*1 TERM, Syllabus. '236 U. S. taking in not was committed that the contention error found, is after an jury case from the examination to be without record, merit. contention, urged a based argument In the court in refusing made usé of the trial expression by some we jury. Although the case request take from'the it totally and find devoid proposition have considered merit, we do not to further state the contention stop yre it as think it concerning the reasons which control us virtually it was not manifestly afterthought, as assign- in not included in the raised the trial court and was for of review court ments error made purpose suing below nor in court’on the out of those made this the writ of error.
Affirmed. GENERAL OF WRIGHT, COMPTROLLER OF GEORGIA, v. CENTRAL GEORGIA RAILWAY COMPANY. THE
APPEAL THE COURT OP UNITED STATES PROM DISTRICT DISTRICT OP FOR THE NORTHERN GEORGIA. January 28, 29, Argued March 1915. Decided No. 161. presume granting a state a This court will either, exemptions practice containing deceit or would make charter grant. a futile special Containing railroads were built under charters
A lessee of subject which the was not irrepealable contracts to be per the annual higher specified a cent on income taxed than derived an ad valorem tax as the is not owner of such therefrom property. regard taxation Georgia in to the of railroads involved
The statutes making exempt the fee are construed as from other tax- in this action provided ation than that favor the lessee well lessor.
WRIGHT v. CENTRAL OF GEORGIA Argument Appellant. While technical distinctions should be avoided as far as be in justice, they matters of taxation in the interest of substantial should disregarded escape order to enable State from bind- *2 ing bargain; regard and so held in to distinctions between lessors and protection necessary lessees where the of the latter is in order to good promise make of the State made to former. place The courts power cannot take the can taxes nor ownership based on be enforced a lessee of Georgia under the statutes of and the leases involved in this case. Rep. 107,
206 Fed. affirmed.
The facts are stated in the opinion. Sibley
Mr. Hart and Mr. H. for appellant. John C. Samuel are exemptions personal, The contracts nor and are valid so transferable, long vendible companies those as such conducted business com- contracts limiting mon carriers. The state charter to whom personal corporations granted tax rate is to these been property, having and did not run with- the trans- Railway with the consent ferred the Central consent, at a time the State could of the State when lessee, be invoked for its own benefit. by cannot contract is made The with whom the person long benefits unmolested as enjoy continue State end, his and he cannot chooses, rights but there as he or its transmit the contract bene- conveyance form Rochester, 205 U. Ry. Rochester v. S. fits to a successor. Louisiana, Gaines, U. S. Wilson v. 217; v. 93 247; Morgan Palmes, R. R. v. 109 U. S. 417; Louis. & Nash. U. S. 103 Louis cfee. dtc., 637; v. Tennessee U. S. St. Pickard 130 244; Railroad Co. v. Gill, 649; U. S. Nor. & West. R. R. v. 150 Pendleton, U. S. 667. 156 Ar- exemption. forbids Constitution State
The 247; U. S. Ry. Rochester, 1 Rochester v. 205 7, 2, par. -, ticle § 95 U. S. Ohio, Wall. Shields v. McGuire, 391; Trask v. 18 49; Railroad 319; Mqine Maine-, Central R. R. v. 96 U. TERM, 676 Opinion of Court. Adams, B. v. 180 S..359; Yazoo.B. U. v. 98 Georgia, Co. U. Osborn, B. B. v. 193 S. 17; &c. Bapids Grand 1; 'S. U. Altgelt, v. 200 Traction Co. Antonio San is total or commuted claimed exemption Whether Great North- principle. the same it stands tax rate S. 207. Minnesota, 216 U. v.By. ern for the is owner perpetuity A lessee Georgia,- 1911, 1018; Civ. Code of taxation. § purpose v. Mayor, Wells 87 Atkinson, Georgia, 649; 139 Penick v. S. 479; Cincinnati Perry Norfolk, 397; Georgia, Oh, Columbus, 276;.Street v. Yeatman, St. Collegev. Dist. Washington Col., Market Co. v. 822; Mississippi, Mackay, 416. pay contracted to appellee, lessee, now question. taxes no for future past in the reason taxes pay
