69
OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AdSTIN
Ronorablo Coorge PI. Sheppord
COaptrOllW OS Pub110 A000uW
A-tin, Texas
Deer Sir:
YOU r.quTt
88 r0110wet
this d~pertmmt
of San Antonio.
ou to advise thir
give ta this attaoh-
bonda &id not nest the legal reqeiremnb for inree$-
ment of the fwids of tho Lloyd8,’ although there -8 ‘.
its
::
70
.,
Honorable 000. H. 3heqqard, p. iI
ample oeouritg bbok of the bonds, In saohlnery an4
equipment en4 ot.hor parSone prOpsrtpb
*U&r the prOViSiO~3 Or the l&W, SS it then
reed, tbe Wz~~on Z3took of & eoloent, 4ivldSn&-paying
corporation no8 elIglblS for the guaranty run4 of the
Lloyde~ therefore, w6 organized Dairy Iniestm5nt8,
InoorporStrd, using a0 Its Cspltsl St0ok ~139,000 In
bon&l8 0t Dslrylend, D’mrpcirated, plus $1,000 in oaeh.
T~s boads of Dalrylrnd, Inoorporeted hMe now been
oallod and in 11~ or thaiso bonds, DeIry InveetmSnte
non has a Illortge@ upon the ?ort Wrth plant oi the
da lry oom~~ni~e~ The InNr8naS Dopsrtment egrood with
this Snbatitutlon an4 I think we h8vs oonvInood thSi#
that the eeourlty b8ok ot the QUO,000 note is, now,
SvSu better than it was whoa Dairy ~Invtestmnte orned
Dairyland, Inoorporateb boa48.
*At Sny reto, you oan Sso that there Ma no
pioperty orested by the organlutlon of Deity 3b?~et-
m3nte, i’le WQTOthfaretoiore paying taxes on tho prop-
erty eeeuring th6 bonds of. Dairyland, Inoorporatod
end wo have oontinue& to do so ever sinas then1 snd
aInoS the Subetltutlon of the tIret mortgdgs otl the
Port iforth plant or the Company, we have, of ooure6,
oontinued to pay tars4 upon the Port Prouth plant a?
the Company. *
The Iesu6 reised 15 whether DSIry Xnveetmente, Ino,
owes ad va1ors.a taxes on laid bonde and mortgage not@.
Artlolo VIII, S6otion 1 Of th@ Texae Conetitutlon Qro-
older in part 5s r0now5t
.
-TexatIon ohall be squel and uniform. All
prbpsrty In this State, whether owned by natural
persona or oorpor,~tlonS, other then muni0Ipal
shall be tax04 in proportion to Ite value, whi oh
Shall be asoertained Sn may be provided by law.”
atlole 7145, R. 3., prov14eSr
-All prsporty, rf301, geraonol or mixed, ox-
oept ouoh ES may be herslnaftar expressly Ox-
‘.,L.;
._ ._ ,73.
Bonosoble Oeo. X. Sheppard, p. 3
lasptsd, IS eub,joot to texatlon, en4 t&o as&a8 ahall
be rmdered and listed as bernin prsaoribed.*
Artiale 9149, R. S., provI4eer
*Parsonal property, Sor the purposes ei texe-
tlon, Shall ba oonetrusd to lneluda all goods,
chattels an4 eireote, an4 all monayr, OradItS,
bonds and othar svI4eeaae of debt owned by aitlrens
or tbie 3tato. whatbor tbo same bo in or out of the
Statei all ahlps, boats an4 vessel0 belon&$ng to
lnh@tbltaate of tbI8 Mate, lf reuiStexed in thle
Stats, whathof st hose or lbroa4, anC all aapltal
Invsetsd tbarein; all monaga at Iat6raet, either
wlthln or kitbout tho State; due the forl)on, to be
taxed over end above what he pay5 lnter*et for,
and all other debte due such porfaoa over an4 abovo
his Indebte4nese~ all publio atook an4 eoouritiee;
all etook la turn-pikoe, railr0a4e, oenels and other
~oorporutione (azoept national bunks) out of the
State, oane4 by inbabltente of thI8 Stati; all per-
aonal estate of nonaye oorporatione, whothor the
owners thereof roaida in or out oT thle State, an4
the Inoome of any annuity, unle~se the aapit61 of
euoh annuity b@ taxed sit&In this state: n11 Shares
in any bnnk organized or that nuy bs organlzad under
tha laws or tha United Stpltss; all lwrovemmte
made by peraoau upon lands bald by them, the title
to whiah ia still voata4 in the State of Taxaa, or
in any rsllrca 4 oompaay, or whloh have baen amapt-
a4 frora taxntlon for tba bemilt of any railroad
ootapanyb o r lny other oorporation whose jmpsrty le
not eubjeat to the. sane no40 an4 rula oi taxation
a8 other property.*
AxtiOle 9149 dOrinesthe word *am4lts* to mean an4 In-
aludo Noverf olalm and d-and for money or other valuable thing,
and ovary annuity or sum or money rooaivable at tatated parioda,
duo or to baooma Uutv, and all olsilps en& demunds eaoure4 by doe4
or mortgage, duo or to bemse 4ue.*
The law is ‘well asttlod that bond8 and note8 ore oonaider-
ed 88 wproparty* for tba purpose of torutlon under sivid statutes.
