123 S.W.2d 784 | Tex. App. | 1938
Defendant Insurance Company, in the trial court, filed an answer to the above petition and, by first amended answer, of date May 1, 1937, plead, after general denial, that the District's valuation of $2,095,661.42, as of January 1, 1934, was correct, except that the Board of Equalization had arbitrarily and illegally increased the total of the Company's agency balances and premium notes (as rendered by it) from $354,811.54 to $398,876.66, or an excess of $44,060.12; further alleged illegal increases were: Interest due and accrued on mortgage loans, $78,146.51; interest accrued on collateral loans, $340.85; and interest accrued on bonds of the United States and Federal Agencies, $29,377.42; or a total excess of $148,776.82; whereby defendant's gross valuations subject to taxation should be only $1,946,884.61, from which the Company was entitled by law to make the following deductions: (1) For unpaid losses, $147,201.06; (2) for unpaid taxes, $65,000; (3) due other companies for reinsurance, $63,367.26; (4) reserve for unearned premiums, $1,603,668.04.
The Insurance Company further plead that, when the aforesaid illegal and excessive property valuations of $148,776.82 were eliminated from the total valuations of the Equalization Board, and the four amounts just enumerated taken off (as legal deductions), its remaining personal property subject to a school tax was only $67,648.25; pleading further that:
"* * * in order to do equity and to avoid becoming delinquent and in order to avoid this suit and in order to keep from having penalties and interest assessed against it, offered to pay to such School District taxes on $216,425 gross, or because of the fixed rule and custom of requiring taxpayers to pay taxes on only 60% of property rendered and assessed, the sum of $129,885.00, which would produce a tax of $1220.64, did on the 28th of January, 1935, tender to C. S. Guthrie, tax-collector of Highland Park Independent School District such sum of $1220.64 in currency of the United States of America, and asked him to accept the same and issue a receipt therefor in full of the personal property taxes of Republic Insurance Company for the year 1934; that the said C. S. Guthrie refused to accept such amount of $1220.64 and stated orally and in writing that he would accept no sum less than $11,819.53; that by virtue of its tender of $1220.64, Republic Insurance Company offered to pay taxes on more personal property than was subject to tax in such School District for the year 1934; that Republic Insurance Company has continued such tender and offer to pay such School District in such amount, and although Republic Insurance Company does not admit, but specifically denies that Highland Park Independent School District is entitled to collect such amount, Republic Insurance Company nevertheless here and now tender absolutely, unreservedly and unequivocally into the registry of this Court the sum of $1220.64, and has deposited with the District Clerk of Dallas County, Texas, such sum of $1220.64 in carrying out such tender, and by virtue of such absolute tender, Republic Insurance Company has discharged all of its obligation to plaintiff on account of taxes due plaintiff for the year 1934, and defendant asks the Court upon final hearing to decree to plaintiff such sum of $1220.64, and order plaintiff and its tax-collector to issue a receipt therefor in full of all of defendant's taxes to such School District for the year 1934.
"Wherefore, premises considered, defendant prays that upon final hearing this Court enter judgment fixing the amount of taxable personal property of Republic Insurance Company for the year 1934 in an amount not to exceed the sum of *787 $216.425.00 gross, and $129,855 net, and the taxes collectible thereon not to exceed the sum of $1220.64, and that the Court decree such amount of $1220.64 herein tendered and heretofore deposited with the Clerk of this Court to the plaintiff, and that the Court in its order command the plaintiff School District and the tax-collector to issue a receipt to defendant for its taxes for the year 1934 * * *."
