Pritchard & Abbott Et Al v. Patrick H. McKenna, Et Al, 162 Tex. 617

CULVER, Justice. This suit was brought by McKenná and certain other taxpaying citizens of Galveston County praying that a certain contract entered into by and between Galveston County acting through its Commissioners Court and the partnership of Pritchard & Abbott, an appraisal firm, be declared void and that the Commissioners Court and each member thereof be enjoined from paying to Pritchard & Abbott any sums of money that might be due under the terms of the contract. The trial court held the contract null and void and issued the injunction as prayed for.

The Court of Civil Appeals affirmed, 343 S.W. 2d 752, holding (1) that the Commissioners Court in entering into this contract usurped the functions, duties and prerogatives of the County Assessor and Collector and therefore that the contract is ultra vires the powers of the Commissioners Court; (2) that under the contract Pritchard & Abbott were employed to provide “a system for the Tax Assessor” as defined by

Article 7264a, Vernon’a Annotated Civil Statutes, and since the contract was not joined in or approved by the State Comptroller as required by that

article it is invalid. Admittedly the Commissioners Court is not expressly clothed with constitutional or statutory authority to contract for the services detailed in this agreement, but we think that authority is implied from the powers that have been expressly granted to and the duties imposed upon this body by law.

Section 18,

Article V, State Constitution, provides in part: “The County Commissioners so chosen, with the County Judge as presiding officer, shall compose the County Commissioners Court, which shall exercise such powers and jurisdiction over all county business, as is conferred by this Constitution and the laws of the State, or as may be hereafter prescribed.” The Constitution also provides that “Taxation shall be equal and uniform. All property in this State, whether owned by natural persons or corporations other than municipal, shall be taxed in proportion to its value, which shall be ascertained as may be provided by law.”'

Section 1,

Article VIII. The County Commissioners Court is constituted as a board of equalization for the County.

Section 18,

Article VIII, State Constitution. The law places upon the County Equalization Board a heavy responsibility and of necessity it must be given considerable power to carry out this responsibility. The Board is charged with the inspection, correction, equalization and approval of assessments made by the County Assessor. The Board is expressly authorized to require the production of relevant books and papers and to summons persons and examine them under oath in order to ascertain the value of the taxable property and to raise or lower the same as may be warranted.

Article 7206. The statute requires that when the Commissioners Court convenes as a board of equalization each member of the court, including the County Judge, shall take an oath that he will faithfully perform the duties imposed upon him to see that all property subject to taxation shall stand on the tax rolls at its true cash market value,

Article 7215, and if any member of that Board shall knowingly fail or refuse to fix the value of property rendered for taxation in compliance with the laws of the State that failure or refusal shall constitute malfeasance in office and shall be cause for his removal.

Article 7216. Respondents say the contract calls for and results in taking over the functions of the Tax Assessor by the Commissioners Court and that this conclusion is borne out by the evidence introduced in the case: So far as the consideration of the evidence introduced in the case is concerned the Court of Civil Appeals, we think, correctly reviewed the provisions of the contract as being clear and free of ambiguity.

I’hat being true its validity vel non is to be determined from an inspection of that document alone without the aid of any other evidence and without taking into account any acts and conduct of the parties in attempting to comply with the terms of this agreement. The following cases cited by the Court of Civil Appeals do not hold otherwise. Lone Star Gas Company v. X-Ray Gas Company, 139 Tex. 546, 164 S.W. 2d 504; Gulf Coast Water Company v. Hamman Exploration Company, Tex. Civ. App., 160 S.W. 2d 92, writ refused, and City of Athens v. Andrews, Tex. Civ. App., 231 S.W. 2d 928, writ refused.

We are fully in accord with respondents in pointing out, as they do, that the County and the County Commissioners Court are not synonymous nor are they one and the same. We quite agree that the County Commissioners Court is not charged with the management and control of all of the County’s business affairs. Each of the various elected officials, including the Assessor-Collector, has the sphere that is delegated to him by law and within which the Commissioners Court may not interfere or usurp.

