1. Where a petition shows on its face that the suit is barred by a statute of limitations, in order for the defendant to raise the defense by demurrer, it must be specially invoked.
2. Where the Federal Government has imposed excise taxes on liquors, payable before any sale is legal, and the amounts of such taxes are paid by a wholesale dealer, either by his direct payment to the Government under arrangement with the manufacturer or by his payment to the manufacturer of an increased purchase-price, the amounts of these taxes constitute an element in the cost and value of the liquors so purchased by the dealer. Therefore a city may lawfully include these amounts in assessing the value of the liquors for ad valorem taxation; and such an inclusion is not a tax on Federal excise taxes. Accordingly, it was not error to dismiss the dealer's petition against the city to enjoin its collection of an ad valorem tax, which was alleged to be illegal because it included this element of value.
No. 14069. APRIL 16, 1942. REHEARING DENIED MAY 20, 1942.
On December 17, 1940, a wholesale liquor dealer in the City of Atlanta filed a petition to restrain and enjoin proceedings by the city under the levy of a tax execution issued for the collection of
ad valorem taxes assessed in 1939 on a stock of liquors. The essential averments are as follows: Early in 1939 a dispute arose as to whether, in arriving at the value of the liquors for such taxation, the amounts of excise taxes paid to the United States and to the State could be included as an item of cost in valuing the stock, like other amounts paid in the purchase, such as the cost of transportation and items additional to the cost of the liquor exclusive of such items, or whether, as contended by the dealer, the inclusion of such Federal and State taxes as an element of value was in effect to levy a tax, not upon the property, but upon taxes, which did not constitute property. Representatives of the parties agreed to negotiate the dispute and try to reach an agreement. In July, 1939, "plaintiff received a written notice that the city had made an arbitrary assessment on the value of plaintiff's liquors to include the United States taxes." Negotiations were immediately continued, and the plaintiff offered to file a tax return based on "the actual cost of the liquors," but this was declined. The city issued a tax fi. fa., but the matter continued to be negotiated until December, 1939, "when plaintiff tendered a tax return . . at the cost price . . and check for $725.99" in full settlement, which was declined." The matter continued in negotiation until April, 1940; and in June, 1940, a levy was made upon plaintiff's property, but the matter continued in negotiation until September, 1940, at which time plaintiff filed with the tax committee of the city council, a petition asking for a hearing and adjustment of said tax assessment, so as to omit "the amount of the United States taxes paid upon said liquors as a part of the value." The matter continued in negotiation, and on October 14, 1940, plaintiff was notified as to a hearing before the city tax committee on October 19, 1940. A hearing was then had, and the committee considered the merits of the petition, but made no finding, and the plaintiff was not notified as to any decision until in December, 1940, when plaintiff was informed that the city's attorneys had advised that there was no recourse against the city, because the plaintiff had failed to bring a suit within twenty days after notice of the assessment, as required by the act of 1939 amending the city charter (Ga. L. 1939, p. 830); and the city tax-collector announced that the property levied on would be sold. The city "waived this requirement by having conducted the negotiations in the attempt to
settle said dispute in good faith;" and the plaintiff "relying upon the good faith of the city in conducting the negotiations with it in an attempt to arrive at a fair solution," it would be unjust, inequitable, and unlawful now to permit the city to take advantage of plaintiff by claiming under said statute, after the city had waived the same and permitted plaintiff "to be misled into the belief that the negotiation for a settlement was in good faith;" and "this court of equity should relieve" plaintiff "from the said inequitable and unjust operation of said statute." The plaintiff continues its previous tender of $725.99, as "a just and fair amount of taxes owing by it," and offers to pay this amount into the registry of the court to remain during the pendency of the case.
The plaintiff excepted to the dismissal of the action upon demurrer on the general grounds as stated, which made no reference to any statute of limitations. Although the petition attacked the assessment as invalid in that it included both State and United States taxes, an amendment limited the attack to United States taxes. The only specific ground assigning error on the dismissal was that "it was illegal for the city . . to assess as a part of the value of its property the amount of taxes plaintiff had paid to the United States Government upon its said property, and because it compelled plaintiff to pay an ad valorem tax upon the taxes it had already paid to the UnitedStates."
