Northwestern Mut. Life Ins. Co. v. Suttles

• Decision Date: 14 May 1946
• Docket Number: 15427.
• Parties: NORTHWESTERN MUT. LIFE INS. CO. v. SUTTLES, Tax Collector, et al.
• Court: Georgia Supreme Court

38 S.E.2d 786

201 Ga. 84

NORTHWESTERN MUT. LIFE INS. CO. v. SUTTLES, Tax Collector, et al.

No. 15427.

Supreme Court of Georgia

May 14, 1946

Rehearing Denied June 12, 1946.

Second Motion for Rehearing Denied July 9, 1946.

Third Motion for Rehearing Denied July 27, 1946. [Copyrighted Material Omitted]

Syllabus by the Court.

1. In this suit by a non-resident insurance company against taxing officials in Fulton County, Georgia, seeking to enjoin enforcement of assessments and executions for State and county taxes for the years 1931 to 1937 inclusive, the assessments being based on credits existing in the company's favor as a result of loans made by it on Fulton County real estate before the year 1931, but remaining unpaid during the years in question, it was held upon a former appearance of the case that the evidence showed without dispute that the loans had a situs for ad valorem taxation in Fulton County where the loan business was conducted, so that to tax them in such county would not violate the due process clause of either the State or Federal constitution, and that the judge, after finding and adjudicating that the credits were not taxable, erred in refusing a new trial.

Upon the next trial, before a jury, the judge upon the evidence introduced directed a verdict in favor of the defendants finding that the credits were taxable.

Held (a) That on the issue as to tax situs or taxability the evidence was substantially the same upon the second trial, and that under the law of the case it was not error to direct such verdict.

(b) Moreover, on legal principles, independently of the law of the case, the evidence demanded the verdict for the defendants as directed by the judge, and there was no merit in any of the grounds of the motion for new trial, complaining that there was no situs for ad valorem taxation in Fulton County.

2. In the instant case, the power of the county board of tax assessors to assess 'mortgage credits' for ad valorem taxes for the year 1937 and for any prior year, was derived from the general tax laws and was not dependent upon or affected by the intangible tax classification act approved December 27, 1937. (Ga.L. Extra Session 1937-1938, p. 156 et seq.)

(a) The plaintiff having submitted to the adverse rulings on the demurrers to its second, third, and fourth amendments, so far as they related to alleged administrative discrimination, by seeking to further amend so as to conform to such rulings, will not be heard to complain that the rulings were erroneous and that the subsequent amendments that it chose to offer were in fact unnecessary.

(b) Whether the same rule would apply with respect to the first and fifth amendments, the overruling of the demurrers to the first amendment was in any event harmless in view of the full latitude taken by the plaintiff, without objection, in attempting to prove its allegations as to administrative discrimination as contained in all the amendments.

(c) None of the exceptions to the rulings of the court sustaining demurrers to the first four of the plaintiff's amendments show cause for reversal.

3. To establish an unlawful discrimination, it is not enough to show that the tax officials have merely made a mistake, or have not been diligent in seeking out those subject to tax, but there must be a clear and affirmative showing that the difference is an intentional discrimination and one adopted as a practice.

(a) Under this principle, the evidence would not have authorized a verdict in favor of the plaintiff company upon any issue as to administrative discrimination, as set forth in any of the five amendments, and the judge did not err in directing a verdict for the defendant tax officials with respect to such alleged discrimination.

(b) There was no error in refusing a new trial.

Northwestern Mutual Life Insurance Company (hereinafter called the plaintiff) filed an equitable petition in the superior court of Fulton County, Georgia, against T. E. Suttles, as tax collector, and C. H. Gullatt, Reese Perry, and Comer Davis, as members of the board of tax assessors of Fulton County, Georgia (hereinafter called the defendants), seeking to enjoin the issuance of executions upon certain tax assessments against the plaintiff the years 1931 to 1937 inclusive, and from entering such executions on the general execution docket.