On September 9, 1937, plaintiff School District, in first amended petition filed, admitted that the item of $1,603,668.04, being reserves for unearned premiums, was tax free, by reason of a Supreme Court decision, leaving a balance of taxable property of $491,993.39; which, with the customary 60% deduction, would produce $2,774.84, for which it sued with penalties and interest. By way of supplemental petition, plaintiff District urged many exceptions to the pleadings of defendant company, on account of which, apparently, a second amended answer was filed of date September 14, 1937, when the cause came on for a jury trial with announcement of ready by both parties. The defenses of defendant, as renewed in its pleadings above mentioned, were the same substantially as it had first pleaded; likewise, as to allegations of unconditional tender of $1220.64, based upon valuations in "an amount not to exceed $216,425.00". A special exception of the plaintiff District was urged and sustained by the Court to defendant's affirmative defense of illegal and excessive over-valuations, in the amount of $151,891.32 (being the same item as $148,776.92 in its former pleading), on the ground of inconsistency with the terms of the tender, wherein a larger amount of valuations ($216,425) was admitted to be available for assessment under the tender, as the minimum valuation at issue; leaving as the sole amounts in controversy the taxability of the reserves for taxes ($65,000); reserve for reinsurance ($63,367.26); and reserve for unpaid losses ($147,201.06). Many other exceptions were urged by both parties to the pleadings of each, and defendant company was given leave to amend, plaintiff filing a trial amendment, admitting that interest due and accrued on United States bonds, Farm Loan Joint-Stock bonds were not taxable, and that its suit was excessive to the extent of $173.16, of the sums theretofore claimed. Then was filed a third amended answer on September 16, 1937, in which were allegations similar to those of earlier pleadings as to the non-taxability of the reserves numbered 1, 2 and 3 above; also renewing and repleading all of the defenses of the alleged void, unlawful and arbitrary action of the Board of Equalization, in excessively valuing certain credits in the amount of $148,776.82; and, after reciting the facts of the previous tender, made new allegations as to the cash payment already in court, that same was again tendered "upon the sole condition that said sum was in full payment and satisfaction of its liability for taxes on its taxable personal property for the year 1934"; and, referring to the amount of $216,425, alleged that: "* * * on which valuation it was willing to pay rather than to be annoyed and harassed by litigation, and which it has at all times sought to pay, and is now willing and able to pay, and hereby retenders said sum of $1220.64 now in the registry of this Court as full payment of said tax liability to Highland Park Independent School District on all its (personal property) for the year 1934". Defendant's last pleading, just quoted from, concluded with the prayer: "Wherefore, premises considered, defendant prays that upon final hearing this Court entered judgment fixing the value of all the taxable property of the Republic Insurance Company in Highland Park Independent School District for the year 1934 in an amount not to exceed $216,425.00 gross and $129,855.00 net, and the amount of taxes collectible thereon not to exceed the sum of $1220.64, and that the Court decree that such amount of $1220.64, heretofore and herein tendered and heretofore deposited with the clerk of this Court, belongs to the plaintiff, and that the Court in its order require the plaintiff School District and its Tax Collector to issue to the Republic Insurance Company its tax receipt in full for all its taxes on its personal property for the year 1934 * * *."
Plaintiff District renewed its exceptions to that part of defendant's pleadings last filed, wherein the Equalization Board was charged with fraudulently, arbitrarily and without lawful warrant, over-valuing certain items to the amount of $148,776.82, on the same grounds as urged to similar matters in defendant's second amended answer; for the reason, among others, that such allegations were wholly inconsistent with defendant's plea of unconditional tender, as theretofore plead, "to which plaintiff had never addressed an exception and which the court had never disturbed in any *788 way, and on which no permission has been given or could under any rule of law be given to file an amendment". This exception being again sustained by the court, the case proceeded to a jury trial, the sole issues being the taxability, or rather, the right of the Insurance Company to deduct from its taxable values the three items of reserve — one, two and three — already enumerated, in the total amount of $275,568.32. At the close of the evidence, both plaintiff and defendant filed motions for an instructed verdict, that of plaintiff district was granted, and the jury instructed to return a verdict for plaintiff in the sum of $3,314.83, being taxes, penalties and interest on the taxable property in suit (including the three reserves) for the year 1934, with foreclosure of lien as prayed. The tender of $1220.64 was credited on the amount as fixed in the instructed verdict, and judgment given against the Insurance Company for the balance; to which due objections and exceptions were taken, with the result of this appeal.
