State v. Tennessee Coal, Iron & Railway Co.

de GRAFFENRIED, J.

In the case of State of Alabama v. Alabama Fuel & Iron Co., infra, 66 South. 169, in which an opinion was handed down on this day, this court determined that the provision in our revenue bill, which provides for an ad valorem tax on “all money lent, solvent credits or credits of value, except such as are secured by mortgage, deed of trust or written contract of conditional sale, upon which a tax imposed by law has been paid,” is violative of no provision of the state or federal Constitution and is therefore valid. The opinion in the above case must be read in connection with this opinion, in order that this opinion may be fully understood.

1. The record in this case discloses that the Tennessee Coal, Iron & Railroad Company is a corporation organized and existing under the laws of the state of Tennessee; that its legal domicile is now and has always been in Grundy county, Tenn., but that on and for many years prior to and continuously since the 1st day of October, 1913, defendant has maintained general offices *520in Jefferson county, Ala.; and that said corporation, having qualified under the laws of the state of Alabama to conduct its business, that of mining and manufacturing within the state of Alabama, is and has been conducting a general mining and manufacturing business within the state. The record further discloses that the particular assessment which has brought about this litigation was an ad valorem assessment upon “money lent, solvent credits, and credits of Avalué arising from the business done in the state of Alabama (excluding such as are secured or evidenced by mortgage, deed of trust, or written contract of conditional sale upon which a tax imposed by law has been paid), due from persons or corporations domiciled and doing business in Alabama, and payable at the offices of said Tennessee Coal, Iron & Railroad Company, in Jefferson county, Ala., owned by said Tennessee Coal, Iron & Railroad Company, October 1, 1913.”

In addition to the above we call attention to the act of the Legislature which is entitled “An act relating to tlie Tennessee Coal, Iron and Railroad Company and to confer certain rights and powers on said company,” which was approved on February 10, 1893. See Acts of Alabama 1892-93, p. 454. The many and broad powers and privileges which are conferred upon this corporation by the above act illumine the question which we have in hand, and, as the act should be read in connection with this opinion, the Reporter will set it out in his summary of the facts. While in this act there is a provision that “nothing herein contained, shall be construed as in any way limiting or interfering with the rights, privileges, and immunities which the said Tennessee Coal, Iron and Railroad Company, may now possess and enjoy, under the charter granted to it by the state of Tennessee,” the act, when read in connection with the assessment and the *521complaint which is founded upon the assessment, clearly indicates that this corporation, in so far as its business in Alabama, is concerned, has established a permanent habitation in this state and that it is- now, by virtue of that, habitation and the act which was placed upon our books for its special benefit, enjoying rights and privileges in this state which pertain to none of our private citizens, and which but few of our own domestic corporations can, under our general laws, enjoy. The above act, when read in connection with the complaint and the assessment, clearly shows that while, by virtue of its birth in the state of Tennessee, this corporation may owe allegiance to the state of Tennessee, it is in reality a denizen of Alabama, and, in so far as the property which is involved in this assessment is concerned, must rely, and is, under our law, entitled to rely, for protection, upon the laws of this state. In modern times, particularly in our states, corporations are not unaccustomed to organize themselves under the laws of one state for the sole purpose of doing business in some other state. It not infrequently occurs that a company which is organized for the sole purpose of supplying some particular city with water or with electricity or with some other public necessity claims citizenship in some state distant from that in which it does its sole business simply because it organized itself into a corporation there. The actual business of such a corporation may be, and frequently is, confined exclusively to some locality in one state, while, pro forma, its citizenship is in some other state. In all such cases the law, when it comes to matters of taxation, must throw aside the draperies with which such a corporation is clothed, and ascertain the situs (the actual place) of its property, and then accord to the state, which in reality has the business of such a corporation within its care, that *522right of taxation which belongs to the state as a return for its actual protection.

