Lewis & Holmes Motor Freight Corp. v. City of Atlanta

• Citation: 25 S.E.2d 699,195 Ga. 810
• Decision Date: 14 April 1943
• Docket Number: 14478.
• Parties: LEWIS & HOLMES MOTOR FREIGHT CORPORATION v. CITY OF ATLANTA et al.
• Court: Supreme Court of Georgia

25 S.E.2d 699

195 Ga. 810

LEWIS & HOLMES MOTOR FREIGHT CORPORATION v. CITY OF ATLANTA et al.

No. 14478.

Supreme Court of Georgia

April 14, 1943

Rehearing Denied May 8, 1943.

Syllabus by the Court.

1. A municipality may levy no taxes upon its inhabitants or upon property therein, except where the power to do so has been plainly and unmistakably conferred by the State.

2. Personal property, in the absence of any law to the contrary follows the person of the owner and has its situs at the domicile of the owner. But for the purposes of taxation it may be separated from the owner, and it may be taxed on its account at the place where it is actually located or used.

3. While it lies within the power of the State to separate for the purpose of taxation such situs from the domicile of the owner as to that class of personalty which is kept in transit and may not be said to have any one fixed location, and to provide for its assessment for municipal taxation, unless it does so the municipality may not declare such a separate situs and thus render such property subject to taxation where it otherwise should not be so.

4. Accordingly, in this State no general statute having been enacted which, would authorize it, a municipality does not under its charter granting only general power, have the authority by 'formula' to assess for taxation trucks owned by a nonresident corporation which move into and out of the municipality in interstate commerce, but which have no fixed location within the municipality, upon the basis of the 'average number' which might be treated as being at all times within the municipality.

Lewis and Holmes Motor Freight Corporation, by a proceeding in equity, challenged the right of the City of Atlanta and its taxing officials to compel the return for taxation of the average number of trucks used by such corporation as a common carrier in the business of transporting property in interstate commerce into and out of the city. An assessment had been made by the taxing authorities by employing a formula from which 'the daily average number of its trucks and trailers habitually in the limits of the City of Atlanta' was determined. The plaintiff declined to make such return, and denied the power or authority of the city to tax upon such basis. The judge on interlocutory hearing, considering both a stipulation of facts and a demurrer interposed by the defendant taxing authorities, denied an injunction and dismissed the action. The assignments of error go to these rulings.

The facts as stipulated and as stated in the petition and determined upon demurrer are substantially as follows: The plaintiff is a corporation under the laws of North Carolina, with its principal office and place of business in that State. It is qualified as a common carrier of property for hire, and carries on business among the States of North Carolina, South Carolina, and Georgia, operating trucks and trailers along various routes, these trucks being regularly driven back and forth along its routes of traffic in these States, and in interstate commerce. It maintains a terminal in the limits of the City of Atlanta, and owns and uses some property within the city in connection with its business, which it returns for taxation and which is not involved in the present litigation. After declining to make a return of the 'average number of its trucks and trailers habitually in the limits of the City of Atlanta,' the plaintiff, in response to a request of the defendant, furnished to the city authorities as information 'the daily average number of its trucks and trailers or main-line equipment continuously used in its business in interstate commerce in and out of Atlanta,' the list showing five such trucks and trailers. It was agreed 'that of this list one of such units, that is one truck and trailer, may be said to be continuously within the City of Atlanta on an average, and the average value of such a unit would be the sum of $1,898.' It was not contended that any of the particular trucks shown on such list was in Atlanta on the taxing date, but it was agreed 'that these trucks were those which were continuously used by the plaintiff in its operations in interstate commerce and which came in and out of the city daily,' and that one would be a fair average which might be said to be habitually in the city. The trucks were operated on fixed schedules, and remained in the city only long enough for loading and unloading. They were not assigned to any specified route, and except in case of emergency they were serviced in High Point, North Carolina. Taxes were paid on all such trucks in North Carolina, the domicile of the corporation.

