Freestone-Central Appraisal District aka Freestone County Appraisal District and Freestone County Appraisal Review Board v. Destec Properties Limited Partnership--Appeal from 87th District Court of Freestone County

IN THE

TENTH COURT OF APPEALS

No. 10-94-017-CV

FREESTONE-CENTRAL APPRAISAL

DISTRICT AKA FREESTONE COUNTY

APPRAISAL DISTRICT AND FREESTONE

COUNTY APPRAISAL REVIEW BOARD,

Appellant

v.

DESTEC PROPERTIES LIMITED PARTNERSHIP,

Appellee

From the 87th District Court

Freestone County, Texas

Trial Court # 92-373-B

OPINION DENYING MOTION FOR REHEARING

Destec's motion for rehearing indicates that it may have misconstrued our opinion on original submission, believing that the "interest in land" that we found was its surface interest in the so-called "fee tract" that it owns. The "interest in land" Dow (Destec) reserved by the agreement is the overriding royalty interest in the lignite reserves.

The Supreme Court, in Gifford-Hill & Company, Inc. v. Wise County Appraisal District, 827 S.W.2d 811 (Tex. 1991), upon which Destec relies heavily, was not called upon to decide whether the limestone rock was legally taxable as "land." The opinion states that Gifford-Hill and the Wise County Appraisal District agreed "that limestone rock is real property and that it is legally taxable as land." Id. at 814. What the Court decided was that the limestone is not a "mineral in place" under the tax code. Id. at 816. It also did not say that the limestone rock, which Gifford-Hill owned partly in fee and partly by lease, was not taxable; in fact, the opinion says that the "value of the land containing the non-producing limestone should be determined by applying a per-acre value to the number of acres covered by the interest rather than by an intrinsic price based upon the market price of the limestone per ton." Id. The Court reversed the summary judgment in favor of the appraisal district because a fact issue existed about the extent of Gifford-Hill's quarry on the 2500 acres that it owned or leased. Id.

If the limestone rock in Gifford-Hill was real property and legally taxable as land, then the lignite in Freestone County (even if not a "mineral in place") is real property and legally taxable as land. Because we found that the overriding royalty interest reserved by Dow (Destec) was an interest in land, i.e., the lignite, we reversed the summary judgment.

With these further observations, we deny Destec's motion for rehearing.

BILL VANCE

Justice

Before Chief Justice Thomas,

Justice Cummings, and

Justice Vance

Motion for rehearing denied

Opinion delivered and filed September 21, 1994

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