Honorable T. M. Trlmble

First Asaiatant State Superintendentof Public Instruction Auatln 11, Texaa OpinionNo. O-6235
Re: Under the facta stated, does the Amarillo Independent School Dietrlct have grounds for legal action agalnet the shareholdersof the American St&z Bank or of the American Rational Bank f’arta;ses

aasesaed against the shareholders Deer Sir: or the Amerlcen State Bank?

We are In receipt of your recent request for en opinion upon the above captionedmatter. You encloseda letter from Mr. George M. Weddill, Secretary of the Amarillo Public Schools to Mr. L. A. Woode, State School Superintendent,presenting the queetionwhich i8 aa follows:

“WI11you plreme submit the following Information to the Attorney General’8 Department and auk them for e rulings Subject: Amarillo IndependentSchool District

Vereua 

### Amerloen State Bank Question of Tax Asseeament January 1, 1936 The following information le taken from publlshed atetementof the conditionof the American State Bank a8 of Deoember 31, 19358 Cegltal Stock 

### Capital Debentures

Surplus & Profits @25,;;;.;:

200,000.00 35.3X3.29
Total $235,3,18.29
In arriving et the proper amount to eeaeae for- .

Honorable T. M. Trimble - page 2, (o-6235)

taxes, our Tax Assessor,Mr. M. H. Hardin, set up the following table: Capital Stock Less Debentures $200,000.00 75,ooo.oo 125,OOO.OO Add Surplus& Undivided Profits 35,320.00 160,320.OO Less Value of Real Estate as shown by Statement 05,280.00
Value of Personal Property

Assessment $275,040.oo The real estatewas assessed separatelyat a valuation fixed by the Board of Squallzation and was paid on accordingly. The matter in question Is the assessment against the stockholdersfor the personalproperty. As a matter of fact, on January 11, 1936,which was eleven days after the above statementwas published by theAmerican State Bank, this institutionceased to do business, and it is representedby officers of thebank that the acceptable assets of the bankwere transferredto the American NationalBank in considerationof their assumption of liability to the depositorsand creditors. It is further claimed that at the time of transfer, the stock of thebank had no value and, if it had no value on January 11, the day the actual transferwas made, therewas no value onwhich to base these taxes on the year 1936because therewas no value of stock on January 1 of that year. It Is further claimed that stockholdersof the new bank thatwas formedwere not the same stockholdersof the old bank, as therewere more than thirty stockholders of the old bank that did not participate in the organizationand become stockholdersof the new bank. With the above informationas a basis, the stockholdersof theAmerican State Bank claim there shouldbe no liability for taxes assessed against them as of January 1, 1936 on the stock of the old bank which was liquidatedor transferredto the AmericanNational Bank on January 11. Up to this time, tax assessmentsby the Independent School District have not been paid, and members of the SchoolBoardwish advice as towhether there is ground for legal action against the stockholdersHonorable T. M. Trlmble - Page 3, (O-6235)

of the American State Bank or the stockholdersof the American NationalBank for the taxes assessed'against theAmerican State Bank 

### as of January 1, 1936."
In rendering our opinionwe are doing so upon the assumption that a valid assessmentwas made against the shareholders of the American State Bank and that the Equalization Board passed upon the taxable value of the shares as rendered and as assessed by your tax assessor.

The followingquoted statutes are relevant to the question under consideration, towit:

Art. 7151 Vernon's Annotated Civil Statutes, 1925: "Allproperty shall be listed for taxation between January 1 andApril 30 of each year,when required by the assessor,with reference to the quantity held or owned on the first day of January in the year forwhich theproperty is required to be listed or rendered. Any propertypurchased or acquired on the first day of January shallbe listedby or for theperson purchasing or acquiring If any property has, 2:; contract or fact by reason of any special been exempt or has been claimed to be exempted from taxation for 

### any period or limit of time, and suchperiod of exemption shall expire between January 1, and December 31 of any year, saidproperty shall'beassessed and listed for taxes as otherproperty; but the taxes assessed against saidproperty shallbe for only the pro rata of taxes for'the gortlon of suchyear remaining. Acts 1909,p. 373

. Art. 7145, V. A. C.-S.: "Allproperty, real, personal or mixed, except such as may be herinafter expressly exempted, is subject to taxation,and'the same shall be rendered and listed as'hereinprescribed. Acts 1876,p. 275; G. L. vol. 8, p. 1111."
Art. 7147, V. A. C; S.: "Personalproperty, for the purposes of taxation, shallbe construed to include all goods, chattels and effects, and all moneys, credits, bonds and other evidences of debt owned by citizens of this State,whether,the samebe in or out of the State; all ships,boats and-vessels belonging to inhabitantsof~this State, if registered in this State,whether at home or abroad, arjd a31 capital Invested therein;all moneys at interest, eitherwithin orwithout the State, due the person,.

