NUMBER 13-14-00574-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG 

SEBASTIAN COTTON & GRAIN, LTD., Appellant,

v.

WILLACY COUNTY APPRAISAL DISTRICT, Appellee.

 

On appeal from the 197th District Court

of Willacy County, Texas.

OPINION ON REMAND

Before Chief Justice Contreras and Justices Longoria and Perkes 

Opinion on Remand by Justice Perkes1

This property-tax dispute has been remanded to us by the Supreme Court of Texas

to decide the following issues: (1) whether appellant, Sebastian Cotton & Grain, Ltd. 

 

1 The Honorable Nelda V. Rodriguez, former Justice of this Court, did not participate in this opinion 

on remand because her term of office expired on December 31, 2018, and she was replaced on panel by 

Justice Gregory T. Perkes in accordance with the appellate rules. See TEX. R. APP. P. 41.1(a).
2

(Sebastian), was the owner of the subject property; (2) if so, whether Sebastian was 

quasi-estopped from entering an agreement pursuant to tax code § 1.111(e) with 

appellee, Willacy County Appraisal District (WCAD); and (3) if not, whether the trial court’s 

finding that Sebastian fraudulently induced WCAD into entering the agreement was 

supported by factually and legally sufficient evidence. Willacy Cty. Appraisal Dist. v. 

Sebastian Cotton & Grain, Ltd., 555 S.W.3d 29, 48, 52 (Tex. 2018). Because we find 

that Sebastian was the owner of the grain, and thus estopped from entering a contrary 

agreement under § 1.111(e), we affirm.

I. BACKGROUND2

Sebastian rendered to WCAD its entire grain inventory as of January 1, 2009. 

See generally TEX. TAX CODE ANN. § 22.01(a) (West, Westlaw through 2017 1st C.S.) 

(requiring a property owner to declare, or “render,” to the appraisal district, “all tangible 

personal property used for the production of income that the person owns . . . on January 

1” so that the property may be taxed). After Sebastian applied for and was denied an 

exemption on a portion of the inventory, it filed a motion to correct ownership under 

§ 25.25(c) of the Property Tax Code, alleging that it actually sold 86% of the rendered 

grain to DeBruce Grain, Inc. (DeBruce) in 2008.

To support its position, Sebastian produced four sales contracts between 

Sebastian and DeBruce, providing for the sale of a total of 1.34 million bushels of grain. 

Each contract was executed in 2008 and provided for shipment in 2008. Through its 

representations to the chief appraiser, Sebastian implied that possession of the grain on 

 

2 The facts are well-known to the parties and the supreme court’s opinion includes a 

comprehensive background. See Willacy Cty. Appraisal Dist. v. Sebastian Cotton & Grain, Ltd., 555 

S.W.3d 29, 34–37 (Tex. 2018). The background provided here is limited to the facts necessary to explain 

our disposition. See TEX. R. APP. P.47.1.
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January 1, 2009 was immaterial because ownership immediately transferred in 2008 

upon execution of the contracts.

3

In a phone conversation with Sebastian’s property tax 

agent, the chief appraiser agreed to change the appraisal roll to reflect DeBruce as the 

owner. Consequently, Sebastian was issued a tax refund.

DeBruce protested the corrected appraisal roll and resulting tax assessment, also 

asserting non-ownership. DeBruce pointed to a provision in the contracts expressing the 

parties’ intent to resolve any disputes under the National Grain and Feed Association 

Rules (NGFA Rules). Rule 6 of the NGFA Rules provides that title and risk of loss 

transfer to the buyer at either the time of shipment or delivery, depending on the specific 

term in the contract, but not before. DeBruce provided WCAD with proof that, of the 1.34 

million total bushels contracted for, only 138,300 had been shipped or delivered by 

January 1, 2009; some were shipped and delivered after January 1; and 808,797 bushels 

were never shipped or delivered. DeBruce acknowledged liability for the 138,300 

bushels and disputed the rest. The chief appraiser agreed, changing the appraisal rolls 

again to reflect Sebastian as the owner of the remaining grain.

