101 Tenn. 680 | Tenn. | 1899
This is a suit brought by the turnpike company to recover back a privilege tax paid the State under protest. The tax was assessed under the provisions of an Act of the General Assembly
The company insists that it is not amenable to this Act nor liable for this tax because of an exemption clause in its charter, as follows: “The property in said road, .when completed, shall vest in said company and their successors for the purpose of a highway, which shall - be free for all persons on the terms and conditions herein prescribed, and the same shall not be liable for taxation.” But for this provision, the tax could clearly be collected under the ruling in the turnpike cases reported in 8 Pickle, 369, and the question is as to the effect of this charter exemption.
It is insisted that, recognizing the principle that clauses exempting from taxation shall be strictly construed, still the provision in this ■ charter is broad enough to exempt the company from all taxation, and that, viewed in the light of the policy Of the State in 1836, when this charter was granted (which was to • encourage public internal improvements), such was the intention and purpose of the Legislature. It is ingeniously argued that it is the highway that is exempt — that is, the entity, with all its uses, property, and franchises, including the privilege of operating it — and not simply its property, and that the
If we adopt the rule of strict construction applicable to charter exemptions, the same result would follow as in case of the grammatical construction. We think the case is identical in principle with that of Railroad v. Harris, 15 Pickle, 696, except that in the latter case certain species of property — -designed, no doubt, to cover all that was taxable— were enumerated, while in the present case, the proper construction of the language is that all property of the company should be exempt. But the property of a corporation is one thing and the privilege of operating that property under franchises granted by the Legislature is another and separate thing, and when one is exempt -it does • not follow that the other is also. To have that effect, such must be the plain provision or unavoidable construction of the exempting clause. Hence, as we think, the case of Memphis v. Bank de Insurance Cos., 91 Tenn., 556, is not an authority for sustaining a grant of exemption in this case. In that case the charter provided that the tax imposed by it should be in lieu of all other taxes. There was no exemption involved. It was simply a manner of taxation, designed to reach not only the property and stock, but, also, the business and occupation of the company, and to determine the tax as á whole. The case of Memphis v. Hernando Ins. Co., 6 Bax., 527, is a case of the
We are of opinion that the exemption in this charter relieves the company from ad valorem taxation upon its property, but not a privilege tax for the right to exercise the franchise granted to them in the use of the property.
It may be argued that the exemption of the property would thus become a barren grant, since its value depends alone upon the use to which it may be put — that is, its operation as a highway. But a similar objection might be made to the taxation of merchants, who, under the law, were required to pay both an ad valorem tax upon their stocks of goods and a privilege tax for the privilege of selling them. In such case, the only use the merchant has for the goods is to sell them, and a plausible argument could be made, that, when he paid an ad valorem tax upon their value, he should not - be required, in addition, to pay a tax for the privilege of selling them. The same argument was urged in the case of Railroad v. Harris, where the property of the railroad was exempt, and it was insisted this was but a mockery if it could be made to pay a tax for the privilege of using the property.