Wright v. Central of Georgia Ry. Co., 236 U.S. 674 (1915)

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Wright v. Central of Georgia Railway Company


No. 161


Argued January 28, 29, 1915
Decided March 22, 1915
236 U.S. 674

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES
FOR THE NORTHERN DISTRICT OF GEORGIA

Syllabus

This Court will not presume that a state legislature in granting a charter containing exemptions would either practice deceit or make a futile grant.

A lessee of railroads which were built under special charters containing irrepealable contracts by which the property was not subject to be taxed higher than a specified percent on the annual income derived therefrom is not subject to an ad valorem tax as the owner of such property.

The statutes of Georgia in regard to the taxation of railroads involved in this action are construed as making the fee exempt from other taxation than that provided for in favor of the lessee as well as of the lessor.

While technical distinctions should be avoided a far as may be in matters of taxation in the interest of substantial justice, they should not be disregarded in order to enable a state to escape from a binding bargain, and so held in regard to distinctions between lessors and lessees where the protection of the latter is necessary in order to make good the promise of the state made to the former.

The courts cannot take the place of the taxing power, nor can taxes based on ownership of the property be enforced against a lessee of the property under the statutes of Georgia and the leases involved in this case.

206 F. 107 affirmed.

The facts are stated in the opinion.