Opinion
15427.
MAY 14, 1946. REHEARING DENIED JUNE 12, JULY 9, 12, 1946.
Petition for injunction. Before Judge Almand. Fulton Superior Court. November 13, 1945.
MacDougald, Troutman Arkwright, for plaintiff.
E. H. Sheats, W. S. Northcutt, and Standish Thompson, for defendants.
1. In this suit by a non-resident insurance company against taxing officials in Fulton County, Georgia, seeking to enjoin enforcement of assessments and executions for State and county taxes for the years 1931 to 1937 inclusive, the assessments being based on credits existing in the company's favor as a result of loans made by it on Fulton County real estate before the year 1931, but remaining unpaid during the years in question, it was held upon a former appearance of the case that the evidence showed without dispute that the loans had a situs for ad valorem taxation in Fulton County where the loan business was conducted so that to tax them in such county would not violate the due-process clause of either the State or Federal Constitution, and that the judge, after finding and adjudicating that the credits were not taxable, erred in refusing a new trial.
Upon the next trial, before a jury, the judge upon the evidence introduced directed a verdict in favor of the defendants finding that the credits were taxable.
Held, ( a) that on the issue as to tax situs or taxability the evidence was substantially the same upon the second trial, and that under the law of the case it was not error to direct such verdict.
( b) Moreover, on legal principles, independently of the law of the case, the evidence demanded the verdict for the defendants as directed by the judge, and there was no merit in any of the grounds of the motion for new trial, complaining that there was no situs for ad valorem taxation in Fulton County.
2. In the instant case the power of the county board of tax assessors to assess mortgage credits for ad valorem taxes for the year 1937 and for any prior year was derived from the general tax laws and was not dependent upon or affected by the Intangibles Tax Act approved December 27, 1937. (Ga. L. Ex. Sess. 1937-1938, pp. 156 et seq.)
( a) The plaintiff having submitted to the adverse rulings on the demurrers to its second, third and fourth amendments, so far as they related to alleged administrative discrimination, by seeking to further amend so as to conform to such rulings, will not be heard to complain that the rulings were erroneous and that the subsequent amendments that it chose the offer were in fact unnecessary.
( b) Whether the same rule would apply with respect to the first and fifth amendments, the overruling of the demurrer to the first amendment was in any event harmless in view of the full latitude taken by the plaintiff, without objection, in attempting to prove its allegations as to administrative discrimination as contained in all the amendments.
( c) None of the exceptions to the rulings of the court sustaining demurrers to the first four of the plaintiff's amendments show cause for reversal.
3. To establish an unlawful discrimination, it is not enough to show that the tax officials have merely made a mistake, or have not been diligent in seeking out those subject to tax, but there must be a clear and affirmative showing that the difference is an intentional discrimination and one adopted as a practice.
( a) Under this principle, the evidence would not have authorized a verdict in favor of the plaintiff company upon any issue as to administrative discrimination, as set forth in any of the five amendments, and the judge did not err in directing a verdict for the defendant tax officials with respect to such alleged discrimination.
( b) There was no error in refusing a new trial.
No. 15427. MAY 14, 1946. REHEARING DENIED JUNE 12, JULY 9, 12, 1946.
Duckworth and Head, Justices, being disqualified, Judges Hawkins and Sloan were designated for this case.
Northwestern Mutual Life Insurance Company filed an equitable petition in the Superior Court of Fulton County, Georgia, against T. E. Suttles as Tax Collector and C. H. Gullatt, Reese Perry, and Comer Davis, as members of the Board of Tax Assessors of Fulton County, Georgia, seeking to enjoin the issuance of executions upon certain tax assessments against the plaintiff for the years 1931 to 1937 inclusive, and from entering such executions on the general execution docket.
It was alleged that such tax executions were void and unenforceable in seeking to impose an ad valorem tax on certain mortgage credits owned by the plaintiff, a non-resident corporation, when the same were not subject to such tax for the reason that said credits did not accrue out of property owned or business conducted by the plaintiff or any of its agents in Georgia; but that said credits accrued out of a business conducted by the plaintiff in Wisconsin, and that enforcement of the executions would deprive the plaintiff of its property in violation of the due process and equal protection clauses of the Constitution of the United States and of the State of Georgia.
The defendants answered, denying the material allegations as to situs and jurisdiction, and contending that the credits were taxable.
On the trial before a judge of the superior court acting as court and jury, the court found for the plaintiff, that the mortgage credits were not taxable in Georgia; and the defendants excepted to the overruling of their motion for new trial.
In Suttles v. Northwestern Mutual Life Ins. Co., 193 Ga. 495 ( 19 S.E.2d 396, 143 A.L.R. 343), this court, reversing the judgment of the trial court overruling the motion for new trial on the ground that the mortgage credits arose out of a loan business conducted by the plaintiff in Fulton County, held that the credits were taxable.
Thereafter and prior to a second trial, the plaintiff offered a first amendment alleging: (1) that the assessments were void, in that they were made without authority, being made after December 27, 1937, the day on which the Intangibles Tax Act became law and at a time when the plaintiff was entitled to the benefits provided in the Code (Ann. Supp.), § 92-157; (2) that the assessments against the plaintiff were void, in that they were based upon 30 percent of the cash market value of the credits and covered the entire period 1931 to 1937, whereas the defendants customarily and systematically followed the practice of accepting returns generally during 1935, 1936, and 1937 on the basis of 5 percent of the value of cash or money in the bank, 15 percent of the value of stocks and bonds and 25 percent of the value of mortgages. That these assessments were confined to the years 1935 to 1937, notwithstanding the owners may have held them for the entire seven-year period of the statute of limitations, totaling 210 percent of the plaintiff's mortgages and 75 percent of others, constituting discrimination and violation of the equal-protection and due-process clauses of the Federal and State Constitutions.
