Henson v. Airways Service, Inc.

• Decision Date: 13 April 1964
• Docket Number: No. 22358,22358
• Citation: 136 S.E.2d 747,220 Ga. 44
• Parties: Charles A. HENSON, Jr., Tax Assessor, et al. v. AIRWAYS SERVICE, INC.
• Court: Georgia Supreme Court

Page 747

136 S.E.2d 747

220 Ga. 44

Charles A. HENSON, Jr., Tax Assessor, et al. v. AIRWAYS SERVICE, INC.

No. 22358.

Supreme Court of Georgia.

April 13, 1964.

Rehearing Denied May 19, 1964.

Syllabus by the Court

1. This court will take judicial notice that one of the defendants named is the Tax Commissioner of Fulton County.

2. The petition stated a cause of action for the relief sought and the trial judge did not err in overruling the general demurrers to the petition.

Airways Service, Inc., filed its petition in two counts against named persons as members of the Joint City-County Board of Tax Assessors and Jack L. Camp, Tax Commissioner of Fulton County. Count 1 of the petition alleged: The plaintiff entered into a written agreement with the City of Atlanta under the terms of which it obtained the right for the period of 19 years to use and operate for service station purposes, under the terms, conditions, and restrictions set forth in the agreement, a tract of land described in the agreement, for which the plaintiff agreed to pay certain percentages of income as rentals. The plaintiff bound itself to erect a complete gasoline service station and auto service and repair shop at a cost not to exceed $100,000, subject to approval of plans and specifications by the Airport Manager, and providing that title to the improvements should vest immediately upon completion in the city. Under the agreement the plaintiff's use of the described premises was not only restricted to the purposes set forth, but the prices which it could charge, its hours of business, its procedure for ticketing of cars, its method of bookkeeping and advertising, and any changes, additions, or alterations by it of the premises, the quality of its business, the cleanliness of the premises, and the appearance of its employees, were either regulated by the agreement or made subject to the approval of the city. Under the provisions of the agreement the plaintiff did not obtain any interest in the premises, but only a circumscribed and limited use over which the city reserved rights as to control, improvement, inspection, and supervision. The plaintiff has received notice from the Joint City-County Board of Tax Assessors that the leasehold interest in the service station has been assessed for tax purposes at a valuation of $26,170 for the year 1962, and the notice provides that if not protested within ten days, it will become final. Under the provisions of the agreement the plaintiff did not acquire a leasehold interest or any other interest in the real estate or in the improvements erected thereon subject to ad valorem taxation; but acquired only a circumscribed, limited use not subject to ad valorem taxation. The defendants have repeatedly demanded that the plaintiff return its right of use for taxation and have threatened to, and will proceed to assess taxes, and will undertake to collect them, based upon an illegal and void assessment, unless restrained. The plaintiff has no adequate remedy at law and is entitled to equitable relief to enjoin the defendants from proceeding to levy and collect ad valorem taxes on its right of use of the described property.

Count 2 relates to the parking areas described in the agreement, and it is alleged that: Under the agreement the plaintiff bound itself to construct facilities not to exceed $150,000 in cost, title to such improvements to vest immediately upon completion in the city. The plaintiff has received notice that these facilities have been assessed at a valuation of $44,120 for the year 1962, and that the assessment will become final unless protested in ten days. Under the provisions of the agreement the plaintiff did not acquire any interest in the real estate or the improvements erected thereon. It acquired only a circumscribed and limited use which is not subject to ad valorem taxation. The defendants have repeatedly demanded that the plaintiff return its right to the use of the property for taxation and it has been notified that it owes a sum of $12,037.09 for the year 1963. The defendants have threatened to, and will undertake to collect taxes from the plaintiff based on the illegal and void assessment, unless enjoined. The prayers were for process, that the defendants be restrained from assessing and collecting taxes, and for other relief.