Neglect *3 Savannah, 181U. S. 547. Wells v. exemption. Tax De- of the nor the inaction the action
Neither 4, 1, par. Art. exemption. raise an could § partment, M. Cunningham, Jr., Mr. T. and A. B. Lawton Mr. - appellee. opinion court. the Mr. Justice Holmes delivered Railway by the Com- brought bill in equity This the collection of certain prevent to appellee, the pany, contrary to Article alleged, I, it is would taxes, which, of the Constitu- the Fourteenth Amendment and to § bill, The case heard on United States. tion of the and agreed facts, and certain the and answer demurrer 206 Fed. injunction prayed. as District Court issued to The facts of details material the Rep. stripped In 1912 defendant us, are as follows: the question before to ad valorem collect plaintiff issued executions bed, estate, value, and franchise road taxes on the “real v. CENTRAL OF GEORGIA Opinion of Court. cent, . . crediting per after . one-half one n ; - its income, property net . . on that portion the‘Augusta system” known in its respectively and. and the Southwestern Railroad. Savannah Railroad built under charters admitted special These roads were contracts, by which irrepealable constitute taxed than one-half of one higher was not to be cent, per income—so that be as- upon the annual if taxes could present sumed that sustained separate corporations were in hands roads still them. built Savannah Railroad and Augusta But and made leases their 1869 the Southwestern Railroad to the Central Railroad respective roads and franchises and the continuance Banking Company during In 1892 the charters the lessors. lessors, into receiver, went the hands of a lessee court, to allow the an election elected being-allowed in his which it did until a sale hands, to remain plan, purchase, reorganization under the same Georgia Railway Company. appellee, the Central of two the latter and the by agreement In 1895 between hun- run one the leases were modified so lessors year, 1 of that renew- years one dred and November terms, forever. Not- same periods upon able in like content down leases the State has been withstanding these provided from the lessors the to this time collect State its conceiving but charter, now, for in their seeks mistaken, Comptroller have been officers *4 to lessee. whole tax the plaintiff for on are taxes The executions .of Smith, Harris v. jurisdiction to issue them. and must show Loan Ass’n & 374; Equitable Building 373, Georgia, 133 jurisdiction depends 746. Here the State, Georgia, v. as plaintiff’s being effect roads upon these attempt is they not, attempt If of law. matter TERM, Opinion of the Court. not own. plaintiff upon property
to does unjustified are such an To whether these taxes decide (cid:127) turn to- the legislation State, We must exaction construction practical given in mind that to bearing half century strong for evidence that nearly the law R. R. right. Wright Georgia contention is v. plaintiff's Church 420, 426; Temple Baptist Banking Co., & Co., 669, Terminal Georgia Georgia, Augusta Waynesboro’ Road, and Rail The charter of approved Augusta Savannah, Decem- afterwards in 13 1838, alongside taxing provision 31, ber § referred, follows 16: “That provided as which we have § at the exclusive use of shall all times have Company said transportation conveyance for or Road, the said Rail freight every kind, goods, wares, merchandise, Road, long Rail so as they over the said and passengers, and said company fit to use this exclusive privilege, see freight or the same rates charge authorized shall be allowed in the charter Rail as are passage that said Banking always, Provided Company: Road and or out all or fit, when see rent may, they company farm right transportation any their exclusive part conveyance passengers, privilege, or freight, individuals, or other company, individual or being added may agreed upon” such term as be —it of trans- Company the exercise of renting “so portation, persons company said . . . on the company shall, they so far as act regarded same, (Laws be carriers.” common p. 179.) at p.