The defendants demurred, upon the grounds that the short statute of limitation and forgiveness clauses of § 92-157 were unconstitutional, and that the facts alleged did not constitute illegal discrimination; and further, that the facts alleged did not entitle the plaintiff to the relief sought. The trial court sustained this demurrer, but granted leave to amend with respect to alleged administrative discrimination.
Pending the first amendment, the plaintiff filed a second amendment, contending: (1) that the assessments were void and violative of the equal-protection and due-process clauses of the Constitution, for the reason that the plaintiff having made a true return of its intangible property in accordance with §§ 92-113 to 92-157, their liability was extinguished under § 92-157; that the defendants believed, and acted accordingly, that under § 92-157 they had a right to deny the benefits of the short statute of limitations and the forgiveness clause to anyone whom they elected to assess between December 27, 1937, the date the Intangibles Tax Act was passed, and January 1, 1938, and it was only those not so assessed during said interval that would be relieved of liability for past-due ad valorem taxes; and that such a construction of § 92-157 and assessments made in pursuance thereof were violative of the equal-protection and due-process clauses of the Federal and State Constitutions; and furthermore, if that part of § 92-157 reading: "on which no return or assessment has been made, or on which no litigation has been instituted either by the taxing authorities or the taxpayer, prior to January 1, 1938," was capable of such construction, or set forth a classification as contended by the defendants, the clause and classification set forth therein are void and of no effect, because violative of the due-process and equal-protection clauses of the Federal and State Constitutions; and that said quoted clause could be stricken from said act without otherwise affecting the Intangibles Tax Act, for that said act expressly provides therefor.
The defendants' general demurrer to this amendment was sustained.
The plaintiff then offered a third amendment, alleging that the defendants had recognized the Intangibles Tax Act as valid, had acted in accordance with this belief, and had assessed the plaintiff and a few others and had failed to assess the vast majority, thus systematically and intentionally discriminating against the plaintiff.
The defendants' general demurrer to this amendment was sustained.
The plaintiff thereupon filed a motion for rehearing and reconsideration of the ruling sustaining the defendants' demurrer, and while said motion was pending filed a fourth amendment, alleging that the discrimination claimed was in the administration of the ad valorem tax laws for the years 1931 to 1937 inclusive.
The motion for rehearing was denied and a general demurrer to this amendment was sustained, the order granting leave to amend within ten days by pleading administrative discrimination independently of the Intangibles Tax Act.
Thereafter and within the ten days allowed by the court, the plaintiff filed a fifth amendment, alleging that the defendants systematically and intentionally discriminated against the plaintiff and a few others in the administration of the ad valorem tax laws, in that they assessed the plaintiff and a few others during the period from December 27, 1937, to January 1, 1938, with the intention of not thereafter assessing the great majority of others similarly situated, and pursuant thereto failed and refused after assessing the plaintiff and a few others, to assess the great majority of others similarly situated, in violation of the equal-protection and due-process clauses of the Federal and State Constitutions.
A general demurrer to this amendment was overruled and a second trial was had, the issues upon this trial being those raised in the original petition and the fifth amendment.
A stipulation was made to the effect that the defendants did not contend that the credits involved arose out of the plaintiff's insurance business in Georgia, and that said credits were not so connected with the Georgia insurance business of the plaintiff as to render such credits taxable on the theory that they were a part of such insurance business. This left two main issues involved in the trial:
1. Whether the credits arose out of the business of lending money conducted by the plaintiff in Fulton County, Georgia.
2. Had there been systematic and intentional discrimination against the plaintiff by the defendants in the administration of the ad valorem tax laws?
On the issue of discrimination, James C. Shelor testified: That in December, 1934, a citizens committee in Fulton County, Georgia, was formed for the purpose of trying to work out a satisfactory basis with the taxing authorities by which the owners of intangibles could return them for taxation on a basis compatible with the rates of adjoining States, and thus not only get more intangibles on the books but keep large numbers of individuals and corporations from leaving the State. Various meetings were held, some of which were attended by the taxing authorities of Fulton County, as well as the taxing authorities of DeKalb County and the City of Atlanta, the series of meetings resulting in an agreement the terms of which were published in three daily newspapers in the City of Atlanta during May, 1935. These advertisements were headed "Taxes," and stated: "Citizenship, our responsibility, our opportunity. This is an appeal to every good citizen to act now. Georgia's antiquated 58-year-old law written in 1877 taxing intangibles, cash stocks, bonds and mortgages at their full market value, is forcing intangibles into hiding to escape confiscatory taxation and is driving capital to neighboring states, citizens and businesses are moving to Alabama, Tennessee, Florida, the Carolinas and other states where intangibles are taxed at a reasonable rate. Accordingly our home owners are bearing an unjust real estate tax burden to make up for this loss of revenue. Realizing this, tax authorities of Atlanta, Fulton County, DeKalb County, have agreed to accept voluntary returns of intangibles, but only through May 15th on the following basis of assessment, taxable stocks and bonds at 15 percent of the market value, mortgages at 25 percent, cash at 5 percent on the dollar. Tax authorities have announced that if you do not voluntarily make your return by May 15th, special investigators will endeavor to locate your intangibles and you will be taxed for this and prior years on the full value, with all penalties provided by law. The undersigned believe that this is a fair basis upon which to make returns of this class of property and we recommend that every one co-operate with the taxing authorities in carrying out this plan. If you have already filed your return, you may revise it to include intangibles at the above rate." This advertisement was signed by eight civic associations. Various newspaper articles quoting taxing authorities as approving the plan were subsequently published in Atlanta papers, full notice being given that those failing to make returns would be subject to tax at full value for all prior years. The time for filing returns was extended to May 31, 1935. All of this was approved by the Tax Assessors of Fulton County. The witness continued: "I know a large number of returns, a hundred, were made and accepted on this basis, and Mr. Gullatt stated that tax assessments for 1936 and 1937 would be made on this basis. After 1935 the taxing authorities of Fulton County stated that, while the campaign had not been a success, they would give it a further trial, and they did, and returns for 1936 were made on that same basis. The tax authorities of Fulton County, Mr. Gullatt, Mr. Perry, and Mr. Gilbert, agreed that if a taxpayer, within the time limit fixed or agreed upon, May 31, 1935, made returns on his intangible property which he owned on January 1, 1935, he would not be expected to pay taxes on or return those intangibles for prior years, but this policy can be explained best by reading from this notice appearing in the Atlanta Journal: "No information obtained on intangibles as the result of voluntary returns will be used and no questions will be asked as to the date such property was purchased and no investigation will be made to secure this information. This policy is not to be construed to mean that taxing authorities will not continue to collect taxes on stocks and bonds for 1934 and prior years provided ownership has been ascertained as the result of investigation heretofore made." That was the correct understanding.
