Pullman Car & Mfg. Corporation of Alabama v. Hamilton

• Decision Date: 17 May 1934
• Docket Number: 6 Div. 549.
• Citation: 155 So. 616,229 Ala. 184
• Court: Alabama Supreme Court
• Parties: PULLMAN CAR & MFG. CORPORATION OF ALABAMA v. HAMILTON et al.

155 So. 616

229 Ala. 184

PULLMAN CAR & MFG. CORPORATION OF ALABAMA v. HAMILTON et al.

6 Div. 549.

Supreme Court of Alabama

May 17, 1934

Rehearing Denied June 28, 1934.

Appeal from Circuit Court, Jefferson County; J. F. Thompson, Judge.

Action for breach of official bond by the Pullman Car Manufacturing Corporation of Alabama against John William Hamilton, the Century Indemnity Company, the United States Fidelity &amp Guaranty Company, and the Fidelity & Deposit Company of Maryland. From a judgment for defendants, plaintiff appeals.

Reversed and remanded.

Cabaniss & Johnston and K. E. Cooper, all of Birmingham, for appellant.

Stokely Scrivner, Dominick & Smith and M. L. Taliaferro, all of Birmingham, for appellees.

THOMAS Justice.

The complaint sought recovery from the tax collector and the sureties on his official bond of the amount paid by plaintiff under protest as for special county and city school taxes for the tax year 1932.

The judgment on demurrers was against the plaintiff, and, failing to plead further, as permitted by the former order of the court, judgment was for the defendants denying the right of plaintiff to recover the two items of taxes paid under protest by it, and it was duly ordered that the latter "go hence without delay and have and recover of the plaintiff all costs herein accrued for which execution may issue."

Adverting to the pleadings in this case, the grounds of demurrer present the questions argued by counsel, viz.: (1) Is section 3023 of the Code of 1928 (Acts 1927, pp. 55, 56, 641, 642 amendatory of sections 3023, 3024, 3025, Code) in conflict with section 100 of the Constitution? (2) Are the taxes in question county or city taxes within the influence of section 3023, Code? (3) Is section 3023 in conflict with the school tax amendment of the Constitution (article 19)?

The counts on which the trial was had are: Count 1, which sought recovery of a sum of money paid by the plaintiff "as and for taxes levied for county school purposes, on the assessed value of plaintiff's said property so exempt from taxation under and by virtue of said resolution * * * of the Board of Revenue of Jefferson County," and collected under the provisions of article 19, Special School Tax Amendment to the Constitution. Count 2, which sought to recover a sum of money paid under protest by the plaintiff as the amount of the special three-mill district school tax, levied under the provisions of the aforementioned amendment to the Constitution on the property located in the school district which is coextensive with the city of Bessemer. And in each count the plaintiff claims these sums, for that it says these taxes on the said properties were exempt by due resolutions of declaration of exemption of the board of revenue of Jefferson county, and by an ordinance of the city of Bessemer for school purposes.

The alleged exemptions here asserted rest upon the validity and efficacy of the appropriate provisions given expression in sections 3023, 3024, of the Code of 1928. Acts 1927, pp. 55, 56, 641, 642. The provision of the statute is, in substance: "For the purpose of encouraging the building, extending and operating of factories" and plants of the character and classes enumerated and specifically described in the statute; that "the court of county commissioners, or other courts having like jurisdiction of any county, and the constituted authorities of any city, or town, in which it is proposed to locate, or add to, or extend any such factories, or plants, are authorized and empowered to remit the taxes assessed on such factories or plants, and on all extensions or additions to such factories, or plants, * * * for all county and municipal purposes, for a period not exceeding five years from the date of the incorporation," etc. (Italics supplied.)

And the succeeding statute (section 3024, Code 1928) indicated the procedure by which "the benefit of the exemptions from county and city taxation above provided" may be had.

And in section 3024 of the Code of 1928, or section 2 of the act of 1927 (Acts 1927, p. 642, § 2) is the further provision, that "such property must be returned to the state for taxation unless exempted therefrom." Crow, Tax Collector, v. General Cable Corporation, 223 Ala. 611, 137 So. 657.

These taxing statutes and laws are to be construed in pari materia. Union Central Life Ins. Co. v. State ex rel. Whetstone, Tax Assessor, 226 Ala. 420, 423, 147 So. 187.

