City of Columbus v. Muscogee Mfg. Co.
| Decision Date | 16 November 1927 |
| Docket Number | 5911. |
| Citation | 140 S.E. 860,165 Ga. 259 |
| Parties | CITY OF COLUMBUS et al. v. MUSCOGEE MFG. CO. |
| Court | Georgia Supreme Court |
Rehearing Denied Dec. 17, 1927.
Syllabus by the Court.
It is a cardinal rule in the construction of grants of exemptions from taxation, whether such grants be by statute or the Constitution, that such exemptions should be strictly construed in favor of the public, and that nothing passes by implication; but this rule must not be pushed to unreasonableness.
Taxation is the rule; exemption from taxation is the exception. The grant of an exemption from taxation rests upon the theory that such exemption will benefit the body of the people, and not upon the idea of lessening the burdens of the individual owners of property.
Under the Constitution of this state, "any person, natural or artificial, a resident of this state who may after January 1 1924, build, equip, establish, or enlarge a plant for the manufacture or processing of" certain products "may, as to such building, enlargement or equipment, be exempt from all county, incorporated town or city ad valorem taxes for a period of time not exceeding five (5) years from the date of the beginning of the building, equipment, or enlargement of such plants." Where a resident corporation of this state, which owns and operates a cotton factory, purchases existing warehouses for the storage of cotton, to be manufactured at its factory, and for the storage of the finished products, such warehouses constituting an existing warehouse plant are not an enlargement of its cotton factory within the meaning of the above provisions of the Constitution of this state, and the same are not exempt from taxation under the above provision of the Constitution.
[Ed Note.-For other definitions, see Words and Phrases, First and Second Series, Enlarge.]
Error from Superior Court, Muscogee County; C. F. McLaughlin Judge.
Petition by the Muscogee Manufacturing Company to enjoin the City of Columbus and others from collecting a tax on its property. Demurrer to the petition was overruled, and defendants bring error. Reversed.
H. C. McCutchen and Wm. de L. Worsley, both of Columbus, for plaintiffs in error.
Slade & Swift and K. E. Bray, all of Columbus, for defendant in error.
The Muscogee Manufacturing Company is a Georgia corporation, which owns and operates a cotton factory in the city of Columbus; and it has been engaged at such factory in manufacturing and processing yarns and cloth from cotton for more than 50 years. On September 2, 1925, this company purchased cotton warehouse which are located on lots 43 and 46, and parts of lots 44 and 45, in that city, and paid therefor the sum of $90,000. Said warehouses were partially adapted to the needs of this company in the operation of its manufacturing plant, in the storage of raw cotton used in its factory, and for the baling and storage of finished products manufactured by it. After the purchase of said lots and warehouses, this company, in order to make the buildings thereon more completely and efficiently adaptable to its needs in the operation of its manufacturing plant, spent the further sum of $17,369.96 in their improvement. The acquisition of said lots and the improvements thereon were preliminary steps in the company's program for the erection of an additional cotton mill and its equipment with cotton mill machinery. The erection of this new mill had been determined upon by the company in 1925, and plans for said mill had all been drawn in said year. Said warehouses were not only essential to the operation of its plant as it existed in September, 1925, but were absolutely required for the further development and enlargement of its plant by the construction of said new mill and its equipment with cotton mill machinery. The company commenced the erection of said new mill in the spring of 1926, and is now completing the same at a cost of $500,000, exclusive of the amount paid for the said warehouse property. In making its tax return to the city for the year 1926, the company claimed that said warehouse property was exempt from taxation, under article 7, § 2, par. 2, of the Constitution of this state, as amended in 1924 (see Laws Ex. Sess. 1923, p. 67), which provision has been put into operation in the city of Columbus by popular vote, at an election held on May 9, 1925, in pursuance of an ordinance of the city calling said election, a resolution of the city commission proclaiming the result of said election, and an act of the Legislature passed on July 22, 1925 (Acts 1925, p. 985), under which the city was authorized, upon the preliminary sanction of a popular vote, to put into effect said paragraph of the Constitution. On August 31, 1926, the company paid to the city the full amount of all taxes assessed by the city on its property, except the assessed value of said warehouse property, upon which the amount of taxes due would be $1,080 if such property is not exempt from taxation under said provision of the Constitution.
The company filed its petition, in which it set up the facts above stated, and sought to enjoin the city and its officers from collecting tax on said warehouse property, alleging that these warehouses were purchased as an enlargement of the company's plant. The city demurred to the petition, upon the ground that under the facts therein set forth the warehouse property is not exempted from taxation under the Constitution. The court overruled the demurrer, and the city excepted. It insists that the company's warehouses and the land on which they are situated, which were subject to city taxation at the time of their acquisition, are not exempt from such taxation, although the same, after improvement, are useful and used in the operation of the old and new factory of the company for the storage of raw cotton to be used in the manufacture of yarns and cloth, and for the storage of the finished products after manufacture and until sold, and although said warehouses may be absolutely essential and necessary for the operation of a new factory which the company had determined to build in 1925, and which it actually began to build in the spring of 1926, and was completing at the time the petition in this case was filed, the company having purchased said warehouses as a plant facility in the operation of its old and new mill. This makes it necessary for us to construe the constitutional amendment of 1924, which exempts certain industries from taxation for a period of five years.
1. We agree with certain cardinal rules which have been adopted by the courts for our guidance in the construction of this constitutional provision. We agree that we should look diligently for the intention of the framers of this constitutional amendment, and give effect to such intention. Civil Code 1910, § 4 (9). We further agree with counsel for the city that it is a cardinal rule, in the construction of grants by the public, whether such grants be by statute or by the Constitution, that nothing passes by implication, that exemption from taxation will be strictly construed in favor of the public, and that such exemption will not be held to be conferred unless the terms of the grant clearly and distinctly show that such was the intention of the framers of the Constitution, or of the Legislature in enacting a statute granting special privileges. Mayor, etc., of Macon v Central R., etc. Co., 50 Ga. 620; Atlanta Street R. Co. v. Atlanta, 66 Ga. 104; Mundy v. Van Hoose, 104 Ga. 292, 297, 30 S.E. 783; Brenau Association v. Harbison, 120 Ga. 929, 48 S.E. 363, 1 Ann.Cas. 836; 26 R.C.L. 302, § 265. The rule of strict construction must not be pushed to the extent of unreasonableness; and it is the duty of the court to ascertain and carry out the intention of the Legislature. 26 R.C.L. 314, § 274. We likewise agree with counsel for this company that their ordinary signification should be applied to words used in this constitutional provision, and that this rule is a...
To continue reading
Request your trial