Homer C. Gullatt testified: "This loose book, 'Assessments made by Board of County Tax Assessors, Fulton County, Ga.', this record, was initiated in December, 1937. We have not made any assessments since December, 1937, and prior to 1937 we did not have any books similar to this. This was prepared to comply with the law passed in 1937, that is my idea about it. Prior to 1937 we didn't have a book, we kept the assessments in the file. The assessment of all non-resident mortgage companies was made in December, 1937. We were using as a cover for our assessments a book you have before this, a bound book with red corners. The entries in this book with the red corners were made like we had in December of this year, it was very unusual; our records that showed on our memorandum might have been dated December 30th and recorded in that book December 31st because we can't get them all ready on these two days, and the ordinary is rather particular about his dates and what he signs, and he wants to sign something that is dated on the day it is posted, because he certifies it; for that reason it may be — but in a case like that notice was not mailed to the taxpayer until it was placed on the assessors' book. In the case of the Northwestern Mutual Life Insurance Company, and that of the other non-resident insurance companies which we assessed, none of these was put in the book after December 31st that is dated December 30th and 31st. That is the last assessment made against any of the insurance or loan companies; they were all in the book in their present form on or about December 31st, 1937; in addition to that book, under the present law after March, 1937, there is no book record kept of those assessments."
W. Comer Davis, one of the defendants, testified in part: "I am a member of the Board of Tax Assessors of Fulton County, Georgia and have been since January 1, 1940. Prior to that I was secretary to the board for approximately five years. Prior to January 1, 1938, all property, real and personal, tangible and intangible, was made to the tax receiver of Fulton County, Georgia, those returns of the tax receiver are sent to the Board of Tax Assessors to determine whether or not there had been any omitted property; if we find any omitted property, it is part of the duties of the tax assessors to determine the value and assess that property. Yesterday Mr. MacDougald looked over part of the records in the tax collector's office of Fulton County, Georgia. With each year's digest the tax collector's office has a recapitulation sheet. The overall return for taxes for 1937 was $267,705,475. Of that amount $13,439,225 was for stocks and bonds, and $13,760,085 represented other intangibles, monies, notes, accounts, etc. Total 1936, $250,072,045; stocks and bonds was $11,377,355; other intangibles $11,223,430. Total 1935, $243,127,170; stocks and bonds $2,877,660; other intangibles $8,141,640. Total 1934, $227,711,735; stocks and bonds $1,324,165; other intangibles $12,089,805. Total 1933, $232,489,335; stocks and bonds $1,543,030; other intangibles $12,365,220. Other intangibles includes cash for each of those years. The overall return of property to the tax receiver for 1938 was $229,775,685. The Intangibles Tax Act was passed by the legislature December 27, 1937, taking intangibles from under the ad valorem tax law.
"After January 1, 1938, returns of intangibles were made to the Department of Revenue at the State Capitol; thereafter the Department of Revenue of the State of Georgia furnished annually to the Tax Collector of Fulton County, Georgia, a list of the residents of Fulton County who owned such intangibles, giving the amount of tax thereon, and the address of such owners. This list did not show the value or the amount of the assessment on such property either in detail or in the aggregate, it merely showed the amount of tax due thereon.
"For the year 1937 there was a total of 74,461 taxpayers in the regular tax digest in Fulton County, and for the year 1938 there was a total of 77,587 an increase of 3,126. The records in the tax collector's office show 8,411 taxpayers who owned intangibles for the year 1938 that were furnished to the tax collector by the Department of Revenue; the total amount due to municipalities, school districts, and county was $516,042.22. The number of taxpayers for 1939 was 78,904, the revenue derived from intangible returns $512,747.19. The Board of Tax Assessors made assessments under the ad valorem tax law for the years 1937, `36, `35, `34, `33, or `31 — I would have to check the records to tell how many. A different form of tax returns was used in 1938; the forms did not have an entry for stocks, bonds, etc. There were no returns of intangibles made to the tax receiver in 1938, and we did not add either money or stocks to such returns because there was no place to add it. The Board of Tax Assessors did not assess any of those persons making returns for intangible property owned by them in the years 1938 and prior thereto, for money in the bank, stocks and bonds, or notes secured by real estate. That was not done in 1938 and has not been done since up to the present time, because there is no place on the tax returns for such items; the change in the design of the tax returns changed the entire picture.
"Not being a member of the Board, I don't know that I am qualified to answer why they never made any assessments after January 1, 1938, for back taxes due under the ad valorem tax law, on mortgages, notes, stocks and bonds, and money in the bank for the years 1937 and prior thereto, except the two, but I do know this, having access to all the information that we assessed all the taxpayers, or all the owners of securities that hadn't made returns, that we had knowledge of up to that time.