Appellant's 49 assignments of error and 40 propositions in support, complaining of many errors of the trial court, are strongly presented in 362 pages of brief (main and reply); while appellee's main responsive thesis embraces 187 pages; supplemented by two replies. The transcript covers 287 pages; the statement of facts a mere 217 pages; additional thereto, however, are properly brought up many original instruments in evidence at the trial. In contrast, the difference in sums finally sued for and the amount of appellant's tender was around $1500. While we are fully appreciative of the services of the parties at interest, in their exhaustive efforts in aid of a correct solution of the many law points here raised, yet, we are mindful of the language of the illustrious Chief Justice Lamm, of Missouri, in a celebrated case, when he remarked that, "However, if the amount at stake is small, the value of the case for doctrine's sake is great".
The contentions of appellant under its various propositions, in substance are: (la) The terms of the tender in the third amended answer (on which the case was tried) being conditional and not accepted, the Insurance Company was not precluded from defending against plaintiff's entire cause of action, in an effort to show that it did not owe the amount sued for, though it may owe the sum tendered, or less; (b) in no event should penalties and interest have been assessed on the sum tendered; (2) the court erred in sustaining exceptions to its defenses of excessive and arbitrary valuations found in the Equalization Board's final order, on the ground of in consistency in the language of its third amended original answer of conditional tender, and that contained in the second amended original answer of unconditional tender; the claim being that such former pleadings had been superseded and were no longer in the case; (3) the School District failed to make out a prima facie case of tax liability in any amount, because based on inadmissible and insufficient documentary and oral evidence; (4a) failure of the Board of Equalization and the trial court to hear evidence on the valuation of credits under Art. 7163, R.S., wherein "No person shall be required to list or render a greater portion of his credits than he believes will be received or can be collected * * *"; (b) or to permit a deduction from the debts due to it of its debts due to others, under Art. 7147; (5) when the Equalization Board, in its final order on defendant's valuations, had attempted to tax the unearned premium reserve of $1,603,668.04 and $24,336.78 in United States Government and other exempt bonds, in disregard of Art. 5057a, R.S., Vernon's Ann.Civ.St. Art. 5057a, and the Federal statutes, even though such items and values were later eliminated from the pleadings of the School District, yet the court should have heard evidence thereon to show the alleged arbitrary, unreasonable and unwarranted attitude and action of the Equalization Board on all matters and items in dispute; (6) the District Tax Assessor's assessment and the Board's order so insufficiently and illegally described the property assessed and equalized as to invalidate the judgment of the trial court thereon; and (7) urging the correctness, prima facie, of the company's tax rendition as made to the District's Tax Assessor, and as supported by evidence at the hearing before the Equalization Board; and there being no evidence of a greater value, any action or judgment increasing valuations was void, and the tax-payer's valuations were the only lawful figures upon which taxes could be collected.
The general contentions of the School District are that, at the time of the unconditional and absolute tender by defendant of $1220.64, on admitted gross valuations of $216,425, that plaintiff was only suing for taxes on general valuations of *789 $491,993.39, composed of the three reserves already referred to, in the amount of $275,568.32 (which defendant had been at all times asserting its right to deduct), and $216,425.06 on other taxable property; that defendant made absolute tender of $1220.64 taxes due on the amount of valuations just above named, and was thereby estopped from disputing or litigating the valuations embraced in such amount, or the gross valuations of the Equalization Board of $2,095,661.42, on which the entire tender was obviously based. Also, that the three items of reserve, the taxability of which were wholly in dispute, were not exempt under Art. 5057a, R.S.; the defendant company being precluded by mere bookkeeping entries from claiming money and property tax-free on the taxable date, under allegations that it had reserved and expected to use such funds at some future time to pay taxes, losses and reinsurance.
