
    STATE ex rel. MERRIMAN et al. v. BALL et al.
    (No. 3936.)
    Supreme Court of Texas.
    June 4, 1927.
    1. Constitutional law &wkey;a278(2) — Waters and water courses <S=ol82 — Fresh water supply district statute held violative of due process clauses for failure to provide for hearing of property owners on questions of boundaries and benefits (Vernon’s Ann. Civ. St. Supp. 1922, arts. 5107 — 180 to 5107 — 266; Const. U. S. Amend. 14, § I; Const. Tex. art. I, § 19).
    Acts 36th Leg. (1919) 1st and 2d Called Sess. c. 48 (Vernon’s Ann. Civ. St. Supp. 1922, arts. 5107 — 180 to 5107 — 266), relating to organization of fresh water supply districts on petition of landowning voters helé violative of due process clauses of the state and federal Constitutions (Const. XT. S. Amend. 14, §, 1; Const. Tex. art. 1, § 19), for failure to provide for a hearing of property owners on the question of boundaries of district and of benefits to lands included therein.
    2. Constitutional law <&wkey;290 (3) — Property owners in local improvement district created by Legislature or municipality have no constitutional right to be heard on question of benefits.
    When a local improvement district is cheated and the burden of taxation spread by Legislature, or by a municipality to which the state can grant and has granted full legislative power over the subject, owners of property in the district have no constitutional right to be heard on the question of benefits.
    3. Constitutional law <&wkey;290'(3) — Where local improvement district is not created by Legislature, opportunity for hearing on question of benefits and lands included is essential to due process (Const. U. S. Amend. 14, § I; Const. Tex. art. I, § 19).
    Where a local improvement district is not created by the Legislature, it is essential to due process (Const. U. S. Amend. 14, § 1; Const. Tex. art. 1, § 19), that a hearing be-had on the question of benefits and as to what lands-shall be included in the 'district.
    Error to Court of Civil Appeals of Ninth Supreme Judicial District.
    Quo warranto proceeding by the State of Texas, filed by Marvin .Scurloek, County -Attorney of Jefferson County, on the relation of W. It. Merriman and others, against M. T. Ball and others, constituting the Board of Supervisors and Tax Collector of Fresh Water Supply District No. 1 of Jefferson County, charging usurpation, and praying for a judgment of ouster. Judgment for relators in the district court was reversed and rendered by the Court of Civil Appeals (245 S. W. 1012), and plaintiffs bring error.
    Judgment of Court of Civil Appeals reversed and that of district court affirmed.
    Marvin Scurloek, Co. Atty., of Beaumont, Holland & Holland, of Orange, W. R. Blain and A. D. Lipscomb, both of Beaumont, and J. A. McNair, of Houston, for plaintiffs in error.
    Sonfield, Nall & King, of Beaumont, for defendants in error.
   CURETON, C. J.

This case is here by writ of error from the Court of Civil Appeals for the Ninth District. It is a quo warranto proceeding, filed in one of the district courts of Jefferson county by Marvin Scurloek, county attorney of that county, upon the relation of W. R. Merriman and others, against M. T. Ball and others, constituting the board of supervisors and tax collector of fresh water supply district No. 1 of Jefferson county, charging usurpation, and praying for a judg-1 ment of ouster. The case was tried before the court without a jury¡ and judgment entered in favor of the relators against the respondents, to the effect that fresh water supply district No. 1, of which respondents were officers, was invalid, and that for this reason they were guilty of usurpation, etc. Upon appeal to the Court of Civil Appeals this judgment was reversed and rendered, and a judgment entered declaring the district legally organized and valid in all respects. For a full statement of the case, see the opinion of the Court of Civil Appeals, 245 S. W. 1012.

Fresh water supply district No. 1 of Jefferson county was organized under chapter 48, Acts of the First and Second Called Sessions of the Thirty-Sixth Legislature, and may be found by reference to articles 5107 — 180 to 5107 — 266, Vernon’s Complete Texas Statutes 1920.

In disposing of this case we find it only necessary to' consider one question — that is, the constitutionality of the act under which the district was organized.