Guaranty Llle Inauranoe Cornpaw 08, City of Austin, 190 8. M.
189 (Sup. Ct.)i Hall ~8, Ullar, 115 3. a. 1166 @up, Ct.); uity
of Abllena ta. Pryar 143 S. ‘8. (2d) 584, 557; Texas Land and
Cattle Company la. City Of Fort Worth, 93 a. k”. (26) 850, appeal
“,‘~a~d,gt3 Il. 9. 716, rrkma@#$ danied 298 U. 9. 7491 26
. . . .
The luthoritfea on the auh$mt 818 almost unanfmou# IA
favor or tha wpl,ll-eat8bllah& mile, uphald or reaoppiaad In
auiasroua aaae8, that to tax the debt aeoured by a sort@@ or
other lian DA real estata 8Ad elm the real ostote at 1ta ruii
value la not tloubls tarabioA.* 122 A. L. R, 743 aad ca8aa there
aitod. sea ala0 40 ‘Per. furlo. 94.
In i)risns vs. Fort, 57 9. z. Bd, 91, writ o? error r&mnd,
the Court raid I
*Ia ma4 lnstanaes, if not as a geAore1 rule,
WheA arodits are taxed, the renult is dupllasta
taxation. Pm instsnoa, when property ia sold
OA oredlt, ths purohaeer 18 required to pay texl)a
on it, regsrdlnss of the fact tbat it ie not paid
tar, and the aellar ia ra:uiwd to pay taxes upon
the amount of the debt owing to bin! By the pur-
ohemr. Now, while auah taxation 1s not llle,&,
it la, In 8 sense, double texotion; and it is for
this raeson, and to titiaate to 60s~ oxtsnt this
hardkhlp, that the ratenua lane of many atat8J
r:rE taxpayer8 to dadwt the debt8 owing by
IA oonnsotion with tha inoorporatioa of Dam Tnvaa6man68,
IAO., an artldavlt waa filed by the incOrpoFatOr8 *ritZi ths Saa-
ratory of S;ibatlr lo aaoordancr with Art1019 1308, R. 3.. to the
bffeot thst *the full amount c? t&i 00 itsl ato~ck with per value
to ba lsaacd by eaid ampany, namalyr s 13O,COO.O0, ha8 bOOA fA
Rood faith aubsorlbad and -)l,OOO.OO thsreoi ha8 bean paid fcr in
would, in d\rr oplnlon, ‘be lnaonelstant hold tbot eald bond8
73
l?onorabla Cao l N. Shsppard , p, 5
sera mproperty* In orCar to offdot a valid inoorporatlon of said
company, but to deny they ware *pri:perty” i~r tax purposes.
In the reoant oaoe of City of S’lohita ?allo va, Cooper,
170 S. ‘8. (26) 777, 780, writ of error retuaod, the Court said:
is olear to us ttat It woe lntended by the
*It
framara of our Conaaltution tbat all property should
be 8ubJeat to taxation, upon en equal and uniform
baa18 for tba purpose of defraylou the eorernmantel
expense, with cho oxoaptian only of auoh property
aa thrlt dooument epaolfloellp axaapta therefrom and
auoh au tha Laglalaturo shall, under Coaatitutloaal
roatrlotlonr, by expllalt language, daalero to ba
@xampt.
*It la the univarsel rule in tbie state ttat tba
Constitution has datlnitcly provld3d for awry Porn
of exemption of property fmn tsxntion; tbot if cm
axersgtion is so mRo it oennot bu anlargad upon elthor
by the Lc~lslstura or by the oourta. Sam oourta have
cone far onourh’. to say that if there la a rmaonsblo ~:-.
doubt uta to tba slwning of the Constitution .i~ 1Mttera
of exemptlone, ths doubt will ba resolved against tbit
sxa~ptlon, for eXWiptlOn* iron toxetlon trr not favor-
ad by the Conatitutlon noP by tbo Courts in their
OOAStfUOtiOA. ‘City oi Dal.ioa vs. Cootcan, Z’ex. Clv.
A>Q., 160 3. :;‘. 32, vcrlt rafuaodi JOAQS vs. ~LW.llaam,
121 Ter. 94, 45 fi. 2. Bd 130, 7-S A.L.R. 983.”
8lnoa, in our opinloA, no grounds axlat IA this oaao upon
shioh an exemption oould be pradioatad, “9 bald that Dairy b
VODtmenta, Ino., is liable for ad valorom tares 0A t&a bonds
end mortl(aga indgbtodndsa ornad by said aorporetlon.
ioura *my truly