Callaway v. Bohler

• Decision Date: 25 June 1923
• Parties: CALLAWAY v. BOHLER, Tax Collector, et al.
• Court: U.S. District Court — Southern District of Georgia

291 F. 243

CALLAWAY v. BOHLER, Tax Collector, et al.

United States District Court, S.D. Georgia.

June 25, 1923

Callaway & Howard, of Augusta, Ga., for complainant.

George M. Napier, Atty. Gen., of Atlanta, Ga., and Pierce Bros., A L. Franklin, and Wm. K. Miller, all of Augusta, Ga., for respondents.

BARRETT District Judge.

J. B White came to Richmond county in 1866, and resided there continuously until 1909, in which year he went to travel in Europe, and died at Genoa, Italy, in March, 1917, leaving a will in which he described himself as of Richmond county Ga., and in which he named as executor E. H. callaway, of said county. Such executor probated the will in said county as a domestic will. White was never naturalized as a citizen of the United States. Such executor filed an inventory, in which were included various stocks and bonds in corporations foreign to Georgia, and which were physically in the possession of Henry Clews & Co. of New York. During the years 1911 to 1917, inclusive, White returned his real estate for taxation, and $300 of household and kitchen furniture, but no other personal property. Subsequent to the death of White the tax receiver of Richmond county demanded of such executor returns for taxation during the years 1911-1917, inclusive of the said stocks and bonds. The executor insisted that they were not liable for taxation in Richmond county, and the tax receiver withdrew his demand. Thereafter Richmond county petitioned for a mandamus against said receiver to compel him to assess said stocks and bonds, and sought to make such executor a party. The court declined to make the executor a party, but allowed opportunity for taking the depositions of a member of the firm of Clews & Co.

Such testimony was taken, and revealed that there was held by Clews & Co. for said White stocks and bonds in such foreign corporations of the following values for the respective years: For 1911, $1,012,366.67; for 1912, $1,397,671.67; for 1913, $1,344,405.83; for 1914, $1,556,915.83; for 1915, $1,443,543.83; for 1916, $1,508,436; for 1917, $1,375,408.50-- and further that there should be added to each amount for each year above given two notes, aggregating the sum of $12,000, and the further aggregate amount of $195,152.19 for the year 1917, covering other stocks in foreign corporations and notes and loans for that year. Included in these were 115 shares of the capital stock of the National Park Bank of New York and 100 shares of the National Bank of Commerce of New York, aggregating from $57,000 to $99,000. These notes and bonds had never been in the name of White, but were always in the name of Clews & Co. White paid Clews & Co. on account from time to time, leaving owing by White to Clews & Co. on the 1st of January of each year the following amounts: January 1, 1911, $478,877.33; January 31, 1912, $707,294.00; January 1, 1913, $520,626.89; January 1, 1914, $712,840.80; January 1, 1915, $610,409.86; January 1, 1916, $227,476.30. On January 1, 1917, White had paid Clews all that he owed, and had to his credit $8,367.17. The tax receiver then assessed against the estate of White the said securities as follows: For 1911, $1,003,866.87; for 1912, $1,399,161.67; for 1913, $1,558,300.83; for 1914, $1,548,735.38; for 1915, $1,439,160.83; for 1916, $1,509,936; for 1917, $1,623,567.52.

The executor then demanded arbitration, as provided by Park's Pol. Code Ga. Sec. 1116(d), being Acts 1910, pp. 22-24, and named his arbitrator. The tax receiver appointed his arbitrator. The arbitrators failed to agree upon an umpire, and he was appointed by the board of commissioners of roads and revenues of Richmond county. On the day such arbitration board was to convene, September 2, 1919, counsel representing the state of Georgia applied to the judge of the superior court of Richmond county seeking to enjoin Callaway and the arbitrators and umpire from proceeding with such arbitration. This application was denied. The arbitration proceeded. Counsel for the state and Richmond county appeared before the board and took part in such proceedings. The following award was on September 2, 1919, made by the arbitrators and umpire as to the assessments for the respective years: For 1911, $112,744.83; for 1912, $154,550.67; for 1913, $187,927.98; for 1914, $194,138.96; for 1915, $190,202.74; for 1916, $301,183.67; for 1917, $360,813.92. On September 5, 1919, such award was delivered to the tax receiver, who made entries on the tax digests for the respective years in accordance therewith. On September 5, 1919, Callaway, as executor, tendered to the tax collector $27,980.88 'in full payment of the above taxes as calculated upon the assessments rendered by the board of arbitration on September 2, 1919. ' Thereafter, on September 25, 1922, such executor paid the tax collector $27,980.88, without any stipulation that it was 'in full payment,' and it was received 'without prejudice to the rights of any of the parties in the pending litigation in reference thereto. ' Such executor claimed that no additional interest was owing, because of the restraining order granted by the judge of the superior court of Richmond county.

