State v. Sellers & Orum Co. , 151 Ala. 557 ( 1907 )

ANDERSON, J.

After this case reached the circuit court, the state made the issue by averring that the assessment was correct. The appellees then filed a reply, setting out AAdierein the assessment was incorrect, and that it included all the capital stock, $40,000, and failed to alloAV a credit for $20,000, represented by mortgages owned on October 1, 1905, which had been recorded and the tax thereon had been assessed and paid under subdivision 7 of section 3911 of the Code of 1896. The state demurred to the appellee’s reply, which was overruled by the trial court, and this action is assigned as error.

Section 9, p. 187, of the Acts of 1903, in providing for the assessment of shares of capital stock in a corporation, authorizes the assessor to deduct from the value of the whole of such shares the aggregate amount or sum at which the real and personal property of the corporation is assessed for taxation. Hence the question is: Were the mortgages owned at the time legally and properly assessed, so as to authorize the deduction of same from the assessment of the shares of the corporation? Subdivision 7 of section 3911 of the Code of 1896 was amended by Acts 1903, p. 227, and the only tax therein placed on mortgages is a privilege tax in case of recordation, and which is in no sense such a tax as would warrant a deduction of the mortgages from the assessed value of the stock of the corporation, upon the theory that thej^ were assessed and taxed as solvent credits. Nor would the fact that a privilege tax for recording authorize a reduction to the extent of said mortgages from the assessment of the stock of the corporation.— Barnes v. Morange, 145 Ala. 313, 41 South. 947. Subdivision 7 of section 3911 having been amended by Acts 1803, p. 227, there was no law at the time of the assessment in question providing for an ad valorem tax on mortgages, and the assessor was not authorized to deduct the mortgages from the assessed value of the shares of stock of the corporation, whether the privilege tax for recording same had been paid or not. The trial court erred in not sustaining the state’s demurrer to the appellee’s reply to the. state’s declaration. Whether it was necessary for the reply to have been more than a joinder of issue, we need not decide; but, as it set up tbe facts to show wherein the assessment was improper, it was subject to the state’s demurrer.

Whether the bill of exceptions was signed in time, or not; we need not determine, as we have already disposed of the one legal question involved in this appeal. The judgment of the circuit court is reversed, and the cause is remanded.

Be versed and remanded.

Tyson, O. J., and Dowdell and McClellan, JJ., concur.