Hirsch, Smith, Kilpatrick, Clay & Cody and Devereaux McClatchey, all of Atlanta, for plaintiff in error.

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

REID Chief Justice.

The issue is purely one of law, and narrows considerably under the able briefs and arguments submitted. The city contends that under its charter, which provides that its mayor and council 'shall have full power and authority and they shall provide by ordinance for the assessment, levy and collection of an ad valorem tax on all real and personal property which under the laws of this State is subject to taxation within the incorporate limits of said city,' it is authorized to collect a property tax upon the basis appearing in the statement of facts. The ordinance relied upon by the city does not undertake specifically to reach such a situation or to establish any 'formula' for taxing such movable personalty in transit, but provides a levy on 'all real and personal property which under the laws of the State and under the charter of the city as amended is subject to taxation by the city.' The motor corporation, while conceding, under authorities which will be mentioned, that the State has the power to render subject to taxation property moving in and out of its borders as here shown, contends that in the absence of a statute which would have the effect of giving a taxable situs to such personalty, by changing the rule that unless actually located within the State, it would follow the domicile of its nonresident owner, the municipality is wholly lacking in the authority claimed by it. In the presentation of the case there has been much helpful discussion with reference to the principles that have by now been laid down with regard to the power of a State to tax or authorize the taxing of that class of property involved. Some attention will later by given to the decisions from various jurisdictions dealing with that question; but we have reached the conclusion that the primary question here to be determined will depend upon the laws of our own State and the decisions of our own courts, although it is admitted that this is a case of first impression so far as these facts are concerned.

At the very outset it may be observed: 'A municipal corporation can levy no tax, general or special, upon its inhabitants, or upon the property therein, unless the power to do so has been plainly and unmistakably conferred by the state. Southern Exp. Co. v. Rose Co., 124 Ga. 581(3), 588, 53 S.E. 185 5 L.R.A.,N.S., 619; Lane v. Mayor [and Council of City] of Unadilla, 154 Ga. 577, 114 S.E. 636.' O'Neal v. Whitley, 177 Ga. 491, 492, 170 S.E. 376, 377. This rule is well grounded in our State, and has been strictly adhered to in many decisions. It is but a part of the general prevailing rule. 'Municipal corporations, unlike the sovereign State, possess no inherent power of taxation. The exercise of such power is dependent upon legislative or constitutional grant. Any attempt to exercise the taxing power, as by levying an ad valorem tax upon property in a municipality, which is found not to be within the powers granted to the municipality, is ultra vires and void.' 38 Am.Jur. 68, § 381. With respect to extent and limits of municipal taxing power, it is a generally recognized principle that a grant by the legislature of the taxing power to a municipal corporation is to be strictly construed. It is likewise an established rule that the authority of municipalities to levy a tax must be made clearly to appear; and that doubts, if any, as to the power sought to be exercised must be resolved against the municipality; power to tax is a separate, independent power, and exists in municipal corporations only to the extent to which it is clearly conferred by their charters or other State statutes, and its existence can not be inferred or deduced from other powers conferred.' 38 Am.Jur. 72,§ 385. In speaking of the limitations imposed on municipalities and counties this court, in Albany Bottling Co. v. Watson, 103 Ga. 503, 30 S.E. 270, 271, stated: 'They can exercise no powers except those which are conferred upon them by legislative action, or such as are necessary to the exercise of their corporate powers, the performance of their corporate duties, and the performance of the purposes of their association. 1 Dillon's Mun.Corp. (4th Ed.) p. 146. This is a principle well established, and must be closely adhered to, when such a corporation undertakes to exercise the power of taxation within its limits. The power to tax is incident to the state, because of its sovereign character. Neither counties nor municipal corporations of any character possess this power, to any extent, unless conferred by the constitution or the laws of the state; and therefore such power can only be exercised when delegated in plain and unmistakable terms, or when it results by necessary implication from other powers expressly granted. 25 Am. & Eng. Enc. L. 580. The exercise of this power being so limited and restricted, the burden is on every political...