Court Opinion

ID: 9669158
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:41:05.134253+00
Date Added: 2024-06-11T18:15:53.039563
License: Public Domain

GONZALEZ, Justice,
dissenting.
[June 3, 1993.]
Mr. W.E. Bailey died in 1973 leaving a wife and two sons. At the time of his death, Mr. and Mrs. Bailey owned 26 parcels of land comprising 146 acres with an estimated value of one million dollars. As administrator of the estate, Mrs. Bailey paid all of the debts of the estate but refuses to pay the taxes that have accrued since her husband’s death. It has been approximately 20 years since her husband died and there is no apparent need for continued administration. Nonetheless, Mrs. Bailey has not distributed the estate to the heirs, her sons. The taxing authorities were successful in the trial court in their suit to collect the delinquent taxes. The district court ordered that a tax hen on the property be foreclosed. The court of appeals affirmed this judgment and additionally declared that the heirs were personally liable for this debt. 817 S.W.2d 117. I would affirm the judgment of the court of appeals.
The majority agrees with the Baileys that this suit constitutes a claim against the estate for which heirs may not be held personally liable. To support this contention the Baileys rely on the definition of “claims” in section 3(c) of the Probate Code. That section provides:
“Claims” include liabilities of a decedent which survive, including taxes, whether arising in contract or in tort or otherwise, funeral expenses, the expense of a tombstone, expenses of administration, estate and inheritance taxes, liabilities against the *587estate of a minor or incompetent, and debts due such estates.
Tex.Prob.Code Ann. § 3(c) (Vernon 1980) (emphasis added). The Baileys assert that under this definition, liabilities “surviving” the deceased are not limited to those incurred while the decedent was alive, but include such expenses as estate and inheritance taxes, funeral expenses, and expenses of administration. They further suggest that “tax” liability which survives necessarily includes taxes other than estate and inheritance taxes. Consequently, property taxes accruing subsequent to the decedent’s death may be classified as debts of the deceased and assessed against the estate. This argument is based upon the premise that the phrase “liabilities of a decedent which survive” is modified by and includes the subsequently enumerated debts and expenses. In my opinion, this is an incorrect reading of this provision.
Section 3(c) classifies certain debts and expenses, the payment and collection of which are considered “claims” by or against the estate. Expenses incurred after the decedent’s death, such as funeral expenses, expenses of administration, and estate and inheritance taxes, are charged to the estate by way of express recognition in section 3(c). “[Liabilities of a decedent which survive” are also expressly recognized in this provision as a separate and distinct classification of “claims” and contemplate debts, including taxes, owed by a decedent for which his estate is now responsible.
There is little question that debts, including ad valorem taxes, that are due and owing by an individual during his lifetime are liabilities of that individual. Accordingly, upon the death of that individual, any outstanding unpaid taxes are liabilities which survive and can be assessed against the estate. Ad valorem taxes accruing subsequent to the decedent’s death, however, were never liabilities of the decedent during his lifetime. Therefore such liabilities do not “survive his death” and should not be charged directly to the estate.
The Baileys argue alternatively, and the majority of the court today agrees, that these delinquent taxes are claims against the estate by virtue of the fact that they are expenses of administration, necessary for the preservation, safe-keeping, and management of the estate. This would be true if the administrator would have actually paid the taxes, and was seeking reimbursement from the estate for such expenditures. In this case, however, the taxing authorities are seeking to collect for the nonpayment of delinquent taxes and, as such, are not seeking remuneration for expenses incurred in the preservation of the estate property.
Although at death ownership of property vests immediately in the heirs, the administrator not only has the right, but also the duty to take possession and control of this property during the course of the administration in order to pay the debts of the estate. Tex.Prob.Code § 37; see also Bloom v. Bear, 706 S.W.2d 146, 147 (Tex.App.—Houston [14th Dist.] 1986, no writ); Atlantic Ins. Co. v. Fulfs, 417 S.W.2d 302, 305 (Tex.Civ.App.—Fort Worth 1967, writ ref'd n.r.e.); Cain v. Church, 131 S.W.2d 400, 402 (Tex.Civ.App.—Dallas 1939, no writ); Adams v. Bankers Life Co., 36 S.W.2d 182, 185 (Tex.Comm’n App.1931, holding approved). During this period of administration, the personal representative of the estate owes a fiduciary obligation to use reasonable care in order to preserve and maintain the estate property.1 Tex.Prob.Code § 230(a); Humane Soc. of Austin and Travis County v. Austin Nat’l Bank, 531 S.W.2d 574 (Tex.1975), cert. denied 425 U.S. 976, 96 S.Ct. 2177, 48 L.Ed.2d 800 (1976); Roberts v. Stewart, 15 S.W. 1108 (Tex.1891); see also In Re Estate of Canales, 837 S.W.2d 662, 668 (Tex.App.—San Antonio 1992, no writ); Radford v. Coker, 519 S.W.2d 934 (Tex.Civ.App.—1975, writ ref'd n.r.e.). The payment of property taxes during this period in order to keep the property free from encumbrances may at times be encompassed in this obligation, as evidenced by Tex.Prob.Code § 329(a)(1) which allows the personal representative of the estate to bor*588row money for the payment of ad valorem taxes. When ad valorem taxes are paid on the property, this expenditure can be presented to the probate court and classified as an expense of administration, which in turn will be paid according to its priority of payment. Tex.Prob.Code § 322; see also Oldham v. Keaton, 597 S.W.2d 938, 945 (Tex.Civ.App.—Texarkana 1980, writ ref'd n.r.e.). Likewise, during a dependent administration, the administrator may seek to have the taxes paid by presenting this expense to the probate court for approval and classification. In either circumstance, the administrator is expending money or seeking to expend money in order to preserve the estate property. The taxing authority, on the other hand, has not paid one cent in order to preserve the estate property, nor are they seeking to spend money for this purpose.
