Newton v. City of Atlanta

• Court: Georgia Supreme Court
• Writing for the Court: JENKINS, Justice.
• Citation: Newton v. City of Atlanta, 189 Ga. 441, 6 S.E.2d 61 (Ga. 1939)
• Decision Date: 17 November 1939
• Docket Number: 13047.
• Parties: NEWTON et al. v. CITY OF ATLANTA et al.

6 S.E.2d 61

189 Ga. 441

NEWTON et al. v. CITY OF ATLANTA et al.

No. 13047.

Supreme Court of Georgia

November 17, 1939

Rehearing Denied Dec. 5, 1939.

Syllabus by the Court.

1. The petition by wholesale dealers in fruits and produce in the State Farmers Market in Atlanta, to enjoin enforcement by the city of an annual occupation tax, was the subject to general demurrer as seeking merely to enjoin criminal prosecutions, or as showing an adequate remedy at law, since it was alleged that the intervention of equity in this suit by the petitioners for themselves and others in the same class involved a threatened infringement of their property rights, and would 'avoid a multiplicity of * * * civil actions.'

2. Activities of the commissioner of agriculture pursuant to the act of February 25, 1935 (Ga.L.1935, p. 369; Code, § 5-208 to 5-223), in creating or operating a State Farmers Market, are State governmental functions.

3. As a general rule, public property and the instrumentalities of government are freed from taxation; and municipalities cannot tax a property or instrumentality of the State, used in the exercise of its governmental functions, in the absence of express legislative authority. This immunity will extend beyond State-owned businesses and instrumentalities to those owned or operated by others on State-owned or State-controlled property for private gain, but for the performance of governmental functions authorized by statute and in accordance with the rules and regulations imposed by the State authority, since the acts of the municipality against such a business or instrumentality might threaten by taxation to impair the functions of the State which are thus performed.

4. Under these rulings, it was error to dismiss the petition on general demurrer. This decision renders it unnecessary to pass upon the grounds of constitutional attack on the city tax ordinance.

G S. Peck and J. LaValle Barwick, both of Atlanta, for plaintiffs in error.

J. C. Savage, C. S. Winn, J. C. Murphy, and Edwin L. Sterne, all of Atlanta, for defendants in error.

JENKINS Justice.

Sixteen partnership and individual wholesale dealers in fruits and other produce in Atlanta, for themselves and others similarly situated, joined by nine others, filed a petition for injunction against the City of Atlanta and two of its officers, to enjoin enforcement of an annual occupation tax of $100 levied on 'dealers in * * * fruits and produce * * * at wholesale.' It was alleged that their business as wholesale dealers was conducted entirely in the Georgia State Farmers Market, created and operated by the State through the commissioner of agriculture under the act of February 25, 1935, providing for such markets; and consisted in the sale of perishable products from farms, orchards, and groves, which petitioners would buy from farmers and growers, and would sell at the market sometimes from stalls or stands and sometimes from the back end of trucks, in which they had brought the products to the market; that this market had been established and was conducted by the commissioner of agriculture by virtue of the act on property controlled by the State, and for the benefit of the farmers of the State in encouraging and promoting the sale of agricultural and orchard products; that pursuant to the act the commissioner had established rules and regulations for operating the market, and the market was maintained as an agency or branch of the State performing governmental functions; that petitioners had subjected themselves to the provisions of the act and the rules and regulations of the commissioner, and were paying to the State through the commissioner sums of not less than fifty cents a day each as fees under the act for the permission or privilege of selling farm products on said market; that they and others of the same class were thus 'a necessary part, adjunct, and parcel of said market, for without them and those similarly situated * * * there would be no market and no need thereof,' that the defendants were without legal authority to impose or collect the tax on their occupation, which was levied only for revenue purposes, and not for license regulation; that the defendants, not only had threatened petitioners with arrest, but had stated to them that fi. fas. would be issued, with a penalty thereon; that the intervention of equity was necessary to avoid a 'multiplicity of * * * civil actions' as well as criminal prosecutions; and that the petitioners had no adequate and complete remedy at law against such acts and 'levies upon their properties, destruction of their businesses, and continued oppression, resulting in their being forced to abandon their useful and lawful occupations.' The levy and enforcement of the tax was attacked as ultra vires and void, on the ground that it was an infringement by the city on the governmental functions of an agency or branch of the State under the state market act of 1935 (supra). By amendment it was alleged that petitioners and others, of the same class, doing business in said market, comprise over 99 per cent. of all wholesale dealers in fruit and produce in the City of Atlanta; that the imposition of this tax had caused the number of trucks coming to said market to sell their products in July, 1939, to fall off approximately 1400 trucks below the number in the preceding month, although the normal volume for each of those months in previous years was practically the same; and that the imposition of this tax will force out of business the petitioners and others dealers in this market, similarly situated, as well as tend to create a monopoly among the remaining one per cent. of large wholesale dealers located elsewhere. There were additional grounds of constitutional attack on the tax and ordinance, as violative of the due-process and equal-protection clauses of the 14th amendment to the constitution of the United States, U.S. C.A., and the State constitution, art. 1,§ 1, par. 3 (Code, §§ 1-815, 2-103), as levying an excessive, unreasonable, and confiscatory tax, and as making an unreasonable and arbitrary classification of the businesses of petitioners and others, in violation of art. 7, sec. 2, par. 1, of the State constitution (Code, § 2-5001.)

The court dismissed the action on general demurrer on the grounds that the petition set forth no cause of action, that it contained no equity, and that each of the petitioners was subject to the tax.

1. While it is the general rule that equity will not enjoin a prosecution for a criminal offense, a recognized exception exists where the acts of a municipality threaten a business or other property right by the issuance and levy of an execution for an...