In the application of legal principles, however, the same discrimination is uniformly made between the two uses of the expression that is made between all other special or privilege taxes and ad valorem or property taxes. Under Constitutions, which, as does our own, provide that special taxes shall be uniform and that property taxes shall be ad valorem, franchise taxes, when laid in the nature of privilege or occupation taxes, must be uniform, while taxation upon franchises regarded in the sense of a certain class of intangible property must be ad valorem. The Georgia Act of December 17, 1902, provides: "That the term 'special franchise,' as used in this Act, shall include every right and privilege exercised within this State, granted to any person, partnership or corporation by the State or its authority, or by any county or county officer, or officers, or any municipal corporation or officer thereof, for the exercise of the power of eminent domain, or for the use of any public highway or street, or the land above or below any highway or street within the limits of said State, and every special right exercised within this State granted by charter, resolution, by-law, statute or otherwise, whether under the laws of this or any other State, for the exercise of any public service, such as the construction and operation of railroads equipped for steam, electricity, horse-power, compressed air, or otherwise, for the common carrying of passengers or freight; the construction or operation of any plant or plants for the distribution and sale of gas, water, electric lights or power, steam heat, refrigerated air, or other substances by means of wire, pipes, or conduits made under or above any street, alley, or highway, or the construction and operation of any telephone or telegraph plant; all rights to conduct wharfage, dockage, or cranage business; the conduct of any express business or the operation of sleeping, palace, dining or chair-cars; all rights and privileges to construct, maintain, or operate canals, toll roads, or toll bridges; the right to carry on the business of maintaining equipment companies, navigation companies, freight or passenger depots, and every other like special function dependent upon the grant of public powers or privileges not allowed by law to natural persons or involving the performance of any public service, not including the mere right to be a corporation by trading or manufacturing, or other corporation exercising no special franchise above numerated." In Section 3 of the Act, it is provided that "said franchises shall be taxed at the same rate as other property upon the value thereof." This Act, therefore, levies not a special or privilege tax, but regards the franchises defined in the Act as property and taxes them ad valorem. It is the purpose of this paper to treat principally upon this form of franchise taxation. As to the constitutionality of the Georgia statute, its legality, so far as its main features are concerned, seems to be well established by an abundance of authority; in fact, it would seem that, under a Constitution like ours, which requires all property not specially exempted to be taxed, franchises are proper subject-matter for taxation, even in the absence of special statute. At. Nat. B. & L. Asso. v. Stewart, 109 Ga. 80, 32 S.E. 73. Fon du Lac Water Co. v. Fon du Lac, 82 Wis. 322, 16 L. R. Com. Elec. Power Co. v. Judson, 21 Wash. 49. A franchise, or "special franchise" as it is distinctively called in the Georgia statute, is property, has the same protection under the Constitutions, State and Federal, as other property has, and is, therefore, taxable as such. Warring v. Ga. Med. Soc. 38 Ga. 626. Bridge Co. v. Dix, 6 How. (U. S.) 507, 12 L. ed. 507 Saving Society v. Coite, 6 Wall. (U. S.) 594, 18 L. ed. 897. N. Mo. Ry. Co. v. Maguire, 20 Wall. 46, 22 L. ed. 287. The venerable Blackstone, that even those who are unlearned and uninitiated into the mysteries of the law may know exactly what a franchise is, informs us that it is an incorporeal hereditament, one of those bug-bears of the law which young law students have ever associated in their minds with nightmares, sea serpents, ichthyosaurians, advowsons, corodies, frankalmoigns, estates tail, and such like, and which those of the inner circle have classed with auditors' reports, election contests, land line disputes, and the other monsters of the law. In 1839, the Supreme Court of the United States, following the definition given by Blackstone and other common law writers, but changing it to conform to our Constitution and form of government, declared, "Franchises are special privileges conferred by government upon individuals which do not belong to the citizens of the country generally of common right. It is essential to the character of a franchise that it should be a grant from sovereign authority, and in this country no franchise can be held which is not derived from a law of the State." This definition has been adhered to, with slight modification, by the lexicographers, law writers, and courts of the country ever since. Bank of Augusta v. Earle, 13 Pet. (U. S.) 595, 10 L. ed. 274. California v. Central Pacific, 127 (U. S.) 1, 32 L. ed. 157. This definition, however, has not been so limited as not to include grants made from subordinate branches of government, such as municipal corporations. People v. O'Brien, 111 N. Y. 1, 2 L. R. A. 254. Boreel v. N. Y., 2 Sandf. 