68 F. 1002 | U.S. Circuit Court for the Northern District of Georgia | 1895
Taxation is tire rule, and immunity from taxation is the exception. It is governmental policy that all
“All real and personal estate, whether owned hy individuals or corporations, resident or nonresident, are liable to taxation, unless specially exempted.”
Section 803 is in this language:
“Lands or other piuperty belonging to citizens of the TTnited States non resident of this state, can not be taxed higher than the property of residents, but all the property of such non residents, whether their itroperty he real or personal, in this state, must pay taxes on the same herein.”
This property, if it is subject to taxation at all, must be taxed as a lump sum in the hands of the receivers. It is not a question, such as has been argued, of the taxation of intangible shares in a corporation at the residence of the stockholder, but the question in issue, according to these petitions, is of the taxation of material, visible property. It is, to a large extent, actual money, as alleged, held by the receivers in the state, county, and city claiming the tax. It is not different from any other property in the hands of receivers of court, which all the authorities agree is subject to taxation in the locality where it is held by these officers of court. In my opinion, these receivers should have returned this property for taxation to the state, county, and city; and, having failed to.do so, the court will require them to pay such amount as should have
“it being made to appear to hie court that this cause has been pending in this court since the 20th da.y of December. 1890, and all parties having claims against ilie defendant have had since then to lile the same, and it being desirable to end the litigation and distribute the assets as early as possible, it is. upon motion of complainant's solicitor, ordered, adjudged, and decreed that all persons having claims or demands against the late the Western & Atlantic ltailroad Company, defendant in said cause, intervene in sáid canse and file a full and complete” statement of their said claims or demands on or before the rules day in August, 1893, so that the same may lie heard and adjudged, it is further ordered, adjudged, and decreed that all claims or demands not made as provided herein he and the same are barred from participating in any part of the assets of said (he late the Western & Atlantic ltailroad Company. It is further ordered, adjudged, and decreed that, ihe receivers in said cause cause notice to be published for a period of sixty days prior to said rules day in August in some one of the daily papers published in the city of Atlanta."
It is contended that, under lire terms of this order, these claims for taxes are presented too late. It may be true that the officers cimrged with their collection have not been as diligent as they might have been in presenting their claims for the same to the court, yet it is equally true tliat Tinder the view enleri¡lined by the court these receivers should have returned the property for taxation, or at least have asked the direction of the court in respect to it. Officers charged with the collection of the state and municipal revenue must depend, to a large extent, upon those whose duty it is to make return of ihe same. Especially is this true as to the kind of property in ihe hands of these receivers. These petitions will be entertained, therefore, and the amount of tax due by the receivers on the assets in their hands determined. The court will not, however, entertain these claims for double taxation. The petitions set out. that, under the law, persons failing to return their properly for taxation in a certain time are subject to double taxation. If the attention of the court had been called to this matter by proper petition it would have been disposed of long ago, and there can be no possible ground, on a petition presented at this late date, to ask for a penalty against these receivers.
An answer has been filed in this case for the complainants in the bill, by their solicitor, which it is unnecessary to consider at present, as the case is now heard on demurrer filed by the receivers to the petitions. It does raise questions of fact which will be important for consideration hereafter as to the extent to which the assets can be taxed. This legal question is raised by the answer, that the funds in the hands of the receivers is net income, and that the net income has already paid its tax from year to year, and should not be subject to additional taxation. This posilion appears untenable. The company was subject to a tax of one-half of 1 per cent, on its net income daring the lease. The lease expired in 1890, and tills property has been held during these years in the hands of the receivers, as has been stated, and it seems to be true that it is net income or profit, as claimed, arising from the operation of i he railroad by the company; but it comes back to the same question
“That statutes imposing- restrictions upon the taxing power of the state, except so l'ar as they tend to secure uniformity and equality of assessment, are to he strictly construed, is a familiar rule. Against the. power nothing' is to he taken hy inference and presumption. Where a doubt arises as to the existence of the restriction, it is to he decided in favor of the state.”
It certainly cannot be said that the right of this property in the hands of the receivers to be exempt from taxation is free from doubt. - The conclusion is that the assets in the hands of these receivers are subject to taxation, but not to double taxation or penalty, and that the order of May 26, 1893, will not be enforced as against these claims. The demurrer will be overruled except as to the claim of double tax.