64 Ga. 783 | Ga. | 1880
The Southwestern Railroad Company brought their bill in equity against Wright, the comptroller-general of the state, and Cherry, the sheriff of Bibb county, to restrain them from .the collection of certain fi.fas. for taxes, purporting to be legally due the state for the years 1876 and 1877, but alleged in the bill to be unconstitutional and wholly illegal and void. The chancellor granted the injunction, and the defendants excepted.
The executions are each for some twenty odd thousand dollars, and for penalties for failure to return and pay taxes each in three times the amount of the tax alleged to be due, the exact amount being for the year 1876 $26,612.29-100
They were issued by the comptroller-general on the 3d of December, 1877, on assessments made by him of the value of all the property of the company, based upon returns of the company for the years, and made in the years, 1874 and 1875. The tax is on the entire road-bed, bridges, iron, locomotives — everything belonging to the railroad company as contained in the returns and valuations made in 1874 and 1875, and for three times that sum for penalty; in the aggregate, over two hundred thousand dollars. The tax is at the same rate per cent, ad valorem as the property of all the people of the state is taxed, without regard to any limitation thereon in the charter of the company, and the executions are levied on the depot and other railroad property of the company in the city of Macon and county of Bibb. To these tax executions the company filed affidavits of illegality under the act of 1874, renewed in 1875, and in 1876, which provided that on certain conditions precedent being complied with, these affidavits of illegality might be taken, returned to the superior court of Fulton county, and appealed by bill of exceptions to this court. This was attempted to be done, but no full and complete returns having been made as contemplated by the act of 1874 as one of the conditions precedent, this court dismissed the illegalities. See pamphlet report, February 9th, 1879, p. 74.
In the opinion or syllabus thereof so ordering the affidavits of illegality to be dismissed, the court intimates that owing to the apparent intricacies and complications of the case of this company, its more appropriate and complete remedy would be in equity. So we have now before us this bill in equity seeking to restrain the sheriff of Bibb county and the comptroller-general from further prosecuting the executions and levies alleged to be wholly unconstitutional and void.
It is substantially alleged in the bill that complainant
“State of Georgia, Executive Department,
“Atlanta, Ga., December 3d, 1877.
' "Ordered, that the comptroller-general issue execution for unpaid taxes due the state against such railroad companies as may be designated by Robert Toombs, attorney for the state, and the attorney-general.
(Signed) “Alfred H. Colquitt, Governor.
“By the Governor:
“J. W, Warren, Sea. Bee. Bep’t,’’
That thereupon, under the instructions of said attorneys, and in obedience to said order, they were issued, and are therefore not the act of the comptroller-general, but the act of the said counsel of the state ; that all legal taxes have been paid; that the property levied on, to-wit: the offices and depot and other property in Macon, is exempt from the tax, being appurtenances to the road absolutely necessary to use the franchise granted it for the public benefit and its own chartered contract with the state, and if these taxes are enforced in the manner and to the extent threatened, its entire franchise will be destroyed and rendered worthless. Therefore the prayer is that the sheriff and the comptroller-general be restrained from further pressing the fi. fas. and levies made on the company’s property, they being for no constitutional, legal and valid tax, but for ex-actions violative both of the constitution of the United States and of the state of Georgia, and illegal and void.
To this bill, thus briefly epitomized, the comptroller gen
The plain meaning of these words, as used in the act of 1801, is that the courts shall not interfere with the collection of taxes imposed by that law. The words are “ under this law; ” if not imposed “ under that law,” then the inference is that there may be interference by the judiciary. In other words, if that law authorize any tax, its collection by levy and distress shall not be hindered; but if that law does not authorize the tax, then it may be hindered by the courts. And so it has been ruled by this court.
In Vanover vs. The Inferior Court et al., 27 Ga., 355, Judge Lumpkin, after laying down the general rule that the 21st section of the act of 1801, above quoted, does not apply to municipal corporations and counties in their levy of taxes, uses this language: “ But apart from this plain and palpable view of the case, the prohibition applies only to taxes properly laid under the act of 1801, and acts amendatory thereof. But suppose, as in this case, the inferior court assumes jurisdiction to levy a tax without authority of law to do so, or the ministerial officers of the state undertake to collect a tax on property, not only not taxable, but expressly exempt from taxation, would not the courts arrest such an attempt, that not being a tax authorized by the act of 1801, or any subsequent statute amendatory thereof ? Most clearly. We hope the profession and the public will apprehend this distinction, and that there will be less doubt and confusion upon this subject.”
