
    The State of Texas et al. v. Taylor & Kelley et al.
    No. 6134.
    Taxation.—The lessee for a term of years of city waterworks is liable for taxes on the value of the leasehold interest and not on the value of the property leased.
    Appeal from Williamson. Tried below before Hon. A. S. Walker.
    
      Jas. S. Hogg, Attorney-General, and James H. Robertson, District Attorney, for appellants.
    
      Fisher & Townes, for appellees.
   Stayton, Chief Justice.

Appellees are lessees of the waterworks property owned by the city of Georgetown. The lease began on February 18, 1884, and is to continue for the period of twenty-five years, the city, however, having the right to terminate the lease at any time after the expiration of ten years.

The assessor for Williamson County assessed the property for State and county taxes against appellees on the actual value of the waterworks property, and not upon the value of the leasehold estate, for the year 1885. The collector of taxes under the assessment had levied upon personal property to enforce the payment of the taxes so levied and assessed, and this suit was brought to restrain him from selling the property or collecting the taxes. A writ of injunction issued, and the facts pleaded being admitted on final hearing was perpetuated.

In Daugherty v. Thompson, 71 Texas, 192, it was held that under art. 4691, Rev. Stats., one holding a leasehold estate could not be taxed upon the value of the lands leased, but only on the value of the leasehold. It was, however, held that the leasehold in that case was not subject to taxation.

The decision in that case is decisive of the question involved in this; and it is not necessary for us to inquire whether appellees are liable to taxation on their leasehold estate. Ho assessment of that was made, and the courts could not make the assessment if on inquiry it should be found that the leasehold held by appellees was subject to taxation.

The judgment of the court below is correct and will be affirmed.

Affirmed.

Opinion December 14, 1888.

Justice Walker did not sit in this case.  