Wright v. The Sw. R.R. Co.

• Citation: 64 Ga. 783
• Parties: Wright, comptroller-general, et al. v. The Southwestern Railroad Company.
• Decision Date: 28 February 1880
• Court: Supreme Court of Georgia

64 Ga. 783

Wright, comptroller-general, et al. v. The Southwestern Railroad Company.

Supreme Court of the State of Georgia

(February Term, 1880.)

[COPYRIGHT MATERIAL OMITTED]

Injunction. Tax. Constitutional law. Railroads. Laws. Stock. Before Judge Simmons. Bibb County. At Chambers. December 22nd, 1879.

Reported in the decision.

R. N. Ely, attorney-general; R. Toombs, for plaintiffs in error.

A. R. Lawton; Lyon & Gresham, for defendant.

Jackson, Justice.

The Southwestern Railroad Company brought their bill in equity against Wright, the comptroller-general of the state, and Cherry, the sheriff of Bibb county, to restrain them from the collection of certain fi. fas. for taxes, purporting to be legally due the state for the years 1876 and 1877, but alleged in the bill to be unconstitutional and wholly illegal and void. The chancellor granted the injunction, and the defendants excepted.

The executions are each for some twenty odd thousand dollars, and for penalties for failure to return and pay taxes each in three times the amount of the tax alleged to be due, the exact amount being for the year 1876 $26,642 29-100 *and for penalty $79,926 30-100, and for the year 1877 $28,203 29-100, and for penalty $84,609 87-100.

They were issued by the comptroller-general on the 3d of December, 1877, on assessment made by him of the value of all the property of the company, based upon returns of the company for the years, and made in the years, 1874 and 1875. The tax is on the entire road-bed, bridges, iron, locomotives—everything belonging to the railroad company as contained in the returns and valuations made in 1874 and 1875, and for three times that sum for penalty; in the aggregate, over two hundred thousand dollars. The tax is at the same rate per cent. ad valorem as the property of all the people of the state is taxed, without regard to any limitation thereon in the charter of the company, and the executions are levied on the depot and other railroad property of the company in the city of Macon and county of Bibb. To these tax executions the company filed affidavits of illegality under the act of 1874, renewed in 1875, and in 1876, which provided that on certain conditions precedent being complied with, these affidavits of illegality might be taken, returned to the superior court of Fulton county, and appealed by bill of exceptions to this court. This was attempted to be done, but no full and complete returns having been made as contemplated by the act of 1874 as one of the conditions precedent, this court dismissed the illegalities. See pamphlet report, February 9th. 1879, p. 74. In the opinion or syllabus thereof so ordering the affidavits of illegality to be dismissed, the court intimates that owing to the apparent intricacies and complications of the case of this company, its more appropriate and complete remedy would be in equity. So we have now before us this bill in equity seeking to restrain the sheriff of Bibb county and the comptroller-general from further prosecuting the executions and levies alleged to be wholly unconstitutional and void.

It is substantially alleged in the bill that complainant *failed to make the full returns required by the act of 1874, in order to have the affidavits of illegality tried, because it was misled by the action and conduct of the comptroller-general himself—that tax executions, like these for 1876 and 1877 now being pressed against the company, were issued for 1874 and 1875, and the questions of their validity were tested before the superior court of Fulton county under the act of 1874, full returns having been then made pursuant to that act; that the case was taken thence to this court, and hence to the supreme court of the United States, where it was adjudicated that the execution for 1874, just like these, was illegal and void, in that it impaired the obligation of the contract made between the state and the company in respect to taxation and set out in the company\'s charter—the state having therein obligated herself not to impose on the company a higher tax than one-half of one per cent. on its net income; that the comptroller-general, after this judgment of the supreme court of the United States, was of the same opinion with the complainant, that the liability of the company for taxes beyond the limit fixed in its charter was settled, and so believing sent to complainant a schedule of returns to be made by it, embracing only its gross and net income, so as to have the company taxed according to its charter; that it made its returns for 1876 and 1877 in accordance with the schedule so sent it and the instructions thus given it by the comptroller-general, and paid all the taxes required by that officer and by the law for said years 1876 and 1877, for which it has the said officer\'s official receipt; that things moved on smoothly in this way, complainant not dreaming that it was liable for more taxes, until the 3rd of December, 1877, when said executions for these large sums, and penalties for not making the full returns, were, to its amazement, issued by the comptroller-general and levied upon its property in Macon without notice or warning; that the comptroller-general had prior tothat time, ever since the act requiring full returns to be made by it and other companies, *sent to complainant a schedule of those returns, and after this decision of the supreme court of the United States, changed that full schedule, and sent out to complainant that which it filled up and returned; that this misled complainant, and the subsequent issue of the executions taxing all its property, in connection with the conduct of the comptroller before recited, operated as a great hardship and fraud upon the complainant; that these executionswould not have been issued by the comptroller-general, who absolutely refused to do so, but for the following executive order from the governor of the state:

"State of Georgia, Executive Department,

"Atlanta, Ga, December 3d, 1877.

"Ordered, that the comptroller-general issue execution for unpaid taxes due the state against such railroad companies as may be designated by Robert Toombs, attorney for the state, and the attorney-general.

(Signed) "Alfred H. Colquitt, Governor.

"By the Governor:

"J. W. Warren, Sec. Ex. Dep't."

That thereupon, under the instructions of said attorneys, and in obedience to said order, they were issued, and are therefore not the act of the comptroller-general, but the act of the said counsel of the state; that all legal taxes have been paid; that the property levied on, to-wit: the offices and depot and other property in Macon, is exempt from the tax, being appurtenances to the road absolutely necessary to use the franchise granted it for the public benefit and its own chartered contract with the state, and if these taxes are enforced in the manner and to the extent threatened, its entire franchise will be destroyed and rendered worthless. Therefore the prayer is that the sheriff and the comptroller-general be restrained from further pressing the fi. fas. and levies made on the company's property, they being for no constitutional, legal and valid tax, but for exactions violative both of the constitution of the United States and of the state of Georgia, and illegal and void.

To this bill, thus briefly epitomized, the comptroller general * Wright, Goldsmith who issued the executions being no longer in office, replied by answer that the superior court of Bibb county, as a court of chancery and the judge thereof as chancellor, had no jurisdiction of said suit, and that the same should be dismissed—that the common law remedy provided by statute, the act of 1874, was complete and failed by reason of complainant's laches—that neither complainant nor the comprollergeneral, nor the sheriff had any interest in the case. Complainant had none, because the Central Railroad & Banking Company had leased its road and bargained to pay its taxes—the sheriff had none, because he was a mere executive officer, levying according to official duty, and the comptroller-general had none, being also a mere officer of the state, and that the entire thing, stripped of disguise, was an attempt to evade the prohibition against judicial interference with the collection of state taxes—the state being the real party in interest, and especially is the Bibb county superior court without jurisdiction, because no substantial relief is prayed for against any defendant resident therein—that the United States supreme court did not conclude the right of the state to tax this company for much of its property, because such property was not the railroad-track, nor iron, nor any other thing "appurtenant to the road or connected therewith, " in the sense of these words as used in the charter, and that the legal taxes should be paid at any. rate before the company could be heard to set up any defense to that which it alleged was illegal, and that, to say the least, much of the property was liable and the tax levied thereon was legal and constitutional, and had not been paid or offered to be paid.

1. These are substantially the issues made in this important litigation, and we have endeavored to give to them that consideration which they merit, and apply the law as we understand it to all the issues made by the pleadings. First, had the chancellor sitting for Bibb county and exercising equity powers therein, jurisdiction to grant the injunction prayed for?

*The Code, section 3668, declares that "no replevin shall lie nor any judicial interference be had in any levy or distress for taxes under the provisions of this Code, but the party injured shall be left to his proper remedy in any court of law having jurisdiction thereof." This section is codified from the tax act of 1804, Cobb's Dig., page 1051, where these words are found: "And no replevin shall lie, or any judicial interference be had in any levy or distress for taxes under this law, but the party injured be left to...