Sebastian protested to the Willacy County Appraisal Review Board (ARB). The 

ARB upheld the change to the appraisal roll and Sebastian sought judicial review,

arguing: (1) WCAD was prohibited by statute from changing the appraisal roll because 

it increased Sebastian’s tax liability; or (2) in the alternative, the phone conversation in 

 

3 Sebastian argued it was only a warehouseman for the grain on January 1, 2009. We note that 

a Rendition of Taxable Personal Property requires the taxpayer to report any property it is holding as a 

fiduciary and to identify the owner. TEX. TAX CODE ANN. § 22.01(a) (West, Westlaw through 2017 1st C.S.). 

Additionally, “a person shall file a report listing the name and address of each owner of property that is in 

his possession or under his management on January 1 by bailment.” Id. § 22.04(a) (West, Westlaw 

through 2017 1st C.S.). Contrary to its subsequent position, Sebastian did not follow either of these 

provisions, rendering all the grain in its possession on January 1.
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which the chief appraiser agreed to change the ownership to DeBruce was a final, 

nonreviewable agreement under § 1.111(e) of the Property Tax Code. See id. § 1.111(e) 

(West, Westlaw through 2017 1st C.S.) (providing that “[a]n agreement between a 

property owner or owner’s agent and the chief appraiser is final if the agreement relates 

to a matter . . . which may be corrected under Section 25.25 or on which a motion for 

correction under that section has been filed but not determined by the [ARB]”). 

WCAD argued the ownership change was authorized and raised fraud as an 

affirmative defense to its agreement with Sebastian. The case was tried to the bench 

and the district court rendered a take nothing judgment against Sebastian, finding WCAD 

was authorized to make the ownership change and the agreement should be set aside 

because it was induced by fraud.

On appeal to this Court, Sebastian again challenged WCAD’s statutory authority 

to make the ownership change, as well as the factual and legal sufficiency of the evidence 

to support the trial court’s fraud determination. We reversed the trial court on the 

authority issue without reaching Sebastian’s sufficiency challenge. The Supreme Court 

of Texas granted WCAD’s petition for review and reversed, holding WCAD acted within 

its authority. Sebastian Cotton & Grain, 555 S.W.3d at 54. The supreme court 

remanded the case to this Court to first determine the issue of ownership, and then to 

determine the propriety of Sebastian’s agreement with WCAD under § 1.111(e). Id. 

II. OWNERSHIP

“[P]roperty taxes are the personal obligation of the person who owns or acquires 

the property on January 1 of the year for which the tax is imposed.” TEX. TAX CODE ANN.
5

§ 32.07(a) (West, Westlaw through 2017 1st C.S.). The trial court determined Sebastian 

was the owner of the grain in its possession on January 1, 2009.

4

 We agree. 

Ownership is a legal question based on determined facts. Sebastian Cotton & 

Grain, 555 S.W.3d at 46 & n.12 (citing Hudson Buick, Pontiac, GMC Truck Co., v. Gooch, 

7 S.W.3d 191, 195–96 (Tex. App.—Tyler 1999, pet. denied)). The material facts in this 

case are undisputed. Instead, both parties point us to the purchase contracts and the 

NFGA Rules incorporated into those contracts to support their respective positions on 

ownership.5 Interpretation of an unambiguous agreement is a question of law we review 

de novo. AEP Tex. Cent. Co. v. Pub. Util. Comm’n, 286 S.W.3d 450, 464 (Tex. App.—

Corpus Christi 2009, pet. denied) (citing Weslaco Fed’n of Teachers v. Tex. Educ. 

Agency, 27 S.W.3d 258, 263–64 (Tex. App.—Austin 2000, no pet.)).

At the outset, this Court notes that each of the four purchase contracts resembles

an option agreement, which is defined as “[t]he right (but not the obligation) to buy or sell 

a given quantity of securities, commodities, or other assets at a fixed price within a 

specified time.” Option agreement, BLACK’S LAW DICTIONARY (10th ed. 2014); see also

Jarvis v. Peltier, 400 S.W.3d 644, 650 (Tex. App.—Tyler 2013, pet. denied). Each 

contract provided a fixed price point per bushel, a specific shipment period, and that

 

4

“The district court shall try all issues of fact and law raised by the pleadings in the manner 

applicable to civil suits generally.” TEX. TAX CODE ANN. § 42.23(a) (West, Westlaw through 2017 1st C.S.).