"The Board of Assessors employed Mr. Armistead to furnish us with information as to the owners of stocks and bonds and he submitted all of the lists, and we began working and making collections as far back as 1934. And the information that had been furnished by Mr. Armistead when the legislature met in 1937, and we understood that they were going to bar us from making any assessments — why of course we scraped the barrel and got all of the data that we had down here and assessed everything that we knew of. I don't know that I am qualified to answer why the Board didn't do something — as to why they didn't make assessments after January 1, 1938. After January 1, 1938, we had no additional information furnished but in June, 1938, it was called to our attention that an assessment should be made against the Lindsey Hopkins Estate and we made it. I do know that the Secretary of the Board — that we had scraped the barrel for all unreturned intangible property, and we made them before December 31, 1937, or by that date; I was working under the direction of the Board. Everything that we had knowledge of was assessed in December, 1937. Mr. John Armistead was employed in 1933 to ferret out the owners of intangible property, and we collected some four or five million dollars we would not have gotten otherwise. We made assessments against taxpayers for 1937 for intangible property. . .
"I have totaled the assessments I read yesterday; the total valuation is $65,068,450 for 1937. Those assessments were made in 1937, but it included the valuation for each of the years `31 through '37, so that it is really a seven-year assessment. During the calendar year 1936 we likewise assessed on these records here, stocks and bonds only, $206,630, that included 30 assessments for `36 and 23 for `37. The assessments that I read are assessments made by the tax assessors on property which presumably had not been returned before that time. We were enjoined from making 27 or 29 assessments; these suits were filed in October, 1937. All the assessments that were made in December, 1937, are in this book; some are dated early in the month, the majority on the 31st. The names of the persons assessed are . . [Here follows a list of about 130 names.]
"I have checked the records for assessments against persons thought to be owners of intangible property subject to tax in Fulton County for the years prior to 1938 which were made subsequent to January 1, 1938. We do not have the property itemized; we were asking for all property, whether real, personal, tangible or intangible, that we had any knowledge of; it would take from now on to read all of the assessments we did make. . . Some of those assessments include . . intangible property. . . The long list of assessments read are the assessments referred to in answers to questions in my deposition. There were 63 taxpayers assessed on stocks and bonds and 51 taxpayers who were assessed on securities growing out of real estate. . .
"I testified in my deposition that a list of over 8000 holders of intangibles as of January 1, 1938, was sent to the tax collector of Fulton County together with the amount of taxes due on those intangibles, . . we did not inspect those records, because our understanding is that we had no right to do it because it is confidential information furnished the State of Georgia.
"We felt Mr. Armistead had completely covered the intangible picture in this county for 1931 through 1937 and I now feel that he did; there might have been a few he didn't get, bought through a New York broker or in some other way, but we certainly scraped the barrel and assessed everything we knew of."
It was stipulated: "In addition to all other properties above described, other taxpayers were assessed by the Fulton County Board of Tax Assessors during the month of December, 1937, for ad valorem taxation in said county, upon stocks and bonds and upon real estate mortgages (all credits secured by real estate); the number of taxpayers so assessed and the valuation at which the taxpayers so assessed were as follows: 63 taxpayers were assessed on stocks and bonds at a total assessment of $6,690,255; 51 taxpayers were assessed on credits secured by real estate at a total assessment of $7,839,663.
"The defendants introduced four books, showing minutes of the Board of Tax Assessors of Fulton County, including assessments made by the Board during the years 1937, 1938, 1939, 1940 against taxpayers for property not returned for the years 1931 to 1937, each book contains approximately 300 pages, and each page contains from 1 to 50 assessments, the average number of assessments being 45 to the page. Part of the assessments are for realty and part for personalty; the assessments designated personalty do not indicate what type of personal property is assessed other than the assessments that were made in December, 1937. It was from these books the witness Davis testified concerning assessments made for the years 1931 to 1937."
At the conclusion of the evidence, the court directed a verdict for the defendants, the plaintiff's motion for a new trial as amended was overruled, and the case comes to this court for review upon its exceptions to that judgment. In its bill of exceptions the plaintiff also assigned error on its exceptions pendente lite to the rulings of the judge sustaining the demurrers to its first, second, third, and fourth amendments.
1. When this case was previously before the Supreme Court, Suttles v. Northwestern Mutual Life Ins. Co., 193 Ga. 495 (supra), questions were raised as to taxable situs and whether the insurance company continued to engage in the loan business in Fulton County during the years 1931 to 1937 inclusive. This court held: "2. . . (a). Intangible property of a non-resident may be taxed in this State, consistently with the fourteenth amendment of the United States Constitution and the similar or due-process clause of the Constitution of Georgia, if it is so used as to become an integral part of some local business conducted by him or his agent. (b) Where a non-resident corporation, a life-insurance company, employed a loan agent in Georgia for the purpose of soliciting and submitting applications for loans and making reports concerning applicants and the proffered security, the agent being employed on a salary basis and having in this State a fixed office or place of business leased in his own name, but the rent of which was paid by the company through reimbursement to him on expense account, and in all negotiations in reference to loans the company dealt with applicants by communications passing through him as its agent, the notes and security deeds though prepared in the home office being sent to him for execution by applicants in this State, and, after their return to the home office and approval there, checks being mailed to him for delivery to applicants here, so that all loan contracts were thus finally executed in Georgia, and where as many as nineteen long term loans were so made during continuous existence of such agency, the company in making such loans was conducting a loan business in Georgia, and thus came within its taxing power, as to property derived from or used in such business. (c) The facts, that all management and control were vested in the officials of the company at its home office, and that the authority of the agent was limited to specific instructions as to each separate loan, do not alter the case. If the company did in fact conduct a loan business in Georgia, it could not deprive the State of its authority to tax by limiting the authority of its agent. (d) Nor does it matter that the company kept no money in Georgia either in the hands of its agent or elsewhere for the purpose of making loans, where there was no effort to tax money, and the only property assessed consisted of credits arising from loans made in such business. Under the facts of the case, it is also unimportant that the notes and security deeds were not kept in Georgia. 3. Where nineteen loans that were made in such business were still outstanding and unpaid on January 1, 1931, and at least six of them were renewed or extended, one in each of the years 1931, 1932, 1933, 1935, 1936, 1937, the smallest number outstanding in any of these years being thirteen, during which period (1931-1937) a number of leases were also assigned by borrowers as additional security, and the same agent remained in his same employment as resident loan agent, performing substantially the same service, except as to solicitation, the company continued to be engaged in the loan business in Georgia, subject to the State's taxing power; and this is true although it had made no new loan since 1928, and the agent had not solicited an application for a loan since that time. . . (b) Under the foregoing rulings as applied to the evidence, the credits arising from such loans had a situs for ad valorem taxation in Fulton County, Georgia, where the loan business was conducted, so that to tax them there would not violate the due-process clause of either the State or the Federal Constitution. The undisputed evidence demanded a finding in favor of the tax."
