Court Opinion

ID: 4136907
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:18:52.815237+00
Date Added: 2024-06-11T14:35:18.412776
License: Public Domain

E           0                     GENERAL

                                    March      25,   1957
              ”

Han;. Jack’q:     Neal                         Opinion       No.      WW-74
County   Attorney
Young   county                                 Re:      Whether    or not the royalty    tnter-
Graham,     Texas                                       est and fee interest   conveyed      in
                                                        trust to the Ftrst   National    Bank
                                                        of Longview    for the use and bene-
                                                        of the Roy H. Latrd     Memorial
                                                        Hospital   owned by the City of
                                                        Kilgore   would be exempt     from
Dear    Mr.       Neal:                                 taxation,

                You request  the     opinion    of   this    office    ufron the following
question      presented  in your     letter:

              “Annie   B. Laird    bequeathed    to the First     National
       Bank of Longview,      Texas,   as trustee    for the Roy H.
       Laird   Memorial    Hospital,   at Kilgore,    Texas,    certain
       oil and gas interest     in Young County, Texas,         and the
       Roy H. Laird      Memorial    Hospital   in Kilgore    is owned
       and operated     by the City of Kilgore,      Texas.

               “Mrs.      Laird,   at her death, owned a one-fourth
       in fee of a 163 acre tract,              a 367 acre    tract and 292.6
       tract and royalty         interest    of different    percentage    in
       a number      of tracts      situated     in Young County,      Texas.
       I am familiar         with the fact that the city-owned           hospi-
       tal would be exempt           from    taxation    but my question      is
       whether    or not the royalty           interest   and fee interest
       conveyed     in trust to the bank for the use and benefit
       of the Roy H. Laird           Memorial       Hospital   owned by the
       City of Kilgore,         Texas,    would come under this
       exemption.      . ..-

              With your letter     you submit a copy of the will of Annie             B.
Laird.     This will is the source      of the title to the property         in question,
which consists      of certain  fee and mineral       interests    in land owned by
Annie    B. Laird.     The wtll bequeaths     to the First      National   Bank of
Longview,     Texas,   as trustee,   property   in ,trust for the Laird        Memorial
Hospital    owned by the Clty of Kilgore,        a municipal      corporation.

             The City of Kilgore,   a municipal   corporation,    is owner   and
operator   of the hospital.    The property   in question   is exempt   from
taxation  under the Constitution    and statutes  of this State, unless    the
fact that it is willed   to the bank as trustee    for the hospital,   with the
                                                                                       .     -

Hon.     Jack    Q . Neal,      page    2 (WW-74)

qualification     that only the income      is to be paid to the hospital       removes
exemption.        We have concluded      that this qualification     does not have that
effect.     The trustee     can make no private      use of the property,      now or
ever,    be it corpus     or income.     The trustee     must hold it and pay the
income      annually   to the hospital,   which is municipally       owned.
Unqualified     fee ownership     in a municipality      is not a condition    precedent
to the exemption.         San Antonio   Independent     School   District   v. Water
Works      Board,    120 S.W.2d,   861 (Courtof    Civil Appeals,      1937, writ ref.)

                 Section     1 of Article     VIII    of the        Constitution      provides     ,in     part,
as follows:

               “All      property      in this State.        . . other     than
        municipal,       shall be      taxed.  . ..”

                 Section     2 of Article     VIII    of the        Constitution      also   provides,
in part,as        follows:
               a,
                . . . but the legislature   may,                by general          laws,
        exempt    from   taxation public property                used for          public
        purposes;    . . .*

            Section   9 of, Article   XI of the Constitution,    after enumerating
certain properties     of cities   and towns exempt    from   taxation,  such as
public buildings,   etc.,  contains   the following:
                 .I
               . . . and all other property      devoted   exclusively
        to the use and benefit   of the public shall be exempt
        from forced   sale and from    taxation,   . . .((

               Pursuant   to this authority,             the Legislature   enacted               Article
7150,     Vernon’s   Civil Statutes,  which             is in part as follows:

                “The following     property          shall     be    exempt
        from    taxation,  to wit:

                 “(4)     All property,      whether  real or            personal,
        belonging       exclusively   to    . . . any political           subdivision
              .,
        . . .

            The following     cases,    in principle,         support   the exemption    of
this property    from  taxation:     Corporation           of San Felipe     de Austin  v.
State,  111 T. 108, 229 S.W. 84m,;              \.
                                                     IJLCLZ~
                                                     CL^L_
                                                                   -“:y
                                                               V. LL~
                                                               _.
                                                                         of Houston,   146
md       277 (C.C.A.  ~1940., error      ref.);   City of Shert-r Ian v. Williams,         84
T. 421, 19 S.W. 606, (1892);        City of Abilene           v. State,   113 S.W.Zd Ii31
(C.C.A.   1938); State v. Taylor,       72 T. 297, 12 Cj.w.6                (1888); A. & M.
Con. Ind, Sch. Dist. v. City of Bryan,             143 Tex. 384., 184 S.W.2d 914
x1945), affg.   179 S.W.2d 987 (C.C.A.)
Hon.     Jack    Q.   Neal,   page   3 (WW-74)

                                         SUMMARY

                Real property,      whether     fee or a mineral      interest
                willed  to a bank, as trustee,          for the use and
                benefit  of a hospital       owned by a municipality,
                is exempt    from     taxation    under the Constitution
                and statutes     of ,this State; and the fact that the
                trustee   is directed     to pay annually      only the
                income   from     the property      to the hospital    does
                not destroy     the exemption,       since the municipality
                is, in fact,   the beneficial      owner    of the interest
                in the property,      both corpus      and income.

                                                 Yours     very      truly,

                                                 WILL     WILSON
                                                 Attorney    General

                                                 BY

                                                         Asslstant

LPL:cs

APPROVED:

OPINION         COMMITTEE
H. Grady        Chandler, Chairman