Fleming-Stitzer Road Bldg. Co. v. Chastain
Fleming-Stitzer Road Bldg. Co. v. Chastain
Opinion of the Court
This suit was instituted by Chastain, Judkins & Chastain against Fleming-Stitzer Road Building Company, owned by G. A. Davisson, and G. A. Davisson individually, C. R. Starnes, county judge of Eastland county, E. H. Webb, J. W. Camp, M. G. Robertson, and Henry Stubblefield, county commissioners, and John Hart, tax collector of Eastland county, alleging that the county commissioners had called an election on August 21, 1919, for the purpose of determing whether or not Eastland county should authorize the commissioners’ court to issue road bonds of Eastland county to an amount not exceeding $4,500,000 for the purpose of building public roads in said county; that said election was duly and legally held on the 27 day of September, 1919, and in due time thereafter, as required by law, the commissioners’ court of said county canvassed the returns of said election and declared said bonds carried by a two-thirds vote; that since, said time the commissioners’ court of Eastland county had caused to be issued and sold bonds authorized by said election to the extent of $2,500,000, and had issued the remaining $2,000,000kprovided for in said bond election, and were about to sell the same and will sell the same unless restrained from doing so; that said bonds run for 40 years from date of issuance and bear 5½ per cent, interest; and that in order to provide for a sinking fund to pay same at maturity the commissioners’ court of East-land county will have to' levy a tax to raise approximately $360,000 a year for the next 40 years; that said bond issue is illegal, excessive, unconstitutional, and void, and is in contravention of article 3, § 52, of the state Constitution, which prohibits any county from issuing bonds to an amount in excess of one-fourth of the assessed valuation of the real property of such county. Plaintiffs alleged that the real estate values of Eastland county in 1919 aggregated the sum of $11,854,030, and therefore did not authorize a bond in excess of $3,000,000. . They further alleged that said bond issue was in contravention of article 8, § 9, of the Constitution of this state, which provides that no county shall issue bonds for road purposes in a greater amount than that a tax of 15 cents on the $100 valuation will pay the annual interest and provide a sinking fund sufficient to pay said bonds at maturity. They further alleged that the total assessed valuation of the property in Eastland county in 1919 was approximately the sum of $24,000,000; in 1920 it was approximately $55,000,000; in 1921 it was approximately $60,000,000; and that said largest valuation would not authorize a bond issue for road purposes in excess of $1,000,000. They further alleged that said bond issue was illegal and void because issued in contravention of the special road law of Eastland county (Sp. Laws 1903, c. 8, § 20), which provides that no bonds shall be issued for a greater amount than that a levy of 15 cents on the $100 property valuation will yield sufficient to pay the interest on the bonds as it accrues and create a sinking fund sufficient to pay the principal of the bonds at maturity; that said bond issue was illegal and void because in direct contravention of title 18, c. 1, art. 613, of the revised Civil Statutes of Texas. Further allegations were made as to alleged fraud on the part of the commissioners’ court and of the tax assessor in assessing the valuation of property in Eastland county above what was its true value. Plaintiffs prayed for a cancellation of all of said bonds in excess of the amount alleged to be áuthorized by laiy, and that the tax collector of said county and Eastland county as a municipal corporation be enjoined from levying, assessing, or collecting any taxes from plaintiffs to pay interest or create a sinking fund for such bonds so found to be illegal.
The Fleming-Stitzer Road Building Company and G. A. Davisson individually, and Eastland county, through its commissioners’ court, and John Hart, tax collector, answered at length; said answer containing special exceptions directed to plaintiffs’ petition and certain defenses which will be hereinafter discussed. Other parties intervened, but, as they were disposed of in the judgment, and no complaint is made in this appeal by *621 them, no further notice will be taken of such other parties.
The cause was tried before the court with out the intervention of a jury, and certain of the esceptions tendered by parties plaintiff and parties defendant were overruled, and other esceptions were sustained. Thereupon the court rendered judgment that plaintiffs were not entitled to recover against the defendants, and that defendants Fleming-Stitzer Road Building Company and G. A. Davisson were not entitled to recover on their cross-action against plaintiffs, and that defendants Eastland county and the commissioners’ court of Eastland county were not entitled to recover on their cross-action wherein they sought for an injunction against the plaintiffs to prevent their bringing any further suits or actions at law or in equity in any way interfering with the issuance and sale of said bonds.