The same questions relating to taxable situs and whether the company continued to engage in business in Fulton County are presented now by the plaintiff's exceptions to the judgment overruling its last motion for new trial. The evidence introduced on the first trial is set forth in the report of the former decision by this court, Suttles v. Northwestern Mutual Life Ins. Co., 193 Ga. 495 (supra). While the company undertook to amplify and supplement its evidence on the second trial, the court after carefully examining the same, and comparing the evidence on the first trial, relating to taxable situs and continuing in business, with the evidence introduced on the second trial, now under review, finds there is no substantial difference with respect to these issues.
"A decision by the Supreme Court is controlling upon the judge of the trial court as well as upon the Supreme Court when the case reaches that court a second time. The principle in the decision may be reviewed and overruled in another case between different parties, but as between the parties the decision stands as the law of the case, even though the ruling has been disapproved by the Supreme Court in a case decided before the second appearance of the case in that court." Western Atlantic R. Co. v. Third National Bank, 125 Ga. 489 ( 54 S.E. 621); Southern Bell Telephone c. Co. v. Glawson, 140 Ga. 507 ( 79 S.E. 136); Saulsbury v. Iverson, 73 Ga. 733. Upon request to review and overrule these cases, the rulings therein are adhered to and the request of the plaintiff in error that they be overruled is denied. However, we need not, and do not, base our present conclusion merely upon the previous decision as the law of the case, but, independently of any such consideration, we reaffirm the decision as a correct statement of the law.
The instant case is distinguished by its facts from the following cases, relied on by the plaintiff: Suttles v. Associated Mortgage Companies, 193 Ga. 78 ( 17 S.E.2d 272); National Mortgage Corp. v. Suttles, 194 Ga. 768 ( 22 S.E.2d 386); Davis v. Metropolitan Life Insurance Co., 196 Ga. 304 ( 26 S.E.2d 618). As pointed out in Suttles v. Northwestern Mutual Life Insurance Co., 193 Ga. 495 (supra), when the present case was previously before this court, the conclusion there reached was in perfect harmony with the decision in Suttles v. Associated Mortgage Companies, (supra), where the choses in action had passed by transfer from the original holder into the ownership of a non-resident, which did not at any time use them in this State, except for purposes looking to their collection. Substantially the same factual situation existed in National Mortgage Co. v. Suttles, 194 Ga. 768 (supra), and in Davis v. Metropolitan Life Ins. Co., 196 Ga. 304 (supra), except in the latter case the Metropolitan Company was in a few loans the direct grantee, but it did not at any time have a resident loan agent in this State, as did the Northwestern Mutual.
Grounds 1, 2, and 3 of the motion for new trial are the general grounds. Special grounds 4 to 12 inclusive merely enlarge the general grounds by insisting that under the evidence the mortgage credits were not taxable in Georgia. There is no merit in these grounds for the reason that the evidence would not have authorized a finding that there was no taxable situs in Georgia.
Special grounds 14, 15, 17, 18, 19 and 20 of the motion for new trial complain of the admission of evidence as to transactions by the plaintiff in error in years prior to 1931, it being contended by the plaintiff in error that the question at issue was whether or not the plaintiff in error conducted in Fulton County, Georgia, the business of lending money during the period of 1931 to 1937 inclusive, and that transactions prior thereto had no relevancy or materiality. The record discloses that the mortgage credits here involved, originally came into being in Fulton County, Georgia, prior to 1931, but that the plaintiff in error continued in the business which it had previously initiated, and renewed and extended loans during the tax period of 1931 to 1937 inclusive. The evidence as to transactions of the plaintiff in error in years prior to 1931 was both relevant and material to the issue involved and the trial judge did not err in admitting such evidence over the objection made.
The 16th special ground complains that the court erred in excluding the testimony of the witness Sam T. Swansen offered by the plaintiff in error: "The entire charge of all investments of the company as well as determining from time to time the financial policy, the employing of agents, the making of contracts and the paying of losses and all matters necessary to the conduct of the business of said company are solely under the control and direction of the officers and trustees of said company in Milwaukee, Wisconsin." The objection made was that it set forth a conclusion. The testimony of this witness is identical with his testimony on the former trial, which testimony on the former trial was read upon this trial, and in construing the testimony of this witness this court said: "As we construe his [Swansen's] evidence, its main purpose was to show clearly or emphasize that management and control in reference to all matters were vested solely in the officers of the company in Milwaukee, and were at all times exercised exclusively by them." The plaintiff in error contends that the exclusion of this evidence was prejudicial and hurtful in that the evidence not only tended to refute the defendants' contention that the credits did so arise (in Fulton County), but to establish movant's contention that the credits arose out of business by it at its home office and legal domicile in Milwaukee, Wisconsin. The exclusion of this testimony was not harmful to the plaintiff in error as this court also held in Suttles v. Northwestern Mutual Life Ins. Co., 193 Ga. 495 (2c) (supra): "The facts, that all management and control were vested in the officials of the company at its home office, and that the authority of the agent was limited to specific instructions as to each separate loan, do not alter the case. If the company did in fact conduct a loan business in Georgia, it could not deprive the State of its authority to tax by limiting the authority of its agent." The testimony if admitted would not have authorized a different result and its exclusion, if error, was harmless. Merck v. American Freehold Land Mortgage Co., 79 Ga. 213 ( 7 S.E. 265).
