Title: McClellan v. Guerra

State: texas

Issuer: Texas Supreme Court

Document:

258 S.W.2d 72 (1953) McCLELLAN et al. v. GUERRA. No. A-3776. Supreme Court of Texas. May 6, 1953. Rehearing Denied June 3, 1953. A. J. Vale, Rio Grande City, Raymond, Algee, Alvarado, Kazen & Woods, Laredo, L. Hamilton Lowe, Austin, for petitioners. Gerald Weatherly, Falfurrias, for respondent. SMITH, Justice. Respondent, H. P. Guerra, plaintiff below, filed this suit against the petitioners, alleging that certain expenditures of county funds were being made in contravention of the Uniform Budget Law, Articles 689a-9 to 689a-12, Vernon's Annotated Civil Statutes. Respondent's prayer for a temporary injunction was denied. On appeal to the Court of Civil Appeals, the order denying the temporary injunction was reversed with instructions to the trial court to issue a temporary injunction restraining petitioners from paying out sums of money not provided for by the 1951 budget of Starr County adopted on September 11, 1950. The original order refusing the temporary injunction was signed on August 15, 1951. The trial court had before it the original budget adopted September 11, 1950, and an amendment to the budget adopted January 11, 1951. The court did not have before it an amendment to the budget which was adopted on August 16, 1951. The Court of Civil Appeals refused to consider the latter amendment for the reason that it was not a part of the record, but instructed the trial court to grant the temporary injunction "without prejudice to the right of appellees [petitioners] to urge the legality of the August 16, 1951, order amending the budget as the basis of a motion to dissolve the temporary injunction or urge the same as a defense to appellant's suit upon a trial of the merits." 243 S.W.2d 715, 718. On November 26, 1951, the trial court granted a temporary injunction "commanding said defendants and each of them to desist and refrain, until final trial and judgment herein, from paying out sums of money for 1951 obligations and indebtedness which are not provided for by the 1951 budget of Starr County, adopted on September 11, 1950. This order is entered without prejudice to the right of said defendants to urge the legality of the August 16, 1951 order amending the budget as a basis of a motion to dissolve this temporary injunction or urge the same as a defense to plaintiff's suit upon a trial of the merits of this cause". On November 26, 1951, petitioners filed a motion to dissolve the temporary injunction alleging in part: "On August 16, 1951, the Commissioners' Court of Starr County, Texas, acting in accordance with the provisions of law, duly and properly amended the budget of said county for the year 1951, and said *73 amended budget authorizes the payment of all salaries and other items of expense involved in this suit and there is now no legal justification for any injunction against these defendants within the pleadings before the court in this cause * * *". On November 30, 1951, the motion to dissolve the temporary injunction was granted, and on appeal, the Court of Civil Appeals reversed the trial court and granted an injunction that "during the pendency of this suit, the appellees and each of them are hereby enjoined from paying out any sums of money upon 1951 obligations of Starr County not provided for in the original budget for the year 1951, adopted on the 11th day of September, 1950. * *" A dissenting opinion was filed by Chief Justice W. O. Murray, 250 S.W.2d 241, 245. This Court has granted a writ of error. It is apparent that the trial court dissolved the temporary injunction on the theory advanced by petitioners that "tax monies collected as a result of the levy of county taxes for the year 1951, irrespective of when they are collected, constitute `current revenues' for the year 1951". Respondent contends that the Constitution and budget and tax laws forbid petitioners creating even current expenses in anticipation of the ad valorem taxes to be collected in October, November and December, 1951, and that these taxes are to be used for 1952 operations and are not "current revenues" for the year 1951. Article XI, Section 7, Texas Constitution, Vernon's Ann. St., provides in part that Article 689a-9, Vernon's Annotated Civil Statutes, provides that the county judge of each county shall serve as budget officer for the Commissioners' Court, and shall, during the month of July of each year, assisted by the County Auditor or by the County Clerk, prepare a budget to cover all proposed expenditures of the county government for the succeeding year, and Article 689a-9 further provides that Article 689a-10, Vernon's Annotated Civil Statutes reads: Article 689a-12 provides: It will be noted that the Legislature was very careful to provide that a grave public necessity must exist to authorize an amendment of the budget once it is adopted. The amendment recites that an emergency existed and then proceeds to raise the estimated general fund current ad valorem tax receipts from $48,000 for the year 1951 to $119,250. This change appears at page 14 of the amendment. The original budget adopted September 11, 1950, estimated the assessed valuation of the county to be $22,000,000, and at page 9 of the original budget the tax rate to care for