It is unquestionably true that in a government like our own it would be desirable for some plan to be devised whereby double taxation would be rendered impossible, but no such plan has yet been devised. To use the language of Holmes, J., in Louisa, Kidd, Ex’x, v. State of Alabama, 188 U. S. 730, 23 Sup. Ct. 401, 47 L. Ed. 240: “No doubt it would be a great advantage to the country and to the individual states if principles of taxation could be agreed upon which did not conflict with each other, and a common scheme could be adopted by which taxation of substantially the same property in two jurisdictions could be avoided. But the Constitution of the United States does not go so far.—Coe v. Errol, 116 U. S. 517, 524, 6 Sup. Ct. 475, 29 L. Ed. 715, 718; Knowilton v. Moore, 178 U. S. 41, 20 Sup. Ct. 747, 44 L. Ed. 969; Dyer v. Osborne, 11 R. I. 321, 327, 23 Am. Rep. 460; Cooley, Tax. (2d Ed.) 221n. One aspect of the problem was touched in the case of Blackstone v. Miller (at the present term) 188 U. S. 189, 23 Sup. Ct. 277, 47 L. Ed. 439. The state of Alabama is not bound to make its laws harmonize in principle with those of other states. If property is untaxed by its laws, then, for the purpose of its laws, the property is not taxed at all.”

2. The Tennessee Coal, Iron & Railroad Company is in all human probability, in pursuance of the powers which are conferred upon it by the above act, one of the chief factors in promoting the development of the resources of that part of the state in which its activities are engaged. In its efforts to promote the interest of its stockholders it is probably largely adding to the material welfare of the state and increasing the prosperity and happiness, not only of its own employees, but also of those who must receive indirect benefits from the *523development of its properties. In harmony with the purposes for which it was admitted- into the privileges which it now enjoys, it may have, and probaably has become, one of the large business interests which the laws of the state must be called upon to constantly protect.—Tennessee Coal, Iron & R. R. Co. v. Hamilton, 100 Ala. 252, 14 South. 167, 46 Am. St. Rep. 48. It has, however, taken up a home with our people. It has established general offices in our state, and we think it plain from this record that, in so far as its business in Alabama is concerned, that business is as distinct from its business in Tennessee (if it has business in that state) as if it were in fact a corporation entirely distinct from the Tennessee corporation. Necessarily, as the Tennessee Coal, Iron & Railroad Company has general offices in Alabama, and as this record and the above act clearly indicate the nature and, in some measure at least, the extent of its business, it must have one or more general agents in this state. The assessment in this case is upon solvent credits “due from persons or corporations domiciled and doing business- in Alabama and payable at the offices of said Tennessee Coal, Iron & Railroad Company in Jefferson county, Ala., owned by said Tennessee Coal, Iron & Railroad Company, October 1, 1911.”

Our statute providing for ad valorem taxes upon solvent credits not secured by mortgages, etc., which have been recorded and which have paid a privilege tax, is broad and sweeping in its terms. It is broad enough to cover, and does cover, all solvent credits which have their situs in this state. In our opinion the record in this case shows that the situs of the solvent credits made the subject of this assessment is the state of Alabama, and that they are liable to an ad valorem tax in this state. Presumptively, under the facts shown by this record, the solvent credits of appellee are in the hands *524of those who have charge of their general offices in Jefferson county.

“The situs of personal property, whether tangible or intangible, for the purposes of taxation, unless otherwise provided by statute, is at the place of residence of the owner; the only exception being where the property is employed in business, or is in the hands of an agent of the owner having an actual situs different from the domicile of the owner. It is not necessary, therefore, that the owner should reside within the state to render his personal property, situated within the state, liable to taxation.”—1 Desty on Taxation, p. 822, § 67; Cooley on Taxation, p. 371; Burroughs on Taxation, § 50, p. 59; Boyd v. Selma, 96 Ala. 144, 11 South. 393, 16 L. R. A. 729.

While the legal residence of appellee may be in Tennessee, it has actually domiciled itself with us, and, on the face of the papers in this record, read in connection with the above act under which the appellee has been conducting operations in this state, we are of the opinion that the situs of the property sought, in this proceeding to be taxed, is the state of Alabama, and that this state has the right to' impose an ad valorem tax upon the same.

The rulings of the trial court were not in accordance with the above views. The judgment of the trial court is therefore reversed, and the cause is. remanded for further proceedings in accordance with this opinion.

Reversed and remanded.

All the Justices concur, except Anderson, O. J., who dissents.