On September 6, 1919, the state of Georgia, in its behalf, and in behalf of Richmond county and the board of education of Richmond county, brought its petition, supplemental to that filed on September 2, 1919, against C. A. Steed, tax receiver, and C. S. Bohler, tax collector, of Richmond county, and prayed that they be enjoined from making the tax assessments and collecting the taxes according to such arbitration. The executor demurred to such original and supplemental petitions, as amended, upon certain special grounds, and upon the general grounds that 'said petition sets forth no legal or equitable cause of action,' and because the 'parties assuming to represent the state of Georgia in said proceeding have no legal authority to bring such a proceeding,' and said arbitration proceedings could be attacked only by the tax receiver or by the executor. The judgment of the court was that the demurrer is 'sustained and the restraining order heretofore granted is dissolved and plaintiff's petition, as amended, is hereby dismissed. ' The Supreme Court of Georgia has decided the mandamus proceedings, affirming that they were rightly dismissed (Richmond County v. Steed, 150 Ga. 229, 103 S.E. 253), and the foregoing petitions for injunction, affirming that the injunctions were properly denied, but the different Justices assigning different reasons for such conclusion in the last petition (State v. Callaway, 150 Ga. 235, 103 S.E. 792; Id., 152 Ga. 871, 111 S.E. 563).

The present bill is by Callaway, executor of White, against the tax receiver, tax collector, and sheriff of Richmond county and sets out the above-stated facts, and, in addition, that subsequent to the said decision of the Supreme Court of Georgia, reported in 152 Ga. 871, 111 S.E. 563, the tax collector of Richmond county, Ga., issued seven tax executions against orator, as executor of White, for back taxes for the years 1911 to 1917, inclusive, aggregating the principal amount of $145,568.30 and interest to date, $70,764.07, and has placed them in the hands of the sheriff of said county for the purpose of levy; that such executions were based upon the assessments made by the tax receiver, after taking the deposition of a member of Clews & Co., which assessments are set forth above; that included in such assessments, in addition to the stock in certain national banks, was $10,500 of stock of the Southwestern Railway of Georgia, a Georgia corporation, which is not taxable by the state or county; that the assessments made by the tax receiver were expressly made under the provisions of the Acts of the General Assembly of the State of Georgia of 1910, as codified in Park's Political Code of Georgia, Sec. 1116(d), and which expressly provides for the right of arbitration; that the right of your petitioner to such arbitration was conclusively established by the decision of the superior court of Richmond county, affirmed by the Supreme Court (150 Ga. 235, 103 S.E. 792), and such decision is res adjudicata; that by reason of counsel for the state participating in such arbitration the state is estopped from any attempt to void or evade the same; that the decision by the superior court of Richmond county in the subsequent proceeding attacking such award, which was dismissed on demurrer, and which dismissal was affirmed by the Supreme Court (152 Ga. 871, 111 S.E. 563), is also res adjudicata; that the issuance of such tax executions by the tax collector was under the Act of the General Assembly of Georgia approved July 31, 1918 (Acts 1918, p. 232); that the act of 1918 did not repeal the act of 1910, but was cumulative; that such act of 1918 was violative of article 1, Sec. 3, par. 2, of the Constitution of Georgia prohibiting retroactive legislation; that if such act of 1918 repeals the act of 1910 it is expressly discriminatory by preserving to taxpayers who make returns to the comptroller general the right to arbitrate, and denying such right to those taxpayers who make returns to the tax receivers, and such discrimination is violative of article 7, Sec. 2, par. 1, and of article 1, Sec. 1, par. 2, of the Constitution of Georgia, and is in violation of the Fourteenth Amendment to the Constitution of the United States; that during 1911-1917, inclusive, the assessment of property in Georgia for taxation did not average 25 per cent. of the true value thereof, and of the class of property sought to be taxed against orator did not exceed 10 per cent. of the true value; that the award of the arbitrators fixed the amounts at from 12 per cent. to 25 per cent. of the true value; that the...