1. Even if a petition shows on its face that a suit is barred by the statute of limitations, so that the defendant might take advantage of the statute by demurrer expressly invoking such a defense, a general demurrer on the ground that no cause of action is stated can not be taken as sufficient to raise the defense of a bar by the statute.Sammons v. Nabers, 186 Ga. 161, (3), 162 (197 S.E. 284);Smith v. Central of Ga. Ry. Co., 146 Ga. 59, 60
(90 S.E. 474); Lee v. Holman, 184 Ga. 694 (4), 696 (193 S.E. 68);Smith v. Aldridge, 192 Ga. 376, 380 (15 S.E.2d 430);Darnell v. Toney, 41 Ga. App. 673, 682 (154 S.E. 379), s. c., 39 Ga. App. 710 (148 S.E. 279); Felton v. State HighwayBoard, 47 Ga. App. 615 (2), 619 (171 S.E. 198). Accordingly, even though the instant petition by a wholesale liquor
dealer to enjoin the collection of ad valorem taxes by the City of Atlanta, imposed on the dealer's liquors, shows that the petition was not filed within twenty days after notice by the city to the petitioner as to the assessment on the property, as required by the act of 1939 amending the city charter (Ga. L. 1939, pp. 830-832), no question as to the bar of the suit by the limitation in the statute was raised by the demurrer on the ground that the petition "sets forth no cause of action against defendant, and alleges no facts sufficient to justify the intervention of a court of equity in this case." And it is unnecessary to decide whether conduct by the municipality in negotiating with the taxpayer as to the proper amount of assessment, after notice thereof, could suspend the period of limitation, or relieve a taxpayer of the bar, or whether in this case the averments of the petition were sufficient to show any such acts of continued negotiation by the city.
2. Under Federal laws existing in 1939, the tax year in question, prior to later statutes enlarging taxes, the excise or stamp taxes imposed by the Government on distilled and other liquors were payable before the liquors could legally pass into the hands of dealers or purchasers. 26 U.S. Code Ann. §§ 2800 (a, 1), 3030(3, b), 3150 (b). The State likewise requires such payment before distilled spirits can be taken from a State warehouse. Ga. L. Ex. Sess. 1937-38, pp. 103, 107; Code Supp. § 58-1015. Such taxes, even though they may in effect have been "passed on" ultimately to the purchaser, by an increase in the purchase-price covering the amount of tax, were an element of cost, first to the dealer and then to the purchaser, by this increased amount which each was required to pay. In determining the cost to the dealer, it is immaterial whether he or the manufacturer paid the stamp tax under the arrangement between them, since in either event the amount paid became part of the actual cost to the dealer. Since the City of Atlanta was authorized under its charter to levy and collect "an ad valorem tax on all . . personal property" (Ga. L. 1874, p. 122, § 25), which amount would ordinarily be based on the true market value in the usual course of trade (Code, § 92-4101; 26 Rawle C. L., § 323), and since in ascertaining such value every fact and circumstance bearing thereon should be considered (State ex rel. Guilbert v. Halliday, 61 Ohio, 352 (56 N.E. 118, 49 L.R.A. 427), and since liquors on sale without payment of the tax required
to make a sale lawful would be illegal and valueless in the ordinary course of trade, but their value would be augmented to the extent of such a paid tax, the city in this case was authorized to require that such taxes, increasing to that extent the cost to the dealer, should be included as an element in assessing the value of the liquor. Accordingly, the petitioning wholesale dealer was not entitled to deduct these amounts from the total price paid, upon its contention that such an assessment in effect compelled the dealer to pay a tax upon the government taxes already paid, and not upon the property. The apparently few pertinent decisions seem to support with unanimity this conclusion. Lehman v. Grantham, 78 N.C. 115, 116 (88, 89); Williams v. Iredell County Commissioners, 132 N.C. 300
(43 S.E. 896). There are also cases holding that where a special percentage tax on the sale price of an article is imposed on the manufacturer or the dealer, and the amount of tax is in effect "passed on" or "buried" in the sale price charged to purchasers, neither the manufacturer, dealer, nor the purchaser is entitled to recover the amount of the special tax or deduct it from ad valorem or other taxes; but that the special tax, like other expenses, was an element entering into the cost of the product. Lash's Products Co. v. U.S., 278 U.S. 175, 176
(49 Sup. Ct. 100, 73 L. ed. 251); Shearer v. Commissioner of Internal Revenue (C.C.A.), 48 F.2d 552, 554 (4, 5); Heckman v.