Honorable T. M. Trimble - page 3, 

### (O-6235)

to be taxed over and above what he pays interest for, and all other debts due such person over and above his Indebtedness: all public stock and securities;all stock ln turn-pikes,railroads, canals and other corporations (exceptnational banks) out of the State, owned by Inhabitantsof this State; all personal estate of moneyed corporations,whether the owners thereof reside In or out of this State, and the income of any annuity, unless the capital of such annuitybe taxedwithin this State; all shares in any bank organized or that may be organized under the laws of the United States; all Improvementsmade by persons upon landsheld by them, the title towhich is still vested In the State of Texas, or in any railroad company, orwhich have been exempted from taxation for the benefit of any railroad company, or any other corporationwhose property is not subject to-the samemode and rule of taxationas other property. Acts 

### 1879, p. 39; G. L. vol.

### 8, p. 1339.”
Art. 

### 7166, v. A. C. S. “Everybanking corporation,State or national, doing business In this State shall, in the city or town inwhich it Is located,render Its real estate to the tax assessor at the time and in the manner required of individuals. At the time of making such rendition thepresident~~or some other officer of said bank shall file with said assessor a sworn statement showing the number and amount of the shares of said bank,.the name and residence of each shareholder, and the number and amount of shares owned by him. Every shareholderof said bank shall, In the city or townwhere saidbank is located,render at their actual value to the tax assessorall shares owned by him In such bank; and in case of his failure so to do, the assessor shall assess.suchunrendered shares as other unrenderedproperty. Each share In such bnnk shall be taxed only for the differencebetween its actual cash value and the proportionate amountper share at which its real estate is assessed. The taxes due upon the shares of banking corporations shall be a lien thereon,and no banking corporation. shall pay any dividend to any shareholderwho Is In default In thepayment of taxes due on his shares;nor shall any banking corporationpermit the transferupon Its books of any share, the owner ofwhich Is in default In thepayment of his taxes upon the same. Nothing herein shallbe so construed as to tax national or State banks, or the shareholdersthereof,at a greater rate than Is assessed against othermoneyed capitalHonorable T. M. Trlmble - page 5, (o-6235)

in the hands of individuals. p. 726.” Acts 1885, p. 106; G. L. vol. g,

Itwill be noted that saidArticle 7166, provides that the shares in a bank shall be taxed on the basis of the amount of personal property owned by the bank and that the nersonal property Itself Is hot taxed.

The Supreme Court of Texas in t,h, vs. State et al, reported in 92 S. W. (2d 7151 (supra)used the following language: 1

“The foregoing articlemakes It all property owned by persons on the January must be listed for taxation,

. ^ .- ^.

_ . _ e case of Chlldress County 1011 in construing Art.

clear that first of and sale

_ tnereos Snortly aSterWard cloes not afr‘ect the rule

.” The ownership of property on the 1st day of January of any year creates a liability on thepart of the owner for taxes levied upon such property for that year. Winters et al, vs. Independent School District of Evant, 208 S. W. 574. Hillstnan vs. Falson 57 S. W. 921; Rhomberg vs. McLaren 21 S. W. 571.

It has been held that the action of a Board of Equalization in fixing the value and assessingproperty is final, and not reviewableby courts; even for gross undervaluation. Chicago R. I. & G. N. Railway Co. vs. State, 241 S, W. 255; State vs. Chicago R. I. & E. Railway Co., Comm. of App. 263 S. W. 249. It has been further held that the decisions of Boards of Equalization, in fixing taxable value of property Involve an issue of fact and such decisions are judicial in theirnature and are final. vs. City of Waco 3 S. W. (2d) 131. It has been further heIdE%% the determinationby a Board of Equalization of the value of the property assessed for taxes cannotbe disturbedby courts In absence of fraud,provided the board has performed its duties substantially in themanner prescribed by statute. Highland Park Independent School District of Dallas County, vs. 80 S. i>J. (2d) 1053. Republic Insurance Company,

It is stated in the quoted letter that the stockholdersor shareholdersclaim’that the stocks or shares as of January 1, 1936 were without value. This raises a fact issue which cannot be passed upon by the schoolboard, and under the decisions the onlyway that same could be adjudicatedwould be by the courts. Under the decisions we doubt very seriously if the courts under the facts statedwould go behind the action of the EqualizationBoard, In the absence of fraud

. It is therefore the opinion of this department that the Amarillo Independent SchoolDistrict has sufficientgrounds for brin&nq legal action against the shareholders of the American StateHonorable T. M. Trlmble - page 6, (O-6235)

Bank for the taxes assessed against said shareholderson the shares ownedby them on January 1, 1936. It is also our opinion that the School District has no-legal claim against the shareholdersof the American National Bank, except thosewho held shares in the American State Bank on January lst, 1936.

Trusting that the above and foregoing fully answers your inquiry,we are
Yours very truly

ATTORNEY GENERAL OF TEXAS 

## /S/ W, V. Geppert

APPROVED OCT. 10, 1944 /s/Carlo8 Ashley
FIRST ASSISTANT ATTORNEY GENERAL W. V. Geppert Assistant

APPROVED OPINION COMMITTEE By B.W.B. Chairman WVG:iw:elb