It will section perceived be that when this was drawn might supposed persons different be allowed of road, per- put carriages upon their the new form clearly early be even more in other charters haps seen And the that was Georgia and elsewhere. revenue might privilege granted derived from exclusive *5 v. CENTRAL OF GEORGIA Opinion of tbe Court. business, in others doing by letting the whole by obtained a the whole. making to á lease it, by share part one, deemed permitted) courses is one Any three standing as appears, and also so far all likely another, as as respect any legal in the mind of alike grant rights. effect the other upon to of 16 lead us believe that would foregoing view § exemption expected in the of tax was change no matter road, more than any to from the demise follow another carrier have admission followed .would own.goods. to his carry or of an individual partial rights, to to further considerations. an introduction But that to meant either Legislature that suppose We cannot grant. or to a futile deception make practice cunning as making the charter are unable to read Therefore, we to the State an unlimited reserving exemption vain that it had all renounced to lessee impose n as notice to the give that was lessor. For know the that law, if supposed parties, they were was earned' in one if the income lost exemption would be supposed if they were ways or, contemplated — that bargain to- was have ignorant, was invite them disastrous result. unexpected January 22,1862 act of special came a After the charter the Central Rail- 119), which authorized (Laws p. "to lease and work such Banking Company road and parties on may agreed on such terms time and concerned, we are interested,” roads with which the two to the cor- reciprocally giving power others, and among to lease the Central owning those roads "so porations respec- their Banking Company Railroad on other term time and such for such tive Railroads the inter- best.” In respectively deem they terms no a Railroad —but we see Road had val the Rail become change has there been believing ground enterprises the pioneer toward of the State the attitude TERM, Opinion of the Court. encouraging years it was a few We still can- before.. inviting the lessors to suppose lose the exemption of their or the lessees to find *6 benefit themselves possible only by with a burden made entrapped accepting of the act. the. invitation that suggesting
We are the contract in the charters assignment to passed by lessee, lessors nor are we that implying exempted generally, it might into whosesoever hands We are dealing come. only specific permitted transaction and en- couraged by 1852, the Acts of 1838 and and saying that we cannot it with our of reconcile construction those acts to to change position allow that transaction for the making worse. We construe those statutes as the fee provided other taxation than that in exempt for, from protection favor as well of the lessee as of the lessor—-the being necessary good of the lessee in order to make that promised to the lessor. instruments, in of present pursuance
The made- ‘demise, in to foregoing powers October, .1895, purport lease and to for hun- let the term one ’ farm dred and years, renewable as above stated. The lessee .one covenants to fixed rent pay semi-annually a and various expenses taking incident to occupation over the road and there is reentry a clause in case failure for six months to payment agreed. the semi-annual make Meantime, however, Code 1861 had introduced hard to distinctions, grasp one trained common law of real property, between the a usufruct years; tenant and an of 1910, estate Code §§ 3687, 3690, it is 3691; argued that leases created these estates of such a nature that the practically lessee was to position subject charge, of owner a rent and was agree taxable for the land. that distinctions We technical taxation, as far as be in to avoided matters to are not curious insist the differences be- we OF GEORGIA v. CENTRAL JJ., dissenting. Pitney, eighty-five run, lease, having years about tween a and a fee perpetuity, renewed may, must, distinc disregard But the technical charge. to a rent justice, not for of substantial tions is the interest to escape binding from enabling the State purpose interpretation If in our of the stat bargain. we are got powers, the leases their ute, parties which the from should legislation this later immaterial escape embracing attempt not be construed as ingenuity almost defies subtlety a contract R. & Wright Georgia Banking Co., R. See understand. stand fall on executions, said, The as we have must They attempt disclose. jurisdiction they injunction plaintiff. the fee as the *7 dis- as owner. We taxing plaintiff runs For before us. the reasons question cuss but the nothing that the taxes given opinion that we have we are cannot executions. The court cannot present collected on the' be Yost taxing power. County, v. Dallas place take the injunction 50. It that must be sus- ante, p. follows tained.
Decree affirmed. no this decision. part Me. Justice Lamak took Pitney Hughes Justice whom Me. Mr. Justice concurs, dissenting. by this be
It
been declared
repeatedly
has
.court
limitations,
or tax
exemptions,
that
law
settled
and
is,
are non-transferable
grantee,
to the
personal
has
unless
not run with
do
nof to
It has been held
otherwise.
provided
explicitly
to make a con-
authorized
grantee
enough
be
and fran-
estate, privileges
property,
of all its
veyance
.
TERM, CO
PitNey, JJ., dissenting.
236 U. S.
Morgan
Louisiana,
v.