Dawes c. Co., 12 F.2d 154; Cudahy Packing Co. v. U.S.,37 F. Supp. 563, 571; State ex rel. Byers-Prestholdt Motor Co.v. Minnesota Tax Com., 178 Minn. 300 (227 N.W. 43).
3. Under the immediately preceding ruling, the court properly dismissed the action on general demurrer.
Judgment affirmed. All the Justices concur.
ON MOTION FOR REHEARING.
Plaintiff in error moves for a rehearing on the contention now made that its petition, attacking the validity of the city's ad valorem tax assessment on liquors, had alleged that these liquors were still in a government warehouse, and that the United States taxes on the liquors were not due until the liquors were sold. Under this contention, movant now insists that the court erred in holding in effect that "the internal revenue tax prescribed by the law of the United States and required to be paid under such laws before the liquor is removed therefrom should be
added to the value of the liquor, even though the tax had not been paid;" and erred in holding that the city, in fixing the value of movant's liquors for taxation, could add unpaid Federal taxes to the cost price as an element of value.
The question now raised can not be considered, since the record fails to support movant's contention that such a question has been raised either in the trial court or in this court. "Where pleadings are ambiguous or couched in alternative expressions, on demurrer they will be given that construction which is most unfavorable to the pleader;" so that, if "two matters are pleaded in the disjunctive, one of which is good and the other not, the petition is to be treated as pleading no more than the latter," and if "any one of several averments alleged in the alternative is insufficient to state a cause of action, the entire pleading is bad and subject to general demurrer." Doyal
v. Russell, 183 Ga. 518 (3-5), 534 (189 S.E. 32), and cit.;Moore v. Moore, 188 Ga. 303, 305 (4 S.E.2d 18);Groover v. Savannah Bank Trust Co., 186 Ga. 476 (2) (198 S.E. 217). The original petition is ambiguous, in containing references to the amount of "State and Federal taxes which hadeither been paid, or were due to be paid when the said liquors were sold," and to "the actual value of said stock of liquors, less the State and Federal taxes which [have] been or are tobe paid upon the same before the liquors are sold," and to "the ultimate . . State and Federal taxes that it would be necessary for petitioner to pay when the said liquors were sold," and in also containing averments as to the liquor in question being part of "its personal property, including its stock of liquors," and to the "State and Federal taxation upon said stock of liquors."
Not only is the fact of past or future payment of Federal taxes on the liquors thus alleged in the alternative, without any indication as to what part of the taxes had been paid and what part had not been paid, but movant's present contention that the liquors remained in a Government warehouse without payment of the Federal taxes thereon is negatived by the express averments that the liquors were a part of "its stock." Movant's contention is further negatived by the express averment in an amendment to its petition that it had "filed a petition with the tax committee of the city council of Atlanta, asking for a hearing and an adjustment of said tax assessment, so that the said tax assessment would not contain the amount of the United States taxes paid upon said liquors, as a part of the value."
The bill of exceptions and the brief of the movant also negative its present contention as to non-payment of the Federal taxes. The assignments of error contain the specific ground, that "it was illegal for the City of Atlanta . . to assess as a part of the value of its property the amount of taxes plaintiff haspaid to the United States Government upon its property, and because it compelled plaintiff to pay an ad valorem tax upon the taxes it had already paid to the United States." The brief for the movant also attacks the validity of the city's assessment because it required the payment of "ad valorem taxes upon the amount of the excise taxes which it had already paid to theUnited States Government and the State of Georgia."