Though it may be a tiresome repetition of figures, as to all of which we have already been compelled to make reference many times from this voluminous record, but which we desire to make clear in support of the conclusion reached, we will say that, as heretofore shown, the taxes claimed by plaintiff District to be due were based upon the Equalization Board's gross valuation of $2,095,661.42. It is further clear from a study of all pleadings above referred to, that the items composing these total valuations, after being described in insurance terms, were:
(Company's) (1) Reserve for unpaid losses ............................. $147,201.06 (2) Reserve for unpaid taxes .............................. 65,000.00 (3) Due other companies for reinsurance ................... 63,367.26 Reserve for unearned premiums ......................... 1,603,668.04 Additional property values making up gross total ...... 216,425.06
Equalization Board's total valuations and basis of suit ................................................. $2,095,661.42
It is necessary to determine here whether defendant's tender when first made, was with reference to any particular portion of its property; and we think it undoubtedly pertained to and embraced the valuations in suit, above the taxability of the three familiar reserves, which were at all times at issue; and when defendant contends the tender was not on any specific kinds or items of property, it refers to the last or conditional tender, which may be considered an offer of compromise, refused by plaintiff. The testimony of Mr. McCrary, defendant's Assistant Secretary and Officer Manager, we believe, is conclusive as to what taxes the deposit was intended to cover at the time of the profert in curia. When asked, "Do you intend to pay any taxes on the three reserve items, that we have been talking about here, with this tender to Mr. Guthrie and the tender into court?", he answered, "I don't know how else to answer it. We tendered the $1220.64 in payment of all taxes, after deducting thesethree items" (italics ours). The nature of the original tender (being unconditional) admitted the correctness of the valuations that produced the amount so deposited; and by such payment defendant waived any alleged irregularities in the assessment of the District Collector or the action of the Equalization Board, in increasing the valuations on the property which it thus conceded to be taxable. "By tendering part of the taxes claimed the taxpayer admits the justice of the tax to the extent of the amount tendered, and is estopped from disputing his liability to that extent." 40 Tex.Jur., Taxation, page 178 sec. 128; City of Rising Star v. Dill, Tex. Civ. App.
It is only where one is seeking affirmative relief in contrast to defending against a claim (as is defendant's position in the case at bar) that title to the deposit remains in the tenderer subject to the outcome of the suit. 26 R.C.L., Tender, sec. 42; 40 Tex.Jur., Tender, p. 885, sec. 18; Texarkana St. F. Ry. Co. v. Brinkman Tex. Civ. App.
Appellant contends, under propositions 7 and 8, that it is entitled to plead an invalid assessment, and void over-valuations, in the face of absolute tender, under the rule of inconsistent defenses; citing Arts. 2001-2006, R.S., and Houston, E. W. T. Ry. Co. v. DeWalt,
Likewise, the court did not err in looking to the allegations of the superseded second amended original answer, so as to determine the true character of defendant's initial tender, though such prior pleadings were not otherwise in evidence; this being the gist of appellant's ninth proposition. This feature of its defense had not undergone any change in status (no exception having been addressed thereto, or consent given to amend it); was still absolute and unconditional; and was properly considered by the trial court in making the ruling complained of. In passing upon demurrers, the court can take judicial knowledge of previous orders, judgments and decrees made and had in the progress of the case, and upon such knowledge sustain exceptions. Carr v. Cleveland et al., Tex. Civ. App.