The 21st special ground complains of the court's ruling in directing a verdict for the defendants in error and insists that the evidence presents questions of fact for determination by the jury. The evidence would not have authorized a finding in the plaintiff's favor on the issue as to taxability and accordingly there is no merit in this ground, so far as it complains of the direction of a verdict for the defendants and against the plaintiff with respect to the contention that the credits were not taxable in Fulton County.
2. Upon the remanding of this case to the trial court for a new trial ( Suttles v. Northwestern Mutual Life Ins. Co., 193 Ga. 495), and before a second trial, the plaintiff filed a first amendment to the original petition, which was, on June 5, 1942, allowed subject to objections; said amendment alleging, in paragraph 21, subparagraphs (a) to (f), that the assessments involved in this litigation were void for the reason that they were made at a time when the defendants had no lawful power, authority, or jurisdiction to make the same, as they were made after December 27, 1937, the day on which the Intangibles Tax Act became law, and at a time when the defendant was entitled to the benefit of the provisions contained in that section of the act (Ga. L. 1937-8, Ex. Sess., pp. 156, 169) codified as § 92-157 (Ann. Supp.), the benefit of which was under the terms of said act denied only where the assessment had been made prior to December 27, 1937.
The plaintiff further alleged that the defendants were acting under authority of the provisions of the Georgia Code, §§ 92-6910, 92-6911, and 92-6913 as amended by the act of March 31, 1937 (Ga. L. 1937, pp. 517-524); and that said law does not provide for notice and hearing to the taxpayer, except for the current year, and therefore violates the due-process clause of the Constitution of Georgia and the equal-protection provision of the 14th Amendment of the Federal Constitution. No reference to this question was made in the argument or in the brief for the plaintiff in error, and it is therefore considered as abandoned.
The plaintiff (in paragraphs 34-51) alleged that the assessments against it were illegal and void, for that such assessments were based upon 30 percent of the market value of the credits involved, and covered the entire period of the statute of limitations (1931-1937), whereas the defendants customarily and systematically followed the practice of accepting returns from taxpayers generally of intangible property during the years 1935, 1936, and 1937 on the basis of 5 percent of the value of cash or money in the bank, 15 percent of the cash market value of stocks and bounds, and 25 percent of the cash market value of mortgages; that such assessments were confined to the years 1935 to 1937, notwithstanding the fact that owners of such property may have held the same for the entire seven-year period of the statute of limitations; the plaintiff's entire assessment for the period totaling 210 percent of the cash market value of the intangibles, and assessments made against others for the three-year period, totaled in the case of cash 15 percent of its value, stocks and bonds 45 percent of the cash market value, and mortgages 75 percent of such value; that this constituted a discrimination against the plaintiff, was not an impartial administration of the tax law, and was in violation of the equal-protection clauses of the Federal and State Constitutions. The plaintiff also alleged that there is no difference in law and in fact, for ad valorem tax purposes, between cash, stocks and bonds, and mortgages, and that it is entitled to have its property taxed upon the same basis. The plaintiff further alleged that the defendants had no right to make an assessment, but if they did, all that could be lawfully claimed would be no tax for 1931, 1932, 1933, and 1934, and one-sixth of the tax claimed for the years 1935, 1936, and 1937, besides interest.
The demurrer to this amendment was in part upon the grounds: that the Intangibles Tax Act (Code, Ann. Supp., § 92-157) is unconstitutional and void as violative of the equal-protection and the uniformity-of-taxation requirement of the Constitution, as well as art. IV, sec. 1, paragraph 1, denying the right of the General Assembly to limit, grant, or give the right of taxation; that the facts alleged are insufficient to constitute illegal discrimination; that the liability for taxes must be determined separately for each year; and further that the allegations do not entitle the plaintiff to the relief sought, and constitute no defense to the collection of the tax. The court sustained the demurrer and struck this amendment, but granted leave to amend so as to claim reduction to an assessment based on 25 percent of market value.
In the instant case the power of the county tax assessors to assess for ad valorem taxes for the year 1937 and previous years was in no sense dependent upon or affected by the Intangibles Tax Act of 1937 (Ga. L. 1937-38, Ex. Sess., pp. 156, 159).
"The clause of the Fourteenth Amendment especially invoked is that which prohibits a State denying to any citizen the equal protection of the laws. What satisfies this equality has not been and probably never can be precisely defined. Generally it has been said that it `only requires the same means and methods to be applied impartially to all the constituents of a class so that the law shall operate equally and uniformly upon all persons in similar circumstances.' Kentucky Railroad Tax cases, 115 U.S. 321, 337 ( 6 Sup. Ct. 57, 29 L. ed. 414)." Magoun v. Illinois Trust Savings Bank, 170 U.S. 283, 293 ( 18 Sup. Ct. 594, 42 L. ed. 1037).
If the plaintiff may claim discrimination because voluntary taxpayers were afforded different treatment, in that the taxing authorities accepted their returns of mortgage credit at 25 percent of the market value, while assessing the plaintiff at 30 percent of the market value of such mortgage credit, the plaintiff would only be entitled to have its assessment reduced to 25 percent of the market value of said mortgage credit, the percentage that the defendants accepted from the voluntary taxpayer for the same kind of property.
The plaintiff sought by this amendment, not to have its assessment reduced to 25 percent of the market value of the mortgage credits as accepted from voluntary taxpayers, but to have its assessment reduced to 5 percent of the market value, that being the percentage of value permitted taxpayers to fix in their returns of cash or money in banks, a different class of property. Compare Montgomery v. Suttles, 191 Ga. 781 (1a) ( 13 S.E.2d 781).
The court did not err in sustaining the demurrer to the first amendment of June 5, 1942, so far as the amendment related to matters other than actual discrimination by the defendants. If there was error with respect to that issue, the error was later cured, as will be shown presently in this opinion.
The second amendment of the plaintiff, filed March 27, 1943, claims certain benefits under the Intangibles Tax Act (Code, Ann. Supp., § 92-157).
