William Wright v. Louisville Nashville Railroad Company

• Decision Date: 14 November 1904
• Docket Number: No. 20,20
• Parties: WILLIAM A. WRIGHT, Comptroller General, Petitioner , v. LOUISVILLE & NASHVILLE RAILROAD COMPANY and Atlantic Coast Line Company
• Court: U.S. Supreme Court

195 U.S. 219

25 S.Ct. 16

49 L.Ed. 167

WILLIAM A. WRIGHT, Comptroller General, Petitioner,

v LOUISVILLE & NASHVILLE RAILROAD COMPANY and Atlantic Coast Line Company.

No. 20.

Argued October 25, 1904.

Decided November 14, 1904.

Messrs. Boykin Wright and John C. Hart for petitioner.

Messrs. Joseph B. Cumming, Alexander C. King, Bryan Cumming, and King Spalding, & Little for respondents.

Mr. Justice Holmes delivered the opinion of the court:

This case comes here on certiorari to the circuit court of appeals, that court haing affirmed, per curiam, a decree of the circuit court enjoining the comtroller general of Georgia from collecting a tax for the year 1900. 116 Fed. 669, 54 C. C. A. 672, 117 Fed. 1007. In view of the conclusion to which we have been driven, it is enough to say that the question presented is whether shares of stock in the Western Railway of Alabama, an Alabama corporation, held by the Georgia Railroad & Banking Company, a Georgia corporation, are taxable as property of the latter, by the state of Georgia, under its Constitution and statutes. The defendants in error, the plaintiffs below, are lessees of the Georgia corporation, and are bound to reimburse the latter for the tax, if it has to be paid. Taking into account the decision in kidd v. Alabama, 188 U. S. 730, 47 L. ed. 669, 23 Sup. Ct. Rep. 401 the power of the state to tax the shares is not denied, so far as the Constitution of the United States is concerned, but it is argued that the state has not attempted to use that power by its present Constitution and laws.

The Constitution of Georgia provides that 'all taxation shall be uniform upon the same class of subjects, and ad valorem on all property subject to be taxed within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.' Code of 1895, § 5883. The words 'within the territorial limits' plainly qualify 'subject to be taxed.' The Constitution further makes void all laws exempting property from taxation, other than the property therein enumerated, which does not include this stock. § 5886. Following these requirements the general tax act for 1899 and 1900, Laws of 1898, No. 150, §§ 1, 2, p. 22, authorizes a tax on all of the taxable property of the state.

The natural inference from the foregoing language is that the comptroller general was bound to collect this tax. It is true that it was said, in a case decided before the date of the present Constitution, that stock in railroads outside the state was not taxable in Georgia, the reason offered being that such stock is really but so many shares of the railroad's property, and that that property is real estate, for the most part at least, and taxable by the state in which the road lies. Wright v. Southwestern R. Co. 64 Ga. 783, 799. This reason is shown by later decisions to be an insufficient ground for a claim of constitutional right, and the language of the case probably does not represent adequately the present opinion of the supreme court, although the passage is cited in the later of the two following cases: Georgia State Bldg. & L. Asso. v. Savannah, 109 Ga. 63, 69, 35 S. E. 67; People's Nat. Bank v. Cleveland, 117 Ga. 908, 913, 915, 44 S. E. 20.

If we look to the construction adopted by the legislature, there is no doubt as to that. The Code, after defining personalty as property movable in its nature, continues: 'Stocks representing shares in an incorporated company holding lands or a franchise in or over lands, are personalty.' § 3070. The act of 1884-1885, touching returns of property for taxation, No. 457, § 2, p. 30, enacted in terms 'that personal property shall be construed, for purposes of taxation, to include . . . all stocks and securities, whether in corporations within this state or in other states, owned by citizens of this state, unless exempt,' etc. It is argued on one side and denied on the other that this section was repealed by the Code; but whether it was or not, it equally may be invoked for the purpose of interpretation, at least. We do not understand and cannot believe that the supreme court of the state would deny the power of the legislature under the present Constitution to tax stock.

The argument against the tax is that the Constitution of Georgia is satisfied if all the lands and goods in the state are taxed once, and that the appearance of the same capital in two forms, technically distinct, ought not to be laid hold of as an excuse for two taxes. It is admitted that no such double taxation is enforced with regard to corporations of which the property is taxed within the state, and it hardly would be contended that this wise moderation is unconstitutional. It even has been thought that a similar constitution forbade taxation of both...