It will thus be seen that if the tax were laid upon property
The same construction precisely has been given to section 3668 of the Code above cited, which indeed is but the 21st section of the act of 1804, applied to taxes laid in the Code and amendments thereof. In the case of Barlow et al. vs. The Ordinary of Sumter County, 47 Ga., 643, Chief Justice Warner uses this language : “Section 3618 (now 3668) of the Code declares that no replevin shall lie, nor any judicial interference be had in any levy or distress for taxes under the provisions of this Code, but the money sought to be collected in this case is not for any tax legally imposed under any provision of this Code, or any other Code, which in law would bind the people of Sumter county to pay it, and the defendants, as securities of the tax collector, to refund it.”
So that it seems clear, from these adjudications, that the construction put upon the act of 1804, and the Code on the subject of judicial interference, is that if the tax be imposed upon property not exempt, or on property upon which a tax might constitutionally and legally be laid, and if it were authorized by the constitution and laws of the state, and thus became a valid law and a tax due the state, then there could be no judicial interference; but if the act under which the ministerial officer of the state was proceeding were unconstitutional, by reason of the property being exempted by contract from taxation or otherwise, then the judiciary should interpose and arrest the collection.
So in White vs. The State, 51 Ga., 254, Judge McCay expresses great doubt of the constitutionality of the immunity from judicial interference on-the part of the state, and the court refuses to extend it.
Again, in City of Athens vs. Long et al., 54 Ga., 33, the same judge uses this language: “ The general rule that it is not competent for the judicial department of the government to interfere with the legislative department in the ex
So also in Decker et al. vs. McGowan, 59 Ga., 806, Judge Bleckley says : “ It is certain that as a general rule judicial interference with the collection of state taxes, is forbidden (citing authorities). Perhaps there is not, save in instances expressly provided for by the statute, a single .real exception to the rule,, properly understood, the so-called exceptions being only apparent. Nothing is a tax but what has the nature of a- tax, and is imposed by some law. For' an officer to exact money under the name of a tax, when there is no law to warrant the exacA tion, is not an attempt to collect taxes, but an attempt to collect something else ; and the rule which excludes interference in the collection of taxes does not apply.” And he goes on and applies this test: “ Conceding all the elements of fact to be as the officer decides them to be, or as favorable to him as possible, would his action be legal or illegal % ' If legal, no interference ; if illegal, interference to the extent necessary for the citizen’s protection.”
Still on the same line of distinction, drawn by Chief Justice Lumpkin in 27 Ga., and the cases of The Georgia Mutual Loan Association et al. vs. McGowan et al., and Burke et al. vs. Speer, in 59 Ga., pages 811 and 353, follow in the same direction.
And so also does 60 Ga., 505, the case of Miller vs. Wilson, where it is held that “in the absence of explicit language clearly expressing the will of the legislature to tax the bonds of the state, the general assembly will not be presumed to have passed upon so grave a question of public policy from the use of general words, especially when like words have been employed in former acts, and the executive department has never construed them to embrace
By reference to those constitutions it will be seen ihat our fundamental law declares : “ Legislative acts in violation of this constitution, or the constitution of the United States, are void, and the judiciary shall so declare them.” Cons. 1877, art. 1, sec. iv. par. ii; Cons. 1868, art. 1, sec. xxxii.
It is difficult to see how the judiciary is to declare an act unconstitutionally imposing a tax on the citizen void, if the citizen has no right to appeal to the courts, and the courts no power to interfere. Courts can only act on cases brought before them, and if they cannot be brought before them in some way, these words of the constitution are mere mockery.
It seems to us, therefore, clear, that where any ministerial officer of the state is attempting to collect money out of a citizen, or a person natural or artificial, under the forms of law, but without any valid constitutional law to authorize the process he uses and calls an execution for taxes, it is the duty of the courts, on a proper case made, to arrest the procéeding in some of the modes known to the law, and afford relief to the party complaining.
