Council v. Sdunbar

• Decision Date: 31 July 1873
• Citation: Council v. Sdunbar, 50 Ga. 387 (Ga. 1873)
• Parties: CITY COUNCIL, OF AUGUSTA, plaintiff in error. v. BARNEY S.DUNBAR, defendant in error.
• Court: Georgia Supreme Court

50 Ga. 387

CITY COUNCIL, OF AUGUSTA, plaintiff in error. v. BARNEY S.DUNBAR, defendant in error.

Supreme Court of the State of Georgia

(Atlanta, July Term, 1873.)

Municipal corporations.Bonds.Taxes.Penalty.Before Judge Gibson.Richmond County.At Chambers.June 4th, 1873..The City Council of Augusta, by its tax ordinance for the year 1873, levied an ad valorem tax of one and one-third per cent, on all taxable property in said city, including in the list of said taxable property all railroad, municipal, or other bonds, (city of Augusta bonds excepted,) solvent notes and accounts, money loaned at interest, and all evidences of debt.

It was provided by said ordinance that all taxes should be payable within thirty days after the tax digest had been placedin the collector\'s hands for collection, and on all taxes unpaid *after the expiration of thirty days, that there should be levied an additional tax of four per cent.; on all unpaid after sixty days, five per cent.; on all unpaid after ninety days, six percent.; on all unpaid on the first of September, seven per cent.; on all unpaid on the first of November, execution, with ten per cent, added to the amount of tax, should be issued.

Barney S. Dunbar, a citizen residing in the city of Augusta, returned, under protest, the following bonds: Bonds of the Georgia Railroad and Banking Company, assessed at $67,900 00; Central Railroad and Banking Company bonds, assessed at $63,000 00; State of Georgia bonds, assessed at $4,500 00, and bonds of the city of Macon, assessed at $21,000 00.He then filed his bill to enjoin the city from collecting the tax, and alleged that said tax ordinance was illegal and invalid, upon the grounds that the obligors in the bonds were non-residents of Augusta, and therefore the property in these debts was not in the city; that the State bonds were not taxable by the city authority; and that the City Council bad no right to levy the additional tax upon default in payment of the original tax.

The answer of the defendant did not vary the case made by the bill.

The Chancellor granted the injunction as to the Central Railroad and City of Macon bonds.To which ruling the City Council of Augusta excepted.

He refused the injunction as to the State bonds, the bonds of the Georgia railroad, and as to the additional tax to be levied in case of delay in payment.To which ruling Dunbar excepted.

James C. C. Black; W. H. Hull, for plaintiff in error, submitted the following brief:

Debts and choses in action are personal property: Ford &.Sheldon case, 12 Coke 1; Ryall v. Rolle, 1 Atkyas, 182.

Such property has in itself no locality; the fact of the paper being in a particular place makes no difference: Morse v.| Morse.I Brown\'s Chancery Cases, 129;Fleming v. *Brook, 1 Sch.andLef., 319;Chapman v. Hart, 1 VeseySr., 273; 2 Wm\'s Ex\'rs, 1015, et seq.

The legislation of Georgia has always treated the residence of the creditor as fixing the locus of the property.

By section 798 of the Code, bonds, notes, etc., on parties in other States are taxable here; and while, by section 797, 800.all real and personal estate in this State is taxable, though owned by non-residents, yet no tax has ever been laid on debts due by residents to non-residents: Collins v. Miller, 43 Ga., 338.

The laws and decisions of other States confirm the same views: Johnson v. Lexington, 14 B. Monroe, 648;Johnson v. Commonwealth, 7 Dana, 338; Thomas v. Mason County Court, 4 Bush, (Ky.,) 135;People v. Park, 23 Cal., 138;People v. Wharlenby, 38 Cal., 461;Latrobe v. Baltimore, 19 Md., 13;Stephens v. Booneville, 34 Mo., 323;Davenport v. Miss. R. R. Co., 12 Iowa, 539.

The State of Pennsylvania has attempted to tax debts due to non-residents by residents; and in the case of the Cleveland, Painesville and Ashtabula Railroad Companyv. Pennsylvania, The Supreme Court of the United States decides that a State cannot do so.

The Court expressly base their decision on the ground that a debt, whether by specialty or simple contract, is property where the creditor, and not where the debtor, resides.That the Georgia Railroad and Banking Company is located in Augusta: SeeActs of 1841, page 174.That State bonds are taxable is ascertained from the consideration: 1st.That there is no Act exempting them. 2d.That there are Acts exempting them in certain cases—as in trust investments—and the Acts of the last Legislature, issuing certain bonds. 3d.That the State could forbid municipalities from taxing them, is certain, but until it does so, no such prohibition will be implied.

