ERROR to the Supreme Court of the State of Pennsylvania.
This was an action brought in the Court of Common Pleas, No. 2, for the county of Philadelphia, by the city of Philadelphia against the Union Passenger Railway Company of Philadelphia.
The following case was stated for the opinion of the court, with the right to either party to sue out a writ of error to the judgment.
That by 'An ordinance supplementary to an ordinance entitled 'An ordinance to regulate passenger railways,' approved July 7, 1857,' approved April 1, 1859 (139), and by the third section thereof, it is provided,--
'That each and every passenger railway company shall pay into the office of the chief commissioner of highways in the month of January of each year, for the use of the city, the sum of thirty dollars for each car intended to be run upon any road, and for each and every car placed upon any road before the time herein provided for paying the license, a proportionate sum shall be paid until the succeeding January, and that no car shall be placed or run upon any road or street until it shall be regularly licensed, and a certificate duly numbered hung in a conspicuous place in said car.'
That the defendants were created a body politic by an act passed April 8, 1864 (P. L. 297), with the authority to construct a railway on certain named streets in the city of Philadelphia. Among other things in said act, it is enacted,--
'SECT. 4. . . . Said railway shall conform in gauge to the passenger railways now laid in the city of Philadelphia. . . .
'SECT. 8. . . . And the said company is hereby authorized and empowered to construct and lay the said railway, without obtaining the consent of the city councils of the city of Philadelphia; but whenever the said railway shall be laid and used, by running passenger cars thereon, the said company shall be subject to the ordinances of the city of Philadelphia regulating the running of passenger railway cars.'
'SECT. 10. That the said company shall pay annually into the treasury of the city of Philadelphia, for the use of said city, whenever the dividends declared by said company shall exceed six per cent per annum, on the par value of the capital stock thereof, a tax of six per cent on such excess over six per cent, . . . and the said company shall also pay such license for each car run by said company as is now paid by other passenger railway companies in the city of Philadelphia.'
By 'a further supplement to an ordinance to regulate passenger railways, approved July 7, 1857,' approved Jan. 2, 1867 (1), it is enacted,--
'That each and every passenger railway company shall pay to the chief commissioner of highways the sum of fifty dollars for each car run upon their respective roads.' . . .
That by 'An Act to define the duties and liabilities of passenger railway corporations in the city of Philadelphia,' approved April 11, 1868 (P. L. 849), it is enacted,--
'That the several passenger railway corporations in the city of Philadelphis shall pay annually to the said city, in the month of January, the sum of fifty dollars, as required by their charters, for each car intended to be run over their roads during the year, and they shall not be obliged to pay any larger sum; and said city shall have no power by ordinance or otherwise to regulate passenger railway companies, unless authorized so to do by the laws of this Commonwealth, expressly in terms relating to passenger railway corporations in the city of Philadelphia.' . . .
That in each year previous to the year 1875 the defendants paid the said plaintiff the sum of fifty dollars for each of the cars run by them during such year.
The defendants, in the month of January, 1875, did run seventy-nine cars on their road, and admit their liability to pay to the plaintiffs for ea h car the sum of thirty dollars and no more.
If the court shall be of opinion that the plaintiffs are entitled to recover the sum of fifty dollars for each car, then judgment to be entered for the plaintiffs at that rate; if not, then judgment to be entered for the plaintiffs at the rate of thirty dollars for each car. The damages to be assessed by the prothonotary.
It is agreed that any act of assembly or ordinance of the city of Philadelphia which may be pertinent to the case here stated shall be considered as embraced herein.
Judgment was rendered in favor of the city at the rate of fifty dollars for each car. It was affirmed by the Supreme Court of the State, and this writ was then sued out. The errors assigned are set out in the opinion of this court.
Mr. David W. Sellers and Mr. F. Carroll Brewster for the plaintiff in error.
The contract between the State and the company arose by the acceptance of the charter by the corporators acting thereunder. It must therefore be construed as of that date. The franchise conferred was subject to certain terms, among which were that whenever the dividends declared should exceed six per cent per annum on the par value of the stock, a tax of six per cent should be paid on such excess, and that a license for each car run, such as was then paid by other passenger railway companies, should be paid.
The annual charge on each car is not technically a tax. Taxation is imposed by the State and city under general laws, and no exemption is here claimed from their exercise. The taxing power of the city conferred by the statute of Aug. 25, 1864, extends to all subjects of taxation specified by sect. 32 of the act of April 29, 1844. It does not, therefore, reach the cars of the company, as they are necessary to the enjoyment of the franchise. Under that section every thing incidental to, or inseparable from, the franchise is exempt from taxation. Navigation Company v. County, 8 Watts & S. (Pa.) 334; Navigation Company v. Commissioners, 11 Pa. St. 202.
The power of the city to open and repair streets does not interpose any barrier against the paramount authority of the State to grant the right to construct railways over them on such terms and conditions as the legislature may prescribed. Case of The Philadelphia and Trenton Railroad Company, 6 Whart. (Pa.) 25; Stormfeltz v. Turnpike Company, 13 Pa. St. 555; Mercer v. Railroad, 36 id. 99. The terms and conditions which are set forth in the company's charter exclude by necessary implication the exercise by the city of any power which would interfere with the enjoyment of the franchise, or diminish its value, even if such power had been, as it was not, vested in the city by pre-existing legislation.
The ordinance of the city passed pursuant to a later statute, and imposing burdens upon the franchise greater than those specified in the charter, is in direct conflict with the contract clause of the Constitution of the United States, and void.
Mr. Charles E. Morgan, Jr., and Mr. W. Nelson West, contra.
MR. JUSTICE CLIFFORD delivered the opinion of the court.
Notes edit
This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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