Louis &c. Gill, 649; v. 156 U. S. & Western Norfolk R. R. U. Pendleton, v. S. Phoenix Fire Ins. Co. 667; v. Tennessee, 161 U. 174; Railway Rochester Rochester, v. As court said the last-mentioned 248) fully case after (p. reviewing legis “A authorities: lative authorization transfer 'the ... 'the property/ . . . of'the franchises/ . charter and . . or of 'the rights fran works/ property/ chise and ... is not sufficient to include an exemption from the or power other it cannot State, word, contended that 'estate’ larger has any meaning.” And -it was further held (p. 252) that it must be regarded as the established rule grant “that a statute authorizing directing the the 'privileges’ transfer of of a which corporation, enjoys, immunity taxation or should not regulation, including interpreted immunity.” See Wright also R. R. & Banking Co., 216 U. S. 420, 437. The controlling principle of these is that, decisions view importance supreme taxing power State, every doubt must be resolved in favor its continuance: salutary rule of interpretation “This is-founded public policy, regards obvious such exemptions as *8 of derogation authority the sovereign- and of common and, right, therefore, not to be beyond extended the exact requirement of express the grants, construed strictis- juris.” simi &c. R. Memphis Commission, R. v. Railroad 617). (p. “If the can supra lay power a aside upon good it for the devolved of the whole of people the private for the of a State, party, speak benefit it must such they unmistakable terms that will not of any admit v. CENTRAL OP GEORGIA CD [00] 'CO Pitney. dissenting. JJ., S. and. U. consistent with the reservation construction reasonable &c. R., supra, of Picard v. Tennessee R. power.” the (p. 641). of which
I do not find a word in the statutes taxing power upon from the this any immunity confers not to question interest, The relates its appellee. . companies. that interest original the What assessed, question. is another be, and how is to be appellee has any immunity The is whether the inquiry first submit, answered, I that, under the contract clause and of its and no it is found that has no contract own when immunity transfer to it of the others. stipulation a of such implication the principle precludes The for or leases applies equally transfer leases—even to claim position A in no better dinary periods. lessee is or a limitations, mortgagee, than a exemptions, authority who under purchaser sale, legal at a foreclosure privileges, the franchises, takes all the property, leasehold interest was mortgagor. question U. University South, presented v. Jetton There, exemption granted the State had University thousand acres of land. The University one and thus a village of lots within this tract gave leases An was made effort community developed. University upon the against tax the State to exemption. it out of the But ground that leases took could not otherwise; court held the state University the South University. be-taxed State, Thereupon Skidmore, Tennessee, of leasehold authorizing legislation under new University lessees, and the interest, assessed enjoin the court to suit in the Federal lessees brought ground impairment of the taxes collection in favor entered a decree Circuit Court contract. The appeal enjoined the assessment. On University that, decree support court, urged it. was to this *9 TERM, Hughes Pitney, dissenting. JJ., placed tax was property, leased in order put could use to which only In- University. to the made of benefit might it that legisla- under assessment that deed, it was said is, that exemption; the value destroyed act tive to save in order the lessee necessary protect that it was con- these court overruled But this right. contract exemption that ‘plain to be thought It tentions. riot extend in fee does of the land to the owner granted in the same of an interest taxation from exemption to an person to another of the fee the owner land, granted of the one immunity The years.’ for a term as a lessee of ex- and the contract other, to the immunity rio gave degree’ remote ‘in the most imply did not emption change not thereafter ‘so its.mode the State would directly.’ of a lessee the interest as to reach assessment the lessee’s tax, it had a taxed what The State University. tax though it could interest, even long ‘lasts so as the court, said the exemption, conveys it a certain and when university lands, owns the longer it no owns person to a third interest them to the right at once becomes interest, which case, may In it be as- present to tax it.’ the State has, acquired has law- that, appellee what the sumed from taxation it cannot claim to be immune fully, but the contract of another. plead recogni- for it to me that its full emphasize this, I seems determination of the important proper case, tion is to a , the con- appellee and that is denied under what permitted tract clause should not be asserted have under another name. dominating effect Nor would dealing of unfair imputation there be basis for an to tax the sharp practice, in case a undertakes State immunity has no company of a which