To the contrary, in the present case the taxing authorities are seeking to impose liability for the nonpayment of these expenses, and as such, this liability cannot be considered an “expense of administration.” Whereas the delinquent taxes are neither liabilities of the decedent which survive nor expenses of administration, and thus not a “claim against the estate,” the question now becomes: who should the taxing authorities look to in order to secure payment of delinquent ad valorem taxes when the personal representative fails to pay these taxes on estate property during the administration of the estate? By statute, the Tax and Probate Codes establish that these ad valorem taxes are the personal obligation of the owners of the real estate; namely, the heirs.2
Section 37 of the Probate Code provides: [w]henever a person dies intestate, all of his estate shall vest immediately in his heirs at law, but ... shall still be liable and subject in their hands to the payment of the debts of the intestate; but ... the executor or administrator shall have the right to possession of the estate as it existed at the death of the testator or intestate ... and he shall recover possession of and hold such estate in trust to be disposed of in accordance with law.
Tex.Prob.Code Ann. § 37 (Vernon 1980) (emphasis added). Under this provision, upon death, title to the decedent’s property passes immediately to the heirs and devisees. Although subject to the administrator’s right of possession in order to pay the debts of the estate, ownership is nonetheless vested in the heirs. See Kelly v. Marlin, 714 S.W.2d 303 (Tex.1986); Welder v. Hitchcock, 617 S.W.2d 294 (Tex.Civ.App.—Corpus Christi 1981, writ ref'd n.r.e.); Zahn v. Nat'l Bank of Comm. of Dallas, 328 S.W.2d 783 (Tex.Civ.App.—Dallas 1959, writ ref'd n.r.e.); Buckner Orphans Home v. Maben, 252 S.W.2d 726 (Tex.Civ.App.—Eastland 1952, no writ). Thus, upon Mr. Bailey’s death, his share of ownership of the real estate vested immediately in his two adult sons.
Further, section 32.07 of the Tax Code provides:
[Pjroperty 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.
Texas Tax Code Ann. § 32.07 (Vernon 1992) (emphasis added). This provision imposes personal liability for payment of property taxes on the owners of the property. Reading these provisions together, the Tax and Probate Code provisions spell out when and in whom ownership of an intestate’s real estate vests, and the tax liability that necessarily flows from such ownership.3
*589The majority relies on this Court’s decision in Blanton v. Mayes, 72 Tex. 417, 10 S.W. 452, 453 (1889), for the proposition that ad valorem taxes “subsequently accruing” after the death of the testator constitute debts of the estate. However, the nature of the taxes involved in Blanton is unclear. Nevertheless, the Blanton case was decided ninety-one years before the enactment of Section 32.07 of the Tax Code. Thus, to the extent Blanton involves ad valorem taxes on real property, the legislature has effectively overruled this opinion by imposing liability, not on the estate, but on the owners of the property, the heirs.
The majority’s reliance on Long v. Long, 252 S.W.2d 235 (Tex.Civ.App.—Texarkana 1952, writ ref'd n.r.e.), and Driscoll Found. v. Nueces County, 445 S.W.2d 1 (Tex.Civ.App.—Beaumont 1969, writ dism’d w.o.j.) is also misplaced. These cases do not even involve the administration of an estate, but rather the management of testamentary trusts. The majority also finds Blinn v. McDonald, 46 S.W. 787 (Tex.1898) and Smith v. Basham, 227 S.W.2d 853 (Tex.Civ.App.—Dallas 1950, no writ) persuasive. These eases are equally not on point. The taxing authority is not a creditor of the deceased. The deceased did not owe the taxes before he died; they accrued after his death. The taxing authorities merely seek to collect the delinquent taxes from the owners of the property and we should apply the statutes as written. Whether application of these statutes may lead to unjust or anomalous results should not be our concern. When the language in a statute is unambiguous, this Court is bound to follow its plain meaning when seeking to effectuate the intent of the legislature. See Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 352 (Tex.1990); RepublicBank Dallas, N.A. v. Interkal, Inc., 691 S.W.2d 605, 607 (Tex.1985). We should apply the Probate and Tax Code as written. Any changes or revisions should be made by the legislature. This Court should not circumvent the plain language of these statutes under the guise of judicial construction.
JURISDICTION
The majority holds that the district was without jurisdiction to foreclose the tax lien on the property and that jurisdiction is proper in the Cherokee County Court at Law where the ongoing dependant administration of W.E. Bailey is pending. However, having concluded that personal liability for the nonpayment of ad valorem taxes accruing subsequent to the decedent’s death falls on the heirs of the estate, I would hold that the district court had jurisdiction over this action.4
This is a suit brought by the taxing authorities of Cherokee County seeking to enforce a personal obligation of the heirs by imposing personal liability and ordering a sale of the property. Although the sale of the property under the estate administration would be incident to an estate, see Palmer v. Coble Wall Trust Co., 851 S.W.2d 178, (Tex.1992) (“a suit is ‘appertaining to or incident to’ an estate when the controlling issue is the settlement, partition, or distribution of an estate.”), this action is based upon a personal obligation of the heirs and, as such, any judgment that could be rendered would be beyond the purview of the probate court. Therefore, the County Court at Law of Cherokee County sitting in probate is without jurisdiction to render judgment imposing personal liability on the heirs for the unpaid taxes. Because the probate court is without jurisdiction to render a judgment affording full relief to the taxing authorities, the district court had jurisdiction over this claim. See Lauraine v. Masterson, 193 S.W. 708 *590(Tex.Civ.App.—Galveston 1917, writ ref'd) (if the powers of the probate court are inadequate to grant full relief to which the claimant is entitled, the district court has jurisdiction over that claim in order to afford full relief).
Accordingly, I would affirm the judgment of the court of appeals.
HIGHTOWER and ENOCH, JJ., join this dissenting opinion.

