APPEAL from Circuit Court of the United States for the District of South Carolina.
The Richmond and Danville Railroad Company, a stockholder in the Atlanta tnd Richmond Air Line Railway Company, filed its bill against the taxing officers of South Carolina to enjoin them from levying any State, county, or municipal taxes upon the property of the last-named company within that State. The court below granted the prayer of the bill, and the taxing officers brought this appeal. The remaining facts are stated in the opinion of the court.
Mr. Le Roy F. Youmans, Attorney-General of South Carolina, for the appellants.
The only ground upon which the claimed exemption is sought to be maintained is that the Air Line Railroad Company was by its charter invested with the rights, privileges, and immunities of the Greenville and Columbia Railroad Company, and that the latter is, for the first thirty-six years of its existence, exempted from taxation. The bill does not aver that the charter is in express terms excepted from the provisions of sect. 40 of the act of 1841, and they are, therefore, to all intents and purposes, as much a part of it and of any amendment thereof as if they had been fully and at large incorporated therein. The power to revoke the charter as it originally existed or was subsequently modified having been thus reserved by positive enactment, all the chartered privileges, rights, and immunities of the Air Line Company were subjected to State control. Tomlinson v. Jessup, 15 Wall. 454. But had the bill set up a case resting on the allegation that the charter of the Air Line Company was virtually, although not in terms, excepted from that section, the appellants contend that to incorporate by implication such a provision into a charter is unwarranted. All grants of special powers or immunities are construed strictly against the grantees and in favor of the State. Jackson v. Lamphire, 3 Pet. 280; Beaty v. The Lessee of Knowler, 4 id. 108; Providence Bank v. Billings § Pittman, id. 514; Charles River Bridge v. Warren Bridge, 11 id. 420. And more especially where the taxing power is concerned, implications are never admitted to create or continue an exemption from its exercise; for 'there is no subject over which it is of greater moment for the State to preserve its power than that of taxation.' Tomlinson v. Jessup, supra.
Such exceptions are uniformly and emphatically restricted to clear and unambiguous grants in express words. West Wisconsin Railway Co. v. Supervisors, 93 U.S. 595. But by the provisions of that section the exception to its operation must be expressly declared in any subsequent act granting a charter, a renewal, an amendment, or a modification thereof. There is no such exception in the charter of the Air Line Company or in the amendment of 1868, and whatever exemption, if any, which that company may have originally had, does not inure to the consolidated company. Morgan v. Louisiana, id. 217.
Mr. Skipwith Wilmer and Mr. William E. Earle, contra.
The Air Line Railroad Company was incorporated in 1856, by a charter which invested it with all the rights, privileges, and immunities granted to the Greenvill and Columbia Railroad Company, and was therefore, to the same extent as the latter company, exempted by an irrepealable law from taxation for the period of thirty-six years. Humphrey v. Pegues, 16 Wall. 244; Tomlinson v. Branch, 15 id. 460; Philadelphia & Wilmington Railroad Co. v. Maryland, 10 How. 376; The State ex rel. Greenville § Columbia Railroad Co. v. Hood, 15 Rich. (S.C..) 177.
The act to 1841 embraces only the charters to which the legislature thereafter granting them intends that it shall be applicable. By its existence on the statute-book, it becomes applicable, in the absence of any thing to the contrary; but if the legislature determines that it shall not, in a given case, be applied, no particular form of expression is required to execmpt from its operation any subsequently granted charter. The question then is narrowed down to the intention of the legislatute which granted the charter of the Air Line Company. If it intended to grant an irrevocable immunity from taxation for thirty-six years, and from the operation of the act of 1841, the grant is valid. New Jersey v. Yard, 95 U.S. 104. Although it did not in express terms suspend that act, yet it by apt words it evinced an intention to do so, then no restrictions thereby imposed can defeat such intention.
The immunity, if conferred upon the Air Line Company, continued unimpaired not only up to the time of the authorized consolidation with the Georgia Company, but the consolidated company was entitled to it so far as the property in South Carolina was concerned. Delaware Railroad Tax, 18 Wall. 206; Tomlinson v. Branch, supra; Central Railroad, &c. Co. v. Georgia, 92 U.S. 665.
The distinction between a privilege granted in an amendment by which the grantor gains nothing and the grantee loses nothing, a grant which is in the nature of a nudum pactum,-is marked and fully recognized in Miller v. Wryman, 3 Pick. (Mass.) 211. Where the exemption is granted as a part of the original act of incorporation, or by an amendment which requires new duties, the benefit to accrue to the State, as they are imposed on the grantee, constitutes a consideration which makes a binding contract that no subsequent legislation can impair. Herrick v. Rutland, 10 Vt. 530; Sharpe v. Rutland & Burlington Railroad Co., 27 id. 146; Wilmington Railroad Co. v. Reid, 13 Wall. 264; Trustees of Dartmouth College v. Woodward, 4 Wheat. 518; Fletcher v. Peck, 6 Cranch, 87.
The rule that a grant by a State of powers and special exemptions is construed most strictly against the grantee can never be strained to the extent of defeating the legislative will or revoking a contract.
MR. JUSTICE FIELD 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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