And the general assembly in 1874, when it began a system of more thorough investigation into the taxes paid by railroad companies, and when itself seemed doubtful of the
This company used this remedy, and tested the main question made in the record, by affidavit of illegality to a similar tax levied on its property in 1874 ; and it was prevented or misled by the acts of the comptroller-general in transmitting to it a different schedule or form of returns, after it had gained the case made before, from using the same remedy to test this proceeding for 1876 and 1877. It cannot be fairly said in a court of equity that it was the laches of the company that it did not comply. It certainly was not negligence unmixed with fault in the comptroller. It was misled by his official act. If it made a mistake, the mistake was caused by the change of the form of its return sent it by the comptroller-general, and surely equity will relieve against a mistake so superinduced. It is remediless now under the mode provided by the act of 1874. It has no remedy at law as the case now stands. It cannot make now the return required to have been made in 1876 and 1877, because the time has passed; and if it has any remedy it is in equity.
Besides, this court at the very time and in the very act of dismissing the case at law, because it had not complied with the conditions required by the statute, which alone gave the superior court of Fulton jurisdiction, announced that it had a remedy in equity, and from the nature of the case it was more complete than at law. The complainant
Was the chancellor right to grant the injunction ?
The tax is imposed on the entire property of the company, without regard to the restriction on taxation specified in its charter, and in the teeth of the principle decided by the supreme court of the United States, whose judgment was made the judgment "of this court, and transmitted to the superior court of Fulton county for further proceedings. The principle thereby ruled covers certainly the much larger part of the property of this road as exempt from taxation, except as limited jin the charter, and which has been paid for both years 1876 and 1877. Yet these heavy taxes, with these heavier penalties, are sought to be forced in the name of the state out of this company illegally and unconstitutionally by these two officers, contrary too to the spirit of the legislation’of this state as shown in its desire to have the questions fairly tested by the highest courts of the country, and contrary to its own constitution and to that of the United States, and the executions are levied upon the very forehead — -the marrow — of the property which is exempted by that judgment.
If equity has jurisdiction and an injunction can ever be granted in a case of this sort, where under color of tax process illegal exactions are made upon a corporate body, surely that case is before us here. Therefore we think that the chancellor did not err injapplying it to these executions,
It admits its liability to pay nothing more than it has 'paid. Hence, it cannot tender any sum as due; but it 'offers to pay whatever may be found to be due according to law. This, we think, is a substantial compliance with the -rule in equity which requires suitors in her forum to do ■equity, and therefore to pay what is owing before the complainant is entitled to relief in regard to what is not due.
We think too that on the hearing complete relief should 'be afforded, and the whole matter be investigated to ascertain precisely what property of the company should be taxed and what should not be taxed — or in other words, what has paid its tax and what has not — or what is covered by the charter and what not. And in order to facilitate the trial, or a settlement if desired before trial, we will indicate our opinion in regard to these matters now.
(a.) We think that the portion of the new Southwestern Railroad, known as the former Muscogee Railroad, from Columbus to Butler, is not liable to be taxed beyond the limitation fixed in its charter, it being covered by the supreme court decision. — 92 U. S., 665. That the road from Fort 'Talley to Butler is not liable further than fixed in the charter, because the words authorizing the extension to Butler, or Wolf Pen as then called, exonerate the extension from further taxation — those words being: “ That all the rights, privileges and powers whatsoever, heretofore granted to the Southwestern Railroad Company, shall extend over the railroad hereby authorized to be built.” This confers on the extension every right and privilege which the Southwestern Company had, and among the most valuable of these rights and privileges is the right and privilege to be exempt from taxation beyond “ one-half of one per cent, on its net .annual income.”
That the main line of road as authorized to be built extends from Macon to Fort Gaines, and is exempt from taxation except as limited in its charter, the entire line through. We construe the franchise to build the road “to some point intermediate between Albany and Fort Gaines, or to any point or points upon the Flint and Chattahoochee rivers below Albany and Fort Gaines, to be agreed upon by the company, from which -point the. said company may build branch railroads to Albany and Fort Gaines,” contained in the original charter of 1845, in connection with the amendment of 1850, which provides “that if said company do not build the main trunk of said road to or below Fort Gaines within two years,” etc., and so construing them, we think that the company was authorized to build the main trunk to Fort Gaines, and has done so, and that the line is exempt from further tax.