552. A. Nash. St. Ry. v. Morrow, 87 Tenn. 406; 2 L. R. A. 853. Thus many forms of intangible property are not included in the technical meaning of the word "franchise" and it is well to keep the definition in mind when we come to consider what intangible property of a person or corporation is to be included in the return of a franchise for taxation. In the first place, that which exists of common right and which does not depend upon a grant from sovereign authority is not included. For instance, where the ordinary definition of the term has not been extended by legislation, commercial or professional good will is not included in a tax on franchises. A citizen owning lands upon a navigable stream may be the proprietor of a public ferry across the stream and of a freight warehouse at his landing. The amount of tangible property connected with each enterprise may be identical, the operating ex penses of each may be the same, the income from the one may equal the income from the other, and each may show a return in revenue far exceeding the percentage usually yielded by other investments of like amount of capital. His right to operate a public ferry is dependent upon the grant of a franchise from the State, his authority to conduct the warehouse business exists of common right. The intangible value, therefore, attaching to his ferry is a franchise and is taxable as such, while the similar intangible value connected with his warehouse business is mere commercial good will, in consequence of its public patronage and local position and is not taxable as a special franchise. Louisville Tobacco Warehouse Co. v. Ky., 49 S. W. 1069. Nor is an easement or privilege obtained from a private person or corporation a franchise in the ordinary sense of the word. Thus the Baltimore, Catonsville & Ellicott's Mills Passenger Railway, which purchased its right of way from a turnpike company and which had no street franchise or concession of any kind conferred on it by the State or city is held not to be subject to a tax laid on franchises, while the other street railway companies of Baltimore are held subject, the latter having obtained permits from the municipality to use its public streets. Mayor, etc. Baltimore v. B. C. & E. Ry., 84 Md. 1, 33 L. R. Monmouth Park Asso. v. Assessors, 60 N. J. L. 372. This element of the definition of a franchise, that it must be a right derived from a sovereign, is involved in the determination of the situs of a franchise for the purposes of taxation. The United States Supreme Court in the recent case of Louisville and Jeffersonville Ferry Co. vs. The Commonwealth of Ken tucky, decided February 23, 1903, (reported in advance sheets U. S. Supreme Court Ct. Rep. L. ed. October term, 1902, No. 10, page 463) definitely holds that the situs of a franchise is only within the State by which it is granted and that an attempt by the State of Kentucky to tax one of its domestic corporations upon a franchise held by it, but granted under the laws of the State of Indiana was void, as being a deprivation by the State of Kentucky of the property of the complainant without due process of law, in violation of the Fourteenth Amendment of the Federal Constitution. The Georgia Act by its terms subjects to taxation "every special right exercised within this State, granted by charter, resolution, by-law, statute, or otherwise, whether under the laws of this or any other State." It seems clear, therefore, in the light of the decision mentioned above, that the provisions of this Act, so far as they seek to tax franchises and rights existing under the laws of other States, although exercised by persons or corporations in this State, are unconstitutional and void. The doctrine here stated is not to be confused with the proposition that, while a State may not directly impose taxes upon fran-chises conferred by other States, yet each State may impose such terms as it sees fit upon foreign corporations which desire to do business within the State and may impose license fees and other excises upon them, even though measured by the value of franchises and property held by such foreign corporations in other States. It cannot, however, impose any such terms upon corporations which have the right to carry on their business without the consent of the State, as is the case where a foreign corporation rests its right to enter the State and carry on its business there upon the Federal nature of its business, for example, owners of copyrights and patents, telegraph companies who have accepted the provisions of the Act of Congress of July 24, 1866, National Banks, and corporations engaged exclusively in interstate commerce. Such taxes upon foreign corporations are purely privilege taxes and are not included properly in a discussion of taxes laid upon franchises, where they are regarded as property as is the case under the Georgia Act. Maine v. Grand Trunk Ry. Co., 142 U. S. 217, 35 L. ed. 994. Philadelphia & S. M. S. S. Co. v. Penn., 122 U. S. 326, 30- Cooley on Taxation, 2nd ed. 23, 27. New York v. Johnson Co., 159 N. Y. 70, 45 L. R. A. 126. |