itself grantor immunity its had an taxation, simply because says not able to transfer. The appellee it was OF GEORGIA RY. CENTRAL JJ., dissenting. Pitney, S.U. not'claiming any exemptions/ it ‘is its argument we should deal none, have appears fact and, *10 footing. this upon with the case property the appellee is the relation then What the & predecessor, Its Central Railroad in question? of had leased' the railroad Georgia, Banking Company & and Southwestern the Savannah Augusta of properties or during in respectively, perpetuity, companies, companies. property of the lessor entire existence Company & of Banking of Railroad the Central 1895, and the appellee foreclosure in was sold under and leases to it of corporation a successor organized were executed both question in properties railroad ‘for full of term one hundred original companies periods upon and renewable in like years, and one in forever.’ The rental each case was the same terms cent, of per capital five on the amount fixed sum of the sum of outstanding, say, $51,145 then is to stock Augusta Company the case of & Savannah In $259,555 Company. case Southwestern what is a lease the took short, appellee under termed hold, if it pleased, perpetuity, the entire charge specified. to an annual of the amounts subject of as we must Dealing things, the substance when of is the United States involved —and the Constitution am unable to see forms or names —I how not with mere appellee an ad valorem process holds a violation due un which it thus is law a system Under Fourteenth Amendment. der the as the incongruities such entire tolerates owner of the equity redemption, to the value of land is separately it mortgagee taxed, interest while.the ground to find to be difficult a constitu would seem of a objection per the treatment holder tional Perry See J. W. as virtual owner. Co. petual lease language In the of Mr. Chief 220 Norfolk, TERM, 686 Pitney, JJ., dissenting. Savannah, Georgia, in Wells v. Bleckley Justice 545): “The value 531, 544, U. (see forever, and he who owns the use use, consists its is the owner subsequent, true be on condition though holds of a being. equally time This for the the property in the world. Where taxation or of all the land city lot taxation, objects the ultimate valorem, ad values are belong should the taxes. pay the values they to whom bargain and sale demised Land sold contract corporeal taxable as rent, is perpetual to a forever is taxable hands the rent also private and in property; on the The tax former is incorporeal hereditament. tenant, and on to the chargeable purchaser perpetual It hardly rent.” can latter to the owner that a so- a constitutional difference said that makes *11 chooses, if it has also may enjoy forever lessee, who called at renewal the the dates. giving up the privilege important, it to be under the Federal I Nor do understand appellee how the interest Constitution, —which technically described. ownership Surely, substance is —is with Amendment is not concerned mere the Fourteenth State is tenure; these, free abolish. technicalities' do not be added that we have here And it should taxation, as the State has credited to of-double question the one-half of one against the demanded the appellee by which was cent., upon income, payable the net per appellee of which the original payment and companies had assumed. capacity State,
In the constitutional considering as to question' of course with the what dealing we are power possesses, of all the do the exercise existing of its merely interpretation with statutes. I 674, recognize McConnico, Castillo v. case, in this so far as it to do fully the difficulties has application Georgia tax laws. interpretation court as a if the decision mere matter of And it were R. & NASH. R. LOUIS. Syllabus. TJ.S. law—in absence a control- of the local construction did statutes ling local decision—that I actually should withhold made, the assessment justify matter, dissent; that would leave the this expression within the left, I it should be control conceive so State, far the mere courts the property ad valorem tax held and imposition of an is concerned. appellee enjoyed to concur the view that tax here I am unable But Constitution collected violates sought States. United Pitney Me. Justice con-
I say authorized am this dissent. curs in McReynolds dissents. Justice also
Me. OF GENERAL WRIGHT, COMPTROLLER NASHVILLE GEORGIA, v. LOUISVILLE AND RAILROAD COMPANY. APPEALS FOR THE CIRCUIT COURT OF
CERTIORARI TO THE FIFTH CIRCUIT. January March Argued 1915. Decided
No. 162. *12 Ry. Georgia, ante, p. followed effect that Wright Central in this action the leases involved the statutes under railroads, the owners whereof ad on valorem executions taxes greater specified per tax than a from a statute exempted were posses those income, could not be enforced cent on the as lessees. sion of the railroads railroad, exempted by statute from who that owners of The fact thereof, specified per on greater cent the income paying a than company open another does the entire road lease on property. lessees the fee of the tax such State to