But that is not to say that the functions of the Board of Equalization and those of the Assessor-Collector are so diverse that information may not be lawfully contracted for and obtained by the Equalization Board because it may likewise be of aid to the Assessor in the performance of his duties. It is the duty of the Assessor as well to determine the value of all taxable property in the county.; The statutory procedure outlined in

Article 7206 is that the Commissioners Court shall convene as a board of equalization on the second Monday in May of each year or at least before the first day of June. At that time the Assessor is to bring before the Board his assessment list for inspection and correction if necessary. After the Board has examined, corrected and approved the Assessor’s list, the Assessor prepares the tax roll and furnishes copies to the Tax Collector, the State Comptroller and to the County Clerk.

Many thousand pieces of real property are located in Galveston County, including residential and business structures of various kinds, vacant lands, harbor facilities, oil properties and installations and other types. Without expert assistance the Board could not begin to carry out its functions and sworn obligations and a thorough appraisal of all taxable property is a task that would necessarily involve months of preparation.

We think it is of no moment that the contract called for this work to be done prior to the meeting of the Equalization Board and to the presentation to the Board of the assessment list made up by the Assessor. The contract is set out in full in the opinion of the Court of Civil Appeals and will not here be duplicated.

Actually the opening paragraph of the contract sets forth the substance of the services to be rendered by Pritchard & Abbott as well as the benefit to be gained by the County from those services as follows: “That, WHEREAS, the County of Galveston, State of Texas, acting by and through its Commissioners’ Court, has determined that there is a necessity for, and that it will be to the best interest of said County and its citizens generally, to employ experts, skilled in the appraisal and valuation of oil and/or gas producing properties, industrial properties, and lands and buildings, and to make a permanent record of all lands and buildings within the County, so that all properties may be properly valued for the purpose of taxation and values thereof equalized.” Respondents seem to concede that if this contract were restricted to the appraisal of oil and gas or other properties that required special skill and experience “not possessed by the ordinary person” the contract would not be invalid.

This would be true, they say, because as a matter of “sheer necessity” in that field skilled appraisers must be employed. We do not agree with that reasoning. The matter of skill required to appraise different kinds of property is one of degree. The appraisal function not only requires an expert in the field of oil and gas, but also an expert in the field of what may be said to be ordinary real estate values. “The ordinary person” is no more qualified to value real estate than he is to value oil and gas properties. Each requires special training, experience and qualifications.

The fact that there may be more qualified experts in the field of ordinary real estate values than in that of oil producing properties and installations cannot be material in determining the power of the Board of Equalization to retain expert advice. To say that the Board may hire experts in one field but not in another is borne out neither by logic nor by the authorities. In Roper v. Hall, Tex. Civ.

App., 280 S.W. 289, no writ history, the Commissioners Court was held to have implied power to contract with an individual for compilation of data for its use while sitting as a board of equalization in determining the taxable value of oil and gas properties in the county. The court held “The services contracted to be rendered called for information and experience not possessed by the ordinary person.

So far as they affected the discovery, assessment, and valuation of unrendered oil properties, they could not have been performed by the County Assessor unless he possessed extraordinary information and experience along the required lines.” Respondents say this rule should not be extended so as to cover all of the real estate in the county. This apparently is based on the theory that the Tax Assessor is always to be considered as a qualified expert as to the usual run of real properties.

Even if this premise be true which it is not, the Board of Equalization is not bound by the values fixed by the Assessor no matter how expert he may be. We fail to see why the Board may not seek independent expert information as to all forms of taxable property, otherwise the members of the Board would not be in position to revise or correct the Tax Assessor’s list but would be derelict in their duty. There is nothing in the Roper case to indicate that the court intended to limit such a contract to the appraisal of oil and gas interests.

As to the exact question before us the authorities are somewhat meager and not wholly decisive. In Federal Royalty Company v. State, Tex. Civ. App., 42 S.W. 2d 670, suit was brought by the State of Texas to recover taxes and foreclose tax lien on a royalty interest in oil and gas lands. The company defended on the ground that the assessment was void because not made by the County Assessor. The County had therefore employed an expert to secure and furnish to it information as to oil and gas properties in the county for use in equalizing assessments.

The court concluded that both the Assessor and the Board could make use of this information and that such practice did not void the assessment. In passing upon this question, probably by way of dictum, the court observed that “where, as in this State, no express authority is given to employ such expert aid, the power to do so is implied, and the expedience of doing so is within the discretion of the Commissioners Court.” It is evident that the company in that case did not contend that the contract was illegal.

The decision is rendered less authoritative also because this court in affirming did not discuss that matter, but disposed of the case by holding that the royalty interests in question was taxable as real estate. In Whelan v. State, 155 Tex. 14, 282 S.W. 2d 378, the Commissioners Court employed an expert to assist in arriving at the value of producing oil and gas properties.

