The Savannah morning news., 1901-05-14
CITY'S RIGHT TO TAX
UPHELD IN GROUND RENT CASE BY
u. s. SUPREME COURT.
NO CONTRACT WAS IMPAIRED.
TAXATION BY CITY DOES NOT YIO-
LATE THE CONSTITUTION.


COntracts-Cnse Was First Filed
More Than n Decade AEo-Ground
Rent Lots sold Under n Peculiar
Plan, Had Not Been Taxed by City
for n Century-They Have Been
Taxed Since and Supreme Court
Says City Is Right
The decision of the Supreme Court Of
the United States has affirmed the right
of the city of Savannah to tax the
ground rent lots. The decision was hand
ed down yesterday morning and upholds
| the contentious of the city in every essen
tial particular.
In so dong, it affirms the decisions of
the Supreme Court of Georgia and these
decisions, in their turn affirmed those of
the Superior Court of Chatham county.
The case was that of David Wells against
the Mayor and Aldermen of the city of
Savannah, Mr.. Wells and a number of
other owners of ground rent lots beilg
united in the effort to prevent the taxa.
ton of this property by the city and to
| that end to secure an injunction to stop
the sale of the property under tax execu-
lions.
The ground rent lots were sold original
Is under the provisions of an ordinance
OF Council, passed May Is, 1890. The lots
| were then owned by the city. They were
put UP for sale at public cutlery a mini
mum price being placed on each lot.
While the scheme contemplated by the
author OF the ordinance seems to have
been that the purchaser who elected to
take the property on the ground rent plan
should be required TO pay the increase
money over ana above the minimum valu-
alton, retain the amount of the minimum
price and pay interest thereon at the rate
OF per cent. per annum forever. the
practice seems to have grown up of per-
uniting purchaser to pay 20 per cent.
of the entire bid and hold the remainder
on this interest or ground rent.
Under this plan things wagged along
for a century, the owners or holders of
the ground rent lots paying the interest
On that portion of the purchase money
which they or their predecessors in title
had retained and paying no city taxes.
In 1889. Council, needing money, called
upon the city attorney to say whether
or not this property was properly subject
to taxation and Mr. Adams, after making
diligent investigation, gave it as his opin-
ion that it was An ordinance was
passed soon thereafter providing for the
| taxation of the ground rent lots, on the
| same basis as other city property. Then
| came a cry of indignation and storm
of protest that swept the city.
The Improvements on the property of
| course, had always been taxed by the
| city, and as tothese there was no change.
| Not even the owners of lots had contend
\ ed that the improvements were not proper
| subjects of municipal taxation; 1t was tax
| alton of the ground to which they OBJ
| jected.
Even the ground, however. was assessed
for taxation by the city at above a million
| and half of dollars. At that time 1t
| was worth on the market considerably
| more money, and since that time has
largely increased in value. keeping step
| In this regard with the advancing pros
| perity of Savannah.
| The city passed its ordinance and as
sessed its taxes and the lot owners re-
| fused to pay. Their contention was that
| the city owned the lots; that they were
merely tenants of the city, paying an an
nual ground rent for the occupancy and
use of the property, and that, therefore,
| the city clearly had no right to levy
taxes on what 1t owned itself.
ut was shown that when lots, under
| the ground rent ordinance, were exposed
for sale, that the city marshal publicly
announced they would not be subject to
city taxes; that this was generally IN
derstood by the city at large and that
for nearly a hundred years after these
sales first began the municipal authori-
| ties failed to tax the lands and in various
| ordinances afterwards passed these
ground rent lands were exempted"
Judge Falligant refused to grant the
temporary injunction asked for by Mr..
| Wells and his associates and the case
was carried, upon this refusal to the
! Supreme Court of the state. Then. in
affirming Judge Falligant's decision.
Chief Justice Bleckley. voicing the opin-
| ion of the united bench of the court,
| said: Whatever the expectation of pur-
| chasers or the unbroken practice Of the
! city hitherto may have been, the man
| date of the Constitution of 1877 is to tax
all property, save that expressly ex-
empted by the Legislature. under con-
| stitutional authority, II any is taxed.
| That this mandate may have heretofore
been disregarded, is no reason why 1t
should not be obeyed now"
While this was not a final decree, disposing
of the issues In the case, in the sense that
1t could be carried to the Supreme Court
| Of the United States. II was a final adju-
dication of the law governing it, and the
| city authorities thought everything had
| been settled.
| In the meantime, however, an ordinance
had been passed by Council, which provid-
| ed that owners of ground rent lots could
| pay the taxes assessed by the city under
! protest so that should the case ever be
| determined adversely to the contention OF
| the city, the owners could recover 9le
| amount of taxes so paid in. AS more
than a decade has passed since that time,
this was another serious question for the
city, and to have been compelled to re-
| turn taxes on property valued at more
| than a million and a half dollars, for
eleven years, would have made the city
treasury look and feel as though II had
an attack OF cramps. The taxes the city
would have been compelled TO refund, had
the decision gone against It, would have
closely Appropriated In amount $500. 000
In addition TO the contention that the
| city had entered into a binding and per-
| petual contract not to tax the lots, Il was
| further commended. on behalf OF the plain
tffs. that the lots were the property Of
the city and that the holders had lease
hold interest In them merely This point
was urged snd argued with great force
and earnestness by Mr.. j. r. Saussy and
Mr.. Pope Barrow, counsel for the plain
| tifGs.
The deduction from this contention was
that tho city owning the lots could not
tax them. To this contention the city
attorney, Mr.. Adams, had a double reply
to make. In the first place. he said, the