It is unquestioned but that the provisions of the law as found in the legislative act were followed in the organization of the district. This act in effect provides for the organization of local improvement districts, for the conservation, transportation, and distribution of fresh water from lakes, pools, reservoirs, wells, springs, creeks, and rivers, for domestic and commercial purposes, as contemplated by section 59, art. 16, of the Constitution of the state. Vernon’s Complete Texas Statutes 1920, art. 5107 — 180. The method provided is the initiative and referendum, and the attack made upon it which we find necessary to notice is whether or not the agency selected by the Legislature for giving those to be affected by the creation of the district a hearing was authorized by the statute to pass upon the boundaries of the district and to determine whether or not the creation of the district would be of benefit to the territory included therein.

Articles 5107 — 181 and 5107 — 184 read as follows:

“Art. 5107 — 181. When it is proposed to create a fresh water supply district, there shall be presented to the commissioners’ court in Which the lands to be included in such district are located, or to the county judge of the county, if the commissioners’ court is not in session, a petition signed by fifty or by a majority of the qualified voters of such proposed district who shall own land within the district proposed, setting forth the proposed boundaries thereof, the general nature of the work proposed to- be done, the necessity therefor, and the feasibility thereof and designating a name therefor, which shall include the name of the county in which it is situated and upon presentation of such petition it shall be the duty of the commissioners’ court of the county, judge of such county if the court be not in session to forthwith fix a time and place at which said petition shall be heard before the commissioners’ court of the county [w] herein it) is filed, which date shall be not less than fifteen nor more than thirty days from the date of the order, and to order and direct the county clerk of such county, as ex oficio clerk of the commissioners’ court thereof, to issue notice of such time and place of hearing, which notice shall inform all persons concerned of the time and place of hearing and their right to appear and contest the genuineness of such petition and the signature [s] thereto, and whether said petitioners are qualified voters of such proposed district, and owners of land therein and to deliver such notice to any adult who is willing to execute the same by posting as herein directed.”
“Art. 5107 — 184. At the time and place set for the hearing of the petition or such subsequent date as may then be fixed the court shall proceed to examine such petition for the purpose of ascertaining the sufficiency thereof, and any persons interested may appear before the court in person or by attorney and offer testimony touching the sufficiency of such petition. Such court shall have jurisdiction to determine all issues raised touching the sufficiency of such petition. Such hearing may be adjourned from day to day and from time to time as the facts may require. The court shall have power to make all incidental orders necessary in respect to the matters before it.”

The statute in a definite way regulates the subject of the elections, and provides for an order, after a canvass of the votes of the commissioners’ court, establishing the district, in the event of a favorable vote therefor.

It will be seen from article 5107 — 181 that when it is proposed to create a district, a petition must be presented to the commissioners’ court signed “by fifty or by a majority of the qualified voters of such proposed district who shall own land within the district. proposed, setting forth the proposed boundaries thereof, the general nature of the work proposed to be done, the necessity therefor, and the feasibility thereof,” etc. When this petition is presented, it becomes the duty of the court to fix a time and place at which the petition shall be heard, and to require the clerk to issue the statutory notice. The statute requires that this notice shall inform all persons concerned of the time and place of hearing, and their right “to appear and contest the genuineness of such petition, the signatures thereto, and whether such petitioners are qualified voters of such proposed district and owners of land therein.”

Article 5107 — 184 prescribes what shall take place at the hearing. At the time and place fixed by the commissioners for hearing the petition, it is made the duty of the court to proceed “to examine such petition for the purpose of ascertaining the sufficiency thereof, and any person interested may appear before the court in person or by attorney and offer testimony touching the sufficiency of such petition.” The article then gives the court jurisdiction to determine “all issues raised touching the sufficiency of such petition.”

Article 5107 — 185 prescribes what must appear of what must be found by the court before it orders an election to create the district. The court must find in favor of the petitioners for the establishment of the district “according to the boundaries as set forth in said petition.” If upon such hearing it be found that the petition (a) is signed by the requisite number of qualified voters of such proposed district, who own lands therein, and (b) that such petition conforms to the provisions of article 5107 — 181, supra, then they must order the election and take the necessary subsequent steps to bring about the submission of the question of its creation to the voters of the district, etc.