5 Neither party has argued in the trial court or this Court that the purchase contracts or NFGA Rules 

are ambiguous. Although the parties interpret the provisions differently, “[a] contract is not ambiguous 

merely because the parties disagree.” URI, Inc. v. Kleberg Cty., 543 S.W.3d 755, 763 (Tex. 2018) (citing 

Samson Expl., LLC v. T.S. Reed Props., Inc., 521 S.W.3d 766, 787 (Tex. 2017)). Contract ambiguity is a 

question of law, id. (citing Samson Expl., 521 S.W.3d at 787), and we find the purchase contracts and the 

incorporated NFGA Rules to be unambiguous because they are subject to only one genuine meaning. 

See Nassar v. Liberty Mutual Fire Ins. Co., 508 S.W.3d 254, 258 (Tex. 2017) (per curium) (citing RSUI 

Indem. Co. v. The Lynd Co., 466 S.W.3d 113, 119 (Tex. 2015)). 
6

payment would be due after delivery. According to the testimony of Sebastian’s owner 

Terry Funk, it is not uncommon in the grain industry for buyers like DeBruce to cancel 

orders; a buyer’s only obligation upon cancelation is to pay the difference, if any, between 

the contract price and the market price at the time of cancelation, as well as any accrued 

storage fees. It is undisputed that DeBruce canceled its purchase of 808,797 bushels; 

i.e., DeBruce never took possession of or paid for the majority of the 1.34 million bushels. 

We reject, therefore, Sebastian’s argument that execution of the four contracts 

immediately transferred ownership in the 1.34 million bushels when DeBruce was under 

no obligation to complete the transactions.

Moreover, we are guided by the plain language of the contracts and the NGFA 

Rules. Each purchase contract contained the same provision: “Any dispute under this 

agreement shall be resolved under the rules of the Kansas City Board of Trade or the 

National Grain and Feed Association.” Rule 6 of the NGFA Rules provides that title and 

risk of loss transfer to the buyer at the time of shipment or delivery, but not sooner:

Title, as well as risk of loss and/or damage, passes to the Buyer as follows: 

(A) On f.o.b. origin or f.o.b. basing point contracts, at the time and place of 

shipment. The time of shipment is the moment that the carrier accepts the 

appropriate shipping document. . . . (B) On delivered contracts: . . . By 

truck, upon arrival at the Buyer’s final destination.

NAT’L GRAIN & FEED ASS’N, NGFA GRAIN TRADE RULES, Rule 6 (2018).

6

 It is undisputed 

that, as of January 1, 2009, only 138,300 bushels had been shipped or delivered to 

DeBruce. We conclude, then, that under the NGFA Rules, Sebastian was the legal title 

holder of all the grain in its possession on January 1.

 

6 Neither party presented the trial court with the rules of the Kansas City Board of Trade and 

Sebastian never argued they conflict with Rule 6 of the NGFA Rules. 
7

The term “ownership” is not defined by the Property Tax Code. See TEX. TAX.

CODE ANN. § 1.04 (West, Westlaw through 2017 1st C.S.). But “[t]he person having legal 

title to property is generally considered to be the owner thereof for purposes of taxation.” 

Childress Cty. v. State, 127 Tex. 343, 349, 92 S.W.2d 1011, 1015 (1936). Sebastian 

has failed to provide us with a principled reason to deviate from this general rule of law.

We are also not persuaded by Sebastian’s argument that ownership and legal title 

are not mutually inclusive. Read in context, the term “title” in Rule 6 was intended to be 

synonymous with ownership. See Columbia Gas Transmission Corp. v. New ULM Gas, 

Ltd., 940 S.W.2d 587, 591 (Tex. 1996) (“In determining the parties’ agreement, [courts] 

are to examine all parts of the contract and the circumstances surrounding the formulation 

of the contract.”) (citing National Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 

520 (Tex.1995) (per curium)). Otherwise, a buyer would be the owner upon execution 

of a purchase contract, with all the attendant rights and obligations of ownership, yet legal 

title would not pass until shipment or delivery—if either occurs at all. The only 

reasonable interpretation of Rule 6 is that it delineates the point at which ownership 

transfers from the seller to the buyer.7

Finally, Sebastian argues in the alternative that DeBruce was at least the equitable 

title holder of the disputed grain. It relies on AHF-Arbors at Huntsville I, LLC v. Walker 

County Appraisal District, 410 S.W.3d 831 (Tex. 2012) for the proposition that equitable 

title, as opposed to legal title, is sufficient to establish ownership for tax purposes. 