Assuming, however, the absence of any such tender in defendant's pleading, were the actions of the tax officials (the assessment and judgment of the Equalization Board) vulnerable to the assault made thereon by appellant? This, we must determine from the record as a matter of law, in view of the trial court's peremptory action. Before February 1, 1934 the Insurance Company made out and delivered to the Assessor of plaintiff District a sworn inventory of its properties, the latter official refusing to accept the same, claiming it was inaccurate and incomplete; and served notice of his intention to make up a list of property for assessment purposes that would include omitted or unrendered items; attach proper valuations to other items, and restore still other values that such assessor contended had been unlawfully deducted. This the assessor proceeded to do, on November 15, 1934, delivering his inventory and assessment to the defendant's secretary the following day; the certificate thereto indicating the defendant's dissatisfaction with it, though Mr. Crawford, the secretary, declined to make oath that the property valuations therein were excessive. Also there was attached to the assessor's amended list a financial statement of defendant to the State Insurance Commissioner, covering its assets and condition of affairs on December 31, 1933, together with the rendition of property theretofore made by defendant to the assessor for tax purposes. Afterward, the District Board of Equalization met and an extended hearing covering about ten days was had, with notice to defendant and the presence of all interested parties; the matter before it being the determination of defendant's property values on January 1, 1934 and the equalization thereof as previously listed, inventoried and assessed by the District Assessor in the above mentioned amended assessment. The judgment of the Board recites a full hearing and consideration of evidence offered by both sides, "showing or tending to show the reasonable fair market value of said company's personal property, the value of which was listed in said assessment and in dispute, both as a whole and as to each individual item as of January 1, 1934", detailing such equalized values, the sum total being $2,095,661.42. The Equalization Board reduced the valuations of the District Assessor almost $750,00, but left on the assessment as taxable credits, over objection of defendant, certain items that had been reported to the Insurance Commissioner in its December 1933 financial statement. These consisted of increased agency balances and premium notes, $44,059.82; (non-ledger assets) interest due and *792 accrued on bonds, $78,146.51; interest accrued on collateral loans, $340.85; and interest accrued on bonds, $29,377.42. Complaint was made by defendant at this hearing of willful discrimination against it in assessments higher than other similar property in the District, but such claims are not brought into this appeal; the charges of arbitrary, fraudulent and illegal action of the Board of Equalization being solely based on the inclusion by the Board in its final order of taxable values, the items just above listed and taken from defendant's own sworn financial statement to the Insurance Commissioner.
School districts are empowered to assess taxes under Art. 7, Sec. 3, Const. Vernon's Ann.St.; Arts. 2784-2791, R.S., Vernon's Ann.Civ.St. arts. 2784-2791; cumulative thereto being Art. 2758, R.S., Vernon's Ann.Civ.St. art. 2758. The district tax-assessor is given the same powers and duties with reference to tax assessments as "are conferred by law upon the city marshal of incorporated towns or villages", who, in turn, as to powers (Art. 1147, R.S.) is granted all of the authority that is prescribed in Ch. 5, Title 28, relating to cities, towns and villages. Vernon's Ann.Civ.St. art.
Appellant's propositions numbers 31-35 assert grounds of error committed by the trial court, in refusing to hear evidence of other illegal and arbitrary acts of the District Board. They are, of necessity, over-ruled, by reason of the conclusions already reached in discussing the effect of the *793 tender and the validity of said Board's final order.
Propositions are also urged that the evidence on which the judgment for taxes are based consisted of inadmissible papers and insufficient testimony; also that the properties assessed are inadequately and illegally described. The individual tax sheets and documents pertaining to defendant's assessment were verified as correct by the Assessor, while a witness, the showing being well within proper requirements in tax cases. City of Rising Star v. Dill, Tex. Civ. App.
A thorough study of the briefs justify the statement that the principal objective for which defendant is contending in this third legal battle between the parties is to demonstrate that the reserve for unpaid losses ($147,201.06), reserve for unpaid taxes, ($65,000), and reserve for reinsurance ($63,367.26), are deductible from the assessment of the tax officials and are tax-free. At least, around appellant's propositions 24-30, inclusive (complaining of the trial court's error in holding these amounts taxable), its heaviest artillery in authority and argument is directly centered. As heretofore stated, defendant's "reserve for unearned premiums" ($1,603,668.04) was admitted by plaintiff to be non-taxable under the Supreme Court opinion of Republic Ins. Co. v. Highland Park Indep. School Dist.,
Appellant insists that penalties and interest should not apply, at least to the cash tender of $1220.64, paid into court on May 1, 1937. The three reserves being taxable, this deposit failed to the amount of taxes producible therefrom, in being a full tender of the taxes legally due. In such a situation, much as we would be inclined to disallow these demands, this relief cannot be afforded, under State v. Fulmore, Tex. Civ. App.
We conclude the trial court correctly disposed of the decisive questions raised on this appeal; and, after full consideration of appellant's assignments and propositions, the judgment below is, in all respects, affirmed.
Affirmed.