Reading these several articles quoted and referred to, it is plain, we think, that the question of the boundaries of the district is confided solely to those who sign the petition for its creation, and that no discretion or power is lodged in the commissioners’ court to determine or fix these boundaries, or to pass upon the question of benefits to the lands to be embraced in the district. In other words, the statute plainly fails to provide for a hearing on the question of the boundaries of the district and on the question of benefits to the lands included in it. We may say that the statute here under review, providing for the organization of fresh water supply districts, in failing to provide for a hearing on the question of benefits and in requiring the commissioners’ court to grant the petition for an election “according to the boundaries set forth in said petition,” is sui generis among the Texas water, reclamation, drainage, and navigation laws. All other district laws, in so far as called to our notice, use language intended to confer power on the statutory agency selected to hear and determine questions of boundary and benefits. Revise Statutes, arts. 7626, 7627, 7814, 7816, 7978, 7979, 8101, 8102, 8103, 8204, 8205; Trimmier v. Carlton, 296 S. W. 1070 (Texas Supreme Court, not yet officially reported); Embree v. Kansas City Road District, 240 U. S. 242, 36 S. Ct. 317, 60 L. Ed. 624. The construction which we have given the act here involved was placed upon the law by the commissioners’ court when the petition for the organization of the district was heard. At that time Mr. Will Merriman, who represented some 200 or 300 of the people of the proposed district, appeared before the county commissioners. As to what took place there, his testimony is as follows:

“At the time they had that hearing I offered to make some showing before the court, I contested it and asked for a hearing. The contest that I was making was the question of being taken into the fresh water district. Mr. Hebert was also there, and the same proposition concerned him as it did me, and that was his contention; he did not think his land ought to be included, and he did not think he could be benefited by it. He wanted his land excluded from the district. When we made the contest the commissioners’ court told me that they could not take any action in the case any further than consider the sufficiency of the petition and the genuineness of the signatures. They refused to hear me on the question of being included in the proposed district.” (Italics ours.)

That the above construction of the articles conferred to is correct we think is conceded by the supplemental brief of M. T. Ball et al., filed in the Court of Civil Appeals. In that brief is found the following:

“We come now to consider the objection that the property owner is, under the act, afforded no opportunity for a hearing as to the creation of the district or on the question of benefits.
“We lay down the broad proposition that the act is not unconstitutional because affording no opportunity to the landowner to object to the inclusion of his property in the district.
“The mere inclusion of the property within the district creates no charge upon the land. Upon the presentation of the petition to the commissioners’ court, the same is set down for a hearing as to the genuineness of the petition, the signatures thereto, and whether the petitioners are qualified voters of the proposed district and owners of land therein.
“If, upon a hearing of the petition, it is found in all things valid and sufficient, it is made the duty of the commissioners’ court to order an election whereat the proposition is submitted for or against the fresh water supply district, and for the election of five supervisors and an assessor and collector. If the proposition is adopted and the supervisors elected, the board organizes, and it may order an election on the proposition of the issuance of bonds and levy of taxes in payment thereof for proposed improvements.
“It is thus seen that the organization of the district imposes no burden and creates no charge upon any property in the district. Through the first election, the inhabitants within the proposed boundaries merely accept the terms of the act and become thereby a public corporation. This being true, the mere organization of the district did not make any property without due process of law; in fact, did not in any manner affect any land wi'thin the district.”

It is true that the organization of a district does not by virtue of that act alone impose any tax burden on the property ’ included therein; but it is the first and a very essential step having for its object the issuance of bonds and the levy of taxes. The statutory activities of such districts necessarily involve large expenditures of money. Their powers are set forth in various articles of the statutes. (See, generally, Vernon’s Complete Texas Statutes 1920, arts. 5107 — 180, 5107 — 196, 5107 — 197 to 5107 — 203.) To accomplish these purposes the districts, upon vote of the qualified electors, are authorized to issue bonds and levy taxes on all the lands in the districts. Vernon’s Statutes, supra, arts. 5107 — 197, 5107— 205 to 5107 — 243, 5107 — 263, 5107 — 265.

The districts are not capitalized, and it is apparent they cannot accomplish their purposes except by the levy of taxes or by both the issuance of .bonds and levy of taxes. As was said by the Supreme Court of the United States in the case of Fallbrook Irrigation District v. Bradley, 164 U. S. 112, 174, 17 S. Ct. 56, 69 (41 L. Ed. 369) :

“In the act under consideration, however, the establishment of its boundaries and the purposes for which the district is created, if it be finally organized by reason of the approving vote of the people, will almost necessarily be followed by and result in an assessment upon all the lands included within the boundaries of the district.”