The contract attached to the petition as 'Exhibit A' is headed: 'Lease and Concession Agreement.' In the opening paragraph the City of Atlanta is designated as lessor and Airways Service, Inc., a corporation, as lessee. It is then recited: 'Whereas, lessor is now in the process of constructing a new terminal building and related facilities at the Atlanta Airport, * * * and proposes to furnish the facilities and services customarily furnished at and in connection with similar airport terminals; and whereas, lessee has offered to provide valet parking operations and service station services and auto repair services at said terminal; etc.'

Article I provides that, with respect to the service station area, designated as Area A; new valet parking area, designated as Area B; and the existing parking area, designated as Area C; the term of the lease shall be for 19 years, the effective date as to Areas A and B to be five months after the date upon which the premises are available to lessee, and the effective date as to all areas to be determined by a letter addressed to lessee by the Airport Manager of lessor. Article II describes the several tracts of land involved.

Article III provides that the rental for the service station area is to be computed as follows: (a) 1 1/2cents per gallon of gasoline sold; (b) 10% of gross receipts from the sale of oil, tires, batteries, and other accessories; and (c) 15% of gross receipts from auto towage and repairs; the amount due each month to be paid at the office of the Airport Manager on or before the 15th day of the succeeding month. For the parking areas B and C the rental is 15% of the gross receipts, to be paid at the office of the Airport Manager on or before the 10th day of the succeeding month. Lessee at its own expense shall provide one sealed cash register for each operation, which cash register shall be so designed as to show accurately the daily and monthly total gross receipts for each respective operation, with the gross receipts from gasoline sales being shown separately, and such cash registers shall be made available to lessor at any reasonable time for inspection.

Article IV provides that lessee shall construct improvements at a cost not to exceed $150,000 in the parking areas designated as Areas B and C; and to erect a complete gasoline service station and auto service and repair shop at a cost not to exceed $100,000 in Area A. The plans and specifications are subject to the approval of the Airport Manager of lessor, and immediately upon completion of the improvements described, title is to vest in the lessor.

Article V provides that the premises leased shall be used for the purposes indicated in that article, the service station area being limited to the general servicing, maintenance, and repair of automotive vehicles, and for the selling of gasoline, oil, tires, and general automobile accessories; the parking areas to be used for the parking and storage of automotive vehicles.

Article VI provides that lessee at the parking areas shall not erect or maintain signs, conduct promotional efforts, or otherwise make any effort to divert users of open lot parking facilities into the facilities covered by the lease; nor elsewhere at the Atlanta Airport make any direct effort to divert users of open lot parking facilities.

Article VII provides that lessee shall secure the approval of the Airport Manager for all signs to be displayed on the premises, that lessee shall make no alterations, changes, or additions in or to the premises without the written consent of lessor, acting through its Aviation Committee. With respect to each of the activities to be carried on by lessee, it shall conduct a first class business of high quality and public service, and shall make available to the public on a twenty-four-hour-a-day basis all facilities covered by the agreement. Prices established and maintained by lessee for merchandise and services shall be competitive with the prices maintained for merchandise of like grade and quality at other service stations operated within a radius of two miles. Parking facilities shall be provided at reasonable prices, which prices shall be subject to approval by lessor, provided, however, that such approval shall not be withheld so long as the prices do not exceed those charged for similar facilities at airports of comparable size. Lessee shall require its representatives and employees to wear uniforms, to maintain at all times a neat and clean appearance, and to carry out their duties in an efficient and courteous manner. Lessee shall maintain the premises in a clean and orderly condition at all times. Lessee shall at its own expense comply with all Federal, State, and local laws, rules, and regulations which may be applicable to lessee's operations at the Atlanta Airport, and shall pay for all building permits, licenses, and other permits which may be required for the activities contemplated by the lease. Lessee shall at its own expense provide facilities for the disposal of industrial wastes originating on the premises.

Article VIII provides that if the lessee shall become insolvent, or shall make a general assignment for the benefit of creditors, or sign a voluntary petition in bankruptcy, or if any lien is filed against the premises because of any omission by lessee, or if lessee shall abandon, vacate, or discontinue its operations, or fail to punctually pay the rentals, the agreement may be terminated by lessor at its option, and no acceptance by lessor of rentals or fees shall be deemed as a waiver of any right to terminate the agreement. Before lessor shall be...