Guano Co. v. . Biddle , 158 N.C. 212 ( 1912 )

This was a civil action instituted by the plaintiff to restrain the defendant sheriff from collecting certain State and county taxes levied on the property of the plaintiff, and for the purpose of having (213) said taxes declared illegal and void and having the same stricken from the tax books. The plaintiff and defendant submitted the matter to the court upon an agreed statement of facts. Judgment was rendered against the plaintiff, and it appealed. An analysis of the facts agreed shows:

1. That plaintiff, a Virginia corporation, doing a fertilizer business in this State, and paying taxes on its property in Virginia, owned personal property, valued at some $25,000, stored on 1 June, 1910, in a warehouse in Craven County. The property consisted of fertilizer and fertilizer materials.

2. That said property was not listed for taxation, and plaintiff has paid no tax thereon, but has paid the tonnage tax collected for the purpose of defraying expenses connected with the inspection of fertilizers, as provided for in section 3955, Revisal of 1905.

3. That said property was held by plaintiff until it had thereafter sold the same to various and sundry customers.

4. That the board of county commissioners for the county of Craven placed the said property on the delinquent tax list of said county, and by virtue of said tax list the sheriff of said county has demanded payment of the regular taxes thereon.

The plaintiff contends:

1. That section 3955 of the Revisal of 1905 exempts said property from said tax.

2. That said tax is illegal and void and is an interference with interstate commerce, "and plaintiff especially pleads the Federal statute applying to such interstate commerce and the Constitution of the United States regulating the same as a defense to the collection of the tax levied and assessed against it."

3. That said property is not liable for taxation both within the State of Virginia and the State of North Carolina.

4. That said tax is a double tax.

The plaintiff does not in this proceeding attack the constitutionality of the inspection tax levied under said section, and which has been collected regularly for many years. The right to levy such taxes has been sustained by the Supreme Court of the United States in (214)Guano Co. v. Board of Agriculture, 171 U.S. 345, and reaffirmed in the recent case of the Red "C" Oil Co. v. Board of Agriculture.

The plaintiff claims exemption from an ad valorem tax upon its property by reason of the following language contained in the statute:

"Whenever any manufacturer of fertilizers or fertilizing materials shall have paid the charges required by this section, his goods shall not be liable to any further tax, whether by city, town, or county," and it is a part of section 3955 of the Revisal of 1905.

Whatever may have been the intention of the General Assembly in employing language so broad and comprehensive, we are forced to the conclusion that under the Constitution of North Carolina all real and personal property owned and located within the borders of the State is subject to an ad valorem tax, and it is not to be supposed that the Legislature intended to violate the fundamental law of the State, Art. V, sec. 3, which requires in express terms that all real and personal property be taxed by a uniform rule according to its true value in money.

In this respect the Constitution "shows no favor and allows no discretion." Wiley v. Commissioners, 111 N.C. 397; Puitt v.Commissioners, 94 N.C. 709; Vaughan v. Murfreesboro, 96 N.C. 319.

The imperative demand to levy the property tax upon its assessed value is in no way connected with the right to levy an inspection tax, or a tax on trades, professions, etc.

These principles of taxation have been discussed and enforced in many cases, and a further elaboration of them is now unnecessary.

We are of the opinion that the personal property of the plaintiff stored in North Carolina, and owned and located within its borders, is liable to the ad valorem tax imposed upon the property of the citizens of the State.

It is undoubtedly true that personal property actually in (215) transit is not subject to State taxation. Kelly v. Rhoads, 188 U.S. 1. In this case it is said:

"The law upon this subject, so far as it concerns interference with interstate commerce, is settled by several cases in this Court, which hold that property actually in transit is exempt from local taxation, although if it be stored for an indefinite time during such transit, at least for other than natural causes or lack of facilities for immediate transportation, it may be lawfully assessed by the local authorities."

After citing several cases, viz., Brown v. Houston, 114 U.S. 622,29 L.Ed., 257; Canal Co. v. Bates, 156 U.S. 577; Coe v. Errol,116 U.S. 517, and discussing them, Mr. Justice Brown continues:

"The substance of these cases is that while the property is at rest for an indefinite time awaiting transportation, or awaiting a sale at its place of destination, or at an intermediate point, it is subject to taxation. But if it be actually in transit to another State, it becomes the subject of interstate commerce, and is exempt from local assessment."

The facts agreed show that the fertilizer sought to be taxed was not in transit, but had reached its destination, and was stored in Craven County for purposes of sale or distribution.

We think it unnecessary to discuss the matter more at length, as the authorities cited seem to dispose of plaintiff's contentions.

Affirmed.

Cited: Guano Co. v. New Bern, post, 355.

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