Home Insurance v. City Council , 50 Ga. 530 ( 1874 )

Trippe, Judge.

1. There is a clear distinction recognized between a license, granted or required as a condition precedent before a certain thing can be done, and a tax assessed on the business which that license may authorize one to engage in: 42 Georgia, 596. A license is a right granted by some competent authority to do an act which, without such license, would be illegal. A tax is a rate or sum of money assessed on the person, property, etc., of the citizen: Bouv. L. D.; 36 Georgia, 460. A license is issued under the police power of the authority which grants it. If the fee required for the license is intended for revenue, its exaction is an exercise of the power of taxation: Cooley’s Const. Lim., 201. The tax assessed upon complainant by the City Council of Augusta, by the ordinance of January 5th, 1874, although called a “license tax,” is more properly a tax than a license fee, or a fee exacted in order to secure the right to engage in a business which, without paying for and obtaining such authority, would be illegal. The title of the ordinance is, “An ordinance to amend an ordinance to assess and levy taxes for the support of the municipal government of Augusta,” etc. The amended ordinance has these further words in its title, “ and for the payment of the interest on the funded debt of said city.” It is true, this last mentioned ordinance, which is so amended, refers to the “ subjects and rates of taxation and license;” but by referring to the ordinance of December 28th, 1872, entitled “An ordinance to fix the annual and specific taxes of the city of Augusta,” etc., and which was continued in force by said amended ordinance, it will be seen that there was a special tax of $100 00 assessed upon such companies as that of complainants. This is the first ordinance, so far as the record shows, assessing such a tax. In that ordinance, both in the title and the enacting clause, it is called a tax. In the second and third sections, it may be that a license is provided for in the cases of two classes of business, and in those sections they are denominated licenses; but the assessment made by it on insurance companies is clearly a tax. If not, the whole ordinance is not what its title and body purport it to be, and is only a series of provisions for ■licenses. This ordinance, as before stated, was continued in force by the one of December 23d, 1873, and this last is the one which was amended by the' ordinance of January, 1874, against which complaint is made.

2. No penalty has been imposed on complainant for nonpayment of the “ license tax,” or for engaging in business before it was paid, or without a license. No complaint is made for the purpose of arresting proceedings of that character, but the objection is, that the City Council cannot require complainant either to take out a license or to pay any tax to the city; that, having obtained the right to transact its business by the authority of the State, it is subject to no further liability, either as a condition precedent to the exercise of such right, or as a tax upon it after it has engaged in such business. Had it been required by this ordinance that -complainant should procure a license before it could transact its business, and a penalty had been imposed for failing so to do, and the complaint was against the enforcement of the penalty, a different question, under the decisions of this Court, would have been presented. But there is a plain distinction between this case and that of the Mayor, etc., of Savannah vs. Charlton, 36 Georgia, 460. There the contest was as to the right of the city to impose upon Dr. Charlton the penalty prescribed by the ordinance for practicing as a physician without taking out a license from the city. It is stated in the decision that the physician was “ not contesting the authority of the city to tax him for practicing his profession; what he contends for is, that the city shall not make that illegal which, by the law of the State, is legal.” And it is immediately added: “We see no good reason why the city may not tax the practice of any profession within the corporate limits of the city.” This much, with reference to the position assumed for plaintiff in error, that under the Act of March 19th, 1869, it having obtained from the Comptroller General the “certificate of authority to .transact business of insurance in this State,” no other liability or tax could be imposed. It may further be said that if this be so, then the State would be equally bound by its own contract, and would, no more than a municipal corporation, have power to assess any further tax upon such companies, or upon any person to whom a license had been granted by its authority to practice a profession or engage in any business. And yet the lawyer, the physician, and many others, have licenses gi’anted by the State, or directly by its authority — have paid the fee for tiie same, and have ever been held subject to be taxed on the very business or profession covered by that license. Probably not a general tax Act has been passed for half a century, or longer, which has not done this very thing. And it may be added that the Legislature never thought that the regulations for insurance business and insurance companies prescribed by the Act of 1869, deprived it of the power of taxing such business or companies, for it has uniformly, since that time, as well as before, assessed a tax on both. And, indeed, on the 18th of March, 1869,.an Act was approved levying a specific tax on all premiums received by all insurance companies doing business in this State, both home and foreign : See Burch et al. vs. The Mayor, etc., of Savannah, 42 Georgia, 596.

