Honorable T. M. Trlmble 

First Asaiatant 

State Superintendent of Public Instruction 

Auatln 11, Texaa 

Opinion No. O-6235 

Re: Under the facta stated, 

does the Amarillo Independent School Dietrlct have 

grounds for legal action 

agalnet the shareholders of 

the American St&z Bank or 

of the American Rational 

Bank f’ar ta;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 captioned matter. You enclosed a letter 

from Mr. George M. Weddill, Secretary of the Amarillo Public 

Schools to Mr. L. A. Woode, State School Superintendent, presenting the queetion which i8 aa follows: 

“WI11 you plreme submit the following Information 

to the Attorney General’8 Department and auk them for 

e rulings 

Subject: Amarillo Independent School District 

Vereua Amerloen State Bank 

Question of Tax Asseeament January 1, 1936 

The following information le taken from publlshed 

atetement of the condition of 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 $2 75,040.oo 

The real estate was assessed separately at a 

valuation fixed by the Board of Squallzation and 

was paid on accordingly. The matter in question Is 

the assessment against the stockholders for the personal property. As a matter of fact, on January 11, 

1936, which was eleven days after the above statement was published by the American State Bank, this 

institution ceased to do business, and it is represented by officers of the bank that the acceptable 

assets of the bank were transferred to the American 

National Bank in consideration of their assumption 

of liability to the depositors and creditors. It 

is further claimed that at the time of transfer, the 

stock of the bank had no value and, if it had no 

value on January 11, the day the actual transfer was 

made, there was no value on which to base these 

taxes on the year 1936 because there was no value 

of stock on January 1 of that year. It Is further 

claimed that stockholders of the new bank that was 

formed were not the same stockholders of the old 

bank, as there were more than thirty stockholders 

of the old bank that did not participate in the organization and become stockholders of the new bank. 

With the above information as a basis, the 

stockholders of the American State Bank claim there 

should be no liability for taxes assessed against 

them as of January 1, 1936 on the stock of the old 

bank which was liquidated or transferred to the 

American National Bank on January 11. 

Up to this time, tax assessments by the Independent School District have not been paid, and 

members of the School Board wish advice as to whether 

there is ground for legal action against the stockholders 
Honorable T. M. Trlmble - Page 3, (O-6235) 

of the American State Bank or the stockholders of the 

American National Bank for the taxes assessed'against 

the American State Bank as of January 1, 1936." 

In rendering our opinion we are doing so upon the 

assumption that a valid assessment was 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 following quoted statutes are relevant to the question 

under consideration, to wit: 

Art. 7151 Vernon's Annotated Civil Statutes, 1925: 

"All property shall be listed for taxation 

between January 1 and April 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 for which the property is required 

to be listed or rendered. Any property purchased 

or acquired on the first day of January shall be 

listed by or for the person 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 such period of exemption shall 

expire between January 1, and December 31 of any 

year, said property shall'be assessed and listed 

for taxes as other property; but the taxes assessed 

against said property shall be for only the pro rata 

of taxes for'the gortlon of such year remaining. 

Acts 1909, p. 373 . 

Art. 7145, V. A. C.-S.: 

"All property, 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'herein prescribed. 

Acts 1876, p. 275; G. L. vol. 8, p. 1111." 

Art. 7147, V. A. C; S.: 

"Personal property, for the purposes of 

taxation, shall be 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 same be in or 

out of the State; all ships, boats and-vessels 

belonging to inhabitants of~this State, if registered 

in this State, whether at home or abroad, arjd a31 

capital Invested therein; all moneys at interest, 

either within or without 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 

(except national banks) out of the State, owned by 

Inhabitants of 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 annuity be taxed within 

this State; all shares in any bank organized or that 

may be organized under the laws of the United States; 

all Improvements made by persons upon lands held by 

them, the title to which is still vested In the State 

of Texas, or in any railroad company, or which have 

been exempted from taxation for the benefit of any 

railroad company, or any other corporation whose 

property is not subject to-the same mode and rule of 

taxation as other property. Acts 1879, p. 39; G. L. 

vol. 8, p. 1339.” 

Art. 7166, v. A. C. S. 

“Every banking corporation, State or national, 

doing business In this State shall, in the city or 

town in which 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 the president~~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 shareholder of said bank shall, In 

the city or town where said bank is located, render 

at their actual value to the tax assessor all shares 

owned by him In such bank; and in case of his failure 

so to do, the assessor shall assess.such unrendered 

shares as other unrendered property. Each share In 

such bnnk shall be taxed only for the difference between its actual cash value and the proportionate 

amount per 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 

shareholder who Is In default In the payment of 

taxes due on his shares; nor shall any banking 

corporation permit the transfer upon Its books 

of any share, the owner of which Is in default 

In the payment of his taxes upon the same. Nothing 

herein shall be so construed as to tax national or 

State banks, or the shareholders thereof, at a greater 

rate than Is assessed against other moneyed capital 
Honorable T. M. Trlmble - page 5, (o-6235) 

in the hands of individuals. 

p. 726.” 

Acts 1885, p. 106; G. L. vol. g, 

It will be noted that said Article 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 article makes 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 the part 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 assessing property is final, and 

not reviewable by 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 their nature and are final. 

vs. City of Waco 3 S. W. (2d) 131. It has been further heIdE%% 

the determination by a Board of Equalization of the value of the 

property assessed for taxes cannot be disturbed by courts In absence 

of fraud , provided the board has performed its duties substantially 

in the manner 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 stockholders or 

shareholders claim’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 school board, and under the decisions the only way that 

same could be adjudicated would be by the courts. Under the decisions 

we doubt very seriously if the courts under the facts stated would 

go behind the action of the Equalization Board, In the absence of 

fraud . 

It is therefore the opinion of this department that the 

Amarillo Independent School District has sufficient grounds for 

brin&nq legal action against the shareholders of the American State 
Honorable T. M. Trlmble - page 6, (O-6235) 

Bank for the taxes assessed against said shareholders on the shares 

owned by them on January 1, 1936. It is also our opinion that the 

School District has no-legal claim against the shareholders of the 

American National Bank, except those who 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 

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