The plaintiff contended that, having made a true return of its property in compliance with the requirements of the Intangibles Tax Act, all liability for ad valorem taxes on such intangibles had been extinguished under the provisions of § 92-157. The plaintiff further contended that the defendants believed and acted in accordance with such belief, that under § 92-157 they had a right to deny the benefits of said section to anyone whom they had elected to assess between December 27, 1937, the date the Intangibles Tax Act was passed, and January 1, 1938, and it was only those not so assessed during said interval that would be relieved of liability for past-due ad valorem taxes; and that such a construction of § 92-157 and the assessments made in pursuance thereof were violative of the equal-protection and due-process clauses of the Federal and State Constitutions.
In this second amendment the plaintiff further contended that, if the part of § 92-157 reading, "on which no return or assessment has been made or on which no litigation has been instituted either by the taxing authorities or the taxpayer prior to January 1, 1938," was capable of such construction, or set forth a classification as contended by the defendants, the said clause and classification set forth therein are void as violative of the due-process and equal-protection clauses of the Federal and State Constitutions; and that this clause could be stricken from the act without otherwise affecting it, under the separability clause as contained in the Code (Ann. Supp.), § 92-159 (Ga. L. 1937-38, Ex. Sess., pp. 156, 169; 1941, pp. 223, 225). The court sustained a demurrer to the second amendment and the plaintiff excepted to this ruling.
The above attack on the intangibles tax statute complaining only that if it was capable of the construction placed upon it by the taxing authorities it would be violative of the equal-protection and due-process clauses of the Federal and State Constitutions, is not sufficient to raise any question as to the constitutionality of the statute ( Loftin v. Southern Security Co., 162 Ga. 730 (2) 134 S.E. 760; Gormley v. Searcy, 179 Ga. 389, 397 (2), 175 S.E. 913; Morgan v. Mertins, 198 Ga. 800, 809, 33 S.E.2d 156), but only raises questions as to the correctness of the defendants' construction of the statute. We agree with the statement of the trial court, as quoted infra, that any such discrimination should be asserted, independently of and without reference to the Intangibles Tax Act. In other words whether there was administrative discrimination would depend not on what the taxing authorities thought of that statute which was not then effective, but on whether they intentionally and systematically discriminated against the plaintiff and in favor of others in the actual administration of the existing tax laws.
Subject to the same qualifications that we made in reference to the demurrer to the first amendment, we hold that the court did not err in sustaining the demurrer to the second amendment of the plaintiff, filed March 27, 1943.
The plaintiff offered third and fourth amendments. These amendments contained substantially the same allegations as the previous amendments, as to administrative discrimination. Both amendments were stricken on demurrer and the plaintiff excepted to the orders striking them.
In the order sustaining the demurrer to the fourth amendment, the court provided that the plaintiff should have the right "to plead by amendment any systematic and intentional discrimination practiced at any time by the tax authorities of Fulton County, in accordance with the standards of equality specified in the previous orders on demurrers in this case dated April 29, 1943. It is the opinion of this court that such discrimination if pleaded must be asserted, independently of and without reference to said Intangible Tax Classification Act." While the plaintiff filed exceptions pendente lite to this order, it nevertheless yielded to the ruling and filed a fifth amendment, alleging systematic and intentional discrimination, in that the defendants assessed the plaintiff and a few others during the period from December 27, 1937, to January 1, 1938, with the intention of not thereafter assessing the great majority of others similarly situated, and pursuant thereto failing and refusing to assess the great majority of others similarly situated, in violation of the equal-protection and due-process clauses of the Federal and State Constitutions.
The plaintiff, having declined to rely upon its exceptions to the rulings of the court upon the proffered amendments, at least in so far as the final amendment covers or attempts to cover the same issues with respect to discrimination which the plaintiff sought to raise in former amendments, and having yielded to the rulings by pleading the discrimination set out in the fifth amendment, which was allowed over objection, will not now be heard to complain of the court's rulings on the previous amendments in so far as the same issues are concerned. Where a plaintiff is not satisfied with such a ruling, he should stand upon his original amendment as drawn, refuse to amend further and except to that judgment. Rivers v. Key, 189 Ga. 832 ( 7 S.E.2d 732); Smith v. Bugg, 35 Ga. App. 317 ( 133 S.E. 49).
Under this rule the plaintiff clearly waived exceptions to the disallowance of the 2d 3d, and 4th amendments as related to alleged administrative discrimination, and there was no error as to other matters. Whether the same rule as to waiver would apply to the order striking the first amendment, and even assuming that the allegations of the first amendment as to administrative discrimination were sufficient to withstand the demurrer interposed thereto, we think any possible error in sustaining the demurrer was fully cured by the fact that the plaintiff on the trial was permitted to and did introduce evidence, the latitude of which was apparently just as wide as it would have been if all the amendments had been allowed. The plaintiff was permitted without objection to introduce evidence showing that the taxing authorities for a part of the period in question accepted voluntary returns of intangibles on the following basis of assessment: cash and money in banks at 5 percent of its value; taxable stocks and bonds at 15 percent of the market value; mortgages at 25 percent; also that they accepted some voluntary returns for the years 1935, 1936, and 1937, without making assessments for prior years. If the court had not allowed the fifth amendment the plaintiff would not have had any pleading upon which to admit the above evidence, but this amendment having been allowed, it was permitted to inquire, and did by the foregoing and other evidence as shown in the statement of facts, actually inquire, into the question as to whether there had been any kind of administrative discrimination against the plaintiff, and it apparently did so just as fully and completely as it would or could have done if none of the amendments had been stricken.