Complainant, admitting the power in the State to tax business, callings, etc., and also in certain municipal corporations, to levy the same under the special terms of their charters, yet denies that the charter of the city of Augusta confers this power on the Mayor and City Council. The words of the charter are, “ to make such assessments on the inhabitants of Augusta, or those who hold taxable property within the same, as may seem expedient,” etc. What is the meaning of the words, “assessments on the inhabitants?” It certainly authorizes a tax on property. Is it limited to that ? If so, why ? Businesses, occupations and professions are as equally the subject of taxation as property, and have been as regularly taxed as any real or personal property: Cooley’s Const. Lim., 479. If the “assessment” is not limited to the person, such as a capitation or poll tax, what is there to confine it to any one subject matter of taxation? It has always been the rule of the Legislature of this State to assess a tax on property, ok business, and also a capitation tax; and when taxation is referred to, the power to “make assessments” includes the power to assess all three, unless there be some other provision to limit it. If it does not extend to the power to levy a tax on business, etc., then it would, in this case, be restricted altogether to property. For, by the Constitution of 1868, there can be but one poll tax, and that to the amount of $1 00, and only for educational purposes. This is levied by the State. The State does not tax income, and it has been held that, therefore, a municipal corporation cannot: 8 Georgia, 23. In the case just referred to, The Mayor, etc., of Savannah vs. Hartridge, 8 Georgia, 23, it was ruled (hat “the history of the legislation of the State, in reference to a particular subject matter of taxation, may be referred to as tending’ to aid in the construction to be .given to the statute; and where the State has never taxed income, the power to do so in a corporation must appear by express words or unavoidable implication.” Hence, though the statute in that case gave the city of Savannah authority to tax “ real and personal estate,” yet, in getting at the meaning of the Act, it was held that, as the State had never made income a source of revenue as taxable, it was not the intention of the Legislature to give the power to a subordinate authority. If the absence of such a custom or practice on the part of the Legislature was a criterion in construing that statute, would not the fact that the legislation of the State had fixed a contrary policy in the matter of taxing occupations, tend equally to aid in reaching the meaning of the general words, “ power to make assessments on the inhabitants,” etc., when used in a city charter ?

