Georgia State Bldg. & Loan Ass'n of Savannah v. Mayor, Etc., of Savannah

• Decision Date: 26 January 1900
• Citation: 35 S.E. 67,109 Ga. 63
• Parties: GEORGIA STATE BUILDING & LOAN ASS'N OF SAVANNAH v. MAYOR, ETC., OF SAVANNAH et al.
• Court: Georgia Supreme Court

35 S.E. 67

109 Ga. 63

GEORGIA STATE BUILDING & LOAN ASS'N OF SAVANNAH v. MAYOR, ETC., OF SAVANNAH et al.

Supreme Court of Georgia

January 26, 1900

Syllabus by the Court.

When by the terms of an act, the president of a building and loan association is required to return to the tax receiver of the county where such association is located, at its true market value, the stock owned by the stockholders thereof upon which no advance has been made, the tax so imposed is not a tax against the corporation, but is against the property of the individual holders, and is a plan adopted by the legislature to conveniently reach this class of stock in the hands of the owner, and is not imposed as a franchise, but a property tax (a) When the same act provides that the taxes and licenses whether state, county, or municipal, against said associations, except a business license, the latter provision is inoperative and void, and is in violation of the constitutional provision requiring all taxation to be uniform and ad valorem.

Error from superior court, Chatham county; R. Falligant, Judge.

Action by the Georgia State Building & Loan Association of Savannah against the mayor, etc., of Savannah and others. Judgment for defendants, and petitioner brings error. Affirmed.

C. J. Tiedeman, Saussy & Saussy, and W. A. Wimbish, for plaintiff in error.

Saml. R. Adams, for defendants in error.

LITTLE J.

The Georgia State Building & Loan Association of Savannah presented to the judge of the superior court of the Eastern circuit a petition making substantially the following case: Petitioner is an interstate building and loan association, chartered under the laws of the state of Georgian, having its principal office in the city of Savannah, and having stockholders residing in a number of states, including the state of Georgia. The business of petitioner is strictly that a building and loan association (that is, lending its funds to its members only), and all securities held by it represent advances made by it to its stockholders upon real estate and stock collateral, and its other property consists of office furniture and real estate acquired by purchase upon foreclosure of liens for advances, or which has been taken in settlement of indebtedness due by its members. Petitioner has made its return for taxes to the state and county for the year 1898 in accordance with the requirements of the act of the general assembly, and has paid to the city of Savannah, a municipal corporation of said county and state, the license fee demanded for the year 1898, and has paid said corporation all taxes legally demanded of it for the year 1898. The city of Savannah assesses the value of real estate for taxation without return of the same by the owner, and requires each resident to make an annual return of personal property to its board of tax assessors. During the month of January, 1898, petitioner made a return fixing the value of its office furniture at $500, and the value of its mortgages and liens at $27,000. The return as to the value of mortgages was made without an admission that the municipal authorities had a right to assess and levy a tax upon such securities, but as a matter of compromise, and in accordance with a plan agreed on between the municipal corporation and petitioner. The tax assessors of the city declined to receive the return as to mortgages and liens, and arbitrarily assessed the mortgages held by petitioner at the sum of $250,000, and the municipal corporation has levied a tax in accordance with such assessment. Petitioner has refused to pay that tax because it is illegally assessed, and the city has caused a tax fi. fa. to be issued and levied on the real property and office furniture of petitioner situated in the city of Savannah, and is proceeding to advertise and will sell the same to satisfy the fi. fa. unless restrained. Petitioner alleges that said municipal corporation has no power to levy or assess any taxes against a building and loan association, except upon its real estate, and, if the city ever had such power, it has been abridged, suspended, and revoked by the act of the general assembly, which reserved to the state the exclusive right to tax such associations in a particular manner, and has expressly rescinded the right and power of the municipality to impose a tax on the property of such associations. The tax assessed against it is contrary to the laws of the state, and violative of the legal rights of petitioner, and it prays that the writ of injunction do issue, restraining the city, its agents and servants, from interfering with the property of petitioner under said tax fi. fa.; that the said assessment and levy of tax be declared illegal and void; that the tax fi. fa. be decreed to be canceled. In answer to the rule to show cause, the mayor and aldermen of Savannah set up that the tax execution assailed is legal and valid, and that petitioner is subject to the tax demanded. On the hearing, after the introduction of evidence tending to support the allegations of fact made in the petition, the judge of the superior court refused to grant the injunction, and to his order so refusing the plaintiff in error excepted.

A number of questions of greater or less importance are made or suggested in the pleadings, and urged in the briefs of counsel; but the main question presented for our determination is whether section 7 of the tax act of 1895 (Acts 1896, p. 27) is violative of paragraph 1, § 2, art. 7, of the constitution of this state, which declares that all taxation shall be uniform upon the same class of subjects, and ad valorem on all property subject to be taxes within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws. This section provides for a tax upon certain shares of stock of building and loan associations, in the following words: "The president of all building and loan associations or other associations of like character, shall be required to return to the tax receiver of the county where such associations are located, at its true market value, the stock of such associations owned by the stockholders thereof (upon which, as shown by the books of such associations, no advance has been made or money borrowed thereon by the individual stockholders therein), to be taxed as other moneyed capital in the hands of private individuals is taxed: provided, that no tax shall be required of building and loan associations to be paid upon any portion of their capital which has been loaned or advanced to a shareholder upon real estate, upon which real estate tax is payable by said shareholders: and provided further, that the taxes required by this section shall be in lieu of all other taxes and licenses, whether state, county, or municipal, against said associations, except a business license by the town or city in which the principal office of any such association is located, and except a fee required to be paid the state treasurer by act approved October 19, 1891." And it is contended by the city of Savannah that the second proviso of said section in effect exempts from municipal taxation the property of the building and loan associations which is held or located in the city of Savannah, and for this reason the said section of the act is unconstitutional and void. On the contrary, three propositions are submitted by counsel for the plaintiff in error as a basis for the contention that this method or imposing taxes on building and loan associations is not violative of the constitutional provision. These are (1) that the proviso to the section creates no exemption of property from taxation, but, as a municipal corporation can impose no tax without an express grant of power, the proviso found in the section operates as a limitation of the right of the city to impose a tax on the property of building and load associations; (2) because that proviso is a legislative declaration against double taxation; (3) that the tax imposed is a franchise and not a property tax.

It may be well to note, in passing, that the general tax act of 1884 contains an exactly similar section, saving and excepting the second proviso, and that in the case of McGowan v. Association, 80 Ga. 515, 5 S.E. 775, the terms of the section were construed by this court, but the ruling did not involve the question of the constitutionality of the method of taxation there adopted, but only the construction of the body of the section, together with the only proviso found therein; and it is not necessary, for our purposes, further to consider the ruling in that case, as the question in the case at bar turns largely upon the legal effect of the second proviso, which declares that the taxes required by the section shall be in lien of all other taxes and licenses, whether state, county, or municipal, with the exception of a license tax by the city in which the principal office of the association is located.

It would be a work of supererogation at this late day to enter into a discussion or to cite authorities to show that, under the system of taxation prescribed by our constitution, the property of all persons and corporations, unless exempted, is not only to be taxed, but must be taxed on the basis of value. Under its provisions, property of every kind--real estate, money, choses in action, and movables--is, as a rule not only subject to taxation, but, taking value as a basis, subject to the same rate of tax; that is to say, the owner of land of the value of $1,000 must pay to the government, as a contribution for protection and support, the same...