Central of Georgia Ry Co v. Wright

• Decision Date: 03 February 1919
• Docket Number: No. 163,163
• Citation: 63 L.Ed. 401,248 U.S. 525,39 S.Ct. 181
• Parties: CENTRAL OF GEORGIA RY. CO. v. WRIGHT, Comptroller General of Georgia
• Court: U.S. Supreme Court

248 U.S. 525

39 S.Ct. 181

63 L.Ed. 401

CENTRAL OF GEORGIA RY. CO.

v WRIGHT, Comptroller General of Georgia.

No. 163.

Argued Jan. 21, 1919.

Decided Feb. 3, 1919.

Messrs. A. R. Lawton and T. M. Cunningham, Jr., both of Savannah, Ga., for plaintiff in error.

Messrs. Samuel H. Sibley, of Union, Ga., and John C. Hart, of Atlanta, Ga., for defendant in error.

Mr. Justice HOLMES delivered the opinion of the Court.

This is a bill in equity brought by the Railway Company to prevent the collection of certain taxes, which, it is alleged, would be contrary to Article 1, § 10, and to the Fourteenth Amendment of the Constitution of the United States. The case was heard on bill, demurrer and answer and certain agreed facts, and the Court of first instance issued an injunction as prayed. The decree was reversed however by the Supreme Court of Georgia and a writ of error was taken out to bring the case here. It presents another attempt to accomplish, by a change in form, what in Wright v. Central of Georgia Ry. Co., 236 U. S. 674, 35 Sup. Ct. 471, 59 L. Ed. 781, was held to be an unconstitutional result.

In that decision it was explained how the Central of Georgia Railway Company had become the holder of leases from the Augusta & Savannah and the Southwestern Railroad of property which by the charters of the lessors was to be taxed only in a certain way and to a certain amount. An attempt had been made to tax the lessee for the property, the leases being for one hundred and one years, renewable in like periods upon the same terms forever. The tax was laid upon the real estate, road bed, and franchise value, (with a certain deduction,) of the two lessors. It was held that the statutes made the fee exempt from other taxation than that provided for, in favor as well of the lessee as of the lessor. The taxes now attempted to be levied are upon the leasehold interests of the lessee in the same roads and it is argued that, if the leases produce a profit in excess of the rental, the value is required to be taxed by the Constitution of the State. But the Constitution was subsequent to the charters that created the exemption and must yield to them if they apply to the present attempt. We are of opinion that although the decision in the former case necessarily was confined to the question before the Court, the reasoning applies with equal force to that now before us. The cases of Rochester Ry. Co. v. Rochester, 205 U. S. 236, 27 Sup. Ct. 469, 51 L. Ed. 784, and Jetton v....