It is plain to us that one of the objects of organizing districts of this character is to issue bonds and collect taxes, that in fact they are when organized local taxation districts for the purpose of making local improvements. At no stage of any of the proceedings of the district, either at or during the course of organization, or thereafter, is any provision made by the law for a hearing on the question o’f benefits to the land included in the district, or what land shall be included. The petitioners themselves fix the boundaries, and no discretion is confided to the commissioners’ court to change or modify them. Tlie petitioners in preparing and presenting the petition include such lands in the district as their judgment and discretion may dictate, and from their action there is no appeal to any agency having authority to give a hearing thereon and determine the justness and correctness thereof. This is not due process under either the federal or state Constitution (Const. U. S. Amend. 14, § 1; Tex. Const, art. 1 § 19). When a local improvement territory is selected and the burden of taxation spread by the Legislature, or by a municipality to which the state can grant and has granted full legislative power over the subject, the owners of property in the district have no constitutional right to be heard on the question of benefits. Browning v. Hooper, 269 U. S. 396, 46 S. Ct. 141, 70 L. Ed. 330; Valley Farms Co. v. Westchester, 261 U. S. 155, 43 S. Ct. 261, 67 L. Ed. 585; Hancock v. Muskogee, 250 U. S. 454, 459, 39 S. Ct. 528, 63 L. Ed. 1081; Withnell v. Construction Co., 249 U. S. 63, 69, 39 S. Ct. 200, 63 L. Ed. 479. But where, as in this case, the district is not created by the Legislature, it is essential to due process that a hearing be had on the question of benefits, and as to what lands shall be included in the district. Browning v. Hooper, supra; Hutcheson v. Storrie, 92 Tex. 685, 693, 51 S. W. 848, 45 L. R. A. 289, 71 Am. St. Rep. 884; Norwood v. Baker, 172 U. S. 269, 19 S. Ct. 187, 43 L. Ed. 443; Fallbrook Irrigation District v. Bradley, 164 U. S. 112, 174, 17 S. Ct. 56, 41 L. Ed. 369.

Browning v. Hooper, supra (the Archer county case recently decided by the Supreme Court of the United States), necessarily rules this case. In that case the Legislature did not create the road district, levy the tax, or fix the amount to be raised. There was nothing in the law to limit the action of the petitioners in selecting the property to be assessed. Subject to a vote of a district of their own choice, the petitioners’ designation of the boundaries of the district, and therefore the property to be taxed, was absolute. There was no hearing before any agency, as to the land to be included in the district, nor upon the question of benefits. The Supreme Court of the United States held the district void, in part saying:

“But it is essential to due process of law that such owners be given notice and opportunity to be heard on that question where, as here, the district was not created by the Legislature, and there has been no legislative determination that their property will be benefited by the local improvement. Appellants were denied all opportunity to be heard. No officer or tribunal was empowered by the law of the state to hear them, or to consider and determine whether the road improvements in question would benefit their lands. The act is repugnant to the due pr'ocess clause of the Fourteenth Amendment.”

The other authorities cited, including Hutcheson v. Storrie by this court, are to the same effect.

The defendants in error strongly rely upon the case of In re Bonds of the Madera Irrigation District, 92 Cal. 296, 28 P. 272, 675, 14 L. R. A. 755, 27 Am. St. Rep. 106, by the Supreme Court of California, as sustaining the right, to create a public corporation similar to that here involved without a hearing as to boundaries or on the question of benefits. In an unchallenged quotation from the Statutes of California 1887, p. 30, the plaintiffs in error show that the California act did provide for a hearing on both questions. The California Code of that date is not available, but we assume counsel have correctly quoted it. See, also, the law as copied on the margin in the case of Fallbrook Irrigation District v. Bradley, 165 U. S. 112, 116, 17 S. Ct. 56, 41 L. Ed. 369. The Madera Case is therefore clearly not in point. But if so, still we are compelled, upon both reason and authority, to follow the decision of the Supreme Court of the United States in Browning v. Hooper, cited above.

Since the act under which fresh water supply district No. 1, Jefferson county, is in violation of the due process clauses of both the Constitution of the state of Texas and the United States, the judgment of the trial court .was a correct one, and that of the Court of Civil Appeals erroneous.

The judgment of the Court of Civil Appeals is accordingly reversed, and that of the district court affirmed. 
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