The remaining point is the power of the city to induce prompt payment by imposing an addition to the tax in case of delay.This rests on the general legislative power conferred on the City Council by the State; which power is only subject *to the limitation of not being repugnant to the Constitution and laws of the land.

Act of 1798, section 3.

Barnes & Cumming, for defendant in error, argued as follows:

We say, first, that the Court erred in holding that the corporation known as the Georgia Railroad and Banking Company has a residence in Augusta.Its charter does not fix its residence there The residence of corporations created by the Legislature is a question over which the Legislature has power: 17 Ga., 333.But where it is not fixed they have no particular residence: 17 Ga., 331.This is shown from the manner of paying taxes direct to the Treasurer of the State.Ibid.Georgia Railroad pays its tax direct to the State: Act of February 1, 1850, cited 26 Ga., 659.And see as to residence of stock, the capital of the company: 26 Ga., 663.Neither can Georgia be said, geographically considered, or as a political body, to have a residence in Augusta.But state bonds cannot be taxed by the city, for if they could, the creature could impair the resources of the creator.If the right to taxexists in the city, it is a right which in its nature knows no limit: Dillon on Municipal Corporations, page 558.True, no express prohibition in the charter, restraining the city from taxing State bonds, but it exists by implication from the nature of things.No prohibition in the Constitution to prevent the General Government from taxing the agencies of the State, or the State Government from taxing the agencies of the General Government, but the prohibition exists by implication: Cooley\'s Constitutional Limitations, 480, 483 and note.The same reasoning applies more strongly to the case of a State and municipal corporation, for the latter has only such power as the former chooses to confer, and it cannot be said, in the absence of plain and unmistakable language conferring such a grant, that the State intended to bestow a power to weaken its resources and impair its credit.

The imposition of additional taxes in the form of penalties, *is a new and unwarranted exercise of power.

No such power has ever been exercised by the State.It is not granted by the city charter, and unless specifically granted, cannot be exercised: Dillon, page 576;Savannah v. Hartridge, 8 Ga., 23.

The power to levy and collect the tax does not authorize a levy of a percentage for expenses of its collection: Dillon, 578;Jonas v. Cincinnati, 18 Ohio, 318-323;Nelson v. La-Porte, 33 Ind., 258 The right to impose a penalty for the non-payment of a tax must be plainly conferred, or it cannot be exercised by the corporation: Dillon, page 614-615;Municipality v. Pauce, 6 La. An. 515, 1851.The imposition of the penalty is illegal further, because it is in violation of that provision in the Constitution requiring uniformity of taxation: Ames' Law Review, vol. iv., page 329; 44 111. 269;Ibid. 280.As all the classes of bonds.

The taxing power of the city of Augusta is a power confined to inhabitants or property within the city;26 Ga., 663;Act of 1798andAct of 1835, conferring powers of taxation.

Debts due by non-residents not within the city, and these bonds, all due by non-residents, are not taxable by the city: 23 Ga., 569;33 Ibid., 114 See, also, 14 B. Monroe, 648-661; Johnson v. Lexington: 1 Bush, (Ky.,) 381.See, also, Dillon, page 592-593;2 Met., 228.

The case of Cleveland, Painesville and Ashtabula Railroad Company, decided by Supreme Court of the United States is cited contra.That was the case of a State tax.The State does afford protection to choses in action, but no protection is afforded by city government.The purposes for which the charter was given should be considered: 8 Ga., 29 and 30;31 Ibid., 715..

Unless the power be plainly given it cannot be exercised.Dillon, 576;8 Ga., 23.In any event, the decision of the Supreme Court of the United States not binding on the State Court, neither according to Padleford, Fay & Co., v. the City of Savannah: 14 Ga., 499, 506, 507; nor 37 Ibid., 135-155;nor according to Cooley\'s Const.LJm., pages 12, 13.

*The doctrine of stare decisis applies in Georgia:

Cooley's Const.Lim., page 49;35 Ga., 65-66.

In conflict between citizen and government as to legality of tax, the rule is a strict construction against the government: 8 Ga., 23.

McCAY, Judge.

1.The case of Bridges v. The Mayor and Council of Griffin, 33 Georgia, 113, is clearly a decision that the locality of a chose in action, such as bonds, promissory notes, etc., is at the...