Coca-Cola Co. v. City of Atlanta
| Decision Date | 28 January 1922 |
| Docket Number | 2697. |
| Citation | 110 S.E. 730,152 Ga. 558 |
| Parties | COCA-COLA CO. ET AL. v. CITY OF ATLANTA. |
| Court | Georgia Supreme Court |
Rehearing Denied Feb. 18, 1922.
Syllabus by the Court.
Equity has jurisdiction to decree a discovery, when no other adequate remedy is available, and the discovery prayed is ancillary to some other proceeding, either pending or to be brought. This is true notwithstanding the equitable petition prays no other relief than a discovery, which is ancillary to a proceeding to be brought against a party or parties other than the defendant in the equitable action. That the defendant in the equitable action has no pecuniary interest in the litigation, or subject-matter involved, will not operate to defeat a discovery which the petitioner is otherwise entitled to.
A proceeding is some act, or acts, done in furtherance of the enforcement of an existing right, real or imaginary. It may be by petition in a court of competent jurisdiction, or by a summary remedy prescribed by statute. The assessing of properties for taxation by a municipality, in accordance with its ordinances, the issuing of executions upon such assessments when the taxes are not paid as required by law and the seizure and sale of the properties so assessed, under such executions, for the taxes due, constitute a proceeding.
Stocks of corporations organized under the laws of other states are liable for municipal taxes in this state when the owners of such shares reside within the corporate limits of such municipality. The location of the assets of the corporation is not a material fact in determining the liability of the shares of such a corporation for taxes; but, if it were otherwise, a corporation organized in Delaware and having 85 per cent. of its properties out of this state could not be classed as a domestic corporation in Georgia.
The classification of the stocks of corporations by the laws of this state, whereby the shares of corporations of this state are exempt, and the shares of corporations of other states are liable for taxation, when owned in this state, is not an unlawful classification, nor is it in violation of section 2 of article 7, or paragraph 2 of section 1 of article 1 of the Constitution of this state. Neither is such classification in violation of the Fourteenth Amendment to the federal Constitution, for any reason assigned.
Under the pleadings and the agreed statement of facts in the instant case, the petitioner was entitled to the discovery prayed; and the trial court did not err in overruling the defendants' demurrers, nor in entering the decree in favor of the petitioner.
Error from Superior Court, Fulton County; J. T. Pendleton, Judge.
Suit by the City of Atlanta against the Coca-Cola Company and others. Decree for plaintiff on demurrer, and defendants bring error. Affirmed.
The city of Atlanta, a municipal corporation, brought its petition against the Coca-Cola Company, S.C. Dobbs, and William Candler, alleging that the Coca-Cola Company was a corporation of the state of Delaware; that it had an office in the city of Atlanta, wherein were kept its books and records; that Dobbs was president and Candler secretary of the company, and that they resided in said county.
The petition alleged that the corporation had a number of stockholders residing in the city of Atlanta, and that their shares in the corporation were subject to taxation by the municipal body; that the owners of these shares had failed and refused to return them for taxation, and that the petitioner had not been able to ascertain their names or the amount of their respective holdings; that the petitioner had made formal demand on the corporation, its president and secretary, for a list of the names of the stockholders of said company residing in said city, in order that the petitioner might assess such shares for taxation, but that the company and its officers had refused to furnish the information desired.
The petitioner averred that it had duly enacted ordinances providing for the assessing of these shares for taxation, and the levying and collection of the taxes; that the taxing date for the year was January 31, 1920, prior to the date of the filing of the petition, and that petitioner had a lien on all shares of the corporation owned by residents of the city of Atlanta on the taxing date aforesaid. Petitioner, averring that its purpose was to assess these shares of stock for taxation as soon as it ascertained the names of the resident owners, and that it was without other remedy, prayed that it have discovery from the defendants of the names of all stockholders in said company who resided in the city of Atlanta on January 31, 1920, and the amount of stock owned by each.
The defendants demurred generally and specially, but later waived the special demurrers. The grounds insisted upon were that the petition set forth no cause of action, or right of discovery against the defendants or any of them; that the petition sought no affirmative equitable relief, and was not ancillary to any other civil proceeding then pending or to be brought; that the petition showed that the defendants had no interest in the subject-matter of the suit or in any civil proceeding to which this petition could be ancillary, or any petition that might hereafter be brought; that the petition shows that the defendants are mere witnesses, and are not proper parties defendant to a petition for discovery; that the petition does not allege that all or the greater part of the physical properties of the corporation are located out of this state, and consequently pay ad valorem tax to some other state; that the petition does not show that the greater part of its tangible properties are not located within the state and that the company does not pay all taxes thereon to the state, county, and city; that the petition does not show any authority in the petitioner to assess taxes against these shares or collect taxes from the owners who reside within the city; that the petition does not show that if the petitioner should collect taxes from the holders of these shares such collection would not be the collection of taxes a second time or double taxation.
The defendants also filed an answer admitting the averments in the petition, except they denied that the shares of the corporation were subject to taxation by the complainant, and averred that the corporation returned its real and personal properties located in the city of Atlanta and paid all taxes thereon required by the state, county, and city of Atlanta that the defendant corporation owned like properties in many other places in this country and Canada, and that said company paid all taxes required upon all these properties to the various municipalities, counties, states, and provincial authorities where located. Defendants contend that to require its shares owned in the city of Atlanta to be taxed by the petitioner would in effect be a double taxation of the assets of the corporation, and that no allowance is made for the fact that the corporation owns properties in the city of Atlanta.
The defendants deny that the petitioner has a lien upon the shares of the corporation which are owned in the city of Atlanta; they admit that the petitioner has ordinances for assessing, levying, and collecting taxes, but deny that these ordinances have any reference to these shares, for the reason that the shares are not liable for taxation by the city of Atlanta. The defendants aver that they have no interest in the question of whether the stock in this corporation is subject to taxation or not, and say they have no authority to divulge the names of the stockholders, or, if such authority existed, their books would not necessarily show who were the actual owners of the stock, inasmuch as the stock is from time to time being transferred, and the transfers are not recorded on the books of the corporation. They say that if the discovery prayed should be decreed it would be useless for the reason that there is no action at law or equity or otherwise which could compel the stockholders in this company to pay taxes on their stock to the city of Atlanta.
The defendants further answering say that the purpose of the city of Atlanta in seeking this discovery is illegal unconstitutional, and contrary to the laws of this state and the United States, and particularly to section 2 of article 7 of the Constitution of the State of Georgia, which provides that "all taxation shall be uniform upon the same class of subjects," etc. The contention is that, inasmuch as shares in domestic corporations of this state are not liable for taxation, and the Coca-Cola Company owns properties in Georgia and in the city of Atlanta, on which it pays the required taxes, the collection of the tax upon the shares owned in the city of Atlanta would not be uniform but would result in a double taxation. The defendants also say that such action on the part of the city would be violative of paragraph 2, section 1, article 1, of the Constitution of Georgia, which provides that "protection to person and property is the paramount duty of government, and shall be impartial and complete"; the contention being that inasmuch as shares in domestic corporations are not subject to taxation, to tax shares of the Coca-Cola Company would be violative of this clause of the Constitution.
It was further contended that the purpose of the city as set forth in its petition would be violative of the Fourteenth Amendment of the Constitution of the United States, based upon the contention that inasmuch as the Coca-Cola Company pays taxes upon certain of its property to the city of Atlanta, the levying of a tax upon its shares owned in said city would be double taxation, and that the owners of such...
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