American Bank & Trust Co. v. Dallas County

ROWE, Justice,

dissenting.

I agree with that portion of the majority opinion which grants declaratory relief. I cannot agree, however, that the taxpayers have failed to show themselves entitled to injunctive relief thus allowing the taxing authorities to collect the assessments in question in full. Instead, for reasons below given, I would, by injunction if necessary, prohibit the taxing authorities from collecting so much of the assessments made under the “equity capital formula” as were attributable to those federal government obligations declared to be exempt by the Supreme Court of the United States.

The Supreme Court determined that the legislative purpose underlying REV. ST AT. section 3701, 31 U.S.C. 742, as amended in 1959, is to prevent state and local taxing authorities from imposing “an intolerable burden on federal obligations by threatening to diminish their value.” To insure against imposition of this burden, section *5763701 exempts from state and local taxation the value of all federal obligations “considered ... in the computation of the tax.” As conceded by the majority opinion, the Supreme Court held that use by tax assessors of the “equity capital formula” for computing the assessed valuation of bank shares does “consider” those federal obligations held by banks. The assessments at issue in this appeal were, therefore, made contrary to section 3701 because the federal obligations held by the banks were not exempted. The majority opinion appropriately renders a declaratory judgment to such effect.

One necessary implication from the Supreme Court’s decision is that because of the undue burden it would impose on protected federal obligations the collection of that portion of the assessments in question attributable to federal obligations is prohibited, and I would expressly so hold. If supplemental relief by way of injunction must be made available to assure this result, as the majority opinion assumes it must, this court has the statutory authority to so provide, TEX.REY.CIV.STAT.ANN. art. 2524-1, § 8 (Vernon 1965). It appears incongruous to me to declare that federal obligations are protected against a certain type of assessment by state and local taxing authorities and at the same time to affirmatively sanction the collection of an assessment of a prohibited type by refusing to grant appropriate injunctive relief.

The majority bases its denial of injunc-tive relief on the ground that the banks failed to offer any proof that under the appropriate standard for determining value (which standard differs from that actually used) their lawful assessment would be less, citing City of Arlington, Montgomery County and similar authorities. None of the cited authorities are in point, however, because none addresses the question here presented concerning the protection of federal obligations. Under circumstances such as these, where protection of federal obligations as well as the interest of Texas taxpayers is at stake, I would hold that the burden of showing an injury substantial enough to authorize injunctive relief is met when the proof establishes, as it does here, that the taxpayers’ exempt federal obligations were included in the formula used to fix the assessment sought to be collected. See City of Waco v. Amicable Life Insurance Company, 230 S.W. 698, 702 (Tex. Civ.App.—Austin 1921), affirmed, 248 S.W. 332 (Tex.Comm’n App.1923, judgment adopted); TEX.TAX CODE ANN. Section 11.12 (Vernon 1982).