CENTRAL OF GEORGIA RAILWAY COMPANY
v.
WRIGHT, COMPTROLLER GENERAL OF THE STATE OF GEORGIA
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The Central of Georgia Railway Company sought to enjoin the collection of state taxes on its leasehold interests in railroad property, arguing the taxes violated the Constitution and conflicted with earlier charter agreements that exempted the property from taxation except as specifically provided. The Supreme Court reversed Georgia's supreme court and held that the original charter contracts' tax exemptions applied equally to the lessee's leasehold interests as to the lessor's fee interests, and therefore the state could not impose the challenged taxes despite the state constitution's subsequent requirement that profitable leaseholds be taxed.
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Mr. Justice Holmes delivered the opinion of the court.
This is a bill in equity brought by the Railway Company to prevent the collection of certain taxes, which, it is alleged, would be contrary to Article I, § 10, and to the Fourteenth Amendment of the Constitution of the United' States. The case was heard on bill, demurrer and answer and certain agreed facts, and the dourt of first instance issued an injunction as prayed. The decree was reversed however by the Supreme Court of Georgia and a writ of error was taken out to bring the case here. It presents another attempt to accomplish, by a change in form, what in Wright v. Central of Georgia Ry. Co., 236 U. S. 674, was held to be an unconstitutional result.
In that decision it was explained how the Central of Georgia Railway Company had becpme the holder of leases from the Augusta and Savannah and the Southwestern Railroad of property which by the charters of the lessors was to.be taxed only, in a certain way and to a certain amount. An attempt had been made to tax the lessee, for the property, the leases being for oné hundred and one years, renewable in like periods upon the same terms forever. The tax was laid upon the real estate, road bed, and franchise value, (with a certain deduction), of the two lessors. It was held that the statutes made the fee exempt from other taxation than that provided for, in favor as well of the lessee as of the lessor. The taxes now attempted to be levied are upon the leasehold interests of the lessee in the same roads and it is argued that, if the leases produce a profit in excess of the rental, the value is required to be taxed by the constitution of the State. But the constitution was subsequent to the charters that created the exemption and must yield to them if they apply to the present attempt. We are of opinion that although the decision in the former case necessarily was, confined to the question before the Court,,the reasoning applies with .equal force to that now before us. The cases of Rochester Ry. Co. v. Rochester, 205 U. S. 236, and Jetton v. University of the South, 208 U. S. 489, were urged as opposed to the conclusion reached but were thought not to control in view of the exceptional facts and language that had to* be considered, as was recognized in Morris Canal & Banking Co. v. Baird, 239 U. S. 126, 132. We must follow the precedent that was established after full discussion and with recognition of the difficulties involved.
The charter contracts in question are of a kind that goes back to the time when railroads were barely beginning and that would not be likely, to be repeated, but of course will be carried out by the State according to what was meant when they were made.
Decree reversed.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398 (U.S. 1934)…; Murray v. Charleston, 96 U.S. 432; Hartman v. Greenhow, 102 U.S. 672; McGahey v. Virginia, 135 U.S. 662; Bedford v. Eastern Bldg. & Loan Assn., 181 U.S. 227; Wright v. Central of Georgia Ry. Co., 236 U.S. 674; Central of Georgia Ry. Co. v. Wright, 248 U.S. 525; Ohio Public Service Co. v. Fritz, 274 U.S. 12. See Warren, The Supreme Court in United States History, vol. 2, pp. 376-379. See Sturges v. Crowninshield, 4 Wheat. 122, 200, 201; Mason v. Haile, 12 Wheat. 370, 378; Beers v. Haughton, 9 Pet. 329, 3…
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Atl. Coast Line R.R. Co. v. Phillips, 332 U.S. 168 (U.S. 1947)…Railroad and Banking Co. v. Georgia, 92 U. S. 665; Wright v. Georgia Railroad and Banking Co., supra; Wright v. Central of Georgia R. Co., 236 U. S. 674; Wright v. Louisville and Nashville R. Co., 236 U. S. 687; Central of Georgia R. Co. v. Wright, 248 U. S. 525; Central of Georgia R. Co. v. Wright, 250 U. S. 519. It is needless to rehearse the issues they involved. Suffice it to say that the prior taxes found to have been barred by the exemption were all taxes on the railroad property. Now for the first t…
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Cent. of Ga. Ry. Co. v. Wright, 250 U.S. 519 (U.S. 1919)…Mr. Justice Holmes delivered the opinion of the court. In this case it was decided at the last term that the .plaintiff in error, the railway company, was exempt from liability to taxation as lessee of certain roads, 248 U. S. 525', as it had been decided a few terms earlier that it was exempt from taxation upon the fee of the same roads. [*524] 236 U. S. 674. A rehearing was granted on the question whether the exemption thus adjudged to exist extends to portions of the plain…
Authorities Cited
- Rochester Ry. Co. v. City of Rochester, 205 U.S. 236 (U.S. 1907)
- Wright v. Cent. of Ga. Ry. Co., 236 U.S. 674 (U.S. 1915)
- Jetton v. Univ. of the S., 208 U.S. 489 (U.S. 1908)
- Canal v. Baird, 239 U.S. 126 (U.S. 1915)