 

7 Of course, as the preamble to the NFGA Rules makes clear, the parties were free to contract for 

different terms. NAT’L GRAIN & FEED ASS’N, NGFA GRAIN TRADE RULES, Preamble (2018). In other words, 

if Sebastian and DeBruce wanted to transfer legal title upon execution of the contracts, they were free to 

include such a term in the contracts. But because they have failed to express a clear intent otherwise, 

Rule 6 controls. 
8

Equitable title is defined as “the present right to demand legal title.” Id. at 837 (citing 

Carmichael v. Delta Drilling Co., 243 S.W.2d 458, 460 (Tex. Civ. App.—Texarkana 1951, 

writ ref’d)). Even if we assume, without deciding, that DeBruce held equitable title in the 

undelivered grain on January 1, 2009, we are not persuaded that an equitable title holder 

should be assessed a tax liability over the legal title holder. 

We find AHF-Arbors to be distinguishable from this case in several material ways, 

and therefore decline to deviate from the general rule that legal title establishes ownership 

for tax purposes. See Childress Cty., 127 Tex. At 349, 92 S.W.2d at 1015. Most 

notably, AHF-Arbors concerned a tax exemption, not a tax liability, and thus required 

interpretation of a different provision in the Property Tax Code with distinct policy 

concerns. AHF-Arbors, 410 S.W.3d at 836–39 (interpreting § 11.182(b), not § 32.07(a), 

and noting the social benefit of encouraging private investment in public housing). 

Additionally, AHF-Arbors involved a nonprofit corporation imputing its status to its whollyowned and controlled subsidiary. Id. at 839. In this case, there is a dispute between 

two purported owners, one of which must be personally obligated to pay the tax liability. 

See TEX. TAX CODE ANN. § 32.07(a). 

To that end, we find Bailey v. Cherokee County Appraisal District, 862 S.W.2d 581 

(Tex. 1993) to be more analogous to this case. In a dispute over whether the equitable 

title holder or the legal title holder owed the tax liability, the Supreme Court of Texas held 

that, “[w]hile it is true that the heirs hold equitable title to estate property, this interest does 

not give rise to tax liability. The responsibility for taxes lies with the administrator as 

holder of legal title.” Id. at 584. We conclude that, as the legal title holder of the grain 
9

in its possession on January 1, 2009, Sebastian was the actual owner for purposes of 

taxation.

III. ESTOPPEL 

Sebastian argues that, even if it is the owner, its agreement with WCAD to resolve 

its motion to correct ownership constituted a final, nonreviewable agreement under 

§ 1.111(e) of the Property Tax Code. See TEX. TAX. CODE ANN. § 1.111(e) (providing 

that “[a]n agreement between a property owner or owner’s agent and the chief appraiser 

is final if the agreement relates to a matter . . . which may be corrected under Section 

25.25 or on which a motion for correction under that section has been filed but not 

determined by the board”); see also Sebastian Cotton & Grain, 555 S.W.3d at 47-48 

(“[T]he oral agreement between the parties in this case may be sufficient to establish a 

section 1.111(e) agreement, assuming the agreement was made by a proper party.”). In 

effect, Sebastian seeks to set aside WCAD’s ownership change to the appraisal roll as a 

violation of their prior agreement. 

A taxpayer relying on the finality of a § 1.111(e) agreement must first establish the 

agreement’s validity. Sebastian Cotton & Grain, 555 S.W.3d at 47. Whether an

agreement is valid and enforceable is generally a question of law we review de novo. 

See Meru v. Huerta, 136 S.W.3d 383, 390 (Tex. App.—Corpus Christi 2004, no pet.) 

(citing Farah v. Mafrige & Kormanik, P.C., 927 S.W.2d 663, 678 (Tex. App.—Houston [1st

Dist.] 1996, no writ)).

The plain language of § 1.111(e) limits its application to an agreement between 

the chief appraiser and “a property owner or the owner’s agent.” TEX. TAX CODE ANN.