We think that the words used in the said amended act by which we understand the road from Cuthbert, or a point near Cuthbert, to Eufaula, was built, to-wit, “ under the rules and restrictions as they are now authorized to construct said Southwestern Railroad,” are not sufficient to limit the taxing power on that road — from Cuthbert to Eufaula, and that it is liable to such tax as is imposed on other property in the state ad valorem, of course deducting what has been already paid by the company for its proportion of the income tax.
We think that the branch from Albany to Arlington is liable to the ad valorem tax, with the like pro rata deduction for its proportion of what income tax has been paid in its behalf, because it Í3 made expressly liable for “such additional tax as the legislature may hereafter impose.” And
We think that by the express language used in theamendatory act of December 19th, 1859, by which the railroad known as the Georgia & Florida Railroad was consolidated with the Southwestern, it being completed from Albany to Americus, to-wit, “ that the said railroad from Americus to Albany shall be considered part and parcel of the road of the Southwestern Railroad Company, and be liable to pay to the state the same tax that the rest of the Southwestern Railroad Company is liable to pay, and such-additional tax as the legislature may hereafter impose,” that portion of the road is liable to pa_y the ad valorem tax less its proportion of the income tax already paid ; but if it has-already by agreement paid an ad valorem tax at a certain valuation then it is not liable to be taxed further for the years embraced in the agreement; and we think that the law officer of the state, the attorney-general, could and did bind the state by the agreement made pending this litigation.
In the statement that the line through from Macon to-Fort Gaines is not liable to be taxed, except as prescribed and limited in the charter of 1845, of course we do not include the short track from Americus to Smithville, as that was part of the Georgia and Florida road, and is covered-by the reservation of the state’s right to tax when the Southwestern was allowed to absorb and consolidate that road with itself.
(a.) Stock in the company’s own road, held by itself, or in other roads in this state, whose charters limit or exempt taxation thereon, and whose income is taxed, is not liable; .and stock held by the company in railroads without the limits of this state is not taxable here. Stock in a railroad is really but so many shares of its property, and that prop■erty is real estate, for the most part at least, and taxable by the state in which the road is located.
(b). But bonds, notes, and all other mere evidences of debt, follow thesiiwsof the creditor, no matter where the debtor lives. Code, §798; 50 Ga., 392. So, any such evidence of debts due this corporation, whether held on natural persons -or corporations, in or out of this state, are taxable. If, however, merely income, and taxed and paid as such, they -ought not to be taxed again; if invested, they should be taxed ad valorem. So, any water-craft belonging to this -company in 1876 and 1877 is also taxable.
The value of the branches which we hold liable will be ascertained in proportion to the business done upon them in connection with the main line. Some will be more others less valuable. We do not think that the proportion of number of miles alone of a branch to the entire line of the road is a fair test. Some branches are very valuable,, some almost worthless on some roads. The value of these branches can be ascertained by the business done upon, them in proportion to the general business of. the road, and the real value of each at last is dependent on the business it does, and not alone on the length of its line. But where it is made part of the main line, and the new stock issued to build the branch is incorporated into the general stock, perhaps it is right that it should be valued in the proportion of its length to the length of the entire road.
Considering, however, that the judgment of the supreme court of the United States is confined to the question really made there, that is, what effect the consolidation of the-Southwestern and Muscogee Railroads had on the limitation on the taxing power in the two charters, we are clear that the principle ruled by that court only covers those; two roads and property belonging to each appurtenant thereto, and cannot be extended to branches which were-constructed with different rights and privileges as to taxation, and to property not appurtenant.
But this company has been forced into a court of equity,, and is entitled to relief therein. The judgment granting-the writ of injunction until the hearing is therefore affirmed, and it is ordered that on the hearing the case be tried on its merits, and that such issues be made as shall bring out the whole truth on the facts, and the law as indicated above be applied to those facts, subject to be modified by the chancellor as facts other than those in this record may require.
Judgment affirmed, with directions.