Article 19 of the Constitution, called Special School Tax Amendment, submitted pursuant to the act of 1915 (Acts 1915, p. 107) and adopted by vote of the people, contains the following provisions:

"§ 1. The several counties in the State shall have power to levy and collect a special county tax not exceeding thirty cents on each one hundred dollars worth of taxable property in such counties in addition to that now authorized or that may hereafter be authorized for public school purposes, and in addition to that now authorized under Section 260 of Article XIV of the Constitution; provided, that the rate of such tax, the time it is to continue and the purpose thereof shall have been first submitted to the vote of the qualified electors of the county, and voted for by a majority of those voting at such election.

"§ 2. The several school districts of any county in the State shall have power to levy and collect a special district tax not exceeding thirty cents on each one hundred dollars worth of taxable property in such district for public school purposes;" etc. Code of 1928, p. 88, art. 19, §§ 1 and 2.

Section 2 of this article is similar to section 1 (applying to counties), except that its application is to public school districts instead of to the whole of the county.

It will be noted that the authorized levy provided in each section is on the "worth of taxable property," as may be the case, in such county, or in "such district for public school purposes."

The amendment in question, authorized of submission and adopted as article 19, III, Code 1928, p. 88, was pursuant to the act of 1915 (Gen. Acts 1915, p. 107). Its purpose and authority were to levy and collect the special tax therein indicated on the worth of taxable property in such counties, and in the several districts of any county under such regulations as the Legislature may have prescribed or may hereafter prescribe. The words " worth of taxable property" employed in this act and the amendment adopted appear in other sections of the Constitution, as in section 260, and were adverted to by Mr. Justice Sayre in Pierson v. Phillips, Tax Collector, 214 Ala. 88, 106 So. 501,

and declared to mean property that is subject to be taxed.

The court, in State v. Birmingham So. R. Co., 182 Ala. 475, 479, 62 So. 77, 79, Ann. Cas. 1915D, 436, held the constitutionality of the provision of the act in question, employing the words, "The taxable property within this state shall be assessed, for the purpose of taxation," will be considered and tested in the light of well-established principles, viz.:

"(1) The power of taxation is an incident of sovereignty and is possessed by the government without being expressly conferred by the people." See Dobbins v. Commissioners of Erie County, 16 Pet. (14 U. S.) 435, 10 L.Ed. 1022; Ohio Oil Co. v. E. A. Conway, 281 U.S. 146, 50 S.Ct. 310, 74 L.Ed. 775; Phelps v. Union Bank & Trust Co., 225 Ala. 238, 142 So. 552; Phoenix Carpet Co. v. State, 118 Ala. 143, 22 So. 627, 72 Am. St. Rep. 143.

"(2) The power is purely legislative." (Italics supplied.)

"(3) So long as no constitutional limitations are exceeded, the Legislature is of supreme authority, and the courts, as well as all others, must obey."

It was there observed that the term employed, "taxable property," means, what the plain and obvious words imply, property that is subject by the law to be taxed, and not that which is and intended by the law to be exempt and not subject to the imposition of taxes.

In the last-cited case Mr. Justice Somerville said:

"Section 211 of the present Constitution had its origin in a provision first found in the Constitution of 1819: 'All lands liable to taxation in this state, shall be taxed in proportion to their value.' This rule, preserved in all succeeding Constitutions, was extended to personal property and incorporated in the Constitution of 1868 in the following language: 'All taxes, levied on property in this state shall be assessed in exact proportion to the value of such property.' And so it has been preserved unchanged in the two succeeding Constitutions of 1875 and 1901. The purpose and scope of this constitutional limitation upon the taxing power has been frequently considered by this court, and the substance of our decisions is that it was designed to secure uniformity and equality by the enforcement of an ad valorem system of taxation and to prohibit arbitrary or capricious modes of taxation without regard to value. Moog v. Randolph, 77 Ala. 597, 602; W. U. Tel. Co. v. State Board, etc., 80 Ala. 273, 275, 60 Am. Rep. 99; Assessment Board v. A. C. R. Co., 59 Ala. 551; Mayor of Mobile v. Stonewall Ins. Co., 53 Ala. 570. This does not mean that all property must be taxed. Moog v. Randolph, supra; State Bank v. Board of Revenue, 91 Ala. 217, 223, 8 So. 852. Nor does it prohibit exemptions from taxation or such classifications of property as are not purely arbitrary, capricious, or without the semblance of reason. Moog v. Randolph, supra. It does, however, prohibit the Legislature from prescribing or declaring an arbitrary or artificial value of the property of individuals or corporations, and assessing taxes on such valuation. Assessment Board v. A. C. R. Co., supra. * * *

"It is thoroughly well settled that the Legislature has the...