Where the court, on a demurrer by the defendant, strikes one of the plaintiff's amendments, such order, even if erroneous, will not result in the reversal of a final judgment in favor of the defendant, where as here, it affirmatively appears that the plaintiff was given and exercised full opportunity to introduce evidence in attempted support of the allegations of fact in the amendment so stricken, and the evidence as a whole (see division 3 infra) was insufficient to sustain such allegations. Hudgins Contracting Co. v. Redmond, 178 Ga. 317 (4) ( 173 S.E. 135); Cozart v. Johnson, 181 Ga. 337 (2) ( 182 S.E. 502); Ellis v. First National Bank of Atlanta, 182 Ga. 641 (4) ( 186 S.E. 813); Harris v. Neuman, 183 Ga. 398 (3) ( 188 S.E. 689); Fidelity Deposit Co. v. Norwood, 38 Ga. App. 534 (1c) ( 144 S.E. 387).
In view of what has been said, even if the court erred in sustaining the demurrer to the first amendment in so far as it sought to allege administrative discrimination, the ruling does not require a reversal. We therefore conclude that there is no merit in any of the exceptions complaining of orders striking on demurrer the plaintiff's first, second, third and fourth amendments.
As we view the case, no decision as to the constitutionality of any part of the Intangibles Tax Act is necessary, and none is made. McGill v. Osborne, 131 Ga. 541 (2) ( 62 S.E. 811); Georgia Power Co. v. Decatur, 173 Ga. 219 (3) ( 159 S.E. 863).
3. We now consider the motion for a new trial as related to discrimination. As above stated the plaintiff's fifth amendment was allowed by the court. The substance of this amendment has been stated in the preceding division.
The 13th special ground, evidently based on the fifth amendment, complains that the verdict is contrary to law, and that the assessment is void because, as the plaintiff in error (plaintiff) contends, "the evidence conclusively established that the said assessment was a deliberate and intentional discrimination against movant [plaintiff in error] by reason of the fact that the assessment was made pursuant to a plan and policy adopted by the taxing authorities of Fulton County, Georgia, on December 27, 1937, to assess those intangibles embraced within the Intangibles Tax Act of December 27, 1937, for unpaid ad valorem taxes for the years 1931 through 1937 during the interval only between December 27th and December 31, 1937, but to not thereafter assess such classified intangibles even though the owners of such property were owing ad valorem taxes thereon for the year 1937 and prior years within the statute of limitation, contrary to the equal-protection clause of the Fourteenth Amendment to the United States Constitution and Article I, section 1, paragraph 3 of the Constitution of the State of Georgia."
The good faith of taxing officials and the validity of their actions are presumed, and when assailed the burden of proof is upon the complaining party. Sunday Lake Iron Co. v. Wakefield, 247 U.S. 350 ( 38 Sup. Ct. 495, 62 L. ed. 1154), cited and applied in Hardin v. Reynolds, 189 Ga. 534, 545 ( 6 S.E.2d 328); Georgia Railroad Banking Co. v. Wright, 125 Ga. 589, 604-606 ( 54 S.E. 52).
The testimony on this issue, as set forth in the statement of facts, wholly fails to establish any deliberate or intentional plan or purpose of the defendants to assess some and not assess others, or to assess some for a short period and others for a longer period.
While the testimony does show that many more taxpayers made returns under the Intangibles Tax Act of 1937 than those who made returns or were assessed under the former law, the record wholly fails to establish that this failure to assess was the result of any intentional or systematic plan or policy of the defendants, but on the contrary shows that they diligently and conscientiously undertook to assess all owners of intangibles known to them. To establish an unlawful discrimination, it is not enough to show that the tax officials have merely made a mistake, or have not been diligent in seeking out those subject to tax, but there must be a clear and affirmative showing that the difference is an intentional discrimination and one adopted as a practice. Chicago Great Western Railway Co. v. Kendall, 266 U.S. 94 ( 45 Sup. Ct. 55, 69 L. ed. 183).
It is undisputed in the record that the reason for the failure to utilize the list of intangibles taxpayers furnished by the State Department of Revenue to the county authorities was the honest belief that they had no right to do so, and the belief that they "had completely covered the intangible picture."
It also becomes necessary in the view we have taken as to the several amendments, to determine whether the judge erred in directing the verdict with respect to administrative discrimination as alleged in any of the plaintiff's amendments. Under the above principles of law, the evidence would not have authorized a finding in the plaintiff's favor upon any issue as to such alleged discrimination, and accordingly there is no merit in the general grounds as related to such issue, nor in the 21st special ground so far as it complains of the direction of a verdict for the defendants and against the plaintiff with respect to alleged administrative discrimination, as set forth in any of the five amendments.
Considering the evidence as a whole, with all reasonable deductions therefrom, it is manifest that there was but one finding which can be legally supported, and that was a finding in favor of the defendants in error; and therefore the judge of the trial court did not err in directing the verdict accordingly (Code, § 110-104), or in overruling the plaintiff's motion for a new trial.
The opinion as originally delivered has been revised on motion for rehearing, to meet certain criticisms contained in such motion which the court considered meritorious to the extent of requiring alternations in the opinion, but not as requiring a different judgment. See Code, § 24-4544 (f) (Ann. Supp.)
Judgment affirmed. Bell, Chief Justice, Jenkins, Presiding Justice, Atkinson, Wyatt and Candler, Justices, and Judges Sloan and Hawkins concur. Duckworth and Head, Justices, disqualified.
ON SECOND MOTION FOR REHEARING.
The plaintiff in error in its second motion for a rehearing is insisting for the first time that this court, on the evidence in the record, should reduce the assessments from 30 to 25 percent of the value of the credits, under the rule announced in the case of Montgomery v. Suttles, 191 Ga. 781. The trial court expressly invited the plaintiff in error to avail itself of this right and it declined to do so, and in the motion for a rehearing it is said that "had the plaintiff in error done so, this would have been to renounce the claim of discrimination based upon the length of time covered by the assessments, the imposition of interest and penalties, which plaintiff in error declined to do." We leave the plaintiff in error in the position it voluntarily assumed.
The other questions discussed in this motion for a rehearing have already been sufficiently dealt with in the opinion.
Motion for rehearing denied.