The Montgomery advertiser., 1908-07-01
JUDGE SAYRE HAS TAX CASE He Will Announce His Decision Later. ----s--- ARGUED ALL OF YESTERDAY
 -----s-- Principal Address Delivered by
 Gregory Smith. He was Answered. By Judge :. D. wsskiey. spss's,ns for sAs state. And ssstssaiss censtituties-
 ality of the Act
 Under Attack.

HlM hlGT NI tA0 1&t1E1&ao 88 8&A1-t ~ Gsston. as Probate Judge of Mont- gomery County. which is being argued before Judge A. D. Sayre of the civil division of the City Court Gregory Smith opened for the railroads at 10 o'clock and occupied the Attention of the court until the adjournraenf for the lunch hour. He again occupied the attention of inc court from s:s0 o'clock until 4:iB o'clock in the presentation of his side of the case. At the close of the day. Judge sayre took the case under advisemsnt.
 The suit against the Probate Judge by the Louisville Snd Nashvilie. tne Atlantic Coast Line. the SeaboEyd AIT line and the Central of GeorGia rail- reads 10 for the recovery of sfs.ooo paid to the Probate Judge during lasa Feb ruary as franchise tax under the law passed by the recent Legislature. The cansion of the act .An Act 60 provide all foreign corporations authorised to ae 'buainess h the State undar rHa laws Of che state of Aiabama % pay an annual franchise tax"
 Teh attornsys are arguing the suit m tho grounds Of it's unconstiutional- ity upon the grounds: First that the act is uneonstitutlonai and void. be- 1il. 2I4 2ts and 2t7 of the Constitution of tha State: (bl with the tenth article Of Seentien 1 of the Consultation of the United States; tel with the t'ouy- teenth Amendment of the United States. Second. that the second section of tho act is unconstitutlonAi because as to t the Act is vioistive of Section A of the Constitution of the State af
 nv agrssmsnt ef counesl before opeuinG the case. the list of speakers cn both sides was arranged, and the program has Seen followed strictly. The State presented its argument Monday cf Bfrminshaui. followed by AttorneY General 0afbsr. Attorney Smith eret presented the case of the rnilreads
 nEr. ensithss ArwunenA.
 Tn Mir. Smiths arguments all of the propositions laid down shy attornegs for the State were contrndictad Mi Smith axsuad that the particular acs under confederation ievtAd . rrepertz tax which was not specially provided for iu Section 3s2. and which was h eenfiict with sections 2ii. 2tt, BIS end MT. Smith,. s'hnt of whst Che body 0f the act porteuds. The Legislature had no right to enact q thing contrary @ the laws of the State and the Un- ion. no matter under what name. The State claims that 1t had the right to take any method in ascertaining what the value of'a franchise may be, and iD this case they took the actual physl- cal property as the measure upon which to base this franchise tax"
 If the tax had been laid on the esp. ital stock co nonine. then the tax would be q franchise tax. but since # is levied on the value of the physical invested. then 1t must be property tax and Is against the Consultation. Tn supporting this view Mir, Smith quoted many authorities.
 The States attorneys Monday cited the case of the Grand Trunk Railway against Canada in proof of their conten- tion that the tax was not property tax. but that the State had right t~ take any basis they chose to make an estimate Of what the franchise tax should be. Mfr. Smith yesterday satd that the case cited did not involve the declared that the tax involved in che Grand Trunk case was an excise tax according to the sta atuta for the exer- else of the privileges of franchise within the state The tax was not even then based upon q valuation of the physical property ora upon the gross earnings Of the railroad conpay for the previous year or any year. It was simply a tax for the right of ex0rcis- ing the rights of q franchise within the bnnnds of the State. The act un- der Consideration in this case is on It's face indelibIy stamped with the chsraetsris.les ss. Si property Is.,.,,,Ia tax . to put a tax upon foreign corporations In proportion to that put upon domea- tic corporations, Tho statute limited the tax to the actual amount of capital stock employed within the bounds of the State. The statute provides not for ' AsaA @n~ (ss~. e.u to do business in the State. It does not provide for license tax payable an- nually. There is no 1urther room for another tax under the statute
 We also contend.y said MT. Smith, that the act under consideration in this ease violates the Fourteenth Amend ment of the Constitution of the United states in that provision which relates to an equal protection of the law. It has been repeatedly admitted that this corporation Is within the Jurisdiction of the State and yet 1t is claimed that 1t Is not under the equal protection of
 Mr. Smith then adjndged the contrae- iural relation which existed between the state and the foreign corporation. His argument was in direct contra diction of the argument made yester. day afternoon by, attorney-general Garber. Mir. Smith stated that for eign corporation is given the right to opeTate a railroad within the bounds of the state Of Alabama, and that the foreign corporation purchasing the domestic corporation also purchased the franchise of the domestic corpora ton as we'll as the road-bed, rolling stock, etc, a proposition which the atorneys for the state denied strenu- ,.S,sly In Monday afternapn.
 MP. Smith concluded his mornings speech with the argument hat any tax other than a property tax, that did not treat all corporations alike was unconstitutional and void by tho com stitution of the United States.
 Court adjourned at 1880 o'clock for the lunch hour to meet again at S:3O o'clock. Mir. Smith had not finished his argument, and on the opening of the court in the afternoon continued his argument for threeTQuarters Of @n hour.
 During the short argument which Mr. Smith made in the afternoon the question of the new act being a bur den to interstate commerce was dis cuSsed. It was argued that the tax was upon a business so bound toGeth- or as to make the business q unit, and that the tax on a single member of the unit effected the whole. By the laws of the state, the railroad coming into the state must do an intra state busi- ness, and if this is so. then the busi- ness must be q unit and the tax bur den upon inher-s state conaxaarce.
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