General Securities Co. v. Williams
| Decision Date | 28 June 1930 |
| Citation | 29 S.W.2d 662,161 Tenn. 50 |
| Parties | GENERAL SECURITIES CO. v. WILLIAMS, Commissioner of Finance and Taxation, et al. |
| Court | Tennessee Supreme Court |
Appeal from Chancery Court, Davidson County; James B. Newman. Chancellor.
Suit by the General Securities Company against Albert Williams Commissioner of Finance and Taxation, and others. Decree sustaining a demurrer to the bill, and the complainant appeals.
Bill dismissed, with directions.
Lowe Watkins and W. B. Marr, both of Nashville, for appellant.
R. E Maiden, of Dresden, for appellees.
This is a suit to recover the corporation excise tax for 1928, paid by the complainant under protest, on the theory that the statute authorizing the said tax is unconstitutional, or, in the alternative, if the statute is valid, to recover part of said tax said to have been illegally exacted. A demurrer to the bill was sustained by the chancellor, and the complainant has appealed.
The statute in question, chapter 21 of the Acts 1923, imposes an annual excise tax upon corporations doing business in Tennessee "equal to three per centum of the net earnings *** arising from business done wholly within the state excluding earnings arising from interstate commerce." Section 1. Many constitutional objections to this act were made and overruled in Bank of Commerce & Trust Co. v. Senter, 149 Tenn. 569, 260 S.W. 144. It is said, however, that the points here made against the validity of the statute were not considered in that case.
In the case before us it is insisted that the act of 1923 is bad because in fixing the measure for the excise tax levied it fails to exclude the income from United States securities, and thereby conflicts with article 1, § 8, cl. 2, of the federal Constitution authorizing the government "to borrow Money on the credit of the United States." It is also said that, in failing to exclude the income from securities exempt from taxation under state laws, the act violates article 1, § 10, cl. 1, of the federal Constitution and section 20 of article 1 of the Constitution of Tennessee forbidding legislation impairing the obligation of contracts.
An examination of the record discloses that the complainant is in no position to make these questions. It is averred in the bill that the complainant is the owner of certain bonds of the United States, and that the income from said bonds constitutes a part of complainant's income. It is not averred, however, that complainant was the owner of such securities during the period for which its income was taken into consideration in fixing the excise tax for 1928. On the contrary, it is conceded in the brief that these United States bonds were acquired after the period mentioned and therefore the income from such bonds was not included in the aggregate of the earnings of complainant by which the 1928 excise tax was measured. It therefore follows that, if the act of 1923 does illegally burden the securities mentioned, it has not as yet touched, nor adversely affected, the complainant, and it cannot assail the validity of the statute. Certainly this is true in so far as the complainant appears as a suitor seeking to recover a tax unlawfully exacted from it.
Neither do we think that the complainant is entitled under the Declaratory Judgments Act, chapter 29, Acts of 1923, to challenge the constitutionality of chapter 21 of the Acts of 1923. In order to obtain a declaration as to future rights of parties involved, a bona fide controversy must exist, some real interest of the parties must be in dispute. Miller v. Miller, 149 Tenn. 463, 261 S.W. 965; Hodges v. Hamblen County, 152 Tenn. 395, 277 S.W. 901.
As heretofore stated, this case went off below on demurrer. The record does not show and this court does not know what is the policy of the fiscal officers of the state in the premises--whether or not the income from government and other tax exempt securities has or will be included in the earnings of a corporation in measuring its excise tax. It is not apparent accordingly that there is any real controversy between the parties.
In any event, however, we are unable to see that chapter 21 of the Acts of 1923 is invalid for the...
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