled. Bank, point Collecting the officers of duties, salaries, define their to set their THE APPEAL OF FIRST CITY BANK addition, to dismiss them. board Bank in its contends authority “manage directors has the point first of error that the trial court erred administer the business and affairs of the holding the Financial Institutions paid Collecting Association.” The cash Reform, Recovery and Enforcement Act of Bank for the sale its assets will be used (“FIRREA”) applicable is not to bar pay expenses.