The court filed his conclusions of law, in which he found that the bonds sought to be attacked had been duly approved by the Attorney General and registered by the Comptroller, and that under article 625 of the Revised Statutes said bonds after having been so certified to and approved and registered are not subject to attack, except for forgery or fraud, and on the ground that such bonds as may be issued are in excess of the limit fixed by .the Constitution or contrary to its provisions, and that the fraud charged in said petition does not raise the question as to the invalidity of said bonds on account of any fraud with reference to the voting, issuance,1 approval, registration, or sale of said bonds; that the fraud charged in said pleading raised a collateral issue, and that the judgments and orders of the commissioners’ court in approving the assessment rolls of Eastland county are final and binding in so far as this proceeding is concerned, and cannot be attacked in any manner except in the manner provided for by law; that the plaintiffs are estopped from pleading the fraud of the commissioners’ court in the matter of passing upon the assessed values of the taxable properties of Eastland county, in that the commissioners’ court could not in law attack the enforcement of the collection of said bonds by alleging or proving that they themselves were guilty of fraud in the matter of increasing the assessed property values of Eastland county, and that, if the commissioners’ court could not lawfully take advantage of their own wrong, if any, the plaintiffs would likewise be prevented from doing so; that the allegations in plaintiffs’ first amended petition as to the question of fraud are insufficient to entitle them to any relief by reason thereof.
■ From this judgment the defendants the Fleming-Stitzer Road Building Company and G. A. Davisson, as owner and individually, have appealed. The appellants and the commissioners’ court of Eastland county and Eastland county have filed briefs in this court. The appellees Chastain, Judkins & Chastain have filed no briefs. The appellants ask that the judgment of the trial court be affirmed, and the appellees Eastland county and the commissioners’ court of Eastland county ask that the judgment be affirmed as to the holding that said bonds so ordered are not in excess of the constitutional or statutory limitations, but that the judgment be reversed and remanded in so far as their prayer for an injunction against the plaintiffs is concerned.
The commissioners’ court and Eastland county in their assignments allege error in the trial court in refusing to permit these defendants to prove by witnesses that this suit was instituted by the plaintiffs in this cause for the express purpose of harassing those defendants and delaying the road work of Eastland county, Tex., and in refusing these defendants the right to introduce proof upon their plea and prayer for injunction, because such plea is and was an equitable plea, and testimony should have been heard upon same in order for the court to arrive at whether or not it would be equitable to grant the injunctive relief prayed for.
That they believed that “there is a concerted action upon the part of the plaintiffs in this cause, acting together with otlier parties who have filed previous suits, to prevent the roadwork of Eastland county from going forward at all hazards, and they are willing to sacrifice the roads of Eastland county, interests of Eastland county, and the best interests of the citizenship of Eastland county, and especially citizens residing along what is known as the Bankhead highway, and by reason of such unwarranted acts this defendant respectfully shows to the court that this court should issue its most gracious writ of injunction to prevent the plaintiffs and all other persons with whom they may be acting from harassing and filing unwarranted suits against this defendant and the commissioners’ court of Eastland county,” etc.
We do not believe that the pleadings of the defendants named, as above quoted, sufficiently allege a state of facts justifying the trial court in granting the injunction prayed for, or at least as would justify this court in reversing the judgment of the trial court in this respect. Hence, all assignments of the appellants named are overruled.
■No question is raised in the agreed statement of facts as to any illegality in the election held on August 21, 1919, nor as to the compliance with the requirements by the commissioners’ court and others of the law touching the issuance of bonds. The only question presented is whether any of these bonds were in excess of the limitations prescribed by the Constitution and the statutes of this state. It is further agreed that said bonds were issued in series of C, D, E, F, and 6, that prior to said election bond issues of series A and B had been duly and lawfully made in road districts Nos. 1 and 2, and that series A and B were issued in the aggregate amount of $180,000, and that the bond election of September 27, 1919, was held and the bonds issued for the purpose of refunding said road district bonds, as well as for the purpose of the construction, maintenance, and operation of macadamized, graveled, or paved roads and turnpikes, or in aid thereof, throughout such county, and that the commissioners’ court was authorized to issue said bonds serially or otherwise, to run not to exceed 40 years from their date, and to bear interest at the rate .of 5½ per cent, per annum. It is further agreed that no bonds were actually ordered issued by the commissioners’ court, printed or lithographed and approved by the Attorney General, and registered by the Comptroller until the year 1920, when series C was so duly approved and registered, and during that year $50,000, all of seines B, was used in refunding road district bonds No. 2, aggregating the sum of $50,000, and that all (presumably $1,000,000 worth) of said series C was sold during the year 1920, except 250 bonds of that series, aggregating the sum of $250,000 and said $250,000 of series C were sold during the month of January, 1921; that February 28, 1921, the commissioners’ court ordered issued series D, aggregating $1,000,000 of bonds, and that during said year the bonds of said series 0D were duly approved by the Attorney General and registered by the Comptroller and thereafter sold; that in July, 1921, series E were duly ordered issued by the commissioners’ court and were approved by the Attorney General and registered by the Comptroller, and during that year $15,000 of them were sold and none others; that on August 23, 1921, series F of said bonds, aggregating $1,-000,000 were duly ordered issued by the commissioners’ court, approved by the Attorney General, and registered by the Comptroller; that on January 14, 1922, series G, aggregating $320,000 were duly ordered issued by the commissioners’ court, approved by the Attorney General, and registered by the Comptroller; that during the year 1922 $326,000 of series E and $259,000 of series F were sold to the defendant Fleming-Stitzer Road Building Company, but final delivery of the same had not been fully consummated at the time of the trial. It is further agreed that the remaining bonds that have not been sold are now in the possession of the commissioners’ court of Eastland county; that the commissioners’ court of Eastland county during the year 1920 levied a tax rate of 40 cents on the $100 of assessed property values of Eastland county for the purpose of providing for the payment of interest and *623 a sinking fund to care for the bonds that had been issued, and that during the year 1921 a tax rate of 45 cents on the $100 property values in Eastland county was duly levied for a like purpose; that during the year 1922 a tax rate of 20 cents on the $100 value of taxable property was levied for such purposes to take care of the interest and sinking fund on series E, and a like amount for a like purpose on series E, and 5 cents was levied on the $100 valuation of taxable property of Eastland county for the purpose of taking care of the interest and sinking fund of series G. It is further agreed that during the years 1919, 1920, and 1921 the assessed value of all real property in East-land county and the assessed value of all the property in Eastland county were as follows:
Assessed Values Assessed Values of Real Property, of All Property.
