Driscoll Foundation v. Nueces County

445 S.W.2d 1, 34 Oil & Gas Rep. 623, 1969 Tex. App. LEXIS 2367
CourtCourt of Appeals of Texas
DecidedSeptember 4, 1969
Docket7076
StatusPublished
Cited by17 cases

This text of 445 S.W.2d 1 (Driscoll Foundation v. Nueces County) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Driscoll Foundation v. Nueces County, 445 S.W.2d 1, 34 Oil & Gas Rep. 623, 1969 Tex. App. LEXIS 2367 (Tex. Ct. App. 1969).

Opinions

KEITH, Justice.

The appeal is from a judgment denying appellants an “agricultural use” designation for ad valorem tax purposes of certain lands in Nueces County, Texas, sought under the provisions of Article VIII, § 1-d, of the Constitution of the State of Texas, added as an amendment on November 8, 1966, Vernon’s Ann.St. The years involved are 1967 and 1968. Following unfavorable jury findings, the trial court upheld the denial of the designation and the appeal has been duly perfected.1 The case is one of first impression.

[3]*3“The Robert Driscoll and Julia Driscoll and Robert Driscoll, Jr., Foundation”, (hereinafter referred to as “Foundation”), was created by a testamentary trust in the will of the late Clara Driscoll. Decedent’s residuary estate was bequeathed to three trustees who were directed to create an endowment for the purpose of establishing and operating a children’s hospital and clinic for the free treatment of indigent, crippled, maimed or diseased children in Nueces County and surrounding counties in Texas. The hospital had been established and has been in operation at all times material to this suit. All of the income of the 'Trustees from the trust estate property, approximately a million dollars per annum, was being expended upon the operation of the hospital. The hospital was operated by a Board of Trustees appointed by the Foundation Trustees.

It appears from the record that the business affairs of the Foundation were conducted by an executive secretary who also served as an accountant, a farm and ranch manager, and a secretary. The Foundation neither owned any farming machinery, employed any farm laborers, nor actually engaged in tilling the soil except as the landlord under share-crop rental leases with a particular tenant. The Trustees owned approximately 103,000 acres of farm and ranch land situated in Nueces County and in several counties adjacent thereto. All of the farming land, approximately 8,500 acres, is in Nueces County and is under a single share-crop rental lease. This farming land, as well as most of the ranch land owned by the Trustees, was under lease for oil and gas and there was a substantial amount of income from production upon the lands of the Trustees.

The Trustees also owned substantial blocks of stocks, bonds, a hotel, an office building, and various other properties which produced income applied to the operation of the hospital.

Within the time and manner provided by the Constitutional Amendment, the Trustees caused to be filed with the several tax assessors of the various political subdivision2 a their sworn statements “describing the use to which the land is devoted.” [Constitution, Article VIII, § 1-d, subsection (b)]. The statements were each substantially the same except only the one submitted to the Nueces County assessor contained all of the agricultural land for which claim was made, the others included only the specific acreage which was situated within the geographical limits of the respective taxing units. No serious question is raised as to the form or sufficiency of the statements, except the taxing agencies raise some questions as to the effect of the answer to question of the “Primary Occupation” of the owners, i. e., the Trustees, which was answered: “To provide hospital care for indigent children.” To this we will return.

The facts presented are common to each of the taxing agencies, except for variations in acreage, tax rates, ratios of assessment to actual value, amount of taxes involved, etc., so that an illustration of the procedures followed with West Oso Independent School District will serve to explain this facet of the case as applicable to all of the agencies. The blank in the printed form for natural owner was filled in by inserting this typewritten material: “Dr. Mclver Furman, W. Preston Pittman, T. S. Scibienski, Trustees of Robert Driscoll & Julia Driscoll & Robert Dris-coll, Jr., Foundation.” The “primary occupation” was answered: “To provide hospital care for indigent children.” The land was properly described and the inquiry as to the use of the land was answered: “All of the above land is being used exclusively for the raising of crops.”

[4]*4Other information found in the form disclosed that the particular acreage involved in West Oso Independent School District had a cotton allotment of 112.8 acres and for grain 229.3 acres; that there were no hunting and fishing leases thereon but that the land was under lease for oil, gas, and other minerals “with production on part of it.” It was shown that the land was in the possession of “Wallace Red-ding — Tenant Farmer.” The claim was supported by the affidavit of each of the three Trustees.

The sworn statement, having been presented to the tax assessor, was rejected by a form letter in which the following blanks were checked as grounds for rejection.

“(x) Agricultural income is less than other income
(x) Applicant is not a ‘Natural person’
(x) Applicant is not in the business of agriculture
(x) Agriculture is not the primary occupation and source of income.”

Following this rejection, the Trustees, or their representatives, appeared before the Board of Equalization where their claim was again rejected. The original petition in this cause having been filed on January 31, 1968, the Trustees went to trial upon their second amended original petition wherein they sought a mandatory injunction requiring each of the assessors to place the properties upon the rolls as “land in agricultural use,” for a prohibitory injunction restraining the several taxing agencies from attempting to collect any taxes except those due under an “agricultural use” designation, and for a prohibitory injunction restraining the fixing of any lien on the properties, etc.

Included in the petition were allegations that the total taxes levied upon the properties of the Trustees for the year 1967 by all of the agencies was $26,823.02, whereas, if the agricultural use designation had been accepted, the total taxes for that year would have been only $1,753.05. The extra tax burden placed upon the Trustees was, therefore, calculated to be $25,069.97. A general allegation covering the year 1968 claimed the denial of the designation resulted in the levy of “excessive” taxes in “an amount greater than” $25,000.00.

The taxing agencies answered by pleas in abatement and special exceptions (which we do not elaborate upon since there is no showing that they were called to the attention of the Court) a general denial and a cross-action for the taxes, interest, penalties, etc., based upon assessments which denied the agricultural use designation. At the conclusion of the evidence, the trial court overruled the motion for instructed verdict filed by the taxing agencies and submitted the case to the jury upon two special issues.3 Negative answers having been returned to both questions, judgment was rendered for each of the several taxing agencies for the taxes then due together with penalties, interest, etc., along with foreclosure of the tax liens thereon.

As Exhibit A to this opinion, we reproduce Trustees’ Exhibit 13, showing the schedule of net ordinary income, “Russell Farm Block,” for the fiscal years shown thereon, noting in passing that (a) the net

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Driscoll Foundation v. Nueces County
445 S.W.2d 1 (Court of Appeals of Texas, 1969)

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Bluebook (online)
445 S.W.2d 1, 34 Oil & Gas Rep. 623, 1969 Tex. App. LEXIS 2367, Counsel Stack Legal Research, https://law.counselstack.com/opinion/driscoll-foundation-v-nueces-county-texapp-1969.