It was alleged that such tax executions were void and unenforceable in seeking to impose an ad valorem tax on certain mortgage credits owned by the plaintiff, a nonresident corporation, when the same were not subject to such tax for the reason that said credits did not accrue out of property owned or business conducted by the plaintiff or any of its agents in Georgia; but that said credits accrued out of a business conducted by the plaintiff in Wisconsin, and that enforcement of the executions would deprive the plaintiff of its property in violation of the due process and equal protection clauses of the constitution of the United States and of the State of Georgia.

The defendants answered, denying the material allegations as to situs and jurisdiction, and contending that the credits were taxable.

On the trial before a judge of the superior court acting as court and jury, the court found for the plaintiff, that the mortgage credits were not taxable in Georgia; and the defendants excepted to the overruling of their motion for new trial.

In Suttles v. Northwestern Mutual Life Ins. Co., 193 Ga. 495, 19 S.E.2d 396, 21 S.E.2d 695, 143 A.L.R. 343, this court, reversing the judgment of the trial court overruling the motion for new trial on the ground that the mortgage credits arose out of a loan business conducted by the plaintiff in Fulton County, held, that the credits were taxable.

Thereafter and prior to a second trial, the plaintiff offered a first amendment alleging: (1) That the assessments were void, in that they were made without authority, being made after December 27, 1937, the day on which the intangibles tax act became law and at a time when the plaintiff was entitled to the benefits provided in the Code, Cum.Supp. § 92-157; (2) that the assessments against the plaintiff were void, in that they were based upon 30 per cent. of the cash market value of the credits and covered the entire period 1931 to 1937, whereas the defendants customarily and systematically followed the practice of accepting returns generally during 1935, 1936, and 1937 on the basis of 5 per cent of the value of cash or money in the bank, 15 per cent. of the value of stocks and bonds, and 25 per cent. of the value of mortgages. That these assessments were confined to the years 1935 to 1937, notwithstanding the owners may have held them for the entire seven-year period of the statute of limitations, totalling 210 per cent. of the plaintiff's mortgages and 75 per cent. of others, constituting discrimination and violation of the equal-protection and due-process clauses of the Federal and State constitutions.

The defendants demurred, upon the grounds that the short statute of limitation and forgiveness clauses of section 92-157 were unconstitutional, and that the facts alleged did not constitute illegal discrimination; and further, that the facts alleged did not entitle the plaintiff to the relief sought. The trial court sustained this demurrer, but granted leave to amend with respect to alleged administrative discrimination.

Pending the first amendment, the plaintiff filed a second amendment, contending: (1) That the assessments were void and violative of the equal-protection and due-process clauses of the constitution, for the reason that the plaintiff having made a true return of its intangible property in accordance with §§ 92-113 to 92-157, their liability was extinguished under § 92-157; that the defendants believed, and acted accordingly, that under § 92-157 they had a right to deny the benefits of the short statute of limitations and the forgiveness clause to anyone whom they elected to assess between December 27, 1937, the date the intangible tax act was passed, and January 1, 1938, and it was only those not so assessed during said interval that would be relieved of liability for past-due ad valorem taxes; and that such a construction of § 92-157 and assessments made in pursuance thereof were violative of the equal-protection and due-process clauses of the Federal and State constitutions; and furthermore, if that part of § 92-157 reading: 'on which no return or assessment has been made or on which no litigation has been instituted either by the taxing authorities or the taxpayer prior to January 1, 1938,' was capable of such construction, or set forth a classification as contended by the defendants, the clause and classification set forth therein are void and of no effect, because violative of the due-process and equal-protection clauses of the Federal and State constitutions; and that said quoted clause could be stricken from said act without otherwise affecting the intangible tax act, for that said act expressly provides therefor.

The defendants' general demurrer to this amendment was sustained.

The plaintiff then offered a third amendment, alleging that the defendants had recognized the intangibles tax act as valid, had acted in accordance with this belief, and had assessed the plaintiff and a few others and had failed to assess the vast majority, thus systematically and intentionally discriminating against the plaintiff.

The defendant's general demurrer to this amendment was sustained.

The plaintiff thereupon filed a motion for rehearing and reconsideration of the ruling sustaining the defendants' demurrer and while said motion was pending filed a fourth amendment, alleging that the discrimination claimed was in the...