Wright v. Louisville & Nashville Railroad

delivered the opinion of the court.

This case comes here on certiorari to the Circuit Court of Appeals, that court having affirmed, per curiam, a decree of' the Circuit Court enjoining the Comptroller General of Georgia from collecting a tax for the year 1900. 116 Fed. Rep. 669 ; 117 Fed. Rep. 1007 . Ip 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 and Banking Company, a Georgia corporation, are taxable as property of the latter, by the State of Georgia, under its constitution and statutes.' The respondents, the plaintiifs 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 ,

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 daté 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 Railroad, 64 Georgia, 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 passages are cited in the later of the two following cases. Georgia State Building and Loan Association v. Savannah, 109 Georgia, 63, 69; Peoples’ National Bank v. Cleveland, 117 Georgia, 908, 913, 915.

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,

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 capital and stock. Burke v. Badlam, 57 California, 594, 601. But, from the point of view of the taxpayer, it does not matter whether all of his double taxation is done in one State or half in one and half in another. He suffers the same injustice. And as manifestly the clearest right to tax belongs to the State where the railroad has its tracks, every principle of justice and patriotism would require the same abstinence from taxing stocks of the railroads of neighboring States that is. practiced with Tegard to those of the taxing State — in this case Georgia — itself.

The difficulty with this argument is that the Georgia constitution requires, the taxation of all property subject to be taxed in Georgia. And while it may be that the constitutional requirement is sufficiently complied with when the land and

Putting the case at the*, lowest, the above cited section of the constitution was adopted in the interest of the State' as a tax-collector, and authorizes, if it does not require, a tax on the stock. In pursuance of the constitution, the law of 1898, under which this tax is demanded, contains the following: “In addition to the questions now propounded to tax-payers by the tax7receivers, questions shall be framed by the Comptroller-General to reach all property upon which a tax is imposed by this Act, and especially the following questions: . . . Thirtieth — How many shares of stock did you own on the day fixed for the return of property for taxation issued by corporations located without this State? Thirty-first— What was the gross nominal value thereof? Thirty-second— What was the fair market value thereof?” Laws of 1898, No. 150, § 16, p. 36. This plainly contemplates that the mandate of the constitution shall be carried out, and in view of §§ 1, 2, of the same act, referred to above, and of the facts that legislation could not make the requirement to tax more explicit, and that the constitution seems to be regarded by the Supreme Court of the State as self-executing, Georgia State Building & Loan Association v. Savannah, 109 Georgia, 63, we think it impossible to escape from the words. The distinction, in

Decree reversed.