the general fund is listed at 25 cents per $100 of the assessed valuation. The amended budget of August 16, 1951, does not make any change in either of these items. Therefore, it is clear that the estimated receipts of $119,250 would permit a total unauthorized expenditure of $71,250. The budget was amended so as to authorize an expenditure of approximately $42,000 in excess of the estimated expenditures contained in the original budget. The record further clearly reflects that the item of "estimated receipts of $119,250.00" inserted in the amended budget of August 16, 1951, was based on the assessed valuation and tax levy for the year 1952, and not for the year 1951. The County Auditor testified: Exhibit Number 5 shows the estimated receipts to be $120,000, a difference of $750, but the following questions and answers support the conclusion that the budget for 1952 was used as a basis for the estimate of $119,250 contained in the amended budget for 1951. To permit the county to amend its budget in this fashion would be to strike down the Uniform Budget Law which was enacted as a sound public policy of the State to prevent deficit spending by counties. According to the record in this case, the item of estimated receipts of $119,250 has no foundation in fact unless we permit the county to reach over into and take a part of the revenues intended for the year 1952, and thereby impose a burden on the revenues of future years. There must be a systematic method of transacting county affairs. That method has been established by the Legislature, and, if followed, each county will be able to conduct its affairs in keeping with the spirit of the statute as well as the Constitution of this State. The amendment of August 16, 1951 is invalid and unquestionably was enacted after the budget had been prepared in July 1951 for the year 1952. The taxes payable in October, November and December, 1951, must be classed as current revenues for 1952, the succeeding year, and not for the year 1951. We construe the statute to so provide. The statute does not grant to the county officers who are charged with the duty of administering the law the discretionary power to take into consideration taxes collected during October, November and December, 1951, as a result of a levy made after the hearing on the county budget for 1952, for the purpose of amending the budget adopted in 1950 so as to increase the current revenues for 1951. The Honorable Price Daniel, Attorney General of Texas, rendered an opinion on June 12, 1947, in response to a request from the County Auditor of Gaines County, Texas. The question submitted called for a construction of Articles 689a-9, 10 and 11. The opinion reads in part as follows: The judgment of the Court of Civil Appeals granting a temporary injunction enjoining the petitioners from paying out any sums of money not provided for in the original budget, adopted September 11, 1950 for the year 1951, during the pendency of this suit, is affirmed. BREWSTER, GRIFFIN and CALVERT, JJ., dissenting. CULVER, J., not sitting. CALVERT, Justice (dissenting). I cannot agree with the majority opinion. As stated by the Court of Civil Appeals, 250 S.W.2d 242, "The controlling question squarely presented by this case is whether or not tax monies collected during the months of October, November and December of 1951, as a result of a levy made following the hearing upon a county budget for the year 1952, constitute `current revenues' for the year 1951." It becomes important to know whether such monies constitute "current revenues" for the year 1951, for if they do not then the action of the commissioners' court of Starr County taken on August 16, 1951, in amending the budget for 1951 and ordering increased expenditures for that year would violate Section 7 of Article XI of the State Constitution and would be void. The pertinent part of Section 7 of Article XI of the Constitution is set out in the majority opinion and need not be repeated here. Suffice it to say that it prohibits any city or county from incurring a debt unless provision is made at the time for levying and collecting a tax sufficient to pay interest thereon and provide a sinking fund. This prohibition has been an integral part of our Constitution since 1869 when it was included in Section 23 of Article XII. Although McNeal v. City of Waco, 89 Tex. 83, 33 S.W. 322, decided by this court in 1895, is usually cited as the leading case for the interpretation given the foregoing constitutional provision to the effect that an obligation to be paid out of current revenue is not a debt within the meaning thereof, that interpretation seems to have been announced first in 1883 in City of Corpus Christi v. Woessner, 58 Tex. 462. It was reaffirmed in City of Terrell v. Dessaint, 71 Tex. 770, 9 S.W. 593, 594 in which the court added: "We freely concede that debts for the ordinary running expenses of a city, payable within a year out of the incoming revenues of the year, and with other indebtedness not clearly in excess of the yearly income for general purposes, can be created by a city." The reason for the construction placed on the provision is made so clear by the court's opinion in McNeal v. City of Waco, supra, that a part of that opinion should be quoted [89 Tex. 83, 33 S.W. 323]: