William Wright v. Louisville Nashville Railroad Company, 20

• Court: United States Supreme Court
• Writing for the Court: Holmes
• Citation: 195 U.S. 219,25 S.Ct. 16,49 L.Ed. 167
• Parties: WILLIAM A. WRIGHT, Comptroller General, Petitioner , v. LOUISVILLE & NASHVILLE RAILROAD COMPANY and Atlantic Coast Line Company
• Docket Number: No. 20,20
• Decision Date: 14 November 1904

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

Page 220

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,

Page 221

or a franchise in or over lands, are personalty.' § 3070. The act of...