Cases argued and decided in the Supreme Court of the State of Texas, during the latter part of the Tyler term, 1884, and the Galveston term, 1885. Volume 63. Page: 24

                                
2.4           GALVESTON WHARF CO. V. GALVESTON. [Tyler Term,
Opinion of the court.
that a municipal corporation may own property which will not be
exempt from taxation; if so, the property involved in this case is
not of that character; and it will be time enough to consider what
kinds of property, if any, belonging to a municipal corporation, is
subject to taxation when a case requiring its decision is presented.
If, however, the decree did not vest in the city the title to one
undivided one-third of the property of which it purports to dispose,
there can be no doubt that the decree vests in the city such a beneficial
interest in the property, and in the dividends to arise from its
use, as would, on principle, render it improper for the city to impose
taxes which would indirectly deprive it of a part of the dividends,
which, under the decree, it was evidently intended the city should
receive.
In other words, can the city tax the property to the extent of its
beneficial interest therein, when to do so will diminish its dividends,
and in addition to this incur the increased expense of collecting the
tax.
In our opinion, it might just as well tax any other property it owns,
and pay the tax out of its own treasury, with a loss to itself of the
cost of collecting.
If the only beneficial interest of the city be to dividends, these
cannot be declared and paid until the expenses of operating and
keeping up the entire property is first deducted; for dividends are
not paid on gross receipts; hence, if the city can tax the entire
property, the tax so levied and collected must be deducted before a
dividend is paid, and thus the dividend be diminished.
A power to tax, under such circumstances, involves Tthe power of
a municipal corporation to tax itself or its own property, which it
certainly cannot do, for obvious reasons.
There are no equities arising in favor of the city from the fact
that the dividends which the city will receive are diminished by the
taxes paid to the city on the interest of the wharf company in the
property, for the city receives the entire tax, and only accounts for
one-third of it in receiving a diminished dividend, caused by this
tax, as do the other stockholders.
If the dividends of the city will be diminished by the payment
of state and county taxes on the interest owned by the wharf company,
this furnishes no reason to sustain the imposition of an
unauthorized tax. It is true that the taxation of two-thirds of the
property, which, under the decree, is the interest of the wharf company,
by the state and county, will diminish the dividends which
the city will receive; but this results from the fact that under the