Consolidated Distributors v. City of Atlanta

• Decision Date: 16 April 1942
• Docket Number: 14069.
• Citation: 20 S.E.2d 421,193 Ga. 853
• Parties: CONSOLIDATED DISTRIBUTORS, Inc., v. CITY OF ATLANTA.
• Court: Georgia Supreme Court

20 S.E.2d 421

193 Ga. 853

CONSOLIDATED DISTRIBUTORS, Inc., v. CITY OF ATLANTA.

No. 14069.

Supreme Court of Georgia

April 16, 1942

Rehearing Denied May 20, 1942.

Syllabus by the Court.

1. Where a petition shows on its face that the suit is barred by a statute of limitations, in order for the defendant to raise the defense by demurrer, it must be specially invoked.

2. Where the Federal Government has imposed excise taxes on liquors, payable before any sale is legal, and the amounts of such taxes are paid by a wholesale dealer, either by his direct payment to the Government under arrangement with the manufacturer or by his payment to the manufacturer of an increased purchase-price, the amounts of these taxes constitute an element in the cost and value of the liquors so purchased by the dealer. Therefore a city may lawfully include these amounts in assessing the value of the liquors for ad valorem taxation; and such an inclusion is not a tax on Federal excise taxes. Accordingly, it was not error to dismiss the dealer's petition against the city to enjoin its collection of an ad valorem tax, which was alleged to be illegal because it included this element of value.

On December 17, 1940, a wholesale liquor dealer in the City of Atlanta filed a petition against the City to restrain and enjoin proceedings by the city under the levy of a tax execution, issued for the collection of ad valorem taxes assessed in 1939 on a stock of liquors. The essential averments are as follows: Early in 1939 a dispute arose as to whether in arriving at the value of the liquors for such taxation, the amounts of excise taxes paid to the United States and to the State could be included as an item of cost in valuing the stock, like other amounts paid in the purchase, such as the cost of transportation and items additional to the cost of the liquor exclusive of such items or whether, as contended by the dealer, the inclusion of such Federal and State taxes as an element of value was in effect to levy a tax, not upon the property, but upon taxes, which did not constitute property. Representatives of the parties agreed to negotiate the dispute and try to reach an agreement. In July, 1939, 'plaintiff received a written notice that the City had made an arbitrary assessment on the value of plaintiff's liquors to include the United States taxes.' Negotiations were immediately continued, and the plaintiff offered to file a tax return based on 'the actual cost of the liquors,' but this was declined. The City issued a tax fi. fa., but the matter continued to be negotiated until December, 1939, 'when plaintiff tendered a tax return * * * at the cost price * * * and check for $725.99' in full settlement, which was declined. The matter continued in negotiation until April, 1940; and in June, 1940, a levy was made upon plaintiff's property, but the matter continued in negotiation until September, 1940, at which time plaintiff filed with the tax committee of the city council a petition asking for a hearing and adjustment of said tax assessment, so as to omit 'the amount of the United States taxes paid upon said liquors as a part of the value.' The matter continued in negotiation, and on October 14, 1940, plaintiff was notified as to a hearing before the city tax committee on October 19, 1940. A hearing was then had, and the committee considered the merits of the petition, but made no finding, and the plaintiff was not notified as to any decision until in December, 1940, when plaintiff was informed that the city's attorneys had advised that there was no recourse against the city because the plaintiff had failed to bring a suit within twenty days after notice of the assessment, as required by the act of 1939 amending the city charter (Ga.L.1939, p. 830); and the city tax collector announced that the property levied on would be sold. The city 'waived this requirement by having conducted the negotiations in the attempt to settle said dispute in good faith;' and the plaintiff 'relying upon the good faith of the city in conducting the negotiations with it in an attempt to arrive at a fair solution,' it would be unjust, inequitable, and unlawful now to permit the city to take advantage of plaintiff by claiming under said statute, after the city had waived the same and permitted plaintiff 'to be misled into the belief that the negotiation for a settlement was in good faith;' and 'this court of equity should relieve' the plaintiff 'from the said inequitable and unjust operation of said statute.' The plaintiff continues its previous tender of $725.99, as 'a just and fair amount of taxes owing by it,' and offers to pay this amount into the registry of the court to remain during the pendency of the case.

The plaintiff excepted to the dismissal of the action upon demurrer on the general grounds as stated, which made no reference to any statute of limitations. Although the petition attacked the assessment as invalid in that it included both State and United States taxes, an amendment limited the attack to the United States taxes. The only specific ground assigning error on the dismissal was that 'it was illegal for the City * * * to assess as a part of the value of its property the amount of taxes plaintiff had paid to the United States Government upon its said property, and because it compelled plaintiff to pay an ad valorem tax upon the taxes it had already paid to the United States.'

Spence & Spence, of Atlanta, for plaintiff in error.

J. C. Savage, E. L. Sterne, J. C. Murphy, and Frank A. Hooper, Jr., all of Atlanta, for defendant in error.

JENKINS Justice.

1. Even if a petition shows on its face that a suit is barred by the statute of limitations, so that the defendant might take advantage of the statute by demurrer expressly invoking such a defense, a general demurrer on the ground that no cause of action is stated cannot be taken as sufficient to raise the defense of a bar by the statute. Sammons v. Nabers, 186 Ga. 161, 162(3), 197 S.E. 284; Smith v. Central of Georgia R. Co., 146 Ga. 59, 60, 90 S.E. 474; Lee v Holman, 184 Ga. 694(4), 696, 193 S.E. 68; Smith v. Aldridge, 192 Ga. 376, 380, 15 S.E.2d 430; Darnell v. Toney, 41 Ga.App. 673, 682, 154 S.E. 379; Id., 39 Ga.App. 710(1), 148 S.E. 279; Felton v. State Highway Board, 47 Ga.App. 615(2), 619, 171 S.E. 198. Accordingly, even though the instant petition by a wholesale liquor dealer to enjoin the collection of ad valorem taxes by the City of Atlanta, imposed on the dealer's liquors, shows that the petition was not filed within 20 days after notice by the City to the petitioner as to the assessment on the property, as required by the act of 1939 amending the city charter (Ga.L.1939, pp. 830-832), no question as to the bar of the suit by the limitation in the statute was raised by the demurrer on the ground that the petition 'sets forth no cause of action against defendant, and alleges no facts sufficient to justify the intervention of a court of equity in this case.' And it is unnecessary to decide whether conduct by the municipality in negotiating with the taxpayer as to the proper amount of assessment, after notice thereof, could suspend the period of limitation, or relieve a taxpayer...