In setting aside the assessments we observed that “the enlistment of expert assistance in such matters is not to be condemned.” We are further reinforced in our conclusions that the Commissioners Court has the implied power to contract for expert services by the proviso contained in

Article 7212. The Legislature set out in that

article that the Commissioners Court “after hearing the evidence, shall fix the value of such property in accordance with the evidence so introduced and as provided for in the preceding Article, and their action in such case or cases shall be final; provided, however, that if the Commissioners’ Court of any county who contracts with or employs any individual, firm, or corporation to compile taxation data, the compensation for such individual, firm or corporation, may be paid on a pro rata basis from each county fund receiving any taxes derived from such valuation.” The implication is patent, we think, that the “evidence” referred to in the

article may include expert advice contracted and paid for and that such contract is within the authority of the Board. Respondents in their brief and oral argument frequently cite and heavily rely upon the decisions in Marquart v. Harris County, Tex. Civ. App., 117 S.W. 2d 494, writ dismissed, and White v. McGill, 131 Tex. 231, 114 S.W. 2d 860. They single out Marquart as the best reasoned and leading authority for their contention that the Commissioners Court did not have the authority to make the contract in question.

But what the Marquart decision stands for is the proposition that the contract made by the Commissioners Court of Harris County was “in connection with the collection of delinquent taxes within the meaning of Articles 7264a and 7335a, Vernon’s Ann. Civ. Stats.” Marquart follows White v. McGill that struck down a Commissioners Court contract by reason of the “tax ferret” provisions in which the so-called tax ferrets were to discover and point out property that had escaped taxation and were to be paid a fee of 15 per cent of the amount of taxes collected on personal property discovered by them.

The Court of Civil Appeals has correctly rejected this argument holding that the contract between Galveston County and Pritchard & Abbott was not entered into in connection with the collection of delinquent taxes and so for that reason did not require the approval of the State Comptroller. Consequently the decisions in Marquart v. Harris County and White v. McGill are not in point. In our opinion subparagraph 2 of paragraph 1 of the contract is not invalid so as to vitiate the whole.

It reads as follows: “Analyze and review the permanent record card system heretofore compiled by First Party, so as to bring appraisals thereon to current condition as of January 1, 1959, adding (due to the extraordinary growth of Galveston County during the period of operations of First Party therein) all new properties, necessitated by construction and changes in ownership as of January 1,1959, thereby supplying to Second Party permanent record cards for each lot or tract of land, showing its description and location, together with a diagram of all improvements located on each lot or tract of land, showing the square or cubic feet in each building, the cost per square or cubic foot to reproduce these buildings, the depreciated value, taking into consideration the age, economic, and obsolescent features.

The card will show the dimensions of the tract of land, the unit front foot price on lots and acreage values on tracts of all real property located in Galveston County, Texas, a copy of such card, marked Exhibit ‘A’, being attached hereto and made a part hereof.” The duties imposed upon Pritchard & Abbott by that sub-paragraph are incidental to and in aid of the only purpose and objective of the contract, namely: “So that all properties may be properly valued for the purpose of taxation and values thereof equalized.” If the Commissioners Court is authorized to contract for and on behalf of the County for expert assistance in arriving at correct property appraisals to be of any substantial benefit, must be supplied to the County in such form that they may be readily accessible to include new construction and changes in ownership and other necessary and detailed information.

In

summary that is all that the subparagraph provides. It is not a “tax ferret” contract nor does it purport to furnish any information that would not be in aid of the Equalization Board in the performance of its duties. This contract would not be rendered void merely because this information is placed in a permanent form so that it may be used by the Board for the current year and in the future as well. We are of the opinion that subparagraph 2 does not provide for such a “system for assessors” as contemplated by

Article 7264a so as to require the joinder of the State Comptroller in the contract of employment of Pritchard and Abbott in this case, This

Article mainly has to do with the adjustment and collection of delinquent taxes,

Section 1 thereof reading as follows: “It is hereby declared the Policy of the State to adjust delinquent taxes, correct errors, to eliminate conflicts in surveys of land, and to collect the delinquent, occupation, franchise and Ad Valorem Taxes, in order to clear this State of such taxes, errors and conflicts at the earliest date possible, and to provide a system for assessors, in order to eliminate the numerous errors that now appear on the tax rolls each recurring year.”