. While the administrator may owe a fiduciary obligation to pay the ad valorem taxes on the property, this obligation is owed to the heirs, not the taxing authority. As such, if she fails to fulfill this obligation, the administrator is potentially liable to the heirs for breach of this duty.

. This is not to suggest that a personal representative may avoid liability for failing to properly maintain the estate assets. The personal representative has a fiduciary duty to maintain and preserve these assets and, as against the heirs, may be liable for breach of that duty. See Tex.Prob.Code § 230(a); Gordon v. Terrence, 633 S.W.2d 649, 652 (Tex.App.—Houston [14th Dist.] 1982, no writ); Gulf Ins. Co. v. Blair, 589 S.W.2d 786 (Tex.Civ.App.—Dallas 1979, writ ref'd n.r.e.). However, as against the taxing authority, the legislature has imposed this responsibility on the heirs, not the estate.

. All statutes are presumed to be enacted by the legislature with full knowledge of the existing laws and with reference to them. See Acker v. Texas Water Comm’n, 790 S.W.2d 299, 301 (Tex.1990); McBride v. Clayton, 140 Tex. 71, 166 S.W.2d 125, 128 (Comm’n App.1942, opinion adopted); T.E.I.A. v. Haunschild, 527 S.W.2d 270 (Tex.Civ.App.—Amarillo, writ ref'd n.r.e.).

. The majority, in my opinion, erroneously concludes that the district court had no jurisdiction to adjudicate this dispute. The concept of "dominant jurisdiction" is not involved here. As fully explained in other parts of this opinion, this suit is not a "claim against the estate" but a suit for collection of delinquent taxes that accrued on the defendants’ property after their father died. Had the taxing authority sought only a foreclosure of the tax liens which have attached to the property, see TexTaxCode § 32.01, jurisdiction would have been proper in the probate court to order a sale of the property and payment to the taxing authority. See Tex.Prob.Code § 322. However, the taxing authority is seeking to enforce a personal obligation on the owners of the property and, as such, the probate court has no jurisdiction to render judgment imposing personal liability to enforce this obligation.