Court Opinion

ID: 9586520
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:12:23.034263+00
Date Added: 2024-06-11T17:32:41.965007
License: Public Domain

Head, Presiding Justice,
concurring. I concur in the opinion of Mr. Justice Candler and the judgment of the court holding that the lease of Delta Air Lines, Inc., from the City of Atlanta is taxable. It is my opinion that no other judgment could properly be rendered.
There is some authority to the contrary, but it is the general rule in this country that the exemption from taxation enjoyed by governmental agencies with respect to lands owned by them does not extend to the leasehold interest of a tenant of those lands. 23 ALR 248, et seq., and citations. See also 51 Am. Jur. 536, Taxation, § 535; 84 CJS 479, Taxation, § 254.
Under the common law a leasehold remains a chattel real. The State, however, may by statute declare its nature contrary to the common law for the purpose of taxation. Wright v. Central of Ga. R. Co., 146 Ga. 406 (91 SE 471); City of Chicago v. University of Chicago, 302 Ill. 455 (134 NE 723, 23 ALR 244). In Wright v. Central of Ga. R. Co., supra, it was said: “At common law the term ‘real estate’ does not include anything short of a freehold. 2. Kent’s Com. *342, 3 Id. *401. An estate for years *21in this State passes as realty. Civil Code, § 3685 [now 85-801]. It is not necessary to go into an analysis of the leasehold interest created by this lease, to determine whether the leasehold interest is to be regarded as personalty or as realty; if it be either, it is property. The Constitution requires that taxation shall be ad valorem on all property not expressly exempted, and relatively to the question of taxation it makes no substantial difference whether the property of the beneficial owner be classed as realty or personalty.” While the decision of this court in the Wright case was reversed by the Supreme Court of the United States (Central of Ga. R. Co. v. Wright, 248 U. S. 525, 39 SC 181, 63 LE 401), the reversal was based upon a contract between the State and the railway company for the taxation of its property and not because the leasehold interest of the railroad was not property subject to taxation.
The United States Supreme Court in Trimble v. City of Seattle, 231 U. S. 683 (34 SC 218, 58 LE 435), held: “When an interest in land, whether freehold or for years, passes from the public domain into private hands, there is a natural implication that it goes with the ordinary incidents of private property and subject to be taxed.” See also Metropolitan Street Railway Co. v. New York State Board of Tax Commissioners, 199 U. S. 1 (25 SC 705, 50 LE 65); J. W. Perry Co. v. City of Norfolk, 220 U. S. 472 (31 SC 465, 55 LE 548).
Code § 85-801 provides in part: “An estate for years is one which is limited in its duration to a period fixed or which may be made fixed and certain. If it is in lands, it passes as realty.” This Code section, under the Constitution of 1877 (and the Constitution of 1945) would require the taxation of the lease held by Delta Air Lines, Inc., as realty. In Wright v. Central of Ga. R. Co., 146 Ga. 406, supra, this court said that whether the lease was realty or personalty, the Constitution required its taxation.
Art. VII, Sec. I, Par. Ill of the Constitution of 1945 (Code Ann. § 2-5403), which authorizes the General Assembly to classify property for taxation, came into existence as an amendment to the Constitution of 1877 by the act of 1937 (Ga. L. 1937, p. 39), which was ratified on June 8, 1937. The Constitu*22tion of 1877 (Code § 2-5001) as thus amended is identical in language with the present provision of the Constitution of 1945 (Code Ann. § 2-5403).
Pursuant to the constitutional authority of the amendment ratified June 8, 1937, the General Assembly at the - 1937-38 extraordinary session enacted a statute classifying property for taxation. Ga. L. 1937-38, Ex. Sess., p. 158. Section 2 of this act classifies leaseholds as real property, and provides that real property, including leaseholds, shall be taxed as now provided by law. Code Ann. § 92-114.
The rule stated in Greene Line Terminal Co. v. Martin, 122 W. Va. 483 (1) (10 SE2d 901), that “a leasehold on a city-owned wharf is not exempt from taxation, where the lessee operates the wharf on a personal profit basis, though public convenience is thereby served,” is applicable here. Although the operation of Delta Air Lines, Inc., is of great public convenience, if not a necessity, its operation is on a personal profit basis, and under the applicable rules of law its leasehold interest is subject to taxation.