3. But it is further objected by plaintiff in error that a foreign corporation, although it has officers, and an office, and is doing business in the city of Augusta, is not an “inhabitant” in the true intent and meaning of that word as used in the charter, and therefore not liable to be taxed. We are aware of the thorough discussion before many Courts, the question whether a corporation is an “inhabitant,” has undergone. Lord Coke, 2 Ins., 703, says, “Every corporation and body politic residing in any county, riding, city or town corporate, or having lands or tenements in any shire, etc., quce propriis manibus et sumptibus possident et habent, are said to be inhabitants there, within the purview of this statute.” He referred to the statute of Henry vhi., concerning bridges and highways, which enacted that bridges and highways shall be made and repaired by “the inhabitants of the city, shire or riding,” and that the Justices shall have power to tax every “inhabitant of such city,” and the collectors may “distrain every such inhabitant as shall be taxed and refuse payment thereof, in his lands, goods and chattels.” In the case of the King vs. Gardner, Couper, 79, a corporation was decided to come within the description of “occupiers or inhabitants.” In Beaston vs. The Farmers’ Bank of Delaware, 2 Peters, 102, the Supreme Court of the United States says, “ that corporations are to be deemed and considered as persons, when the circumstances in which they are placed are identical with those of natural persons, expressly included in a statute.” And this rule was recognized in South Carolina Railroad Company vs. McDonald, 5 Georgia, 531. See Louisville Railroad Company vs. Letson, 2 Howard, 497 ; modifying the decisions in Bank of the United States vs. Deveaux, 5 Cranch, 84, and Strawbridge vs. Curtis, 3 Cranch, 267; see, also, The People vs. The Utica Insurance Company, 15 Johns, 358. In Davis and Redding vs. The Central Railroad and Banking Company, the judgment of the Court was, not that a corporation was not an inhabitant, but that where a charter of a railroad provided that “the principal office of the company shall be located at Savannah, with subordinate officers or agencies at Macon and such other places as the board of directors shall determine, and all elections and meetings of stockholders shall be held at such principal office only,” it was said that “this is not the same as would have been a provision that the corporation shall be established at Savannah.” The case arose upon the question of the unconstitutionality of an Act of the Legislature making the road liable to be sued for killing live stock in the county where the damage was done. It was held that the Act was constitutional, and that the Legislature had power over the question of what shall be the place of residence of a corporation. Judge Benning, in his opinion in that case, seems to object pretty strongly to the English rule as given by Coke, but stated that it was not necessary to hold that it was not the law in this Stale, in order to reach the conclusion to which the Court came. Indeed all the cases either directly or indirectly admit that a corporation is an inhabitant for the purposes of taxation. Nor is the case in 5 Cranch, supra, in conflict with this, for in that it is said of a corporation, “ this ideal existence is considered as an inhabitant where the general spirit and purposes of the law require it.” This is substantially what was said in 2 Peters, supra, and to show the force that was given to it, it is quoted in the opinion in Louisville Railroad Company vs. Letson, supra, and the question immediately put, “ if it be so for the purposes of taxation, why is not for the purpose of a suit, etc. ?” and then it is added, “ certainly the spirit and purposes of the law require it.” The fact that complainant is a foreign corporation, does not affect the question as to its liability to taxation. It may contract in this State — purchase, and the State could authorize it to hold real estate: The Union Branch Railroad Company vs. The East Tennessee and Georgia Railroad Company, 14 Georgia, 327. In the Bank of Augusta vs. Earle, 13 Peters, 588, Taney, Chief Justice, says, “ it is sufficient that its existence as an arlifieial person in the State of its creation is acknowledged and recognized by the law of the nation where the dealing takes place; and that it is permitted by the law of that place to exercise there the powers with which it is endowed.” This was said with reference to the rights which a corporation may enjoy outside of the State of its creation. If it held property in another State, would not that property be subject to be taxed by that State, and equally wdth other similar property by the municipal corporation within whose limits the property was? If it enjoy other privileges or rights within that same municipal corporation, is it not liable to the same taxes as other inhabitants? We think that upon principle and authority, it is.

4. It was further objected by complainant that the tax upon fire insurance companies being different from that on life insurance companies, made it obnoxious to that provision of the Constitution which requires that “ taxation on property shall be ad valorem only, and uniform on all species of property taxed.” In the cases of Burch vs. The Mayor, etc., of Savannah, supra, and Bolder vs. Schneider, 49 Georgia, 195, it was held that a tax on professions, business, etc., was not a tax on property, so as to be subject to the constitutional requirements of uniformity, and that it must be ad valorem. In the case of The Bank of the State of Georgia vs. The Mayor, etc., of Savannah, Dudley’s Reports, 130, it is said, “ Every man’s private business, pursuit or calling, are things in which he has an interest, and many species of employments are legitimate subjects of taxation, and are taxed. Still, they are not, strictly speaking, property. They are the means from which income is derived — property made. But there is a clear distinction between the employment and the income or profits.” The fax Acts of the State, assessing taxes on professions, etc., vary the tax from ten dollars to ten or twenty times that sum. And this has been so in every tax Act which has been passed since the uniformity and ad valorem rule has been in the Constitution. This contemporaneous, unbroken, practical exposition of the meaning of the Constitution by all departments of the State government, should not be disregarded in the search for the true interpretation of the provisions we are considering. By the light of this and the principles and authorities cited, we conclude that the Court below did not err in refusing the injunction prayed for.

Judgment affirmed.