1919.$12,599,870.00 $24,037,100.00
1920.$22,558,195.00 $55,134,958.00
1921.!.$31,486,622.00 $57,024,743.00
It is further agreed that series A of said bonds, aggregating the sum of $130,000, were ordered issued by the commissioners’ court during the year 1920, but that said issue has never been approved by the Attorney General nor registered by the Comptroller, and that said series A were ordered issued for the purpose of refunding road district bond No. 1, but that said bond of said road district has never yet been returned or delivered back for cancellation.
“The total indebtedness of any county shall not be increased by any issue of bonds to a sum exceeding five per cent, of its said taxable values.”
This article is part of the Acts of 1893. Article 8, § 9, of the Constitution was amended in 1907. This amendment did not change this section as passed in 1890 in any way affecting the matter now under consideration, the only change being the authorization of a tax “not exceeding fifteen cents to pay jurors.” Under this section:
“The Legislature may also authorize an additional annual ad valorem tax to be levied and collected for the further maintenance of the public roads; provided that a majority of the qualified property tax paying voters of the county, / voting at an election to be held for that purpose, shall vote such tax, not to exceed fifteen cents on the one hundred dollars valuation of the property subject to taxation in such county.”
Article 3, & 52, of the Constitution, reads in part as follows:
“The Legislature shall have no power to authorize any county * * * to lend its credit; ⅜ * * provided, however, that under legislative provision any county * * * upon a vote of a two-thirds majority of the resident property taxpayers voting thereon who are qualified electors of such district or territory to be affected thereby, in addition to all other debts [emphasis ours] may issue bonds or otherwise lend its credit in any amount not to exceed one-fourth of the assessed valuation of the real property of such district or territory *624 * * * for the following purposes, to wit. * * *
“(O) The construction, maintenance and operation of macadamized, graveled or paved roads and turnpikes, or in aid thereof.”
■ This section was declared adopted December 29, 1904, and was a radical change over the same section under the Constitution of 1876. The first law putting into effect the provisions of this section was the act of the Thirtieth Legislature (volume 13, Gammell’s Laws, p. 249). Section 1 of this act became article 627 of the Revised Statutes, and it has never been changed by amendment. Section 6 of the act limited the amount of taxes to be levied to 15 cents on the $100 valuation. Acts of the Thirtieth Legislature, Regular Session, pp. 249 to 251. Sections 5 and 6 of this act were amended in 1919. Acts of the Thirty-First Legislature, Regular Session, p. 185. Section 5 under the 1909 amendment limited the tax to be levied to 25 cents on the $100 valuation of taxable property, but at the first called session of the Thirty-First Legislature both the acts of the Thirtieth Legislature and of the regular session of the Thirty-First Legislature were repealed. Acts of the Thirty-First Legislature, First Called Session, p. 271. Section 2 of this last-mentioned act became article 628 of the Revised Statutes, section 6 became article 634, and section 9 became article 641. By this last-named article “any county operating under a special road tax law may take advantage of any of the provisions of this subdivision.” In no part of this act is there any limitation on the amount of road bonds to be issued, except that it must not exceed one-fourth of the assessed valuation of the real property in the county. In 1917 articles 628 and 632 were amended, and articles 637a, 637b, 637c, 637d, 637e, and 637f (Vernon’s Ann. Civ. St. Supp. 1918, arts. 628, 632, 637a-637f) were added, but by these amendments no further limitation as to the amount of road bonds were suggested. Acts of the Thirty-Fifth Legislature, pp. 461 to 467. In 1919 other amendments were made, but no change as to amount of bonds or tax rate. Acts of First and Second Called Sessions of the Thirty-Sixth Legislature, pp. 89 to 95 (Vernon’s Ann. Civ. St. Supp. 1922, arts. 637a-637c, 637g-637hh).
We conclude that even the $4,500,000 worth of bonds were authorized under the state of record as here shown.
All assignments are overruled, and the judgment is affirmed.
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Reference
- Full Case Name
- FLEMING-STITZER ROAD BLDG. CO. Et Al. v. CHASTAIN Et Al.
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- 10 cases
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- Published