Section 2 of the

Article provides for meeting the expense of the collection of delinquent taxes. It also provides that the cost of installing “the tax or plat system” shall not exceed 15% of the delinquent taxes collected.

Section 4 reads in part: “This Act is not intended to change any law now in effect regarding the collection of delinquent taxes, but to be an aid to the officials in the discharge of their duties, * * *.” There is nothing in the contract to indicate that the information furnished and set down on the record card is for the benefit of the assessor or to be turned over to him for his use. To the contrary, the services and cards are to be supplied to the county.

Moreover, paragraph 4 of the contract recites in part, “and it being necessary to maintain and correct the basic records herein provided for on a current basis, in order that the same may furnish a reliable guide in the equalization of all classes of properties for tax purposes in Galveston County.” The system provided for in

Article 7264a is for the stated purpose of eliminating “the numerous errors that now appear on the tax rolls each recurring year.” Also, the

Article provides that this “tax or plat system” may be installed by any county to clear up errors, conflicts, and unknown owners and paid for by a percentage of the delinquent taxes collected not to exceed 15 percent. The character of the system is also indicated by the language used in the emergency clause by which this

Article was enacted as follows: “The fact that officials have let state taxes become delinquent to the amount of approximately twenty million dollars, most of which can be collected by adjustment and CORRECTION OF ERRORS, and the further fact that counties where land conflicts cause millions of dollars of property to appear on the tax rolls does not exist, WHICH FACTS show the necessity for a tax system, and the further fact that the state and counties are in need of their money, create an emergency and a public necessity exists requiring the suspension of the Constitutional Rule * * * ” Laws 1931, 42nd Legislature, p. 384, ch. 229,

Section 5. Furthermore, subparagraph 2 of paragraph 1 of the contract did not impose upon Pritchard and Abbott the obligation to install “a tax or plat system,” but to only analyze and review the record card system theretofore compiled and make such corrections and additions as might be necessary. The information to be furnished and put on record cards by Pritchard and Abbott was concerned wholly with appraisals of the value of real properties and furnishing data in support of those appraisals. It was not a plat system as described in

Section 2 of the

Article which would ordinarily indicate a series of maps of the county. The respondents argue that even if the Commissioners Court had the authority to make the contract in question, nevertheless the contract cannot be upheld because the district court in the exercise of its “general supervisory control” over the Commissioners Court has struck it down, and that should end the matter.

Section 8,

Article V of the Constitution does provide that “The district court shall have appellant jurisdiction and general supervisory control over the County Commissioners Court with such exceptions and under such regulations as may be prescribed by law; * * This provision has never been construed by the courts to mean that the district court is empowered to superintend the deliberations and decisions of that body or to substitute its judgment for that of the Commissioners Court in determining what is best, proper and advantageous.

Possibly the Legislature might enact “such exceptions” and “such regulations” as would clothe the district court with that power but it has not seen fit to do so. In Haverbekken v. Hale, 109 Tex. 106, 204 S.W. 1162, in considering the extent of control given to the district court by that

section of the Constitution we said: “* * * The power of the District Court to supervise the proceedings of the Commissioners’ Court here involved gave the injunction suit the character of a direct attack upon those proceedings rather than a collateral one. Crawford v. McDonald, 88 Tex. 626, 33 S.W. 325. This permitted a full inquiry for the purpose of seeing whether throughout the proceedings the Court had complied with the law, unhindered by any presumptions ordinarily indulged in a collateral attack upon a judgment of a court of general jurisdiction.

Not otherwise could the District Court supervise and control its action.” So that the power of supervision is limited to a determination as to whether or not the Commissioners Court has proceeded according to law or acted arbitrarily or abused its discretion. In this case the only question before the district court and the only one here is whether or not the Commissioners Court in entering into this contract acted within its lawful authority. We are not concerned with the propriety of that action nor was the district court. See also Stovall v. Shivers, 129 Tex. 256, 103 S.W. 2d 363.

Being therefore of the opinion that the contract is not ultra vires the powers of the Commissioners Court but lies within the scope of its authority, the judgments of the trial court and of the Court of Civil Appeals are reversed and judgment here rendered denying all of the relief sought by the respondents in the trial court. . Federal Royalty Company v. State, 124 Tex. 290, 77 S.W. 2d 1021.