§ 1.111(e). Although we have determined Sebastian to be the actual owner of the grain 
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in its possession on January 1, and thus the proper party to enter a section 1.111(e) 

agreement, our inquiry does not end there. The supreme court instructed us to consider 

“whether estoppel or quasi-estoppel may preclude Sebastian from entering into an 

agreement under section 1.111(e) based on its representation that it was not the property 

owner.” Sebastian Cotton & Grain, 555 S.W.3d at 48. 

But before turning to this question, we are guided by the supreme court’s holding 

that an agreement under § 1.111(e) cannot resolve ownership as a legal matter because 

a chief appraiser does not have the authority to make such a determination. Id. at 49. 

As the supreme court explained, “liability arises out of actual property ownership, not the 

appraisal roll and tax roll reflection of ownership. . . . Simply put, tax liability exists 

independently of the appraisal roll or tax bill.” Id. at 45. 

The substance of Sebastian’s agreement with WCAD was the resolution of 

Sebastian’s motion to correct ownership, but that “correction did not determine actual 

ownership as a legal matter.” Id. at 49. Instead, we have determined ownership in this 

opinion, and our holding means Sebastian was the owner on January 1, 2009, long before 

its agreement with WCAD. Id. at 45 (“[U]nder the Property Tax Code, WCAD’s correction 

had no effect on tax liability—if Sebastian was indeed the owner on January 1, Sebastian 

was liable for property taxes regardless of whose name appeared on the appraisal roll or 

the tax bill.”). Because Sebastian was the owner of the disputed grain on January 1, 

2009, we proceed to examine “whether estoppel or quasi-estoppel may preclude 

Sebastian from entering into an agreement under section 1.111(e) based on its 

representation that it was not the property owner.” Id. at 48 (emphasis added). 
11

“Quasi-estoppel precludes a party from asserting, to another’s disadvantage, a 

right inconsistent with a position previously taken. The doctrine apples when it would be 

unconscionable to allow a person to maintain a position inconsistent with one to which he 

acquiesced, or from which he accepted a benefit.” Id. at 48 (quoting Samson Expl., LLC 

v. T.S. Reed Props., Inc., 521 S.W.3d 766, 778 (Tex. 2017)). 

In this case, Sebastian must now rely on its actual ownership to establish its right 

to enforce the finality of its agreement with WCAD under § 1.111(e). See TEX. TAX. CODE 

ANN. § 1.111(e); Sebastian Cotton & Grain, 555 S.W.3d at 48 (“It should go without saying 

that if Sebastian was not the property owner, then it, by definition, lacked the authority to 

make an agreement under section 1.111(e). To be clear, nothing in the statute or our 

public policy prevents a non-owner of property from agreeing with the chief appraiser to 

change the appraisal rolls to reflect that the non-owner in fact does not own the property. 

However, such an agreement would not arise under section 1.111(e), and therefore would 

be subject to review by the ARB or a judicial body.”). The assertion of this right is wholly 

inconsistent with its prior position—that it was not the owner. For example, in the leadup to the agreement, Sebastian’s tax agent stated in an email to WCAD’s chief appraiser 

that “Sebastian Grain did not own most of the inventory on January 1.” Sebastian’s 

assertion of its right to finality under § 1.111(e) is to the detriment of WCAD and the taxing 

authorities because, if the agreement is valid and enforceable, the grain will escape 

taxation. And Sebastian accepted the benefit of resolving its motion to correct ownership 

based on its assertion of non-ownership. It would be unconscionable to allow Sebastian 

to now rely on its actual ownership to enforce that agreement when “the very nature of 
12

the agreement was to establish that Sebastian was not the owner of the grain.” 

Sebastian Cotton & Grain, 555 S.W.3d at 48; see Samson Expl., LLC, 521 S.W.3d at 778.

Because WCAD established Sebastian’s ownership as a legal matter, Sebastian 

was precluded from taking the position that its agreement with WCAD was a final, 

nonreviewable agreement under § 1.111(e). Because this issue is dispositive, we do not 

reach Sebastian’s sufficiency of the evidence issue regarding fraud. See TEX. R. APP. P.

47.1. 

IV. CONCLUSION

The trial court’s judgment is affirmed. 

GREGORY T. PERKES

Justice

Delivered and filed the

18th day of April, 2019.