Thus it appears from the cases cited that before the turn of the century the term "current revenue" took on special meaning in interpreting the constitutional provision to determine whether a particular obligation was a debt. During the entire period covered by the foregoing decisionsand ever since, for that matterthe statutes of this state provided that taxes for any given year were due and payable on October 1st of that year. See Acts 1876, p. 260, General Laws of Texas, Vol. 8, p. 1096, Vernon's Ann. Civ.St. art. 7255. That such was the effect of the statute is not left in doubt by judicial decisions. Wall v. Club Land & Cattle Co., Tex.Civ.App., 88 S.W. 534, reversed in part, Club Land & Cattle Co. v. Wall, 99 Tex. 591, 91 S.W. 778, 92 S.W. 984; Echols v. Miller, Tex.Civ.App., 218 S.W. 48, no writ history; Crutcher v. Aiken, Tex.Civ.App., 252 S.W. 844, no writ history. In Club Land & Cattle Co. v. Wall, supra [99 Tex. 591, 91 S.W.2d 779] this court said that "The indulgence by the state to the 1st of March did not relieve the taxpayer of the duty to pay at any time between the 1st of October and the 1st of March." While it is not likely that as large a percentage of taxes was paid in October, November, and December of the year for which they were levied prior to the enactment in 1939 of Article 7255b, V.A.C.S., giving a premium for early payment, as are now paid in such months, we may assume, I think, that at least some taxpayers met their tax obligations promptly. So it was with full knowledge that the law provided for the payment of taxes for the current year on and after October 1st of the same year and that payments thereof were actually made in the months of October, November, and December of the same year that the court spoke of "current revenue" as "incoming revenues of the year" and "yearly income" of the year. Webster's New International Dictionary defines the word "current" as "belonging to the present time" and the word "revenue" as synonymous with "income". "Income" is said to mean "to come in". The taxes levied in the instant case in August 1951 were taxes for the year 1951, not for the year 1952. They were levied upon property owned on and valued as of January 1, 1951, Art. 7151, V.A.C.S., and were due and payable on October 1, 1951. These taxes constituted current revenue within the meaning of the constitution for some year. The majority has said for 1952. But how can it be said that taxes levied in 1951 for the calendar and fiscal year of 1951, upon property owned on and valued as of January 1, 1951, to be due and payable on October 1, 1951, and actually paid in October, November, and December 1951, are "current revenue" for 1952? How can it be said that such taxes are "incoming revenues of the year" 1952, or "yearly income" for the year 1952? How can it be said that these taxes "come in" in 1952 when in fact they "come in" in 1951? The majority supports its holding solely by an opinion of the Attorney General which says, in effect, that to hold the money to be current revenue for the year 1952 rather than for the year 1951 is more in harmony with the provisions of the Uniform Budget Law. Art. 689a-9 to 689a-12, V.A.C.S. But the term "current revenue" has been used constantly by the courts and has therefore had a definite meaning since 1883, and the budget law *78 was not enacted until 1931. I find nothing in the budget law which expressly or by necessary implication requires a new and different meaning. Moreover, our attention has been called to another opinion of the Attorney General, No. V-2960 dated September 18, 1952, in which it is held that taxes collected in October, November, and December in the year in which levied are current revenue for such year in counties of over 225,000 population coming under the provisions of Acts 1939, 46th Leg., p. 144, § 1, as amended Acts 1945, 49th Leg., p. 93, ch. 65, § 1, Art. 1666 note, V.A.C.S. Under the provisions of the act referred to the budget of the county is originally prepared and adopted in January and it appears to be the reasoning of the Attorney General that since the adoption of the budget is not followed immediately by a tax levy, "this new budget law does not tie the budget to any particular tax levy", "current revenue" in these counties is something wholly different from "current revenue" in counties of less than 225,000 population coming under the Uniform Budget Law. The vital instrument being construed in each instance is the Constitution and it is wholly unlikely that the Legislature by the enactment of different budget laws should have intended that the constitutional prohibition against incurring debts would mean one thing as to one group of counties and something wholly different as to another group. I submit there is no such distinction that current revenue for a given year in counties both large and small is the actual or reasonably anticipated income of the county for that year, that is, the money collected or to be collected by the county during the year. This was the meaning of the term for half a century before adoption of the Uniform Budget Law and it is still its meaning. The judgment of the Court of Civil Appeals should be reversed and the judgment of the trial court affirmed. BREWSTER and GRIFFIN, JJ., join in this opinion.